Opinion
Rehearing Denied Jan. 29, 1960.
Hearing Granted March 10, 1960.
Opinion vacated 5 Cal.Rptr. 686.
Gold, Needleman & Fain, Beverly Hills, for appellant.
Shaw & Barnett, Riverside, Slaughter, Schlesinger & Schlecht, and James M. Schlecht, Palm Springs, for respondents.
GRIFFIN, President Justice.
In 1946 the real estate involved in this action was owned by Mr. and Mrs. Raymond Hatton. They sold a portion of this property to Mr. and Mrs. Miller and another portion to the plaintiff, Anthony Burke. In connection with the sale to each of these parties there was executed an agreement for the furnishing of domestic water for which the purchasers agreed to pay. Among other things, it was agreed:
'(1) Grantors agree and hereby undertake to furnish to the Grantees such water as may be necessary for domestic use consisting generally of the usual household and domestic uses and the adequate watering of ornamental plants, trees and shrubs, and household garden plots connected with the use, occupancy and development of the property of the Grantees hereinabove described as a residence, but not for any industrial, commercial or general agricultural purposes, and in no event to exceed 1/50 of such water as may be available from the existing water well on the real property hereinabove described, or any replacement well in lieu of the existing well as hereinafter provided for.
'(2) It is contemplated by the parties hereto that said portions of the said available water, not to exceed 1/50 thereof, will be adequate for the uses hereinabove permitted by the Grantors, but Grantors make no guarantee concerning the quantity of water agreed to be furnished, or concerning the continuing availability thereof, except as hereinafter set forth.'
The property remaining in the name of the Hattons was sold and ultimately purchased by the defendant Herbert, who became responsible for the fulfillment of the contract. That portion of the property This litigation arose out of a dispute between the parties with reference to the interpretation of and the obligations of this contract. It was the claim of the defendant that the water which he was obligated to deliver pursuant to this contract was a maximum amount of 1/50th of the capacity of the well as it was equipped with pumping facilities at the time of the execution of the agreements. The plaintiff, on the other hand, contended that the obligation was to deliver to each of them a maximum amount of 1/50th of the capacity of the well. At the time of the original contracts there had been installed upon the land of the defendant pipes for delivery of water to the properties of the plaintiffs and there had been from time to time some changes as to these facilities. Apparently the controversy between the parties become somewhat bitter and the defendant installed upon his property devices which would limit the flow of the water onto the lands of the plaintiffs to the amount to which he claimed they were entitled under the contract. There was a considerable difference in amount between the claims of the parties, and plaintiffs contended that the amounts which defendant conceded he was obligated to deliver and which he did deliver were inadequate for their requirements.
This litigation was the result this controversy. The claims of the plaintiffs are set forth in a second amended complaint in which each plaintiff sets forth his cause of action in 20 counts. The pleadings of the parties are similar. It is alleged, in substance, that the defendant is obligated to deliver water under the original water agreements which have been modified by several subsequent amendments. It is set forth that there exists a controversy between the parties with regard to the amount of water which defendant is obligated to deliver; the contentions of the parties in that regard are set forth and the plaintiffs seek a declaratory judgment establishing their rights and seek injunctive relief, both temporary and permanent, for the protection of the rights thereby established. In addition, it is set forth, in substance, that the defendant by the installation of devices has limited the flow of the water onto the lands of plaintiffs and that thereby they have suffered damage for which they seek recovery. It is further claimed that the acts of the defendant were malicious and oppressive and punitive damages are sought.
The defendant admitted the existence of the water contract and denied generally the remaining allegations of the complaint. In this connection the defendant denied that there had been any modification of the terms of the original agreement. The action was tried before a jury which returned a verdict in favor of the plaintiff Acadia, California, Ltd. in the amount of $5,753 compensatory damages and $10,000 punitive damages, and a verdict in favor of the plaintiff Burke in the amount of $8,000 compensatory damages and $10,000 punitive damages. In addition thereto, the court rendered its further judgment purporting to adjudicate the rights of the parties under the water contract as found to be amended. From this judgment the defendant appeals.
