*1 following law, judgment superior court, be affirmed. should Carter, J., concurred. J.,
Shenk, July rehearing was denied for a Respondent's petition J., were J., Schauer, Shenk, Carter J., 1956. granted. petition
opinion that 6, 1956.] In Bank. June F. No. 19116. [S. Appellant, v. (a Corporation), ELECTRIC
LEMOGE Respondent. MATEO, OF SAN COUNTY *3 Appellant. F. ’Dea for O John Attorney, E. Sorenson, and Howard District
Keith C. Respondent. for Attorney, Deputy District Gawthrop, corporation, a licensed electrical GIBSON, C. J.Plaintiff for reformation a contract brought this action contractor, judgment appeals from a county, defendant with sustaining general of a demurrer without after defendant to amend. leave may complaint be summarized as allegations of the
follows; $172,421 for electrical bid Plaintiff submitted hospital. This bid was found county to done at the work announced that lowest, and, when defendant to be the $222,700, $197,500 to ranged from bids of other contractors mistake had been made plaintiff realized that some material preparation in the of its bid. The contract was not awarded time, having рeriod at 30-day defendant reserved a in investigation by act. Prompt to revealed that in its work sheets cost of amounting certain materials $10,452 inadvertently had been listed a clerk as $104.52. mistake, applicable This considered with the sales tax and “mark-up” profit, for overhead and resulted an in under- $11,744.39. statement of bid in the amount of Whеn the mis- plaintiff immediately take was discovered notified defendant and furnished work adding tapes with sheets and machine showing knowledge the error. With the mistake and what it, caused defendant attempted the erroneous bid and consequences to bind to the the error. Plaintiff requested that adjusted compensate the bid be for the еrror, but defendant refused to allow the correction. It further mistake of such a material and fundamental character that there meeting has been minds and defendant. questions presented are appeal.
Two on this Does allege sufficient facts to entitle to reforma- err sustaining tion? Did the court in the demurrer without to amеnd leave opened plaintiff’s
Once and declared, bid was in the nature option, right irrevocable a contract of which deprived defendant could not be without its consent unless the requirements for (M. were Kemper rescission satisfied. F. City Const. Co. v. Angeles, Los 37 Cal.2d 700 [235 7].) right rescind, Plaintiff then had the and it incurring any liability could have done so withоut on its (M. Kemper Co., bond. F. Const. Cal.2d 702-705 Instead, did But not rescind. accord ing by plaintiff to statements in its at made briefs and oral argument, into a formal defendant it entered contract with on specified proceeded perform the terms the bid and any required work. It is not at claimed agreed pay plaintiff greater time an amount than the designated sum bid. There was no element of disclose; failure to fraud or neither knew of the error *4 parties until after the bids were opened, both knew of the bid was or the formal before contract was alleged do to executed. The facts not entitle reforma and, by of other tion, plaintiff, view facts admitted there pоssibility is no can be amended the theory. any to a of state cause action on
663
of reformation is to
purpose
correct a written
to
a common
in order
intention of both
instrument
effectuate
incorrectly
(Bailard
writing.
reduced
v.
parties
to
which
10].)
P.2d
In
703, 708
order
Marden, 36 Cal.2d
[227
to
this relief there must have been an
obtain
pаrties
terms,
on all
understanding between the
essential
writing
which
there would be
standard to
the
otherwise
(Bailard Marden, 36
703,
reformed.
v.
Cal.2d
708
could be
Pickering
10];
Corp.,
McConnell v.
Lbr.
F.2d
P.2d
217
[227
(rev.
1937),
5
on Contracts
ed.
see Williston
44, 48-49;
Rest., Contracts,
504,
b;
com.
45 Am.
p. 4339;
§
§
609-610.)
3399 of
586-587,
Section
Civil Code*
Jur.
the
principle by providing that,
specified
this
under
incorporates
truly
does
exprеss
contract which
conditions, a written
parties” may
the
of
be revised so as
set
“the intention
pointed
Marden,
As
in Bailard
forth
intention.”
out
v.
“that
single
is
language refers
a
intention which
supra,
this
(36
by
parties.
p. 708.)
Cal.2d at
both
entertained
may
Beformation
be had for a mutual
or
mistake
party
the other
or
for the mistake of one
knew
sus
purpose
remedy
the
in either situation
pected,
truly express
written contract
is to make
intention
parties.
Where the failure of the written con
parties
express
intention
is due to the
tract
them,
mistake is mutual
of both
inadvertence
may
application
party
contract
be revised on the
(See g.
Cal.App.2d
95
559
aggrievеd.
Schulba,
e. Mills v.
[213
408].)
only
one
to the contract
P.2d
When
or
provisions
as to its
and his mistake is known
mistaken
may
other,
reformed to
suspected
be
(Stevens
single
parties.
both
express a
intention entertained
Am.St.Rep.
