Transamerica Equipment Leasing Corporation, a Texas Corporation v. Union Bank, a California Corporation

Pursuant to a contemplated three-party financing agreement, Transamerica sought to obtain a $600,000 loan from Union Bank to enable it to loan money to a corporation which had interests in some oil wells (Ancora Corporation). Transamerica alleges, and the bank denies, that a binding loan agreement was consummated. In this diversity action the- district court found for the bank on the grounds that an alleged oral agreement was barred by the statute of frauds and a purported written contract was only an offer because the terms of the alleged contract left essential matters to further negotiation.

The participant in the transactions on Transamerica’s side was C. Lee Chip-man. Chipman initiated the negotiations with a bank loan officer, Harold P. Smith. Smith engaged one Eugene Fiedorek to conduct an engineering study on the primary and secondary reserves of the Ancora oil wells which were to be the security for the transaction. On September 12 and 13, 1963, Chipman met with appellant’s officers to review the proposed documentation and to obtain approval of the loan. At this time the bank informed Chipman that it could not rely on Fiedorek's favorable engineering report because…