Appellant upon this appeal has raised many questions with reference to the sufficiency of the evidence and with reference to the law applicable to the facts involved. In view of the fact that we find it necessary to reverse the judgment because of errors and uncertainties in the instructions, it would serve no useful purpose to indulge in a more detailed statement of facts and a more detailed discussion of the issues than is necessary to determine the propriety of instructions involved.
The court instructed the jury, in substance, that the defendant was obligated under the agreement as modified to furnish such water as was reasonably necessary for domestic and household uses and for the adequate irrigation of plants, shrubs, trees, gardens and lawns, not exceeding 1/50th of As a result of combining into one action a complaint for declaratory relief, a complaint for injury and an action for damages, it is not an unusual result that some confusion follows. The contract in this case is not free from uncertainty. It is ambiguous in the sense that it is susceptible of more than one meaning. Whether the original owner of the property obligated himself to furnish to each of these parties a full 1/50th of the entire potential quantity of the water that could be produced upon his remaining premises, or whether he obligated himself to furnish from time to time to each owner a 1/50th fraction of the water then being produced, or whether he obligated himself to furnish an amount equivalent to 1/50th of the capacity of the well and pumping facility then in existence, becomes a matter of construction of the contract. Under the general rules for such interpretation there may be taken into consideration the surrounding facts and circumstances existing at the time the contract was entered into. There may also be considered such interpretation as the parties have themselves placed upon the contract and such interpretation as may have resulted from any subsequent modifications or discussions with reference thereto. There is in the record evidence upon all of these matters. There is some conflict in the evidence. Unquestionably as a result of a consideration of the physical facts and surrounding circumstances the court reached its conclusion and its interpretation.
The difficulty with that situation is that the parties were engaged in the trial before a jury of an action for damages. Regardless of whether the damages claimed were for a breach of contract or for tort, there was involved as one of the necessary elements the amount of water to which each of the plaintiffs was entitled. Where the interpretation of a contract is to be made solely from an examination of the instrument itself, such interpretation is one of law for the court, but where there is involved a consideration of extrinsic evidence to resolve an ambiguity of the contract, the intepretation becomes one of fact. Walsh v. Walsh, 18 Cal.2d 439, 116 P.2d 62.
It is held that the plaintiff may not, by combining in one action counts for declaratory relief and counts for damages, deprive the defendant of his right to a jury determination of their contractual rights where there is involved in such determination a question of fact. Coats v. General Motors Corp., 3 Cal.App.2d 340, 39 P.2d 838.
Where there is involved extrinsic evidence for the interpretation of a contract it is held to be error for the court to take such interpretation from the jury. In other words, the courts must under proper instructions submit that question to the jury. First National Bank of Redlands v. Bowers, 141 Cal. 253, 263, 74 P. 856.
Of far greater importance, however, is the question of whether there was involved in the claim for damages an action for breach of contract or an action for damages for tort. This question becomes of the utmost importance because of the rule under Civil Code Section 3294 that punitive Finney v. Lockhart,
The plaintiffs contended at the trial that a contract for the delivery of water involved a right in real property, relying upon Relovich v. Stuart, 211 Cal. 422, 295 P. 819. Plaintiffs further took the position that the interference with water supply constituted a tort, for which plaintiff could recover exemplary damages, relying upon Jones v. Kelly, 208 Cal. 251, 280 P. 942.
The trial court, in general terms, instructed the jury as to the measure of damages for a breach of contract. This instruction was followed by instructions in general terms that an invasion of property rights constituted a tort and gave the general instruction patterned upon Civil Code Section 3333 as to the measure of damages for tort. The court instructed the jury that punitive damages might not be allowed for breach of contract but only for tort. A number of instructions concerning the allowance of punitive damages followed. The court then stated:
'The court has given you instructions covering both a breach of contract and the commission of a tort. You are instructed that you cannot award damages under both, but must select which theory, if any, is substantiated by the evidence.'
