v. (1938)

After further study and consideration of the opinion the District Court of Appeal rendered in the above-entitled cause, we are of the opinion that the law applicable to the facts of said case has been correctly applied by the District Court of Appeal, and that that court reached the correct conclusion concerning the matter involved in said cause. We, therefore, adopt the opinion of the District Court of Appeal, written by Mr. Justice Houser, which is as follows:

‘This is an appeal by defendant, as executor of the will of Ida Fricke, deceased, from a judgment that was rendered on a creditor's rejected claim against said estate, as well as from an order by which his motion for judgment notwithstanding the verdict was denied.

‘The essential facts are that in their lifetime August Fricke and Ida Fricke (husband and wife), who were engaged in the bakery business in the city of Los Angeles, promised to Meta Klatt, then 17 years of age, that if the latter would work for August and Ida Fricke ‘as long as they desired her to do so,’ in compensation for such services, in addition to being furnished by the Frickes with board, lodging, clothing, and ‘spending money,’ on the death of the survivor of August Fricke and Ida Fricke, all the property which had been accumulated by them ‘would belong to’ Meta Klatt, ‘and that the survivor of said community would leave the same by deed or will to her.’ In such circumstances, Meta Klatt was induced to and did perform all services that were required of her by the Frickes for a period thence next ensuing of approximately 6 1/4 years, at the expiration of which time, with the consent and approval of August Fricke and Ida Fricke, she was married to one Long. Thereafter, excepting occasionally, when she was paid $3 per day for her services, she performed no labor for the Frickes.

‘In the course of about 16 years after Meta Klatt had left their said service, first August, and then Ida Fricke, died. No provision in any way having been made by either of them for carrying out their original promise that on the death of the survivor of them all their property would go to Meta Klatt, and her asserted claim against the estate of Ida Fricke having been duly rejected by the executor of her last will, Meta Klatt, suing by her married name, instituted an action against the said executor for the value of the services which she had rendered as aforesaid, which action resulted in a judgment in her favor. It is from that judgment, as well as from an order by which defendant's motion for judgment in his favor, notwithstanding the verdict, was denied, that the instant appeal is taken.

‘It is conceded by respondent that, in accord with appellant's contention, an oral agreement to devise or to bequeath any property or to make any provision for any person by will is unenforceable, ‘whether the action be either for a breach of an oral contract to make a will, for specific performance of such contract, or for damages for the breach of such a contract.’ Section 1624, Civ.Code; section 1973, Code Civ.Proc. It is unnecessary to decide, and this court does not undertake to decide, whether that concession on the part of respondent is a correct and all-inclusive statement of the law. But, without regard to respondent's position in that connection, by an examination of the allegations in her complaint, it is disclosed that the action was not of the exact character which is indicated by the provisions of the statute, but, to the contrary, was ‘on the quantum meruit for the reasonable value of plaintiff's services rendered.’

‘In that regard, in effect, it is provided, both by section 1624, subdivision 6, of the Civil Code (enacted in 1905) and by section 1973, subdivision 6, of the Code of Civil Procedure (enacted in 1907), that ‘an agreement which by its terms is not to be performed during the lifetime of the promisor, or an agreement to devise or bequeath any property, or to make any provision for any person by will,’ is invalid, ‘unless the same or some note or memorandum thereof be in writing, and subscribed by the party to be charged or by his agent.’ Since the date of the enactment of subdivision 6 of section 1624 of the Civil Code, the courts have experienced no great difficulty in arriving at the conclusion that, ordinarily, an oral agreement of the kind that in the instant matter is shown to have existed was unenforceable; but beginning with the case of Mayborne v. Citizens' Trust & Savings Bank, 46 Cal.App. 178, 190, 188 P. 1034, 1039, and thereafter continuing throughout the decisions of the appellate courts of this state, it has been ruled that the provisions of the statute do not apply ‘to a case like this for recovery upon a quantum meruit.’ Warder v. Hutchison, 69 Cal.App. 291, 231 P. 563; Lauritsen v. Goldsmith, 99 Cal.App. 671, 279 P. 168; Burr v. Floyd, 137 Cal.App. 692, 31 P.2d 402; Zellner v. Wassman, 184 Cal. 80, 193 P. 84. See, also, Wax v. Adair, 16 Cal.App.2d 393, 60 P.2d 904; Turell v. Anderson, 16 Cal.App.2d 445, 60 P.2d 906.

