Davis v. Jacoby

Brief Fact Summary.

Frank and Caro Davis (Plaintiffs) appealed from a judgment refusing to grant specific performance of an alleged contract by Caro’s uncle, Mr.Whitehead, to make a will under which Caro would “inherit everything.”  

Synopsis of Rule of Law.

A unilateral contract is one in which no promisor receives a promise as consideration for his promise.  A bilateral contract is one in which there are mutual promises between the parties to the contract, each party being a promisor and a promisee.  Under the Restatement, there is a presumption that offers are to enter a bilateral contract. 

Facts.

Caro was the niece of Mr. and Mrs. Whitehead, and she and her husband had a very close relationship with them.  Mr. and Mrs. Whitehead were elderly and infirmed, and Mr. Whitehead sought assistance from Frank and Caro to leave their home in Windsor, Canada and come to California.  In a letter dated April 12, 1931, which was construed as a definite offer, Whitehead asked them to “come out here and be with me and look after [his] affairs,” and if they agreed, Caro would “inherit everything.”  In a return letter, Mr. Davis unequivocally stated that he and Mrs. Davis accepted the proposition, and that they would both leave Windsor to go to him on April 25th. 

On April 22nd, Mr. and Mrs. Davis were engaged in closing out their business affairs and home and making arrangements to leave when Mr. Whitehead committed suicide.  Mr. and Mrs. Davis immediately went to California, and stayed by Mrs. Davis’ side until she passed away on May 30th. 

After Mrs. Whitehead’s death, it was discovered that she had left everything to her husband, and Mr. Whitehead had left everything to his nephews, the respondents.  This action was commenced on the theory that Mr. Whitehead entered into a contractual obligation to make a will, Mr. and Mrs. Davis fully performed their side of the agreement, and specific performance should be granted upon the equitable principle that “equity regards as done that which ought to be done.” 

The trial found that the letter of April 12th was an offer to enter into a unilateral contract that could only be accepted by performance and not a promise to perform, that Mr. Whitehead’s suicide revoked the offer and the purported acceptance was of no legal effect.

Issue.

Was Mr. Whitehead’s letter an offer to enter into a unilateral contract?

Held.

No.  Judgment reversed; rehearing denied.

·         The offer of April 12th was to enter a bilateral contract.  The parties were very close, and Mr. Whitehead knew from his past relationship that if they gave their promise to perform he could rely upon them. 

·         Further, the contract required Mr. and Mrs. Davis to perform services for both Mr. and Mrs. Whitehead, so if he died first some services would have to be performed after his death.  Therefore, the offer could not have been for a unilateral contract. 

·         Mr. and Mrs. Davis fully performed their part of the contract; and where damages are insufficient specific performance will be granted.  

Dissent.

None

Concurrence.

None

Discussion.

·         It would have been contrary to the presumption of bilateral contracts and common sense to construe the April 12th letter as a unilateral offer. 

·         Mr. and Mrs. Davis also sold their business and home in reliance on the offer, so it would have been inequitable to deny them rights under the contract.