The court's instructions contain nothing to indicate to the jury what test was to be applied in determining what was a breach of contract or what amounted to a tort, or whether an act complained of might constitute either one. The court apparently relied upon those rules discussed in detail in Crogan v. Metz, 47 Cal.2d 398, 303 P.2d 1029. It is there held that where acts complained of may constitute either breach of contract or tort and where the parties plead upon both theories and no election is made by the plaintiff or required by the court, the jury may determine which cause of action or count has been established by the evidence and give relief accordingly. It is further held that where relief has been granted and judgment entered without any election or determination as to the theory upon which the relief is granted, the court upon appeal will, if possible, determine whether a theory has been established by the evidence and avoid, if possible, a retrial. In that case the court determined that no tort had been proven and therefore struck from the judgment the award of punitive damages, permitting the judgment to stand upon a recovery justified by the evidence on a contractual basis.
The situation involved in the Crogan case is essentially different from the case at bar. It is recognized by all authorities that an act complained of may under proper circumstances constitute both a breach of contract and tort, from whence arises the doctrine that a plaintiff seeking damage may waive the tort and sue upon contract or may under the California procedure join separate counts. It is not true, however, that all breaches of contract constitute torts.
'It is a distinguishing characteristic of torts that the duties from the violation of which torts result are creatures of the law and not of particular agreements. Since contractual duties proper have their origin in, and derive their vitality directly from, the assent of the parties, a breach of such duties only does not constitute a tort. The test to be applied is the nature of the right which has been invaded. * * *
'Where there is such a contract to which are attached duties of a dual character, some with a consensual basis and others imposed by law on the particular relation which the parties have assumed, while a breach of the former class of duties only is not tortious * * * a breach of the latter class constitutes a tort.' 86 C.J.S. Torts §§ 2, 3, pp. 923, 924.
California recognize this general law.
'If a cause of action arises from a breach of a promise, the action is contractual In Peterson v. Sherman, 68 Cal.App.2d 706, at page 711, 157 P.2d 863, at page 866, the court said:
'In seeking a determination whether an action is one is contract or in tort, the general rule is that the character of the action is to be determined by the nature of the grievance rather than by the form of pleading and when it is not clear to which class the action belongs, it will ordinarily be construed in contract rather than in tort. * * * It has been well established in this state that if the cause of action arises from a breach of a promise set forth in the contract, the action is ex contractu, but if it arises from a breach of duty growing out of the contract it is ex delicto. Jones v. Kelly, 208 Cal. 251, 280 P. 942; Berning v. Colodny & Colodny, 103 Cal.App. 188, 284 P. 496.'
An examination of the pleading reveals that the gist of the cause of action of the plaintiffs is their contention that the defendant failed and refused to deliver into their pipes that amount of water which he was obligated to deliver according to the contract. This is a duty and obligation which arises from the express terms of the contract as distinguished from an obligation or duty to use care which the law places upon contracting parties by reason of the fact of the existence of the contractual relationship. As such it is a breach of contract and gives rise to no right of recovery of exemplary damages even though the breach be willful or malicious. 14 Cal.Jur.2d 828, sec. 200.
Although in the complaint it is alleged by both plaintiffs that the actions of the defendant were willful and malicious and that therefore they are entitled to the recovery of exemplary damages, the acts which they complain of constituted a failure to deliver the amount of water called for by the contract as they interpreted it.
Even though there might be involved in such situation some act by the defendant which constituted a tort and not a breach of contract, the court could not properly leave it to the jury to determine as it saw fit which acts constituted breach of contract and which constituted tort without any instruction as to the legal tests to be applied. As the instructions stand, they are entirely confusing, and this fact doubtless explains the confusion evidenced by the verdict.