‘Appellant's suggestion, that no express contract such as is outlined by the allegations of the complaint was proved, is of no avail. The record herein discloses the existence of sufficient evidence to establish the conclusion that such a contract was entered into by the respective parties; but even assuming the possible absence of such a situation, in each of several cases to which attention hereinbefore has been directed, the principle is announced that even an implied promise to pay the reasonable value of the services performed will suffice.

‘Without an abandonment of either of his prior contentions, appellant next urges the point that ‘the recovery must be upheld, if at all, upon the quantum meruit theory, and the rules of limitation governing such actions are the ones which apply.’ In that connection, it is conceded that, in an action such as that here involved, the cause of action accrues on the termination of the services that may have been rendered, with the result that the 2-year limitation on the commencement of such an action, for which provision is made in section 339 of the Code of Civil Procedure, should be given application. Such a rule is indicated in each of the cases of Lauritsen v. Goldsmith, 99 Cal.App. 671, 279 P. 168, Burr v. Floyd, 137 Cal.App. 692, 31 P.2d 402, and in Seib v. Mitchell, 10 Cal.App.2d 91, 52 P.2d 281, where other California cases are cited as authority therefor. But it happens that in each of such cases the performance of services was practically continuous from the time when the agreement was entered into between the parties, at least until the date of death of the person who had promised the payment of compensation for such services. In that regard, it may be remembered that within the facts herein it appears, not that the agreed services were thus continuous; but, to the contrary, that with the consent and the approval of both the Frickes, Meta Klatt married one Long, and that thereafter, for a period of 16 years, or until the death of Ida Fricke, who was the survivor of said promisors, aside from the occasional rendering of services for which she was fully compensated, Meta Klatt performed no services in accordance with the terms of the agreement. In nearly all cases wherein is recognized the general rule to the effect that at least until the death of the promisor of compensation has occurred, no cause of action has arisen in favor of the person who has been performing the services—the reason for the existence of such rule is declared to be that the promise being that compensation would be made or provided by deed or will, until both the fact of the death of the promisor, together with the fact that he has failed to keep his said promise, can be established—in the absence of a prior repudiation of the contract, no breach of such contract has occurred. And assuming the legal soundness of such reason, it becomes clear that it is as applicable to the facts herein as it is in those cases in which the service is continuous to the date of the death of the promisor of compensation; that is to say, by the terms of the agreement between Meta Klatt, and August and Ida Fricke, the latter parties agreed to compensate the former party either by deed or by the will of the survivor of the latter; and therefore that August and Ida Fricke had all the time up to the date of the death of the survivor of them within which to fulfill the said promise; and not until such death had occurred could it be determined that the contract had been breached. Upon the happening of such breach, and not before, the cause of action accrued; and the action having been instituted within the time limited by the provisions of the statute (section 339, Code Civ.Proc.), it follows that appellant's point in that regard is not well taken.

‘The next point that is suggested by appellant is that the evidence was insufficient to support the judgment that was rendered in plaintiff's favor for the sum of $11,750. No useful purpose would be served by a review of the evidence that was presented on that issue. Of itself, and without here taking into consideration certain permissible offsets thereto, this court is convinced that, from the evidence which was placed before it, the jury was authorized to return the verdict of which complaint is made; from which it follows that appellant's additional objection to the verdict in respect to the amount thereof, to wit, that it was the result of passion and prejudice, cannot be sustained.