;
53
Holman,
agreement, it has (Bailard be mutual or unilateral. parties, whether the mistake Burt Los Marden, 703, ; 36 Cal.2d 708 P.2d v. v. [227 10] 668, P. Angeles Assn., 175 Cal. 674-675 Olive Growers [166 1549, pp. (rev. ed., 1937), ; 5 Williston on Contracts § 993] c; 45 Rest., Contracts, 504, com. Am.Jur. 4344, 4345; § As have seen it is that de- 587-588.) we greater agreed pay plaintiff an amount than fendant ever complaint bid, in and therefore designated the sum entitling plaintiff reformation. does not state facts great liberality justice In furtherance complaint, amend his permitting in a be exercised ordinarily an abuse of discretion to sustain and it constitutes if there is a reаsonable leave to amend a demurrer without (Wen cured amendment. possibility the defect can be Medicine, University 20 Cal.2d nerholm v. School of Stanford ; v. 522, 141 A.L.R. Guilliams 713, seq. 717 et P.2d 1358] [128 ; 104 P.2d see Hollywood 97, 18 Hospital, Cal.2d [114 1] 809, Pozzo, v. 26 Cal.2d 472c; MacIsaac Proc., Code Civ. § Court, Klopstock Superior 17 Cal. 449]; 815-816 P.2d [161 318].) 135 A.L.R. But 906, P.2d 13, 2d 19-20 [108 cannot said, been clear, in of what has view of action to state a cause complaint so as amend its how the Nor has shown reformation rescission. or quasi a cause action amended to state can be recovery on this existing here In circumstances contract. assumption necessarily to be based theory have would As have seen when we no contract ever existed. option to had an irrevocable opened defendant were the bids specified figure, at the perform the work plaintiff to bind right deprived without not be this defendant could satisfied. requirements for rescission were unless its consent ( City Angeles, Los 37 Kemper Co. v. F. Const. M. 7].) Plaintiff failed to assert 696, Cal.2d 700 [235 bid, rescind, defendаnt right to its incorporated the terms which formal contract entered a into any misappre was under Neither of the bid. were, formal contract provisions to what hension as certain, for a sum express contract there was and since theory implied of an contract recover on the plaintiff cannot not, need We performed. value services for the that, rule general of applicability therefore, consider the by com must be let a contract requires that statute where a quasi recover person cannot bidding, petitive
665 (See or McKinnon, labor materials furnished. Miller v. 140 83, 34, 570]; Cal.2d A.L.R. Reams v. [124 seq. 151 et Cooley, 171 Cal. P. Ann.Cas. 1917A [152 ; Fire Alarm Co. v. Lоs Angeles, Gamewell Tel. Cal. 1260] App. 149, 154 P. remedy,
Plaintiff had a it chose exercise, not to any hardship that would have relieved it of that could result from error. However, rescinding, plaintiff, its instead of knowledge of mistake, proceeded perform with full its contract, compel and it pay cannot now *6 recovery amount which it сlaims it or intended to bid obtain quasi on a if no contractual basis as contract existed. Such only contrary legal a result would principles, not to settled uncertainty but would also and in the create confusion field competitive bidding. of judgment is affirmed.
Carter, J., Traynor, J., Spence, J., McComb, J., and con- curred. SCHAUER, J., Dissenting.—This case is us on before
appeal judgment from a of dismissal sustaining after the of general a demurrer without leave to amend. As stated in the majority opinion, justice “In great furtherance liber- ality permitting plaintiff should be exercised a to amend his complaint, ordinarily and it constitutes an abuse of dis- cretion to sustain a demurrer without leave to amend if there possibility is a by that the defect can be cured ” majority amendment. Nevertheless, opin- [Citations.] unjust ion, with liberality, strictness rather than with refuses permit plaintiff opportunity to amend and forecloses any remedy (it from for a mistake of which must be conceded for the purpose appeal) sought of this defendant аdvantage although, alleged by plaintiff, to take as defendant knew that mistake occurred under circumstances which made it the result excusable not the result inadvertence and neglect legal duty. of a my opinion
In has facts sufficient to show might unambiguously that it state a cause of action on the one recovery figure hаnd for on a contract at a corrected or on the other hand for the reasonable value of the materials work and allegations, by general furnished. Plaintiff’s tested de- murrer, are sufficient express to show that no contract was figure formed at the mistaken bid; stated that with mistake, on defendant knowledge was based a the bid full by incorporating such mistake sought to create a contract purportedly offer which was acceptance of the purported although all that, did represented by bid; knowledge of accept mistaken bid with it could to accept could and did only offer which it mistake, the intended to make. it knew an offer whiсh was attempts which it alleged particular facts Plaintiff has provision section 3399 of the bring case within party, through ... a mistake one “When, Civil Code that suspected, or a written time knew which the other at the parties, truly express the intention does party aggrieved, of a so application on may be revised e., intention, plaintiff ”; . . i. that intention . express as to figure. corrected Plaintiff at a argues, to contract have made its opportunity to allowed an have been showing and removal allegations such intention clear either possibly im- general—and more complaint of the from the meeting has been material—allegation “there by аllegations showing defendant,” or minds defendant, action; i. e.: cause when quasi-contraetual a excusably expressed mistake, at- knowing plaintiff’s bid unjustly profit by, form, bid and accept tempted bid, figure stated in the erroneous based a contract a contract figure; nor was formed at that no contract subsequently attemptеd figure to which formed at the *7 figure to not known bid, for was the that correct to accept bid; since no contract to the purported it time at the equity it manifest in figure since is either formed at was work pay the that defendant good conscience and promise to accepted implies the law and materials vаlue. pay their allegations appear that it does not plaintiff’s of the basis On the by the dismissal after upholding adjudged, be it should amend, to without leave general demurrer
sustaining of the I would any cause of action. not state could plaintiff that judgment. the reverse dissent.
