Elks v. North State Insurance

This appeal presents one question for our decision, and that is, whether the evidence introduced by the plaintiff, construed most favorably for him, establishes a contract between him and the defendant.

Before considering the evidence, it is well to have in mind some of the elements that enter into a valid contract, so that we may see if the plaintiff has met the requirements of the law.

*624It is elementary that it is necessary that the’minds of the parties meet upon a definite proposition. “There is no contract unless the parties thereto assent, and they must assent' to the same thing, in the same sense. A contract requires the assent of the parties to an agreement, and this agreement must be obligatory, and, as we have seen, the obligation must, in general, be mutual.” 1 Par. Con., 475.

If the alleged contract is made by conversations and correspondence, the whole must be considered, and although certain parts taken alone appear to constitute a binding agreement, if the whole correspondence and negotiations show that there were other terms contemplated by both parties, as essential to the proposed contract, on which they fail to agree, there is no contract. Hussey v. Horne-Payne, 4 App. Cases, 312.

The leading opinion in this case was written by Lord Cairns, and Lord Selborne, concurring, sums uxd the conclusion of the Court as follows: “The observation has often been made that a contract established by letters may sometimes bind parties who, when they wrote those letters, did not imagine that they were finally settling the terms of the agreement by which they were to be bound; and it appears to me that no such contract ought to be held established, even by letters which would otherwise be sufficient for the purpose, if it is clear, upion the facts, that there were other conditions of the intended contract, beyond and besides those expiressed in the letters, which were still in a state of negotiation only, and without the settlement of which the parties had no idea of concluding any agreement.”

If the minds of the parties meet upon a xoropoosition, which is sufficiently definite to be enforced, the contract is compdete, although it is in the contemplation of the parties that it shall be reduced to writing as a memorial or evidence of the contract; but if it apipjears that the parties are merely negotiating to see if they can agree upon terms, and that the writing is to be the contract, then there is no contract until the writing is executed. Winn v. Bull, 7 Ch. D., 31; Pratt v. R. R., 21 N. Y., 308; Miss. Steam. Co. v. Swift, 41 Am. St., 553 (86 Me., 248) ; Rankin v. Mitchem, 141 N. C., 280.

*625In the case from hlaine, the authorities, English and American, are reviewed, and the Court says: “From these expressions of courts and jurists, it is quite clear that, after all, the question is mainly one of intention. If the party sought to be charged intended to close a contract prior to the formal signing of a written draft, he will be bound by the contract actually made, though the signing of the written draft be omitted. If, on the other hand, such party neither had nor signified such an' intention to close the contract until it was fully expressed in a written instrument and attested by signatures, then he will not be bound until the signatures are affixed. The expression of the idea may be attempted in other words; if the written draft is viewed by the parties merely as a covenant memorial or record of their previous contract, its absence does not affect Ihe binding force of the contract; if, however, it is viewed as the consummation of the negotiation, there is no contract until the written draft is finally signed. In determining which view is entertained in any particular case, several circumstances may be helpful, as: whether the contract is of that class which are usually found to be in writing; whether it is of such nature as to need a formal writing for its full expression; whether it has few or many details; whether the amount involved is large or small; whether it is a common or unusual contract; whether the negotiations themselves indicate that a written draft is contemplated as’ a final conclusion of the negotiations. If a written draft is proposed, suggested, or referred to, during the negotiations, it is some evidence that the parties intended it to be the final closing of the contract.”

Contracts are usually made by an offer by one party and an acceptance by the other; and it is in this way, the plaintiff contends, a contract was completed between him and the defendant.

"When an offer and acceptance are relied on to make- a contract, “The offer must be one which is intended of itself to create legal relations on acceptance. It must not be an offer intended merely to open negotiations which will ultimately result in a contract, or intended to call forth an offer in legal form from the party to whom it is addressed.” 1 Page on Contracts, sec. 26.

*626“The offer, even if intended to create legal relations, must be so complete that upon acceptance an agreement is formed which contains all the terms necessary to determine whether the contract has been performed or not. An offer in which.the price is not fixed, and yet is so specified that it is evidence that the parties did not intend merely whatever should be a reasonable compensation, is not definite enough.” 1 Page on Contracts, sec. 27.

