In the argument and discussion of this case there has developed a confusion of principles of law which should be clarified, even though some of the results are not before us as issues upon this appeal.
When we discuss the sufficiency of a memorandum under the Statute of Frauds, we are discussing an oral contract and not a written contract. The following quotation from the case ofStandard Oil v. Koch, 260 N.Y. 150, 183 N.E. 278, 279, is illustrative of this thought:
"Except as evidence of the oral contract, the memorandum has no force or effect unless and until the oral contract has been established by a preponderance of evidence. Then, if accurate and complete, it prevents the interposition of the Statute of Frauds as a bar to the enforcement of the oral contract."
See also: Williston on Contracts, Rev. Ed. Vol. II, Sec. 567, note 8, page 1618. In our general Statute of Frauds this seems obvious as that statute includes this expression:
"* * * unless such agreement, or some note or memorandum thereof is in writing subscribed by the party to be charged."
In other words, there are two contingencies either of which removes the contract from under the bar of the statute — (1) The agreement is in writing, or (2) The agreement is oral, but evidenced by a note or memorandum in writing signed by the party to be charged. See Section 33-5-4, U.C.A. 1943. Section 81-1-4, U.C.A. 1943, involved in this action, is part of our Sales Code. It says nothing about an agreement in writing, but uses only the expression as to the note or memorandum. Section 81-1-3, however, provides that sales contracts may be in writing or may be oral, or may be partly written and partly oral. Of course, if a contract is in writing, signed by the party to be charged, then there need be no memorandum also signed by the party to be charged to evidence it.
We should not overlook the fact that where the question is one of mutual assent, we are faced with the question *Page 606 of whether or not all the elements of a contract are present. A general denial to a complaint alleging a contract raises the issue of the existence of each of the elements. On the other hand, the defense of the Statute of Frauds as a bar to recovery on the contract is an affirmative defense, and admits the existence of those elements, but denies their effectiveness upon the ground that they have not taken the proper written form. In effect, then, the Statute of Frauds deals primarily with the law of evidence; while mutual assent deals primarily with the substantive law of contracts — those rules which give recognition to the foundation of rights and duties.
Plaintiff's (respondent's) complaint is founded upon a written contract — it alleges a written contract made up of two cablegrams, an offer cablegram of August 8, which is, as a matter of fact signed by the party to be charged; and an acceptance cablegram of August 9, signed by the offeree. We are not concerned with any question of the sufficiency of a memorandum signed by the party to be charged to evidence the terms and the parties of an oral contract. If these two cablegrams evidence a binding contract, it is a written contract, not an oral contract. If these two writings evidence mutual assent, there is a written contract. If they do not evidence mutual assent, then there is no contract so far as this case is concerned as no one is suing on an oral contract. It is, in determining the question of mutual assent, that the meaning of the terms of the alleged written offer and of the alleged written acceptance are subject to explanation by parol evidence if those terms are uncertain or ambiguous.
Obviously if that cablegram is ambiguous in its terminology as an offer, we must look to the oral testimony to identify or explain the meaning of the terms of the written offer — but not to expand its scope. If it develops that the parties are talking at cross-purposes there is no mutual assent, and no contract. *Page 607
The offer cablegram standing alone is capable of two interpretations — an agency direction, or an offer to purchase. The evidence upon this point is in conflict and raises an issue of fact. The Eimco witness contends that it is a direction; the Hawaiian Company witness claims it is an offer to purchase. In the lower court the defendant (appellant) requested instructions to the jury upon this issue which was one of mutual assent. No doubt this was in accord with the following principles found in 53 Am. Jur. 218, Sec. 258:
"* * * The general conclusion to be drawn from the cases is that where all of the matters relied upon as constituting a contract appear either wholly from writings which may be understood without reference to parol evidence, or from such writings and from parol evidence which admits of but one construction, it is for the court to say whether a contract is shown, but that where proof of any of the factual elements of the alleged contract is made wholly or partly by parol, either because the writings relied upon are obscure or ambiguous, or because they are incomplete, and such parol evidence is subject to opposite conclusions or inferences as to the existence of any essential element of the contract, it is for the jury to draw such conclusions or inferences, perhaps indicating their decision by a determination under appropriate instructions as to whether or not a contract existed. * * *"
The lower court decided this issue of fact however; but this is not assigned as error here.
The appellant assigns six errors:
(1) The admission of the offer cablegram.
(2) The admission of the acceptance cablegram.
(3) The admission of the cablegram of correction of the offer.
(4) The admission of the confirmation letter.
(5) Failure to direct a verdict for defendant (appellant).
(6) Failure to grant defendant (appellant) a new trial.
One of these is sufficient, if an error, to be fatal to the lower court's judgment. *Page 608
In discussing the effect of the acceptance cablegram of August 9, appellant raises the issue of its being conditional. Reference is made to the phrase (italicized for this opinion) in the following quotation of that acceptance:
"In accordance your cable Hawaiian Equipment Company sells yousubject delivery from surplus approximately 922 chipping hammers 1836 scaling hammers 24 dollars and 17 dollars each respectively fob Honolulu preparing for shipment as soon as possible. Will advise. MacNaughton." (Italics added.)
Respondent seeks to meet this argument by stating in effect that it was implicit in the dealings of the parties that the sale was contingent upon delivery from the Government — that the offer was made with that understanding. To expressly state a condition which without its being expressed would be implied in law, does not make an acceptance conditional. Such is not this case, however. The witness MacNaughton, for plaintiff, testified that upon receipt of the offer cablegram of August 8, he called the Government representative to buy the tools and was told to bring his check over and he could have them. Following this, the next day, August 9, the acceptance cablegram was sent. Under such circumstances, it seems strange to argue that the implications of the italicized phrase are that the sale was conditioned upon a delivery of the tools by the Government. Such an argument seeks to shift to defendant's shoulders the effect of plaintiff's procrastination in delivering its check. At the time the acceptance cablegram was sent, there was no question about plaintiff getting the tools from the Government, unless plaintiff itself failed to get them.
Under the circumstances, I am of the opinion that the acceptance cablegram was a conditional acceptance of the offer cablegram, and no contract resulted.
A verdict should have been directed for defendant. *Page 609