Pearsall v. Henry

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 316 A rehearing of this appeal was ordered after decision in Department. Upon further consideration, we adhere to the Department opinion. As stated therein, section 1698 of the Civil Code must be held to be inapplicable where the offer is to prove a substitution of a new agreement for the prior written agreement. This is very clearly shown in the opinion in Guidery v. Green, 95 Cal. 630, [30 P. 786 *Page 317 ], where it was held that one sued up a written agreement could show by parol evidence that a subsequent written agreement was executed upon the consideration and agreement between the parties that the former agreement should be canceled, and all claims of the plaintiff against the defendant thereunder waived. Speaking of such evidence, the court said: "Its purpose was to show that that agreement had been canceled by mutual consent, and had no longer any operative effect. Such evidence is as admissible as is oral testimony that the terms of a written agreement have been fully performed by the parties, or that the instrument evidencing such agreement has itself been canceled and destroyed by the concurrent act of both parties. In either case the object and effect of such evidence is not to change any of the terms of the contract, but to show that the contract has no longer any existence, and therefore cannot be made the basis of an action. The objection that the written agreement could be altered only by an agreement in writing, or by an executed oral agreement (Civ. Code, sec. 1698) has no application to the facts offered to be shown. The offer was to show that the subsequent written agreement had been substituted for the original agreement, and the oral agreement of which proof was offered was the agreement to make this substitution. It was not an offer to prove an executory oral agreement, but an oral agreement that had been fully executed by the substitution. This, in effect, was an offer to prove a novation. (Farmers' N.G. Bank v. Stover, 60 Cal. 387. )" (See, also, Adler v. Friedman, 16 Cal. 138.) It is true that to effect a substitution the new agreement must be valid in itself (Adler v. Friedman, 16 Cal. 138), and, solely by reason of the statute of frauds, the new agreement was one that was required to be in writing in order to be valid. But the objection on this score is fully answered by what is said in the Department opinion on the effect of the performance of Pearsall of his part of the contract, the conveyance to the defendants of the Del Norte County lands. Having accepted such conveyance under the new contract (which is the effect of the findings of the trial court), the defendants are no longer in a position to raise the objection that such new contract was not in writing. We do not understand the authorities relied on by learned counsel for defendants to hold that *Page 318 the mere fact that the act relied on as part performance was something which the party performing had been obligated to do under a prior agreement is conclusive against the claim of part performance of the new oral agreement. Some of them say that to constitute part performance the acts relied on must be referable exclusively to the oral contract (see Page on Contracts, sec. 719), but as we understand it this means no more than in the light of all the circumstances of the particular case such acts are so referable. There is no hard and fast rule under which the mere existence of a prior obligation to do the acts bars all inquiry on the subject. The rule as to the effect of part performance is based entirely on equitable considerations, and when it is clearly and unequivocally made to appear that there has been a performance by a party of his part of an oral agreement required by the statute of frauds to be in writing, under such circumstances as to make it inequitable to allow the other party receiving the benefit thereof to repudiate it on the ground that it was not in writing, he is estopped from doing so. The question whether there has been a part performance of the oral agreement is necessarily one of fact to be determined by the trial court. If the testimony of plaintiffs' witnesses be taken as true, as to which the trial court was the sole judge, it affords unequivocal and satisfactory evidence of the particular oral agreement alleged by Pearsall, and showed acts of part performance referable exclusively, under all the circumstances, to such oral agreement. The findings of the trial court sufficiently show a consideration for the oral contract in the existence of the disputes between the parties and the settlement thereof, and there is sufficient evidence to sustain such findings. In Department it was held that the evidence was insufficient to support the finding as to the amount of incidental expenses incurred by Pearsall in acquiring the Del Norte County lands, and for which, under the oral contract, he was entitled to reimbursement. The trial court found this amount to be $4,650, and included such amount, with interest from July 1, 1901, in the judgment. The judgment of this court was that the judgment and order be reversed, with directions to the trial court to retry only the issues regarding the expenditures on account of such incidental expenses, and to *Page 319 enter judgment in favor of H. May Pearsall for the amount, if any, found to have been so expended, together with the amounts due by reason of the other findings. Plaintiffs for the purpose of obviating any further proceedings, have filed in this court their waiver of any further claim on account of such incidental expenses, and their consent that the judgment be modified by deducting therefrom the said amount of four thousand six hundred and fifty dollars, with interest thereon from July 1, 1901, leaving plaintiff, H. May Pearsall, entitled at the date of the judgment (April 22, 1904) to the sum of $46,443.11, with interest from said date at the rate of seven per cent per annum, and costs of suit taxed at $189.55. This obviates the necessity of a new trial. The order denying the motion for a new trial is affirmed. The judgment is modified by inserting the amount of $46,443.11 as the amount which plaintiff H. May Pearsall shall receive, in lieu of the $51,876.95 awarded, and as so modified, said judgment is affirmed as of its original date. Defendants shall recover the costs of this appeal. Beatty, C.J., dissented. The following is the opinion rendered in Department One, November 10, 1907, adhered to in the foregoing.