COLLIER WALLIS v. ASTOR (1936)

The respondent corporation was engaged in the business of conducting a private employment agency, under a license issued by the commissioner of labor, pursuant to the provisions of the general laws regulating private employment agencies (Act 2349, General Laws 1931). Primarily, its activities pertained to employment in connection with the theatrical and motion picture business.

On November 28, 1929, plaintiff and defendant entered into an agreement the written memorandum of which, signed by the parties, reads as follows:

“November 28th, 1929

“Ruth Collier, Inc.

“Hollywood, California.

“I hereby agree to have you act as my exclusive personal representative in connection with securing engagements for me as a motion picture or legitimate stage artist; the words stage or motion picture artist, as used in this agreement, shall include the legitimate stage inclusive of vaudeville and all types of motion pictures made or manufactured, including sound pictures or talking pictures. This agreement to continue for a period of one year from the above date.

“You will promote to the best of your ability my interest in connection with motion pictures and legitimate stage work, securing for me the most advantageous engagements.

“In consideration of this service, I agree to pay you ten percent of all monies I receive under engagements entered into by me during the term of this agreement with you, with the exception of any engagement I may enter into at the Fox Studio with the Kenneth Hawks Unit.

“During the terms of this agreement, I will authorize you to collect my salary through your office.

“Sincerely,

“Mary Astor.

“Accepted: Ruth Collier, Inc.

“By Ruth Collier, President.”

Thereafter, respondent obtained several engagements for appellant in the line of her work, and on September 18, 1930, as a result of the efforts of respondent, an agreement was executed between appellant and the R. K. O. Studios, by the terms of which agreement R. K. O. Studios was given the option to employ appellant at certain times and for certain periods therein specified. The only one of these optional periods relevant to the controversy herein is the following: “(b) To employ the artist from January 1, 1931, or from the date of completion of the picture referred to in Option (a) hereof, whichever of the two dates is the later, for not less than forty (40) weeks guaranteed employment prior to December 31, 1931. The terms and conditions of such employment are as hereinafter set forth, except the salary to be paid the artist during this optional period shall be Two Thousand Dollars ($2,000.00) per week. The producer may exercise this option by serving a written notice on the artist any time prior to December 1, 1930, and it may be exercised whether or not Option (a) hereinabove referred to shall have been exercised.”

On November 12, 1930, R. K. O. Studios exercised said option in the form of a written notice delivered to appellant, a copy of which is as follows:

“November 12, 1930

“Miss Mary Astor,

“780 Gower Street,

“Los Angeles, Calif.

“Dear Miss Astor:

“With reference to your contract with us, dated September 18, 1930, this is to advise you that the undersigned elects to and does hereby exercise Option (b) contained in Paragraph One (1) thereof, namely to employ you for not less than forty (40) weeks prior to December 31, 1931, upon the same terms and conditions as are set forth in said contract, except that the amount of compensation to be paid you during the above term shall be Two Thousand Dollars ($2,000.00) per week. The period for which this option is exercised shall commence on January 1, 1931.

“Very truly yours,

“R. K. O. Studios, Inc.

“By Wm. LeBaron

“Vice President

“And F. H. Smith

“Assistant Secretary.

“Receipt of the foregoing notice, this 12th day of November, 1930, is hereby acknowledged.

“Mary Astor (Mary Astor).”

Up to and including January 5, 1931, and for some time prior thereto, defendant was engaged in making a picture for R. K. O. Studios, Inc., under the terms of an agreement not included in any of the options granted under the contract of September 18, 1930. From January 5, 1931, to March 2, 1931, defendant rendered no service to R. K. O. Studios, Inc. Commencing on March 2d, however, she was continuously employed by R. K. O. Studios, Inc., to and including December 31, 1931, with the exception of the period commencing on April 6, 1931, to and including May 4, 1931, and during the entire period of such employment she received for her services a salary of $2,000 per week, which amount was paid to her during such entire period of employment by said R. K. O. Studios, Inc.

The defendant under her contract with the plaintiff was obligated to pay to the plaintiff 10 per cent. of all moneys received by her from engagements entered into during the term of that agreement; that is to say, prior to November 28, 1930. She, in fact, paid to the plaintiff 10 per cent. of all amounts received by her from all engagements which she performed from the date of the execution of the contract with the plaintiff up to and including the 10th day of October, 1931; that is to say, she actually paid to the plaintiff 10 per cent. of the moneys received by her from R. K. O. Studios, Inc., for the services performed from March 2, 1931, to October 10, 1931. From the moneys received by the defendant from October 10, 1931, to December 31, 1931, she refused to pay plaintiff any commission or compensation, and an action was brought for the purpose of recovering the amount alleged to be due. Judgment was entered therein for the plaintiff, and this appeal is from the judgment in said action.

