Richmond v. Frederick

• Decision Date: 06 March 1953
• Citation: 253 P.2d 977,116 Cal.App.2d 541
• Court: California Court of Appeals Court of Appeals
• Parties: RICHMOND v. FREDERICK. Civ. 15338.

Page 977

253 P.2d 977

116 Cal.App.2d 541

RICHMOND v. FREDERICK.

Civ. 15338.

District Court of Appeal, First District, Division 1, California.

March 6, 1953.

Alfred Nelson, Piedmont, for appellant.

Anderson & Peck, Milner J. Anderson, Edward F. Peck and Gordon W. Nelson, Oakland, for respondent.

PETERS, Presiding Justice.

This is an appeal from a judgment for $1,213 and costs, rendered in an action against an estate upon a rejected claim for money due upon an open book account for real estate commissions claimed to have been earned by plaintiff Don Richmond while working for L. B. Frederick, the deceased. From this judgment the executrix appeals.

The decedent was a real estate broker. As such, he employed some eight or ten salesmen, among them the plaintiff, to assist him in his operations. Decedent did not operate by listing properties and selling them on commission. He and his salesmen would secure options on properties and exercise them if the properties could be resold at a profit. The commission on the resale was divided 10 per cent to the salesman securing the option, 45 per cent to the salesman making the resale, and 45 per cent to decedent. The profit on the resale above the commission was split 25 per cent to the salesman securing the option, 25 per cent to the salesman making the resale, and 50 per cent to decedent. Accrued profits were paid out semi-monthly. Obviously, such profits could accrue over a substantial period of time. Plaintiff was employed by decedent from 1944 to 1946. Late in March, 1946, plaintiff and decedent quarreled and plaintiff quit. At that time the accounts between the parties were unsettled. This action involves commissions earned during 1946 and which became payable before and after plaintiff terminated his employment.

It took the plaintiff up to a sixth amended complaint to state a cause of action not susceptible to demurrer. Only the original, the first amended and sixth amended complaints are to be found in the record. One of the major contentions on this appeal is that the action finally pleded on an open book account was barred by the statute of limitations. This contention requires an analysis of the pleadings.

The complaint was filed October 31, 1949. After setting forth the jurisdictional facts, including the filing and rejection of a claim for $1,865, the complaint alleges a cause of action for such sum 'for real estate commissions earned by said plaintiff from the said decedent, upon written contract, for the period of 1946 to 1948 inclusive.'

Pursuant to leave of court, plaintiff, on August 1, 1950, filed his (first) amended complaint, in which he abandoned his cause of action upon a written contract and alleged a liability of decedent of $1,865 based upon 'an open book account' for such commissions.

Demurrers to this and four succeeding complaints were sustained. The sixth amended complaint, which was filed January 5, 1951, and upon which the case proceeded to trial, is also based on an open book account for real estate commissions, also alleging that such commissions were earned from 1946 to 1948 'while said plaintiff was employed by said decedent as a real estate broker, under an oral agreement, whereby said decedent promised and agreed to pay to plaintiff one-half of any and all commissions received by said decedent on any and all sales of real estate made by plaintiff while in the emply of the decedent.'

The executrix claims that the cause of action pleaded in the sixth amended complaint was barred by the provisions of section 337, subd. 2, of the Code of Civil Procedure, which provides that in an action on an account the cause of action is barred four years from the 'date of the last item.' See for applications of this rule Egan v. Bishop, 8 Cal.App.2d 119, 47 P.2d 500; Gardner v. Rutherford, 57 Cal.App.2d 874, 136 P.2d 48; Furlow Pressed Brick Co. v. Balboa L. & W. Co., 186 Cal. 754, 200 P. 625; Merchants' Collection Agency v. Levi, 32 Cal.App. 595, 163 P. 870. The account that was introduced into evidence and upon which the judgment is predicated shows the date of the last entry as September 30, 1946. It is the contention of the executrix that since the sixth amended complaint was not filed until January 5, 1951, and since the plaintiff completely changed his cause of action in that complaint from one on a written contract to one on an open book account, the time for the running of the statute of limitations must be computed from the date of the filing of the sixth amended complaint. So computed, the statute had run when that complaint was filed.

