Tomlins v. American Ins. Co.

• Decision Date: 01 February 1968
• Citation: 258 Cal.App.2d 525,66 Cal.Rptr. 92
• Court: California Court of Appeals Court of Appeals
• Parties: Royden C. TOMLINS, Plaintiff and Respondent, v. The AMERICAN INSURANCE CO., a corporation, Defendant and Appellant. Civ. 23744.

Page 92

66 Cal.Rptr. 92

258 Cal.App.2d 525

Royden C. TOMLINS, Plaintiff and Respondent, v. The AMERICAN INSURANCE CO., a corporation, Defendant and Appellant.

Civ. 23744.

Court of Appeal, First District, Division 3, California.

Feb. 1, 1968.

As Modified Feb. 16, 1968.

Pillsbury, Madison & Sutro, Thomas E. Haven, Charles M. Richardson, Jr., Donald S. Zinn, San Francisco, for appellant.

Vincent Hallinan, Carl B. Shapiro, Patrick Sarsfield Hallinan, Leroy W. Rice, San Francisco, for respondent.

DRAPER, Presiding Justice.

Plaintiff had judgment on jury verdict in this action for breach of an employment contract. Defendant appeals.

Plaintiff had been employed for some four years by Crum & Forster Group, Inc. In September 1962, one Maas, defendant's vice-president in San Francisco, asked whether plaintiff was interested in working for defendant. After negotiations with Maas, plaintiff went to defendant's home office in New Jersey, at defendant's expense, for interview with officers there. When he left he was told that decision would be reached at the home office and transmitted to him through Maas in San Francisco. A few days later, plaintiff and Maas met. It was agreed that plaintiff would go to work for defendant at an agreed salary. The evidence of plaintiff and Maas is in complete conflict on the question of whether there was an agreement on a term of employment. Under the established rule, we look to the testimony favoring the claim of plaintiff-respondent. Plaintiff testified that Maas said 'there's no way of getting a contract,' but that 'a letter of intent' would be secured. Plaintiff testified 'I was assured that I could expect to be there for three years and this would be confirmed in writing.' Plaintiff left his employment with Crum and went to work for defendant. He was discharged a week later.

Jury verdict was against defendant, but in favor of Crum & Forster, against whom recovery had been sought for inducing breach of contract. Plaintiff does not appeal from the judgment on that verdict. Defendant moved for directed verdict and for new trial. Both motions were denied, and this appeal followed.

Defendant contends that, as a matter of law, Maas was without authority to agree, for his principal, to a three-year term of employment. As to actual authority, the contention is sound, since there is no evidence of conduct of defendant causing Maas to believe that he had such power. But defendant is bound if Maas had ostensible authority. Such authority is established by proof of conduct of defendant which reasonably led plaintiff to believe that Maas was empowered to act (Tomerlin v. Canadian Indemnity Co., 61 Cal.2d 638, 643, 39 Cal.Rptr. 731, 394 P.2d 571). The issue is one of fact (id.), and we ignore conflicts and determine only whether the evidence and inferences favorable to plaintiff provide a basis of substance for the jury's implied finding. Maas intitiated the employment discussions with plaintiff, and there is room to infer that he did so at the instance of defendant's home office. Defendant then paid plaintiff's way to New Jersey for interview as to possible employment. Detailed terms were not discussed there. Rather, plaintiff was instructed to return to San Francisco and await word from defendant through Maas. This evidence would support a finding that defendant's conduct was such as to cause plaintiff reasonably to believe that Maas had authority to agree upon duration of the employment.

The agreement claimed by plaintiff, however, obviously is one not to be performed within one year. Since there is no assertion of any written memorandum, the contract is within the statute of frauds (Civ. Code, § 1624, subd. 1). This issue was urged by defendant in its answer, in repeated objections to evidence, and in motions for directed verdict and judgment notwithstanding the verdict. Plaintiff sought to avoid the defense of the statute by proving estoppel to assert it.

Estoppel to assert the statute of frauds has long been recognized in California, and was delineated in detail as early as 1909 (Seymour v. Oelrichs, 156 Cal. 782, 106 P. 88). Seymour stressed the 'unjust and unconscientious injury' to the party against whom the statute was asserted (pp. 794--795, 106 P. 88), but also referred to a promise to reduce the oral agreement to writing. In a comprehensive review of the doctrine in 1950 (Monarco v. Lo Greco, 35 Cal.2d 621, 220 P.2d 737) the Supreme Court pointed out that cases later than Seymour had listed representation that a writing will be executed 'as a requirement of estoppel' (35 Cal.2d at p. 625, 220 P.2d 737). The court pointed out, however, that in each of these cases there was either unconscionable injury to the party against whom the statute was asserted, or unjust enrichment to the party relying upon the statute of frauds. It concluded that where one of those elements exists, 'the doctrine of estoppel has been applied whether...