Appellant contends: First, that the evidence is insufficient to support the findings and that the findings do not dispose of the issues raised by the pleadings. Second, that plaintiff's suit is premature in that it did not allege in its complaint that the dispute between plaintiff and defendant had been referred to the commissioner of labor, or that the commissioner of labor had passed upon plaintiff's claim for money; also, that plaintiff had failed to comply with the provisions of Act 2349 of the General Laws as to other more or less minor items.

Appellant's first contention is based upon the claim that the contract and the option provided that the employment was for a period of forty weeks commencing January 1, 1931; and that there is absolutely no provision or agreement in these two documents which states that the employment of defendant was to commence on March 2, 1931. The argument advanced in support of this contention, quoting from appellant's brief, is: “Unless R. K. O. Studios, Inc., actually gave the defendant her employment at $2,000 per week commencing January 1, 1931, it breached the contract. This failure to perform would excuse the defendant from performing.” And further, quoting from appellant's brief: “It (plaintiff) must prove that R. K. O. Studios, Inc., performed the option contract as exercised before it can successfully contend that Miss Astor's employment during 1931 was pursuant thereto.”

Thus it is sought by appellant to make the conduct of R. K. O. Studios, Inc., as to its agreement with appellant, the test of appellant's responsibility to respondent. This is clearly beside the issues involved. The question is not whether R. K. O. Studios performed the option according to its terms, but whether appellant accepted employment under, and as a result of, an agreement entered into between her and R. K. O. Studios, which bound her to the performance of her agreement with respondent. On this question the pleadings were adequate and there was evidence to support the findings in respondent's favor. There is nothing in the record sustaining appellant's contention that the findings do not dispose of the issues raised by the pleadings and that the evidence is insufficient to support the findings in any respect. It does not necessarily follow that simply because appellant commenced work on March 2d instead of January 1st, that her employment was not under, and the result of, the contract obtained for her by respondent.

Referring now to appellant's second contention, it is urged that the contract, which is the subject of the dispute herein, did not contain the essentials specified by the Private Employment Agency Act; that the omission of these essentials renders the contract void; and that therefore no recovery can be had on such contract. For the failure to comply with the act in this respect a penalty is provided, and there is nothing in the act which justifies the assumption or the construction that the legislature intended any other penalties than those specified. Such penalties do not include any which in effect, directly or indirectly, render the contract void. The situation in this respect is somewhat similar to that in Wood v. Krepps, 168 Cal. 382, 143 P. 691, L.R.A.1915B, 851. Moreover, the Supreme Court of California, in a discussion of the right to contract about one's affairs, used the following language: “The Supreme Court of the United States, * * * made an exhaustive review of the authorities touching the right to contract about one's affairs, including the right to make contracts of employment, and held that such a right was a part of the liberty of the individual which is protected by the Fifth Amendment to the Constitution of the United States.” In re H. B. Smith, 193 Cal. 337, 340, 223 P. 971, 972; also, People v. Holder, 53 Cal.App. 45, 199 P. 832. For an able discussion and review of the authorities by Mr. Justice Marks, see Ex parte Ed Moffett (Cal.App.) 55 P.(2d) 584.

Section 19 of the act in question, namely, Act 2349 of the General Laws, provides as follows: “Powers of labor commissioner. To carry out the purpose of this act, the commissioner of labor is vested with full power, authority and jurisdiction to prescribe rules and regulations, not inconsistent with any provision of this act, for the purpose of facilitating and making certain, uniform and effective the enforcement of the provisions of this act; and in all cases of controversy arising under this act the parties involved therein shall refer the matters in dispute to the commissioner of labor, who shall hear and determine the same, subject to appeal within ten days to the superior court where the same shall be heard de novo, and to stay any award for money, the party aggrieved shall execute a bond to be approved by said superior court in a sum not exceeding twice the amount of said judgment. In all other cases said bond shall be in a sum of not less than one thousand dollars to be approved by the said superior court.”

Based upon the foregoing provisions of the act, appellant further urges that plaintiff's complaint did not state a cause of action because a compliance with such provisions was not alleged. Plaintiff and respondent, on the other hand, takes the position that this provision of the act is unconstitutional, in reply to which appellant insists that plaintiff is estopped from asserting such a claim for the reason that it had been licensed by the commissioner of labor, pursuant to the Private Employment Agency Act, for a number of years, and having elected to accept the benefits of the statute, is therefore estopped from denying its validity.

Respondent, in taking exception to the constitutionality of that portion of the act which purports to vest the commissioner of labor with authority to determine disputes arising under the act, is abundantly supported by authority, and must be sustained. It should be noted at this point that Act 2349 of the General Laws is a product of the Legislature and not of the Constitution. The trial and the determination of the issues involved in the controversy between plaintiff and defendant herein are purely judicial functions, and while commissions created by the Legislature may be empowered to determine questions of administrative or of ministerial character, the Legislature is without authority to vest such commissions with judicial powers. Department of Public Works v. Superior Court, 197 Cal. 215, 239 P. 1076; Van Camp S. F. Co. v. Fish & Game Commission, 75 Cal.App. 764, 243 P. 702.

