County of Los Angeles v. Farnsworth

This is an action against the principal and surety on a bond given to the County of Los Angeles for the faithful performance of a contract to cause certain public improvements to be made for the benefit of .a subdivided tract of land. The trial court.held the contract, and therefore the bond, to be without consideration. Plaintiff appeals from a judgment in favor of defendant.

The contractors Peterson, Farnsworth and Glessman gave a performance bond with a corporate surety in the sum of $8,408.86, being one-fourth of the estimated cost of the improvements. This contract and 'bond were dated April 30, 1924, and were delivered to and filed with the board on that date. On May 26, 1924, the board duly accepted for public use the streets, avenues and alleys offered for dedication as shown on the map, and the map was thereupon duly recorded in the office of the county recorder. The board subsequently extended the time for the completion of the work until April 30, 1926.

On December 2, 1925, Farnsworth exchanged his interest in the property with one Mitchell, receiving therefor a ranch in Fresno County. Mitchell entered into a contract with the county on December 15, 1925, by which he agreed to install the improvements in the tract, and gave bond for faithful performance in the same amount as was stipulated in the previous bond, the defendant appellant Metropolitan Casualty Insurance Company of New York becoming surety on this bond. The provisions of the Mitchell contract differed in no material respect from the Farnsworth contract, stat

Plaintiff, by its amended complaint, alleged the execution of both contracts and bonds and sought recovery only against defendants Mitchell and Metropolitan Company. Mitchell having died before the trial, the ease was tried against the Metropolitan Company alone. The answer of this defendant pleaded, among other defenses, want of consideration for the contract between Mitchell and the board of supervisors. The basis of this claim is that the only consideration stated in the contract is the acceptance by the board of the highways shown on the map; that they had long before been accepted under the Farnsworth contract; that there remained nothing for the board to do and therefore the agreement was unilateral and without consideration. It is not to be questioned that the contract and bond fail unless they are supported by some consideration other than the one recited.

Upon the trial the court received evidence, subject to objection of defendant, of an oral agreement between Farnsworth and Mitchell, made at the time of the exchange of properties, to the effect that Mitchell would undertake tho obligation of completing the installation of the public improvements which Farnsworth was then under contract to do. Evidence was likewise received of a communication of the county road commissioner to the board, dated December 17, 1925, purporting to submit Mitchell’s agreement and bond as a substitute for those of Farnsworth, and reading in part: “I beg to advise that the property has changed hands and the new subdivider wishes to exchange the old bond for new. ’ ’ Minutes of the board of supervisors were received in evidence, subject to defendant’s objection, reading as follows: “Office of the Board of Supervisors of the County of Los Angeles, State of California, Monday, December 21st, 1925. The Board met in regular session. Present, Supervisors B. F. McClellan, Chairman presiding, Prescott F. Cogswell, J. H. Bean, F. E. Woodley and Henry W. Wright; and L. E. Lampton, Clerk,' by Mame

This evidence was offered by plaintiff to meet the objection that the Mitchell agreement was without consideration. It was objected to by defendant upon the ground that it tended to add to or vary the terms of the Mitchell agreement. The court thereafter struck out all of this evidence on motion of the defendant. Evidence was given and the court found that only about fifteen per cent of the work had been done under the contract and that the cost of completing the work would amount to $28,590.14. The court found that no damage had been sustained by the county by reason of the failure of defendant Mitchell to complete the work, presumably basing this finding upon the fact that the contract was held to be without consideration.

The provisions which we have quoted are the only ones which relate in any manner to the question of consideration. The board of supervisors by the terms of the Farnsworth contract and as a consideration therefor were to accept the dedication to public use of the highways shown on the map. This they did. The Mitchell contract recited the same consideration, but there remained nothing for the county to do in that respect on the date of the contract, since the streets had been accepted more than a year prior thereto.

Two principal questions are presented: Was any evidence of consideration not stated in the contract admissible ? If it was admissible did the evidence that was stricken out tend to establish the existence of a consideration to such an extent

Assigning the exclusion of the evidence referred to as error, appellant relies upon the rule set forth in section 1962 of the Civil Code that where a writing recites a consideration, parol or extrinsic evidence may be received to show the true consideration to be other than the one recited. The following, among other cases, are cited: International Mortgage Bank v. Eaton, 39 Cal. App. 39 [ 177 Pac. 880 ]; Royer v. Kelly, 174 Cal. 70 [ 161 Pac. 1148 ]; Richardson v. Lamp, 209 Cal. 668 [ 290 Pac. 14 ]; Field v. Austin, 131 Cal. 379 [ 63 Pac. 692 ]; Gardner v. Watson, 170 Cal. 570 [ 150 Pac. 994 ].

