CAMERON, Circuit Judge.
This appeal presents the question whether the court below erred in entering summary judgment for the appellee Karl’s Shoe Stores, Ltd., (defendant) in a diversity action brought by appellants Betty Lee Shoes, Inc., a Texas corporation, and four of its stockholders, Sam Lichenstein, Bernice Lichenstein, R. L. Osborn, Jr., and Bessie Ruth Osborn (plaintiffs). The court below did not write an opinion, merely dismissing the action on the merits, stating that it had found that there was no genuine issue as to any material fact and concluding that Karl’s was entitled to a judgment as a matter of law.
The statement in the margin of the issues involved, omitting the record references, is taken from the abstract of the case appearing in appellants’ brief.
This statement is followed by an enumeration of the points upon which appellants stake their case:
“It is appellants’ position that:
“(1) The ‘employment contract' was sufficient to constitute an enforceable contract to make a contract.
“(2) At least a fact issue was raised on whether all the essential terms were included in the ‘employment contract’.
“(3) The Statute of Frauds does not apply.
“(4) A fact issue was raised on whether appellee was estopped to assert either the Statute of Frauds or that there was no contract.
“(5) A fact issue was raised on whether an action for deceit existed.”
We will follow this definition by appellants of the issues involved, and will take up the points upon which they rely for reversal in the foregoing order. We come first to the contention that the employment contract of March 13, 1956 was sufficient to constitute an enforceable contract to make a contract.
We do not think so. The general law governing a contract to make a contract is quoted by appellants from 1 Cor-bin, Contracts, § 29, pp. 67-71:
“ * * * ii js qUiie possible for parties to make an enforceable contract binding them to prepare and execute a subsequent documentary agreement. In order that such may be the effect, it is necessary that agreement shall have been expressed on all essential terms that are to be incorporated in the document. That document is understood to be a mere memorial of the agreement already reached. If the document or contract that the parties agree to make is to contain any material term that is not already agreed on, no contract has yet been made; and the so-called ‘contract to make a contract’ is not a contract at all.”
See also 17 C.J.S. Contracts § 49, and 12 Am.Jur., Contracts, § 25. Texas is not contra. The ease chiefly relied upon by appellants, Vise v. Foster, Tex.Civ.App., Waco 1952, 247 S.W.2d 274, 278-279, presented a factual situation altogether different from this one. Nevertheless, the rule set forth above was subscribed to:
“In Radford v. McNeny, 129 Tex. 568, 104 S.W.2d 472, 475 (Com.App., opinion adopted by the S.Ct.) we find this statement of the general rule: ‘ * * * to be enforceable, a contract to enter into a future contract must specify all its material and essential terms, and leave none to be agreed upon as the result of future negotiations.’ ”
The Texas cases relied upon by appellants are collected in Vise v. Foster, 247 S.W.2d at page 279.
It is clear that the language of the contract of March 13, 1956, set forth in footnote 2 supra, does not satisfy the requirements spelled out in these authorities. First, it will be noted that the employment contract was to be entered into only if the parties should consummate the agreement of purchase and sale bearing the same date. Next, the employment contract did not describe the duties which Lichenstein was to perform for a period of five years at a salary of $1,000 per month. It did not state whether the employment was to be full time or only part time, the character of duties he was to perform, or the place of their performance, whether his expenses were to be paid if he was absent from his home, or any other details of the work Lichenstein was to do for the $60,000 mentioned in this sentence of the contract. Further, it is clear that the contract of employment, embracing the main consideration as recognized by all parties, “shall be drawn, satisfactory to both parties * * No authority is cited which comes anywhere near justifying the enforcement of a writing which, though unambiguous as far as it goes, shows clearly that many of the most important portions of the proposed contract had not yet been defined or agreed to.
It is equally clear that appellants’ Point (2) is without sound basis; and that there was no fact issue as to whether all essential terms were embraced in the employment contract. In deciding that issue, we look to the wording of the two writings upon which appellants rely. The language used by the parties in these two documents is not vague, indefinite or ambiguous. It is plain what the parties were agreeing to in those written instructions of March 13th.
