find that such agreements constituted binding and enforceable contracts which obligate defendant to their terms in the face of the evidence disputed. In any event they were not the agreement under which the plaintiffs had performed services and upon which their rights are necessarily based, nor do they confirm the existence of any such prior contract. Very pertinent questions were raised with regard to the acceptability of the plaintiffs by the Treasury Department, the possible depletion of vitamin factors, warranties and representations of the parties and the advisability of an arbitration clause. All of these circumstances indicate quite clearly the absence of any definite enforceable contract based upon mutual acceptance of obligations.
Preliminary negotiations leading up to the formation of a contract must be distinguished from the contract itself, and proof of the contract must be certain and explicit at least on all essentials. "An arrangement of terms, in contemplation of a written contract, is not a perfect agreement upon which an action can be maintained.To produce this effect, it must be shown, by the acts or declarations of the parties, that they intended the agreement to be operative before execution, and without regard to the writing." Maitland v. Wilcox, 17 Pa. 231.
In the present case the negotiations and writings between the promoters and the defendant, the call of meetings to get together on an agreement, the continuing discussions as to terms, the two formal but unacceptable drafts, and the furtherance of the project by the plaintiffs after being advised on July 15, 1940, of Allen's state of mind, are convincing proof that the acts and declarations of the parties had not accomplished a meeting of the minds on July 10, 1940. They were no more than incomplete understandings looking to the creation of an express agreement. "It is not unusual for persons to agree to negotiate with the view of entering into contractual relations and to reach an accord at once as to certain amjor items of the proposed contract and then later find that on other details they cannot agree. In such a case no contract results." Upsal Street Realty Co. v. Rubin, 326 Pa. 327, 192 A. 481, 483. There may have been an agreement on certain points such as the use of defendant's corporation, shares of ownership, and the amount of royalties, but it is obvious that there was no agreement on other important points and that the acts and declarations of the parties throughout indicated they were continuing their efforts to reach and execute a written agreement before they would mutually become obligated in the joint venture.
As to the claim for damages on the quantum meruit basis, that also is dependent upon the establishment of an oral contract which was breached, or upon proof that the plaintiffs rendered services to the defendant. It is found that no oral contract was established. It is found also that the services were rendered not at the instance and request of the defendant for its purposes, but they were rendered in pursuance of the desire and efforts of both parties to promote and operate a joint business enterprise in which each party would have his interest and receive his share of the returns. It cannot be presumed from these circumstances that the defendant company sought and requested the services of the plaintiffs for the accomplishment of its own purposes and that an implied contract resulted. The law will not presume or imply a contract except in cases where it is necessary to do so in order to prevent an undue hardship or injury upon one of the parties. "A party who relies upon a contract must prove its existence; and this he does not do by merely proving a set of circumstances that can be accounted for by another relation appearing to exist between the parties." Hertzog v. Hertzog, 29 Pa. 465. The plaintiff have expressly stated that the relationship between the parties was not a contractual relationship of employment, nor were services rendered at the request of the defendant. It was a joint venture in which both parties were functioning toward a final determination of the desired relationship, and it is therefore accounted as a relationship other than one based upon an implied contract.
The record does not prove the existence of an enforceable contract between the parties nor does it establish facts from which a contract must be implied, and it would seem that there is no basis upon which the Court might find any sum due to the plaintiffs by the defendant.
Those cases in which compensation may be allowed on a quantum meruit appear to be based upon contracts which are indefinite, uncertain, void or unenforceable, but not illegal in themselves, and by virtue of which a quasi-contractual obligation is incurred by the defendant because of services rendered to him in pursuance thereof. Kisinger v. Pennsylvania Trust Co. of Pittsburgh, 119 Pa.Super. 16, 180 A. 79; Blair Engineering Co. v. Page Street & Wire Co., 3 Cir., 288 F. 662. In the present case we have not found any actual agreement to exist, but are bound to conclude that the agreement if any was upon the plan, and probably some of the terms, of a proposed joint venture instituted for their mutual benefit and at their joint risk and from which neither party benefitted upon its collapse. The failure of the joint venture was obviously a disastrous disappointment to both parties and it seems equitable to permit the loss to fall upon them to the extent of their respective time, efforts and investments.
The amendments to the bill of complaint are allowed but the bill as amended is not supported by adequate proofs and is therefore dismissed.
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