Jennings v. Ruidoso Racing Ass'n

• Decision Date: 20 May 1968
• Docket Number: No. 8140,8140
• Citation: 1968 NMSC 81,79 N.M. 144,441 P.2d 42
• Parties: Cecil JENNINGS, Plaintiff-Appellant, v. RUIDOSO RACING ASSOCIATION, Inc., a corporation, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 42

441 P.2d 42

79 N.M. 144

Cecil JENNINGS, Plaintiff-Appellant, v. RUIDOSO RACING ASSOCIATION, Inc., a corporation, Defendant-Appellee.

No. 8140.

Supreme Court of New Mexico.

May 20, 1968.

Grantham, Spann & Sanchez, Albuquerque, for plaintiff-appellant

Neal & Neal, Tom W. Neal, Hobbs, for defendant-appellee.

OPINION

NOBLE, Justice.

Cecil Jennings, asserting that he was hired as comptroller of the Ruidoso Racing Association for the period May 1, 1963 to April 30, 1964 at a salary of $1,000 per month and was wrongfully discharged on May 18, 1963, sued for his salary. He has appealed from a judgment denying recovery.

The basis of the trial court's denial of recovery was that (1) there is no sufficient memorandum in writing of the oral contract of employment to satisfy the Statute of Frauds, and (2) the action of the corporation's board of directors in employing Jennings as comptroller was ultra vires and void.

The trial court found:

'* * *.

'6. * * * at which meeting (Board of Directors April 28, 1962) Cecil Jennings was first elected Treasurer of Ruidoso Racing Association at a salary of $1,000.00 per month or $12,000.00 per year.

'7. The By-laws of Ruidoso Racing Association provide the duties of the treasurer of the corporation and those duties were further outlined in the meetings of April 21,1962 and July 12, 1962 and included all of the duties performed by Cecil Jennings in connection with the fiscal activities of the corporation.

'10. The only written memorandum relating to the contract of employment is the minutes of the corporation on March 15, 1963, together with the checks and payroll records theretofore issued or compiled in connection with Cecil Jennings' tenure as Treasurer of the corporation for the year beginning May 1, 1962.

'11. At the meeting of March 15, 1962 (sic), the Board of Directors attempted to employ Cecil Jennings to perform the same duties he had theretofore performed for the salary being paid to him as treasurer of the corporation but designated his employment as being that of controller instead of treasurer in order to avoid the effect of the By-Laws of the corporation requiring the election of a treasurer to be at the first meeting of the Board of Directors after the annual stockholders' meeting. The minutes of this meeting were signed by Cecil Jennings as Secretary of the corporation and approved by Jim Derrick as President of the corporation.

'12. There is no evidence in the record disclosing any duties to be performed by the controller of Ruidoso Racing Association not required of the treasurer and no action of the corporation establishing the office of controller or defining its duties.

'13. The alleged oral employment contract contemplated plaintiff would perform the same duties for the corporation that had theretofore been performed by him as treasurer.'

From these facts, the court concluded:

'* * *.

'2. The oral contract which formed the basis of plaintiff's action cannot be enforced under the statute of frauds by reason of the fact there is no sufficient memorandun in writing to establish such contract or its terms and conditions.

'3. Any action by the Board of Directors of Ruidoso Racing Association attempting to elect a treasurer prior to the annual meeting of the stockholders of the corporation to be effective after the first meeting of the Board of Directors of the corporation subsequent to the annual stockholders' meeting is ultra vires and void.

'4. There is a fatal variance between the terms of the claimed oral contract and the written memorandum introduced to establish the terms, conditions and provisions of such oral contract by reason of which the same is unenfordeable under the provisions of the statute of frauds.

'5. * * *.'

The pertinent portion of the fourth section of the English Statute of Frauds and Perjuries (29 Charles II, ch. III) has been adopted in New Mexico, Pitek v. McGuire, 51 N.M. 364, 184 P.2d 647, 1 A.L.R.2d 830. Section four reads:

'* * * no action shall be brought * * * upon any agreement that is not to be performed within the space of one year from the making thereof; unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith or some other person thereunto by him lawfully authorized.'

