Ruinello v. Murray

• Decision Date: 07 February 1951
• Citation: 36 Cal.2d 687,227 P.2d 251
• Court: California Supreme Court
• Parties: RUINELLO v. MURRAY. L. A. 21714.

Page 251

227 P.2d 251

36 Cal.2d 687

RUINELLO v. MURRAY.

L. A. 21714.

Supreme Court of California, in Bank.

Feb. 7, 1951.

Rehearing Denied March 8, 1951.

Seymour D. Sommer, Los Angeles, for appellant.

Gibson, Dunn & Crutcher, Frederic H. Sturdy and John T. Pigott, Jr., Los Angeles, for respondent.

TRAYNOR, Justice.

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% 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 twenty 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 approximately $263,000. Plaintiff seeks recovery of $11,050, the sum he would have been entitled to receive as salary during the remainder of the employment agreement. He also prays for an accounting of the gross profits and for judgment for 20% of the yearly gross profits in excess of $114,000.

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. (Civ. Code section 1624(1); Code of Civ.Proc. section 1973(1).) The trial court sustained the demurrer to the original complaint as well as the demurrer to the amended complaint. Plaintiff, by stipulation, followed his second amended complaint with a third amended complaint to which a demurrer was sustained without leave to amend.

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, 220 P.2d 737 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, 193 P.2d 81; Standing v. Morosco, 43 Cal.App. 244, 248, 184 P. 954. 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, 106 P. 88; Tuck v. Gudnason, 11 Cal.App.2d 626, 627-628, 65 P.2d 88; cf. Wilk v. Vencill, 30 Cal.2d 104, 105-107, 180 P.2d 351. 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 consideration other than the services to be rendered. Speegle v. Board of Fire Underwriters, 29 Cal.2d 34, 39, 172 P.2d 867; Lord v. Goldberg, 81 Cal. 596, 601-603, 22 P. 1126; Shuler v. Corl, 39 Cal.App. 195, 197-198, 178 P. 535; see cases collected in 35 A.L.R. 1432; Edwards v. Kentucky Utilities Co., 286 Ky. 341, 150 S.W.2d 916, 135 A.L.R. 646. Since plaintiff has not alleged such consideration or other terms indicating a contrary intention, it cannot be concluded that the employment he gave up was not at the will of either party. 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. Murdock v. Swanson, supra; Standing v. Morosco, supra.

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, 220 P.2d 737; Long v. Rumsey, 12 Cal.2d 334, 342, 84 P.2d 146; 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 Ass'n, 15 Cal.2d 472, 485, 101 P.2d 1099, 130 A.L.R. 120; Dukes v. Kellogg, 127 Cal. 563, 565, 60 P. 44; Werner v. Hearst Publications, Inc., 65 Cal.App.2d 667, 673, 151 P.2d 308; Thayer v. Magill, 13 Cal.App.2d 21, 27, 55 P.2d 1272; Whittemore v. Davis, 112 Cal.App. 702, 708-709, 297 P. 640.

The judgment is affirmed.

GIBSON, C. J., and SHENK, EDMONDS, SCHAUER and SPENCE, JJ., concur.

CARTER, Justice.

I dissent.

In my opinion the complaint sets forth circumstances showing that plaintiff will suffer an unconscionable injury if the oral contract with defendant is not enforced. It is alleged that plaintiff had been continuously employed as engineer and superin tendent of the 834 South Broadway Building in the City of Los Angeles from the time it was crected in 1926 until October 14, 1945; that at the latter date plaintiff was employed under an oral agreement with the owner of the building, Aaron Weinraub, whereby plaintiff had a permanent lifetime job; that plaintiff resigned this position at the request of defendant and in reliance upon an oral agreement with defendant; that the latter agreement provided that defendant would pay plaintiff a monthly salary and a yearly bonus in consideration of plaintiff's giving up his position with Weinraub and taking a similar position with defendant, the owner of the Ninth and Broadway Building, for a term of five years; that plaintiff took over his duties as superintendent and engineer of the defendant's building on December 1, 1945, and performed such duties until February 21, 1948, when defendant discharged plaintiff without cause to avoid the payment of the bonus to which plaintiff was entitled.

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 life-time 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, 193 P.2d 81, and Standing v. Morosco, 43 Cal.App. 244, 184 P. 954, 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 Code Civ.Proc., § 452; Speegle v. Board of Fire Underwriters, 29 Cal.2d 34, 42, 172 P.2d 867; Buxbom v. Smith, 23 Cal.2d 535, 542, 145 P.2d 305. From the premise that 'Assuming against the pleader, as we must, all facts reasonably consistent with the facts alleged, but adverse to the plaintiff,' 43 Cal.App. at page 248, 184 P. at page 956, the court concluded that no serious detriment to the plaintiff would result from its refusal to enforce the contract with the defendant. It was surmised that...