Respondent relies upon cases holding that where the statement of consideration is contractual or a promise to do specific things, such provision cannot be enlarged or modified by parol or extrinsic evidence, citing Hendrick v. Crowley, 31 Cal. 472 ; Arnold v. Arnold, 137 Cal. 291 [ 70 Pac. 23 ]; Harding v. Robinson, 175 Cal. 534 [ 166 Pac. 808 ], and similar eases.

If the consideration stated, namely, the acceptance of the offer of dedication, appeared in the Mitchell contract as a mere recital of a past event and not as a contractual and executory obligation of the board, some of the evidence offered by plaintiff was erroneously excluded. We do not doubt that the reference to the acceptance of the highways was nothing more than a recital of something that had already taken place and was not in any sense contractual. In fact, respondent concedes this to be true when it urges the defense of failure of consideration. The argument of respondent is that the county was bound to do nothing because the thing it might have agreed to do had already been done. It is not suggested that it was not known to the contracting parties that the offer of dedication had long since been accepted. The same language found in the Farnsworth contract related to something to be done in the future, but as found in the Mitchell contract it must be construed in conformity with the obvious understanding of the parties, who could not have believed it to be executory. Extraneous evidence of consideration was therefore admissible.

The testimony of Farnsworth that Mitchell had orally agreed with him at the time of the exchange of properties that he would assume Farnsworth’s obligation to do the

Appellant claims that a further consideration is proved by the following facts: Under the contract of Farnsworth, Peterson and Glessman with the county, dated April 30, 1924, the work was to be completed in one year; upon application of the contractors that time was extended for another year and the county was entitled to have the work completed by April 30, 1926. Mitchell acquired his interest in the subdivision in December, 1925. By the terms of his contract with the county he was given a year from that date in which to do the work. Had he acquired the land without this added time there would have remained but four and one-half months in which to comply with the terms of the Farnsworth contract. It was undoubtedly to his advantage to have an additional seven and one-half months for that

The county had an interest in having the improvement work done in the new subdivision. The highways had become open to public use and their improvement at private expense was a matter of public concern. When the time was extended for the completion of that work, the county suffered a detriment because of the delay. That was a consideration for the contract. (Sec. 1605, Civ. Code; 6 Cal. Jur. 198.)

The extension, it is true, was granted to Mitchell, not to Farnsworth, but we do not see wherein that fact is significant. It will not be presumed that the board of supervisors, having agreed with the new owner for a longer time for completion of the work, would take the duplicitous position that it could at the same time insist on an earlier completion under the first contract.

The ruling of the court was correct in so far as it applied to the letter of the road commissioner to the board of supervisors and the minutes of the board offered for the purpose of showing that the Mitchell bond and contract were tendered and accepted “in lieu’’ of those of Farnsworth and his surety. There is nothing in the record to show that the alleged substitution was made in response to any agreement between the board and any of the other interested parties. It does not appear that anyone requested such action or that it was other than gratuitous and voluntary upon the part of the board. The evidence as offered was not admissible against the defendant because neither Mitchell nor his surety could be bound in the absence of a showing that they were parties to the substitution and no such showing was made or attempted. No proper foundation was laid for the admission of this evidence.

Respondent seeks to justify the exclusion of all of the rejected evidence upon the further ground that its admission would alter the terms of the contract under which the bond was given and create new obligations be

It is also argued that the amended complaint fails to state a cause of action, in that it affirmatively appears therefrom that there was no consideration for the agreement. This point is substantially answered by what has already been said upon the subject of consideration. A consideration is presumed and need not be alleged. The fact that a consideration is recited which may be wholly insufficient leaves the door open for proof of a valid consideration. The presumption attaches in such a case with equal force as though no consideration whatever were recited.

Respondent makes the further point that acceptance of an offer to dedicate highways to public use is not necessary; that they may be accepted by public use thereof, and that the act of the board in accepting the highways in question would not furnish a consideration for an agreement to improve the same. We have shown that this was not one of the executory terms of the contract and it is not relied upon by appellant as a consideration therefor. We entertain no doubt, however, that the acceptance of an offer of dedication of highways in a newly subdivided tract of land, creating public rights therein and imposing certain public burdens, is of mutual benefit to the public and the land owner.

The evidence which we hold to have been erroneously stricken out was vital to plaintiff’s case. Its exclusion

York, J., concurred.

Houser, Acting P. J., dissented.

A petition for a rehearing of this cause was denied by the District Court of Appeal on March 6, 1935, and an application by respondent to have the cause heard in the Supreme Court, after judgment in' the District Court of Appeal, was denied by the Supreme Court on April 11, 1935.