If it be assumed that a change from a written contract to an account stated is an attempt to state a wholly new and different cause of action within the application of the rules applicable to the statute of limitations, a point subject to some doubt, ¹ the difficulty with this contention of the executrix is that it completely disregards the allegations of the first amended complaint. That complaint was filed August 1, 1950. The last item in the account was dated September 30, 1946. That item and some six others were made within the four-year-period involved. Thus, the cause of action on an account stated was first brought into the case some two months before the statute of limitations had run. The differences between the first and sixth amended complaints, from the standpoint of the rule under discussion, are minor and did not amount to pleading a completely new and different cause of action. (See cases cited in last footnote.) Thus, the contention that the cause of action on an account stated was barred by the four-year statute of limitations is without merit.

The executrix next contends that, in any event, the cause of action pleaded and proved was barred by the provisions of section 339, subd. 1, of the Code of Civil Procedure, providing for a two-year limitation on oral contracts. It is urged that plaintiff pleaded and proved an oral contract with the incidental keeping of accounts, it being contended that such a device cannot be used to lengthen what would otherwise be the two-year-period applicable to oral contracts. There are cases cited by the executrix such as Stewart v. Claudius, 19 Cal.App.2d 349, 65 P.2d 933; Lee v. DeForest, 22 Cal.App.2d 351, 71 P.2d 285; and People v. California Safe Deposit, etc., Co. [People v. Magee], 41 Cal.App. 727, 183 P. 289, that hold directly or by way of dicta, that, where there is a written contract and the debt sued upon arises at a fixed time by the operation of the contract, the incidental keeping of accounts cannot operate to extend the statute. But that rule is not here applicable. In the instant case the pleading and the evidence to which reference will hereafter be made, show not a debt arising at a fixed time by the operation of the express contract, but a running account upon which withdrawals could be made, and without a definite date for payment, because the salesmen could only be paid when a deal was closed. Unlike the cited cases, the contract here was a mere framework necessarily contemplating the keeping of open accounts, and was not, as were those cases, the mere recording of transactions conducted under the terms of the contract. See Mercantile Trust Co. of San Francisco v. Doe, 26 Cal.App. 246, 146 P. 692.

We turn now to a discussion of the relevant evidence. The plaintiff Richmond was permitted to testify that he was a licensed real estate agent, and was permitted to identify his books, which he stated were kept in the regular course of business, but most of his other testimony was successfully objected to under the provisions of section 1880, subd. 3, of the Code of Civil Procedure. His books were admitted into evidence, subject to a motion to strike, but there is a complete absence of any testimony as to the correctness of the entries in these books. These books were not used by the court in fixing the amount of the judgment. That judgment is predicated on the books kept by decedent.

Before decedent's books were introduced, the plaintiff called several witnesses, including the office manager of decedent, who testified that plaintiff was employed by decedent during the period in 1946 here involved, and that the terms of employment were as already described. The office manager testified that plaintiff brought signed option papers into the office while working there in a quantity described as 'quite a number.' These papers were kept by the office. There was evidence that plaintiff worked for decedent until late in March of 1946, when he quit because of a quarrel with decedent. Under the terms of the employment, however, a person quitting could have commissions accruing in his favor thereafter on options secured by him during his employment and sales made by others thereafter. That is what happened in reference to plaintiff.

The office manager also testified that after March of 1946 plaintiff came into the office and demanded of decedent his earned commissions. The then bookkeeper for decedent (who is now the wife of plaintiff) testified to being present after March of 1946 at several conversations between plaintiff and decedent when plaintiff made demands for his commissions. During one of these conversations decedent paid plaintiff $1,000 and admitted more was owing but asked for time to pay. Plaintiff claimed, in these conversations, that over $1,900 was still due and owing. Decedent at no time denied that some sum was owing, and stalled plaintiff, promising to pay in the near future.

It was during the bookkeeper's testimony that the decedent's books were introduced. She, then unmarried, had been the bookkeeper for decedent from January or February of 1946 to September of 1946. She testified that ledger sheets were kept and filed in the office for each salesman, and she found and identified the ledger sheets relating to plaintiff's account. The office manager later testified that each salesman had his ledger account on...