“The offer must not merely be complete in terms, but the terms must be sufficiently definite to enable the court to determine ultimately whether the contract has been performed or not. If no breach of the contract, could be assigned which could be measured by any test of damages from the contract, it has been said to,be too indefinite to be enforcible, and this vice is usually due to the form of the offer.” 1 Page on Contracts, sec. 28.

The same principle is declared in Tanning Co. v. Telegraph Co., 143 N. C., 378, in which Justice Brown, speaking for the Court, says: “The offer must be distinct as such, and not merely an invitation to enter into negotiations upon a certain basis. Wire Works v. Sorrell, 142 Mass., 442; Beaupre v. Telegraph Co., 21 Minn., 155; 24 Am. and Eng. Ency., 1029, and cases cited. Again, the offer must specify the specific quantity to be furnished, as a mere acceptance of an indefinite offer will not create a binding contract. McCaw Manufacturing Co. v. Felder, 115 Ga., 408; 24 Am. and Eng. Ency., 1030, note 1, and cases cited. ‘The offer must be one which is intended of itself to create legal relations on acceptance. It must not be an offer merely to open negotiations which will ultimately result in a contract.’ 1 Page on Contracts, sec. 26, and cases cited; Clark on Contracts, sec. 29.”

If the minds of the parties have met, and the terms have been agreed to, it does not always follow that a contract is complete and such a one as can be enforced, although not illegal, as the law demands that the terms shall be definite and certain, or capable of being made so. Silverthorne v. Fowle, 49 N. C., 363; Spragins v. White, 108 N. C., 453; Thomas v. Shooting Club, 123 N. C., 287; Price v. Price, 133 N. C., 515.

*627In tbe first of these cases it was held that a contract to tow a raft of timber was void on account of indefiniteness, wbicb provided that the raft was "to be ready when corn was done " and in the last the Court says: “That an agreement may be valid, it is necessary that the parties use language sufficiently clear for it to be understood with reasonable certainty what they mean; and if an agreement is so vague that it is not possible to gather from it the intention of the parties,, it is void, for neither the court nor the jury can make an agreement for the parties.”

Having determined the elements entering into a completed contract under conditions existing between the plaintiff and the defendant, let us see if the plaintiff has met the‘requirements of the law.

We are of opinion he has not.

(1) When all the evidence is considered, including the correspondence, it amounts to no more than negotiations for a contract, and the conduct of the plaintiff shows that he so understood it. He claims now that the finance committee of the defendant approved his application, and that this made the contract complete; but he made no such claim when the contents of the letters set out in the evidence were communicated to him.

(2) No promise on the part of the defendant, express or implied, to lend the plaintiff $1,000 is proven. The approval by the finance committee, if made, was not such. It is merely a safeguard adopted by the defendant as preliminary to a loaii. The attorney passes upon the title and the committee examines the security and the conditions of the finances, and if the reports of both are favorable, the defendant makes the loan.

(3) The agreement, as contended for by the plaintiff, shows that the transaction was not completed, and that other terms were to be. agreed to, or it is so indefinite that it cannot be enforced.

The plaintiff says he offered to borrow $1,000 of the defendant, and that the defendant accepted his offer. It is agreed that a note and mortgage were to be executed by the plaintiff to consummate the contract, but he tendered neither to the defendant. The reason he did not is obvious. He did not know how to write the note and mortgage, and no lawyer could have pre*628pared them, because stipulations necessary to a complete contract bad not been discussed or agreed to, to wit, tbe time tbe loan was to run. It is certain tbe plaintiff did not intend to borrow $1,000 payable one day after date, because be says be needed tbe money to use in payments of debts, in repairing a mill, and in cultivating crops, and if not payable one day after date, when was it to be due? Suppose tbe defendant bad said: “Prepare your note and mortgage, and I will lend you tbe money payable in two months,” or three months, or six months; is it not certain that tbe plaintiff bad tbe right to say: “I do not want tbe money on such short.time, and have not promised to take it”; and if tbe plaintiff bad said tbe note must become due one year or two years from date, that tbe defendant could have declined to lend on such terms, because it bad not ju'omised to do so ?

If so, terms which were necessary to complete tbe contract bad not ..been agreed to.

Tbe right of action on contracts to lend money is considered in Coles v. Lumber Co., 150 N. C., 188, but tbe discussion there is not material in this case, as tbe Court was then dealing with tbe measure of damages, and not with tbe question whether a contract bad been made.

We are of opinion that no contract has been established, and that the judgment of nonsuit was properly entered.

Affirmed.