SHENK, J. I of the ease section 3399 undisputed facts the On it is by plaintiff and the invoked properly was Code Civil that on The record shows by relief reformation. entitled to supervisors of the defendant the board January with in connection for electrical work bids county opened county hospital. the The bid of the was the lowest. right reject The any board had reserved and all bids accept days. and nоne No award of contract was day on opened made the bids were February nor until 2d. January days 22,1954, On three after the opened, bids were informed the board of supervisors by letter an error as to one item. This item mistakenly was listed as it should $10,452. $104.52 when have been The sub- mitted the board its work sheets and tapes machine indi- cating the in plаcing mistake point. the decimal brought error county’s to the attention immediately after became aware of it diligent and an earnest effort county was made to have the recognize the error and approve its correction. Had the correction been made as requested would still have been the lоwest bidder. Nevertheless, February on 2d, the board accepted resolution the erroneous bid.
By present action, days commenced within 22 after the action supervisors in accepting board the erroneous bid, plaintiff sought a reformation of the contract. has It good performed in faith compliance the contract in with the county. demands It is conceded that section 3399 of the Civil controlling. Code is provides That section part: “When, through . . . party, mistake of one which the other at the time knew or suspected, a written contract does not truly express parties, the intention of may revised, application party of a aggriеved, express so as to that intention, so far as it can be prejudice rights done without acquired by persons, in good third faith and for value.” The rights of parties third were not involved.
The court holds purpose of reformation is to effectuate a common intention parties. of both But this is not purpose. just its sole Another as cleаr purpose and distinct permit “revision,” which is “reformation” when there is a party mistake one which is known to the other at the time the contract comes being, into this case that was when plaintiff’s February bid was on Both 2d. parties early knew mistake January as as 22d. may It be assumed if an inadvertent error is discovered one after the еxecuted, contract is and is not known party prior to the other thereto, reformation would lie. (Bailard Marden, 36 Cal.2d 703 But *8 is not this case. The bid of response a contractor in to a request for bids only constitutes offer, an and contractual
668
being only
into
rights binding
parties
upon
come
the
both
acceptance
(Argenti
and the
of the
of the bid
award
contract.
203.)
12
Francisco,
255;
v. San
16 Cal.
Cal.Jur.2d
Here the
county
option
accept
offer of
plain
at
the
the
had most
option
outstanding
day period.
tiff
The
was
within the 30
county.
until
exercised
Until then it did not
it was
the
(Bruce
for
work.
the contract
construction
constitute
;
Mieir,
Cal.App.
204.)
120
P.2d
12
Cal.Jur.2d
[7
1037]
the
The result of thе court’s decision is that
action of the
compelling
plaintiff
accept
is condoned in
$10,452
worth
work and materials furnished
$104.52
impelled
and under circumstances which should have
grant
request
plaintiff
to correct the
board to
error.
in the clerical error as to one
As shown the mistake consisted
point
places
left, mаking
to the
placing
item of
the decimal
two
request
$10,000.
on its face of over
The
was
a difference
pro-
from the
sheets
promptly
so obvious
work
made
possible prejudice could have
duced
that
county inasmuch as with the item as corrected
resulted to the
was still
lowest bidder.
has a cause
question
There cаn be no
3399 of the Civil
of action for reformation under section
amending
com-
It
from
Code.
should not be foreclosed
County
plaint.
Kemper
(M. Kemper
Co. v.
case
F.
Const.
7])
point.
not in
Angeles,
Los
37 Cal.2d
[235
is conceded
That was a case
rescission. It
proceeded for that form of relief. But was
could have
relegate thе cause of action
compelled
do so. To thus
forego the
compel
benefits
would be to
plainly entitled.
to which it was
controversy
applied to a
If the facts
were
between
circum-
would not under the
private parties the defendant
retaining
of over
justified
be
the benefit
stances here shown
paying
$10,000 worth оf materials and services without
happens to
in this case
The fact that the defendant
them.
immunity in
entity
not clothe it with
public
be a
should
(See
permitted.
injustice as is here
perpetuating such an
570, County
Placer,