Certain other matters not only entered into the question of uncertainty but should be avoided upon a retrail of the action. For example, in directing damages to be awarded, the court instructed the jury that they might allow damages for 'The reasonable value, not exceeding the cost, of drilling a new well and installation of pumping and pressure equipment on the property of plaintiff Acadia, California, Ltd.' The court indicated that such allowance might be made either in case of recovery for breach of contract or in case of recovery for damages for tort. There was evidence that Mr. Miller, who with his wife owned the stock of Acadia, California, Ltd., had gone to expense in installing a well for his own purposes. The evidence establishes further that the shortage of water occasioned by the limitation of the amount delivered to plaintiff existed but a comparatively short time until this action was commenced and temporary injunctions issued. Allowance of the full cost of such well and pumping equipment, bearing in mind that the plaintiff still has available the well and its benefits, could be substantiated only upon the theory that there was an anticipatory breach of the contract, that as a result of the breach the plaintiff considered the contract terminated and thereby was forced to go to the expense to furnish an alternative source of water supply. No such claim was made by the plaintiff either in the pleadings or in the evidence. Such claim would be inconsistent with the allegation Lenard v. Edmonds,
Instructions with reference to the damages allowable to plaintiff Burke were also erroneous. The situation involved was, in substance, that Mr. Burke purchased property in the first instance and the contract was made with him. There was nothing to indicate any community interest on the part of his wife. The evidence showed that Mrs. Burke had suffered theretofore some mental illness or disturbance and the claim was that as a result of the existence of the dispute about water, her mental illness returned. By the express instructions given to the jury, the court permitted the jury to award damages of the reasonable value, not exceeding cost, of examinations, attention and care by physicians of plaintiff's wife. The jury was also instructed that the plaintiff Burke might recover the reasonable value, not exceeding cost, of the services of nurses, attendants, hospital accommodations and care, and ambulance, airplane and hotel services required in giving her treatment. The jury was also permitted to award to plaintiff Burke loss of earnings or profits in his business as a real estate broker occasioned by the necessity of taking care of his wife in connection with her illness. The jury was further instructed that they could award to plaintiff Burke damages for loss of services of plaintiff's wife by reason of her illness. This instruction was so broad as to permit recovery of damages for loss of consortium. Since the trial of this case this court has held in West v. City of San Diego, ---- Cal.App.2d ----, 346 P.2d 479, that no such allowance may be made. In that case the court has considered and analyzed all of the cases discussed by the parties in their briefs. It was further instructed that the jury could award damages of the plaintiff Burke for pain, discomfort, fears, anxiety and other mental and emotional distress. By special question submitted to the jury, it developed that of the $8,000 awarded, $3,000 was awarded to compensate Mr. Burke for his worry and distress occasioned by the illness of his wife.
It is well established that damages for mental anxiety may not be allowed in an action for breach of contract. Westwater v. Rector, etc., of Grace Church, 140 Cal. 339, 73 P. 1055. Plaintiffs relied upon Herzog v. Grosso, 41 Cal.2d 219, 259 P.2d 429. This action, however, involved a tort for invasion of property rights and the circumstances of the tort were such that the person was put in fear. It is the ordinary rule that in the absence of direct injury to a party or a putting in fear that no damages may be awarded for mental suffering. Espinosa v. Beverly Hospital, 114 Cal.App.2d 232, 249 P.2d 843. It is also established that recovery may not be allowed for damages for mental anxiety occasioned by injuries to another person. Reed v. Moore, 156 Cal.App.2d 43, 319 P.2d 80.
The record furnishes no information sufficient to determine what elements of damage were included in the total award to plaintiff Burke. Obviously an allowance for damages for loss of business could only be justified by proof of such contractual relation that it could fairly be contemplated that the breach would probably result in such damage. With reference to all of the instructions as to the claimed special damages by plaintiff Burke, the court indicated that such damages might be allowed in case of recovery whether for contract or tort.
By reason of these errors in instruction resulting in such confusion that the jury Judgment reversed.
SHEPARD, J., concurs.