‘Appellant registers further complaint regarding the conduct of the trial of the action, to the effect that prejudicial error was committed, in that, over the objection of defendant, plaintiff was permitted to introduce evidence of the value of the estate. Although it may be possible that, if the action had been based on breach of contract, or for damages (if such an action were maintainable on such ground), the questioned evidence might have been admissible on the theory that the parties to the agreement had agreed that, for the services which Meta Klatt was expected to perform, she would be compensated with the entire estate which might be lift by the survivor of the Frickes (O'Brien v. O'Brien, 197 Cal. 577, 588, 241 P. 861; Roy v. Pos, 183 Cal. 359, 366, 191 P. 542; Morrison v. Land, 169 Cal. 580, 590, 147 P. 259; 71 Cor.Jur. 439), it is clear that in an action in quantum meruit the financial condition of the person for whom services may have been performed can form no satisfactory basis for a determination of the reasonable value thereof. Had the parties agreed upon the amount of a specified legacy that would be left by the survivor of the Frickes to Meta Klatt, evidence of that situation might have been somewhat, albeit vaguely, indicative of the actual value of the services which the parties had in mind (Offeman v. Robertson-Cole Studios, 80 Cal.App. 1, 251 P. 830; Reynolds v. Jourdan, 6 Cal. 108, 111; Clark v. United States, 95 U.S. 539, 24 L.Ed. 518), provided, of course, that they also had in mind the length of time that thereafter probably would ensue before the survivor of the Frickes had deceased. It so happened that Meta Klatt actually worked for the Frickes for a total period of 6 1/4 years. The estate of Mrs. Fricke was inventoried at the net sum of approximately $23,500. To say that it was agreed between the respective parties to the agreement that, at the death of the survivor of August and Ida Fricke, Meta Klatt would become the possessor of the entire estate of such survivor, is not the equivalent of saying that for a specified period of 6 1/4 years of work it was agreed that Meta Klatt should be paid $23,500. It is manifest that at the date when the agreement was made no one knew the length of time thereafter that the survivor of the Frickes would live; nor did any person know but that Meta Klatt would be the first to die. Any one of them thereafter might live for 1 year, or possibly for 50 years. Everything in that line was not only undetermined, but likewise was indeterminable. On the very next day following the date of the agreement, had both the Frickes met with an accident which resulted in the immediate death of both of them, in an action in quantum meruit to recover the reasonable value of the one day's services of Meta Klatt, it would seem unreasonable to contend that those services were worth $23,500 because that was the implied value that had been placed thereon by the respective parties to the agreement. Furthermore, on the trial of the action, no showing was made regarding the financial worth of the Frickes at the date when the agreement was made. For aught that appears in evidence, they then may have been insolvent, or their financial worth may have been much more than it was when Mrs. Fricke died. They did not then know for what length of time the survivor of them would live; nor, even assuming that they then were worth a specified sum of money, did they know that they would not thereafter suffer such heavy financial reverses that by the time the survivor came to die the estate would not be bankrupt. In such a state of uncertainty, to admit evidence of the value of the estate left by Ida Fricke, for the purpose of establishing the reasonable value of the services that were performed by plaintiff, was erroneous. Lisk v. Sherman, 25 Barb., N.Y., 433, 439; Clark v. Gilbert, 32 Barb., N.Y., 576.

‘Presumably based upon evidence which had been introduced relative to the value of the estate which had been left by Ida Fricke, together with other evidence that related to the agreement made by the parties thereto, in three separate instructions the jury was told respectively, that if it so desired it might (1) ‘adopt as the reasonable value of plaintiff's services, the value of the property of which said survivor died possessed, if such value is shown by the preponderance of the evidence’; (2) ‘* * * adopt * * * as the value of said services, the value which the parties themselves fixed, if shown by the evidence, viz., the value of the property so agreed to be awarded plaintiff by August and Ida Fricke, if the evidence shows such value, as the reasonable value of plaintiff's services'; (3) ‘adopt * * * the value of services which the parties themselves placed on said services, if shown by the evidence, and fix the value of said services at what the parties themselves fixed said value of services to be, viz., the sum which you find from the evidence to be the value of the property at the time of the death of the said Ida Fricke.’

‘Aside from that which might be termed a proper and deserving criticism for the repetition (and the resulting emphasis) of the instructions regarding the province of the jury with respect to a determination by it of the value of plaintiff's services, each of the cited instructions was subject to the further objection that in reaching a verdict in favor of plaintiff it was authorized to take into consideration certain evidence with reference to the value of the estate that had been erroneously introduced. Although from the fact that the appraised net value of the estate was approximately $23,500 and the amount of the verdict was $11,750, it may be that instead of awarding to plaintiff the full value of the estate, the jury may have concluded that one-half the value of the estate would be a sufficient compensation for her services—nevertheless, had the evidence respecting the value of the estate not been introduced, it might well be questioned whether the jury would have placed as high a value on plaintiff's services as in the circumstances was placed thereon. It results that, both by reason of the admission of the evidence to which reference has been had and by the said instructions, defendant was prejudicially affected.