Appellee was to pay Betty Lee Shoes $1.00 plus 75% of the cost of merchandise it had on hand April 30, 1956, not to exceed $55,000. In addition, if the conditions of the purchase contract were met, appellee was to pay Sam Lichenstein $60,000 in equal monthly installments for performing certain services for appellee over a term of five years. The contract to be drawn up was to be “satisfactory to both parties.” In the second paragraph of appellants’ brief, it is stated that the contract between the parties to this litigation “was then incorporated into two instruments — the purchase agreement * * * and the employment contract * * An examination of the writings upon which action is admittedly predicated, therefore, demonstrates clearly, as a matter of law, that they do not express an enforceable contract, because they show on their face that agreement had not been reached by the parties on essential elements or, in any event, that the writings did not include those terms.
Appellee pled affirmatively that the agreement upon which appellants based their case was, as a matter of law, unenforceable because it was not executed in conformity with the Texas statutes of fraud.
Appellants devote only seven
lines of their brief to responding to appellee’s argument; contending, as Point (3) of their argument, that the Statute of Frauds does not apply to this case. They cite in support of their position the decision of the Supreme Court of Texas in Wright v. Donabauer, 1941, 137 Tex. 473, 154 S.W.2d 637.
Appellee takes the position that the case before us is governed rather by later decisions of the Supreme Court of Texas, Chevalier v.
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CAMERON, Circuit Judge.
This appeal presents the question whether the court below erred in entering summary judgment for the appellee Karl’s Shoe Stores, Ltd., (defendant) in a diversity action brought by appellants Betty Lee Shoes, Inc., a Texas corporation, and four of its stockholders, Sam Lichenstein, Bernice Lichenstein, R. L. Osborn, Jr., and Bessie Ruth Osborn (plaintiffs). The court below did not write an opinion, merely dismissing the action on the merits, stating that it had found that there was no genuine issue as to any material fact and concluding that Karl’s was entitled to a judgment as a matter of law.
The statement in the margin of the issues involved, omitting the record references, is taken from the abstract of the case appearing in appellants’ brief.
This statement is followed by an enumeration of the points upon which appellants stake their case:
“It is appellants’ position that:
“(1) The ‘employment contract' was sufficient to constitute an enforceable contract to make a contract.
“(2) At least a fact issue was raised on whether all the essential terms were included in the ‘employment contract’.
“(3) The Statute of Frauds does not apply.
“(4) A fact issue was raised on whether appellee was estopped to assert either the Statute of Frauds or that there was no contract.
“(5) A fact issue was raised on whether an action for deceit existed.”
We will follow this definition by appellants of the issues involved, and will take up the points upon which they rely for reversal in the foregoing order. We come first to the contention that the employment contract of March 13, 1956 was sufficient to constitute an enforceable contract to make a contract.
We do not think so. The general law governing a contract to make a contract is quoted by appellants from 1 Cor-bin, Contracts, § 29, pp. 67-71:
“ * * * ii js qUiie possible for parties to make an enforceable contract binding them to prepare and execute a subsequent documentary agreement. In order that such may be the effect, it is necessary that agreement shall have been expressed on all essential terms that are to be incorporated in the document. That document is understood to be a mere memorial of the agreement already reached. If the document or contract that the parties agree to make is to contain any material term that is not already agreed on, no contract has yet been made; and the so-called ‘contract to make a contract’ is not a contract at all.”
See also 17 C.J.S. Contracts § 49, and 12 Am.Jur., Contracts, § 25. Texas is not contra. The ease chiefly relied upon by appellants, Vise v. Foster, Tex.Civ.App., Waco 1952, 247 S.W.2d 274, 278-279, presented a factual situation altogether different from this one. Nevertheless, the rule set forth above was subscribed to:
“In Radford v. McNeny, 129 Tex. 568, 104 S.W.2d 472, 475 (Com.App., opinion adopted by the S.Ct.) we find this statement of the general rule: ‘ * * * to be enforceable, a contract to enter into a future contract must specify all its material and essential terms, and leave none to be agreed upon as the result of future negotiations.’ ”
The Texas cases relied upon by appellants are collected in Vise v. Foster, 247 S.W.2d at page 279.
It is clear that the language of the contract of March 13, 1956, set forth in footnote 2 supra, does not satisfy the requirements spelled out in these authorities. First, it will be noted that the employment contract was to be entered into only if the parties should consummate the agreement of purchase and sale bearing the same date. Next, the employment contract did not describe the duties which Lichenstein was to perform for a period of five years at a salary of $1,000 per month. It did not state whether the employment was to be full time or only part time, the character of duties he was to perform, or the place of their performance, whether his expenses were to be paid if he was absent from his home, or any other details of the work Lichenstein was to do for the $60,000 mentioned in this sentence of the contract. Further, it is clear that the contract of employment, embracing the main consideration as recognized by all parties, “shall be drawn, satisfactory to both parties * * No authority is cited which comes anywhere near justifying the enforcement of a writing which, though unambiguous as far as it goes, shows clearly that many of the most important portions of the proposed contract had not yet been defined or agreed to.
