HENRY RUINELLO, Appellant v. DOROTHY CLUNE MURRAY, Respondent.
L. A. No. 21714
In Bank
Feb. 7, 1951
Appellant‘s petition for a rehearing was denied March 8, 1951.
36 Cal.2d 687
Gibson, Dunn & Crutcher, Frederic H. Sturdy and John T. Pigott, Jr., for Respondent.
TRAYNOR, J.—Plaintiff appeals from a judgment of dismissal entered after a demurrer to his third amended complaint was sustained without leave to amend.
Plaintiff alleges that in October, 1945, he and defendant entered into an oral agreement whereby in consideration of plaintiff‘s giving up a “permanent life-time position” with another employer as engineer and superintendent of the 834 South Broadway Building and taking a similar position with defendant, the owner of the Ninth and Broadway Building in Los Angeles, for the term of five years, defendant would pay plaintiff a monthly salary of $350 plus a yearly bonus of 20 per cent of the gross income in excess of $114,000; that plaintiff had been continuously employed as engineer and superintendent of the 834 South Broadway Building since its erection in 1926 until October, 1945, when he resigned to enter the employ of defendant; that plaintiff was personally acquainted with defendant for 20 years and had been previously employed by defendant‘s deceased husband and by defendant, who were lessees of 834 South Broadway Building from 1933 to 1943; that plaintiff was employed by defendant from December 1, 1945, to February 21, 1948, when defendant summarily discharged him to avoid payment of the bonus; that during the period plaintiff worked for defendant he was able to increase the annual gross income of the building to
Defendant demurred to plaintiff‘s original complaint on the ground that the oral agreement, admittedly not to be performed within one year, was within the statute of frauds. (
Plaintiff contends that he has alleged sufficient facts to estop defendant from relying on the statute of frauds. There can be no estoppel unless plaintiff will suffer unconscionable injury or defendant will be unjustly enriched if the oral contract is not enforced. (Monarco v. Lo Greco, 35 Cal.2d 621, 623-624 (1950) and cases there cited.) Plaintiff has not alleged facts that meet either of these conditions.
To state a cause of action based on unconscionable injury it is not enough to allege that plaintiff gave up existing employment to work for defendant. (Murdock v. Swanson, 85 Cal. App.2d 380, 385 (1948); Standing v. Morosco, 43 Cal.App. 244, 248 (1919).) He must set forth his rights under the contract given up and show that they were so valuable that unconscionable injury would result from refusing to enforce the oral contract with defendant. (See, e.g. Seymour v. Oelrichs, 156 Cal. 782, 792 (1909); Tuck v. Gudnason, 11 Cal.App.2d 626, 627-628 (1936); cf. Wilk v. Vencill, 30 Cal.2d 104, 105-107 (1947).) Plaintiff alleges that he resigned a “permanent life-time position” under an oral contract with another employer to enter defendant‘s employ. This allegation does not show that plaintiff will suffer an unconscionable injury if the oral contract with defendant is not enforced. Ordinarily a contract for permanent employment, for life employment, for so long as the employee chooses, or for other terms indicating permanent employment, is interpreted as a contract for an indefinite period terminable at the will of either party, unless it is based on some considera-
Nor are there allegations of facts showing that defendant will be unjustly enriched if the contract is not enforced. Although plaintiff alleges that the gross income of defendant‘s building was substantially increased as a result of his efforts, he does not allege that the reasonable value of his services was greater than the $350 a month he was paid while working for defendant. No unjust enrichment results when the promisee has received the reasonable value of his services. If the salary he received under the oral contract was not the equivalent of the reasonable value of his services, an action in quantum meruit for that value would prevent any unjust enrichment of defendant. (See Monarco v. Lo Greco, 35 Cal.2d 621, 625 (1950); Long v. Rumsey, 12 Cal.2d 334, 342 (1938); Restatement, Contracts, § 355, Illustration 1.)
Although the deficiencies in plaintiff‘s complaints were raised in defendant‘s demurrers, after three attempts he has not overcome them. The trial court could reasonably conclude that he was unable to do so, and accordingly, it did not abuse its discretion in sustaining the demurrer to the third amended complaint without leave to amend. (Wing v. Forest Lawn Cemetery Assn., 15 Cal.2d 472, 485 (1940); Dukes v. Kellogg, 127 Cal. 563, 565 (1900); Werner v. Hearst Publications, Inc., 65 Cal.App.2d 667, 673 (1944); Thayer v. Magill, 13 Cal.App.2d 21, 27 (1936); Whittemore v. Davis, 112 Cal.App. 702, 708-709 (1931).)
The judgment is affirmed.
Gibson, C. J., Shenk, J., Edmonds, J., Schauer, J., and Spence, J., concurred.