Finally, it is sought by appellant to foreclose respondent's recovery under the judgment by the application of the doctrine of estoppel, as hereinbefore stated. That is to say, appellant contends that respondent, having been licensed under an act, cannot be heard to question its validity. This issue raises a question of especial importance, for it assails the right of a citizen to invoke the protection of the Constitution. Although first impression might doubt its existence, the courts have approved of a doctrine which effects such a result. 12 Cor.Jur. p. 769. It should be noted, however, that where it is sought to prevent refuge in the Constitution by the application of the doctrine of estoppel, success depends upon the existence of the elements of equitable estoppel. In some of the decisions where these elements do not appear, the doctrine of “waiver” has been held to apply. The application of either doctrine manifestly depends upon the facts involved.

In the case at bar, appellant's reliance upon the doctrine of estoppel is based upon the authority of Gregory v. Hecke, 73 Cal.App. 268, 238 P. 787, wherein it was held that the respondent, who had been licensed under the California Economic Poison Act, and whose license had been revoked, was estopped from questioning the constitutionality of the act. That action was between the respondent Gregory and the appellant Hecke as director of the department of agriculture of the state of California. Therein the court held that respondent, having enjoyed the protection of the very statute whose constitutionality he challenged, and having elected to accept the benefits of the statute, was estopped from denying its validity. Cofman v. Ousterhous, 40 N.D. 390, 168 N.W. 826, 18 A.L.R. 219, which is cited by the court as authority for the conclusion, serves as an example of the lack of unanimity of opinion on the subject, for that decision is by a divided court, and the dissenting opinion by Mr. Justice Christianson presents an able and enlightening discussion in direct conflict with the prevailing opinion of the court. Mr. Justice Robinson concurred in the dissenting opinion.

It is at once evident by a comparison of the facts in the Gregory Case, supra, with the facts of the case at bar, that there is no resemblance between the two; hence, logically, it cannot be said that because the doctrine applies to one it likewise applies to the other. In the case at bar the revocation of the license was not involved; moreover, respondent had not elected to proceed under the provisions of the statute to settle the dispute herein but in the first instance filed an action in the superior court.

When a license is obtained under a particular law, it does not always follow that the licensee will be deemed to have assented to conditions and restrictions sought to be imposed, in violation of his constitutional rights, and, by obtaining such license, waive the right to question the constitutionality of the statute. As was declared by the Supreme Court of the United States in a consideration of this question: “The defendant, however, insists that some of the provisions of the statute are in violation of the Constitution of the United States, and if it obtained the required license, it would be held to have accepted all of its provisions, and (in the same words of the statute) ‘thereby to have agreed to comply with the same.’ § 1. The answer to this suggestion is that the acceptance of a license, in whatever form, will not impose upon the licensee an obligation to respect or to comply with any provisions of the statute or with any regulations prescribed by the state railroad & warehouse commission that are repugnant to the Constitution of the United States. A license will give the defendant full authority to carry on its business in accordance with the valid laws of the state and the valid rules and regulations prescribed by the commission. If the commission refused to grant a license, or if it sought to revoke one granted, because the applicant in the one case, or the licensee in the other, refused to comply with statutory provisions or with rules or regulations inconsistent with the Constitution of the United States, the rights of the applicant or the licensee could be protected and enforced by appropriate judicial proceedings.” (Italics added.) W. W. Cargill Co. v. Minnesota ex rel. Railroad and W. Com., 180 U.S. 452, 21 S.Ct. 423, 429, 45 L.Ed. 619, 626.

It is obvious, from an analysis of the Private Employment Agency Act (Gen.Laws, Act 2349), that it was adopted for the benefit of those transacting business with employment agencies. There is nothing in the record which reveals that respondent received any benefit from the act, unless it was the fact that a criminal prosecution was avoided by obtaining a license pursuant to its provisions. Moreover, appellant points to no rights or benefits which may possibly have accrued to respondent, by the adoption of this act, which had not already existed prior to its adoption, and none of the elements of equitable estoppel have been shown by appellant to exist.

There is a limit beyond which the courts in the application of this doctrine have declined to go. As was stated by the Supreme Court of California, with reference to the subject: “We do not think that the principle of estoppel can be so far applied as to prevent a party who may be entitled to the benefits to be obtained by application to an administrative board or officer from asserting in a court of justice that other and severable portions of the law under which he makes such application and receives such benefit, and which impair his full enjoyment thereof, are void because violative of the Constitution; nor do we think the cases cited by the respondents sustain so extreme an application of the principle of estoppel.” Mojave River Irr. Dist. v. Superior Court, 202 Cal. 717, 730, 262 P. 724, 729.

In view of the foregoing, other minor questions raised by the appeal but related to the principal issues herein reviewed, are unimportant, and for the reasons stated the judgment is affirmed.

DORAN, Justice.

We concur: HOUSER, P. J.; YORK, J.