It is equally clear that appellants’ Point (2) is without sound basis; and that there was no fact issue as to whether all essential terms were embraced in the employment contract. In deciding that issue, we look to the wording of the two writings upon which appellants rely. The language used by the parties in these two documents is not vague, indefinite or ambiguous. It is plain what the parties were agreeing to in those written instructions of March 13th.
Appellee was to pay Betty Lee Shoes $1.00 plus 75% of the cost of merchandise it had on hand April 30, 1956, not to exceed $55,000. In addition, if the conditions of the purchase contract were met, appellee was to pay Sam Lichenstein $60,000 in equal monthly installments for performing certain services for appellee over a term of five years. The contract to be drawn up was to be “satisfactory to both parties.” In the second paragraph of appellants’ brief, it is stated that the contract between the parties to this litigation “was then incorporated into two instruments — the purchase agreement * * * and the employment contract * * An examination of the writings upon which action is admittedly predicated, therefore, demonstrates clearly, as a matter of law, that they do not express an enforceable contract, because they show on their face that agreement had not been reached by the parties on essential elements or, in any event, that the writings did not include those terms.
Appellee pled affirmatively that the agreement upon which appellants based their case was, as a matter of law, unenforceable because it was not executed in conformity with the Texas statutes of fraud.
Appellants devote only seven
lines of their brief to responding to appellee’s argument; contending, as Point (3) of their argument, that the Statute of Frauds does not apply to this case. They cite in support of their position the decision of the Supreme Court of Texas in Wright v. Donabauer, 1941, 137 Tex. 473, 154 S.W.2d 637.
Appellee takes the position that the case before us is governed rather by later decisions of the Supreme Court of Texas, Chevalier v. Lane’s, Inc., 1948, 147 Tex. 106, 213 S.W.2d 530; 6 A.L.R.2d 1045 (which discusses Wright v. Donabauer at pages 532-533, of 154 S.W.2d), and Hall v. Hall, 1957, 158 Tex. 95, 308 S.W.2d 12.
We agree with appellee’s position.
By the terms of the writings sued on it is provided that appellee “will agree to enter into an employment contract between themselves and San Lichenstein for a period of five years at a salary of $1,-000.00 per month.” It is perfectly clear that Lichenstein could not perform five years of services within one year and that, therefore, this contract, as it is written, could not be performed within one year and that the quoted statute of Texas applies. No contract, embracing what the parties agreed would be contained in it, would be enforceable unless it was in writing and signed by appellants.
Appellants argue Points (4) and (5) supra together, contending that a fact issue was raised on whether appellee was estopped to assert the Statute of Frauds, or that there was no contract; and that a fact issue was raised on whether an action for deceit existed. In support of this phase of the argument they claim that Karl’s representatives managed the transaction throughout (although the approach had been made by appellants); that they went to appellants' stores and moved the central organization in Austin, shipped out some of their merchandise, bossed their employees, changed the locks on the doors and moved considerable of their equipment. They claim further that Lichenstein was “not satisfied with the procedure and protested to Karl's representatives who assured and lulled him into a sense of false security, saying ‘Don’t worry, Sam, we’ve got a deal. This deal is going to close, Sam. Stop worrying.’ ”; and that, relying on these assurances, Lichenstein “reluctantly permitted Karl’s representatives to continue their plan.” Appellants add that “When Sam Lichenstein refused their last minute effort to further reduce the consideration promised, they walked out on the deal stating they were not willing to stick by Karl’s original commitment. Mr. Lichen-stein was too trusting, a quality for which he has been penalized.”
It is likely that the last sentence summarizes whatever unfortunate consequences ensued to appellants in connection with the prolonged negotiations which followed between them and appellee. But the conclusion stated in that sentence does not support the action appellants brought against appellee. It cannot be doubted that, when Betty Lee approached Karl’s in an effort to sell the latter its chain of stores, both parties entered into the tentative arrangement expressed by the two writings of March 13th in good faith. From the start it was plain that Karl’s interest in consummat
ing the tentative arrangements was conditioned upon its ability to “expense” the $60,000 to be paid to Lichenstein so that it could benefit by the tax consequences which would follow such a course. All of the spirited negotiations and maneuvering for position which followed in the ensuing weeks recognized this as the chief item which had to be agreed upon.