The complaint alleges that the employment for which the action is brought was to commence May 1, 1963 and continue for a period of one year. For the purpose of determining whether the period for performance brings the agreement within the statute of frauds, the time begins to run from the day the contract is entered into. See Annot., 138 Am.St.Rep. 590, 611. It is thus generally held that a contract for a year beginning at a future date, as was this one, is within the statute. 49 Am.Jur. Statute of Frauds, § 24; Columbia Pictures Corp. v. De Toth, 26 Cal.2d 753, 161 P.2d 217, 162 A.L.R. 747.

We are thus concerned with whether the record discloses some memorandum or note in writing signed by an authorized person on behalf of Ruidoso Racing Association sufficient to satisfy the statute of frauds. Jennings trongly urges that the writings may consist of several instruments, and introduced excerpts of the minutes of the board of directors of March 15, 1963 and a check as writings sufficient to satisfy the statute. Thus, it is necessary for us to determine whether excerpts of the minutes of the March 15, 1963 meeting, together with a check subsequent thereto, will satisfy the statute of frauds.

The minutes of the March 15, 1963 meeting of the board of directors, admitted in evidence, contain the following:

'Director A. A. Bradford moved that in recognition of services performed, the corporate secretary, Cecil Jennings, be paid $1,000.00 as a bonus, and further that since the term of his original employment was near expiration, that he be hired as comptroller for the next succeeding year at his present rate of compensation. Ralph Nix seconded and it was so voted.'

The parties agree that corporate minutes, if otherwise sufficient, may be used as a memorandum in writing to meet the requirements of the statute of frauds. See Fanney v. Virginia Inv. & Mortgage Corp., 200 Va. 642, 107 S.E.2d 414, 420. Those minutes were signed by the plaintiff as secretary and by the president of the corporation. They were, accordingly, signed by the party to be charged with the contract.

Does the excerpt from the above minutes sufficiently describe the duties which Jennings was hired to perform and prescribe the salary he was to receive? The statute is not pressed 'to the extreme of a literal and rigid logic.' Marks v. Cowdin, 226 N.Y. 138, 123 N.E. 139. The statute of frauds is intended to protect against a fraud, but it is not intended to be taken as an escape for those seeking to avoid their obligations. Keirsey v. Hirsch, 59 N.M. 18, 26, 265 P.2d 346, 43 A.L.R.2d 929. It must be remembered that the memorandum, sufficient to satisfy the statute of frauds, need not in itself amount to a contract. The contract in this instance is an oral agreement. The statute of frauds only requires that there be written evidence to prove that the particular contract was made. Pitek v. McGuire, supra. Clearly, Jennings was employed as 'comptroller' of the corporation. The terms 'comptroller' and 'controller' are synonymous. Roget's International Thesaurus 482 (New Ed.); Black's Law Dictionary 399 (4th Ed.). These terms have a well-defined meaning without further explanation. 'Controller' is defined in Webster's Third New International Dictionary, p. 497, as:

'1a:. * * * c: the chief accounting officer of a business enterprise whose duties usually include responsibility for all accounting, budgeting, costing, and internal auditing functions, the measuring of performance against previously approved plans and standards, and the interpreting and reporting thereon to other members of the management responsible for policy or executive action. d: comptroller 2a: one that controls or has power or authority to control. * * *'

In Fanney v. Virginia Inv. & Mortgage Corp., supra, a memorandum describing the employment of the cross-complainant as 'executive-secretary' was held to sufficiently describe the service to be performed.

In Boswell v. Rio De Oro Uranium Mines, Inc., 68 N.M. 457, 362 P.2d 991, we said:

'A memorandum sufficient to satisfy the Statute of Frauds need not be contained in a single writing but may consist of several writings if (1) each writing is signed by the party to be charged * * *.'

Does the memorandum sufficiently fix Jennings' rate of pay?...