Beall v. Foster

BURNETT, J.

1. No question is raised about the first subdivision of the instrument quoted in the complaint. It appears in evidence that the defendant assigned to the plaintiff, one half of the nestable culvert patent and that, acting together, they organized corporations in Washington and Montana, putting in the use of the patent in those state as one half of the capital stock subscribed by them and residents there took the other half in each instance. In Utah and California they operated together in the employment of an agent who effected sales of the patent right, upon which certain royalties were received and divided by the plaintiff and the defendant. It appears also that the defendant sold his stock in the Washington and Montana corporations for considerable sums of money.

It is noted in passing that the letter purports to be the plaintiff’s understanding of a certain conversation. In addition to this the defendant signed the memorandum at the foot, “I hereby accept the above as correct.” Taken by its four corners, this amounts to no more than a memorial of uncompleted negotiations thus far had between the parties. The kernel of the controversy is found in this excerpt from the second subdivision of the letter:

“The terms and conditions pertaining to this are to be agreed upon later by us but are to be in the bounds of reason and on about the same basis as has been customary in similar deals before, by other people.”

Whether such language as this amounts to a contract or not, was considered by this court in Holtz v. Olds, 84 Or. 567 ( 164 Pac. 583, 1184 ), and it was there held that *43 an agreement to make a contract in the future is not binding unless all the terms and conditions are agreed upon and nothing is left to future negotiations.

It is substantially admitted in the argument that an agreement to agree does not constitute a contract. The reason for this is plain; for, unless the- minds of two parties have met on the same proposition there can be no agreement. The question before us is not purely one of construing a contract. We are called upon to determine whether there was any contract at all. The language of the parties postpones agreement to a later date. In the face, of their own words, we cannot say that their minds met at the time on any definite proposition. We cannot make for them a contract as of that date, when they themselves have said one was to be made thereafter and that, too, on terms not specified. The plaintiff is not seeking to recover on a quantum meruit for services rendered. He declares on a written instrument which he calls a contract and which he sets out in haec verba. His whole case is founded on the theory that on the date of that instrument he and the defendant made a complete contract which was then and there an enforcible compact. Their own words refute this theory and refer the close of negotiations to some indefinite later date. With the convention between the parties in this state of uncertainty, the plaintiff essays in effect to import into the so-called contract a stipulation not found there, and then to recover upon it as he would thus reform it. It is indeed true that that is certain which can be made certain, but for all that there must be a standard of certainty in contemplation by the parties. To say that the terms must be “in the bounds of reason and on about the same basis as has been customary in similar deals before, by other people,” is not certain. The *44 conduct of the parties as disclosed by the evidence does not in the least indicate that either of them relied upon or considered the second clause of the contract as imposing any obligation.

Much reliance is placed by the plaintiff on the case of Olympia Bottling Works v. Olympia Brewing Co., 56 Or. 87 ( 107 Pac. 969 ). In that instance the plaintiff had the contract for handling the beer manufactured by the defendant for some compensation described in the agreement. That instrument contained this clause:

“At the close of the five-year period covered hereby the second party shall have the option of continuing this agency for another five years, but the prices of the beer shall be revised, but not exceeding the prices for beer ruling at that time; this agreement to take place on the first day of March, 1902.”

In substance, the decision of the court, Mr. Justice Eakin dissenting, turned upon the principle that the phrase, “prices ruling at that time,” meant the market prices, which could be established by competent evidence, so that the language quoted amounted to a contract in praesenti, providing an ascertainable standard as one of its terms, to operate in the future.

An examination of the precedents cited by the plaintiff shows that the instrument declared upon in each instance contained terms then agreed upon as a canon by which possible future differences should be adjusted. Here, the parties directly declined to agree at the time of signing the writing, by expressly postponing that feature to a later date. In brief, the minds of the parties did not meet on any specific proposition, and hence on primary principles there was no contract.

The Circuit Court was right in its conclusion and its decree must be affirmed. Affirmed.

Bean, Benson and Harris, JJ., concur.