Davis v. Jacoby

Facts

Caro M. Davis was the niece of Blanche Whitehead, wife of Rupert Whitehead. The childless Whiteheads, of Piedmont, California, treated her as their daughter. After her 1913 marriage to Frank M. Davis she moved to his home in Canada, but the families stayed close. Early in 1931 Mrs. Whitehead, seriously ill, was moved to a private hospital. Mr. Whitehead had suffered financial reverses, was in poor health, and needed a trusted helper for his wife and his business. He wrote that he could still save about $150,000. On April 12, 1931, he wrote to Frank and Caro that if Frank would come and look after his affairs, Caro would inherit everything, and asked them to reply as soon as possible. The trial court found the offer also asked them to care for Mrs. Whitehead until her death. Davis received the letter on April 14 and at once sent an air-mail letter accepting and saying they would leave Windsor on April 25th. The letter was lost, but the trial court found it was sent and received. The Davises then began closing out his business and their home. On April 22, 1931, Whitehead committed suicide. The Davises came to California, and Caro cared for her aunt until Blanche died on May 30, 1931. After her death they learned that Whitehead's will, after several specific bequests, left the balance of his estate to his wife for life and then to two nephews, the respondents.

Issues

1. Was Whitehead's April 12th letter an offer to enter into a bilateral contract that could be accepted by a promise, or a unilateral contract that could be accepted only by performance?
2. If the offer was bilateral, was the Davises' April 14th letter a binding acceptance?

Holding

The April 12th letter was an offer to enter into a bilateral contract, and the Davises' April 14th letter promising to come was a binding acceptance. Because the Davises fully performed, damages were insufficient and specific performance should have been granted.