The holding of the majority that the foregoing allegations do not state facts which estop defendant from relying upon the statute of frauds is based upon the proposition that a “permanent lifetime position” ordinarily means merely an employment for an indefinite period which is terminable at the will of either party and Murdock v. Swanson, 85 Cal.App.2d 380 (1948), and Standing v. Morosco, 43 Cal.App. 244 (1919), are cited as authority for the conclusion that “The leaving of such employment for employment with defendant that is also terminable at the will of either party because of the statute of frauds does not result in unconscionable injury.”
The complaint in the Standing case alleged that the plaintiff, at the defendant‘s request, gave up his employment and sold his home and furniture in New York and moved to Los Angeles in order to enter the defendant‘s employ in the latter city. The decision that a cause of action based upon an unconscionable injury had not been stated appears to have been based upon an erroneous conception of the proper construction of the pleadings. (See
It was surmised that perhaps the plaintiff had sold his property in New York at a profit and that possibly he preferred to live among the ranks of the unemployed in Los Angeles. Directly contrary to that decision on substantially similar facts is Kaye v. Melzer, 87 Cal. App.2d 299 (1948).
Even if it be assumed that the result reached in the Standing case was proper on the ground that sufficient facts had not been set forth with regard to the New York employment which had been given up, the complaint in the present case is not deficient in that respect. As stated above, plaintiff alleged that he had been continuously employed for 19 years in his previous position with the 834 South Broadway Building and that this employment was to continue at least indefinitely.
Murdock v. Swanson, supra, was an action upon an oral contract to make a will. The complaint alleged that the plaintiff had sold her business in order to devote her time to performing services for the decedent. In holding that facts were not alleged which indicated that a serious change of position had taken place, it was said that the allegation with regard to the plaintiff having sold her business was insufficient because it was not asserted that the decedent requested or knew of the sale. (But see Wilk v. Vencill, 30 Cal.2d 104, 108 (1947), where this requirement is repudiated; see, also, Tuck v. Gudnason, 11 Cal.App.2d 626 (1936).) Again, even if the Murdock case merits approval on its facts, it furnishes no precedent for the present case. It is alleged here in considerable detail that plaintiff gave up his prior employment at the request of defendant.
The fact that plaintiff‘s employment agreement with Weinraub may have been terminable at will does not compel the conclusion that he will not suffer serious detriment if his contract with defendant is not enforced. In the first place, it is, I submit, a matter of common knowledge that one who has been employed in the same position for a number of years has performed satisfactory services, enjoys the good will of his employer, and will not ordinarily be discharged without good cause. In this respect plaintiff‘s change of position was
The decisions holding that an action to recover damages may be predicated upon an intentional and unjustifiable interference with a contract terminable at will (Speegle v. Board of Fire Underwriters, supra, 29 Cal.2d 34, 39-40, and cases cited; Romano v. Wilbur Ellis & Co., 82 Cal.App.2d 670, 673 (1947); see Prosser, Torts, pp. 981-982) indicate that the loss of such a contract does involve a serious detriment. Particularly is this true with respect to employment contracts—the means by which the great majority of people earn a living. Thus, the severe individual hardships resulting from unemployment and the national problems thereby created were recognized by Congress in enacting the Social Security Act of 1935. (Steward Machine Co. v. Davis, 301 U.S. 548, 586-587 (1937).) That the giving up of employment of long duration, as is here alleged, is not a matter of great importance to the employee, and a serious change of position on his part, is, in my opinion, a highly unrealistic conclusion.
The majority opinion cites Wilk v. Vencill, 30 Cal.2d 104 (1947), as an example of the showing necessary to establish an estoppel to rely upon the statute of frauds. The only substantial change of position there was that the plaintiff gave up an opportunity to purchase another house in the neighborhood in reliance upon the defendant wife‘s oral consent to an agreement to sell the defendants’ house to the plaintiff, it being alleged that there were no other houses available in the vicinity. If such a comparatively slight inconvenience or the mere loss of a desirable opportunity, rather than the termination of an agreement relating to one‘s very means of livelihood, is the proper test of unconscionable injury, then plaintiff has also brought himself within that rule. The complaint alleges that plaintiff informed defendant in September, 1945, that he planned to remain on his job at the 834 South Broadway Building for another five years, at which time he expected to retire; “that the defendant then stated to the plaintiff that if he desired to work for five years only that would be agreeable to her and that if he would accept the
In my opinion the change of position alleged here is at least as serious as those involved in Wilk v. Vencill, supra, Vierra v. Pereira, 12 Cal.2d 629 (1939), Wilson v. Bailey, 8 Cal.2d 416 (1937), Frey v. Corbin, 84 Cal. App.2d 536 (1948), Beverly Hills Nat. Bank v. Seres, 76 Cal.App.2d 255 (1946), and Holstrom v. Mullen, 84 Cal.App. 1 (1927).
I would, therefore, reverse the judgment.
Appellant‘s petition for a rehearing was denied March 8, 1951.. Carter, J., voted for a rehearing.