Ruinello v. Murray

227 P.2d 251, 36 Cal. 2d 687, 1951 Cal. LEXIS 217

• Court: California Supreme Court
• Decided: February 7, 1951
• Docket: L. A. 21714
• Status: Published

Opinions

TRAYNOR, J.

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 per cent 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 20 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 per cent 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, § 1624(1); Code Civ. Proc., §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, 623-624 [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, 134 Am.St.Rep. 154]; Tuck v. Gudnason, 11 Cal.App.2d 626, 627-628 [54 P.2d 88]; cf. Wilk v. Vincill, 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, 15 Am.St.Rep. 82]; Shuler v. Corl, 39 Cal.App. 195,197-198 [178 P. 535]; see eases collected in 35 A.L.R. 1432; 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, 625 [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 Assn., 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. Eearst 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., Shenk, J., Edmonds, J., Schauer, J., and Spence, J., concurred.