Jacobs v. Tenneco West Inc‪.‬

[186 CalApp3d Page 1415] This case has a long and tortured history and involves an action by respondents to specifically enforce two contracts dated May 16, 1973, for the sale of agricultural land wherein appellant Tenneco West, Inc. (Tenneco), is the seller and respondents are buyers. The original complaint was filed in 1974. The case proceeded to trial in 1977 and a nonsuit in favor of the original defendants, including the present defendant, Tenneco, was granted by the trial court. In Jacobs v. Freeman (1980) 104 Cal. App. 3d 177 [163 Cal. Rptr. 680] (Jacobs I), this court reversed the judgment of nonsuit in favor of Tenneco. In so doing, we concluded that a condition of the contracts (escrow instructions) providing that the escrow would be subject to approval by Tenneco's board of directors ""was intended to be a condition precedent to the seller's duty to convey title to the land rather than a condition precedent to the formation of a contract."" (Id. at p. 189.) Respondents then filed a third amended complaint alleging the existence of the agreements, that Tenneco failed to submit the agreements to the board for approval or disapproval, and that board approval had been waived or, in the alternative, that the board had ratified the agreements because the funds paid outside of escrow were deposited in Tenneco's general account. The plaintiffs sought specific performance and damages, compensatory as well as exemplary.