For example, appellant Lichenstein attached, as an exhibit to his affidavit opposing appellee’s demand for summary judgment, a “confirmation” of the agreement between the parties bearing an April date and written by Karl’s to Lichenstein, which sets forth the terms which Karl’s desired incorporated in the contemplated written agreement. With respect to Lichenstein’s proposed employment, it was made clear that the terms which appellee would find “satisfactory” must include a number of provisions defining the character and scope of Lichenstein’s duties.
Appellants’ lawyer, in his deposition, stated that he “wanted it [the employment contract] written in such words that * * * they couldn’t fire him without a reasonthat “it was a matter of getting a piece of paper which made it clear and positive that he wouldn’t be fired after they got possession of the business;” that if he “could get Mr. Dougherty [appellee’s attorney] to write the duties on paper that were objective enough, that would assure me that after everything was signed up that Karl’s couldn’t fire Mr. Lichenstein for any half-baked reason, we were ready to go.” The lawyer further insisted, for a considerable time during the negotiations, that some sort of security should be given to Lichenstein protecting him in the payment of the monthly salary. The lawyer finally agreed to take Mr. Karl’s personal endorsement as such security.
Appellants take the position that “ * * it was clearly understood that he [Lichen-stein] was not to seriously undertake substantial action that would require his ability and understanding of the retail business;” and that the entire arrangement to employ Lichenstein was nothing but pure “sham,” substituting the “employment contract” in lieu of the purchase price for a portion of Betty Lee’s assets.
The only possible significance of this evidence is that it shows that the minds of the parties never met on an important and essential ingredient of the
contract the parties had agreed to make. The only contract in writing which was enforceable under Texas laws was the one where the parties contracted that “they will agree to enter into an employment contract,” and that a contract “shall be drawn, satisfactory to both parties.” It was recognized that the writings of March 13th did not constitute a contract, but merely an agreement to make a contract. The parties worked diligently in an effort to draw up an employment contract which both would be willing to enter into — which would be “satisfactory” to both parties. This they were never able to do. Since the termminology of the two writings of March 13th they both signed was clear and unambiguous and there were no conflicts between any of the provisions, the construction of the meaning of the parties as therein expressed called for the decision of a question of law only. Extrinsic evidence was not admissible under Texas law to vary, alter or amend the terms of these unambiguous written instruments. Anderson & Kerr Drilling Co. v. Bruhlmeyer, 1940, 134 Tex. 574, 136 S.W.2d 800, 127 A.L.R. 1217; Texas Electric Ry. Co. v. Neale, 1952, 151 Tex. 526, 252 S.W.2d 451; Tower Contracting Co., Inc. v. Flores, 1957, 157 Tex. 297, 302 S.W.2d 396. And cf. Collins v. Republic National Bank of Dallas, 1953, 152 Tex. 392, 258 S.W.2d 305; Lewis v. East Texas Finance Co., 1941, 136 Tex. 149, 146 S.W.2d 977; and 2 McCormick & Ray, Texas Law of Evidence, 2d Ed., § 1634, pp. 489-492.
It is plain, therefore, that extraneous evidence was not, in the absence of fraud, admissible to show that an agreement to enter into an employment contract at a salary of $1,000 per month was not an employment contract at all, but a sales contract involving no employment and no salary.
Finally, appellants contend that their evidence raised issues of fact as to whether appellee was not estopped to assert the statute of frauds, or to contend there was no contract. They argue likewise that an issue of fact was developed as to whether they were entitled to recover on an action for deceit. An examination of the briefs and of this record of more than five hundred pages fails to disclose any material factual issue as to estoppel or deceit.
The short answer to these contentions, however, is that they were not advanced by the appellants in the court below. Neither the complaint nor any pleading by either party mentioned estoppel or deceit, or referred to any facts tending to support an action involving either. Both estoppel and fraud are required, under Rule 8(c) F.R.Civ.P., 28 U.S.C.A., to be pled affirmatively, and Rule 9(b) requires that the circumstances constituting fraud
be set forth with particularity.
The court below decided this action on summary judgment. Rule 56(c) requires that judgment be rendered forthwith for the party demanding it “if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact * * *.” The issue contemplated by this rule is an issue which is raised by the pleadings.
For the reasons given we think that the judgment of the court below was right and it is
Affirmed.