Thompson v. California Brewing Co.

• Decision Date: 25 April 1961
• Docket Number: No. 19162,19162
• Citation: 12 Cal.Rptr. 783,191 Cal.App.2d 506
• Court: California Court of Appeals Court of Appeals
• Parties: Arnie E. THOMPSON, Plaintiff and Appellant, v. CALIFORNIA BREWING COMPANY, a corporation; Foote, Cone & Belding, a corporation; and G. B. Richardson, Defendants and Respondents.

Page 783

12 Cal.Rptr. 783

191 Cal.App.2d 506

Arnie E. THOMPSON, Plaintiff and Appellant, v. CALIFORNIA BREWING COMPANY, a corporation; Foote, Cone & Belding, a corporation; and G. B. Richardson, Defendants and Respondents.

No. 19162.

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

April 25, 1961.

Hearing Denied June 21, 1961.

Edward b. Gregg, San Francisco, for appellant.

Eisner & Titchell, Gang, Tyre, Rudin & Brown, Los Angeles, for respondent California Brewing Co.

Lillick, Geary, Wheat, Adams & Charles, San Francisco, for respondent Foote, Cone & Belding.

DUNIWAY, Justice.

This is the second appeal in this case. In the first (Thompson v. California Brewing Co., 150 Cal.App.2d 469, 310 P.2d 436) this court reversed a judgment sustaining demurrers without leave to amend, as to the first two causes of action. It held (150 Cal.App.2d at page 477, 310 P.2d at page 440) that those causes of action, one upon an express contract and one upon an implied in fact contract, were on their face barred by the two year limitation period prescribed by section 339, subdivision 1, of the Code of Civil Procedure. This was because the complaint, when supplemented pursuant to Code of Civil Procedure, § 426, subdivision 3, showed on its face that the defendants' use of plaintiff's idea began more than two years before the action was filed. It also held (150 Cal.App.2d at page 478, 310 P.2d at page 441) that plaintiff should be given an opportunity to amend by pleading 'facts which, if they exist, negative the seeming bar of the statute as to the first and second counts.'

Upon remand, plaintiff amended both counts, but at the trial he elected to withdraw the first count and to proceed on the second count, on the theory of an implied in fact contract to pay for his idea. At the conclusion of plaintiff's case, the court granted a nonsuit, and plaintiff again appeals. We conclude that the judgment must be affirmed.

Briefly, the cause of action pleaded in the second count, as it was before this court on the prior appeal, is that plaintiff, at defendants' request, submitted to them a 'new and novel idea' for the advertising and promotion of the sale of beer. The idea, stated in a letter, is: 'Brew at least 2 kinds of beer under two different labels, a man's beer and the present beer under your new label for feminine and home consumption trade.' The submission was stated to be with the expectation, as defendants understood, that plaintiff would be paid if they used it. It was also alleged that they did use it in an advertising campaign. The reasonable value was stated to be $50,000.

The amended second count adds an additional zero to the claimed value of the idea. It also alleges that it was 'clearly understood' between the parties that defendants might test the idea, and that if it was found to be suitable, then they might adopt and use it, in which event they 'would pay to plaintiff the reasonable value of the use of said idea, and would continue to pay for such use as long as defendants * * * continued to use' it. It is further alleged that defendants did test the idea, did, within two years preceding the filing of the action, ascertain that it was suitable, and did adopt and use it thereafter.

Thus plaintiff construed the prior opinion as holding that if it were so agreed between the parties in the alleged implied in fact contract, the statute would not commence to run until after the test period. In other words, to avoid the bar of the statute, it was necessary to show that the claimed free test period and postponed obligation to pay was one of the terms of the contract. In this we think plaintiff was correct. We are of this opinion although the prior decision does not state the matter in just those terms. In that decision it was also held that the 'test' theory would not lift the bar of the statute as to the third count, which was based upon a tort theory of breach of confidence (see 150 Cal.App.2d at page 478, 310 P.2d at page 441).

Moreover, we think that in the absence of an express or implied understanding that a 'test' would be free, or that any obligation to pay would be postponed by the test, there would be a breach of the implied in fact contract by any use of plaintiff's idea, whether for test purposes or not, without either paying for the idea or agreeing upon terms of payment, and that such breach would start the statute running. Cf. Lattin v. Gillette, 95 Cal. 317, 30 P. 545. In the absence of such an understanding, there was just as much a breach of contract duty when defendants started using plaintiff's idea for test purposes as there was of a delictual or tort duty under the third cause of action. It was so held as to the two contract counts that were then before the court on the prior appeal. That holding is now the law of this case.

Plaintiff's evidence does not support any implication of any such term of the implied in fact contract relied upon. We assume, but do not decide, because it is unnecessary to do so, since we find that the action is barred by the statute of limitations, that the evidence was sufficient to go to the jury on the question of whether there was an implied in fact contract to pay for plaintiff's idea, if it were used by defendants. Cf. Weitzenkorn v. Lesser, 40 Cal.2d 778, 256 P.2d 947;...