‘But with respect to the trial proceedings, appellant further complains that, by a ruling which was made by the trial judge, defendant was precluded from introducing evidence which, if believed by the jury, in all probability would have resulted in a substantial reduction of the amount of the verdict that was awarded to plaintiff. In that regard, it appears that plaintiff had introduced evidence respecting the value of the services that had been performed by her, which evidence, without taking into consideration the value of the board, lodging, clothing, and ‘spending money’ that had been furnished by August and Ida Fricke to plaintiff, consisted in a showing that for an eight-hour day such services as were performed by plaintiff were reasonably worth as much as $35 per week, with extra time to be paid for at the same rate of compensation. To partially offset the amount per week to which plaintiff might have been entitled, defendant ‘proposed to put in evidence what these items (food, shelter, clothing and ‘spending money’) so provided by the deceased, were reasonably worth.' The trial court sustained plaintiff's objection to the introduction of that line of evidence. This court is of the opinion that that ruling constituted prejudicial error. In the first place (if practicable), plaintiff's evidence with respect to the value of services that were rendered by her should have taken into account the several benefits which she had received from August and Ida Fricke. Assuming that plaintiff's services were worth $35 per week, with added compensation for overtime, nevertheless, as a credit on account of such value, in effect, she had been paid various sums of money, uncertain in amount, by having been furnished with room, board, clothing, and a certain amount of money called ‘spending money.’ In attempting to reach a determination of the amount, if any, for which plaintiff should recover a judgment, defendant should have been accorded the right to show the reasonable value of the room, board, and clothing, as well as the amount of money which plaintiff had received during the entire time that she worked for August and Ida Fricke. In the continuous course of 6 1/4 years, the value of such items would have aggregated a considerable sum, and to deny to defendant the right to any credit on account thereof would be to unjustly deprive the executor of the will of Ida Fricke of that to which in law he would have been justly entitled. In the same connection, and for similar reasons, this court also is of the opinion that, contrary to the ruling made thereon by the trial court, defendant should have been permitted to introduce evidence for the purpose of establishing the amount of wages which, during the period of time that was embraced within the 6 1/4 years of such employment, was paid by other employers to their respective employees who at that time were employed and who performed services in the same, or in a similar, position as or to, respectively, that in which plaintiff was employed. 16 Cal.Jur. 991; Shade v. Sisson M. & L. Co., 115 Cal. 357, 368, 47 P. 135.

‘It becomes unnecessary to rule upon either of the additional specifications of error presented by appellant.’

The judgment is reversed; and the appeal from the order by which defendant's motion for judgment notwithstanding the verdict was denied, is dismissed.

I dissent. The facts relied upon by the respondent show a situation which is entirely different from that present in those cases where a plaintiff has been allowed to recover in an action on quantum meruit for services performed under an invalid contract to compensate for those services by will.

It has uniformly been held that an oral contract of the kind which the respondent claims that she made with August and Ida Fricke is unenforceable as being within the statute of frauds. Section 1624, Civ.Code; section 1973, Code Civ.Proc.; Warder v. Hutchison, 69 Cal.App. 291, 231 P. 563. But this state has recognized the somewhat general rule that, where one who has made such an agreement has rendered services consistent with its terms continuously to the time of the death of the promisor, an action upon quantum meruit may be maintained. Under those circumstances the plaintiff recovers upon a quasi contract, or contract implied in law, which is remediable in an action upon the common count. Such a contract does not rest upon the intention of the parties but is entirely independent of agreement. It is implied in law, not in fact. Liability exists because of a duty which the law implies from the acts of the parties, and a recovery is allowed because under fundamental principles of equity and natural justice a servant is worthy of his hire. Hence, if services have been performed and they were not rendered gratuitously, the law implies a promise to pay for them. 6 R.C.L. 588. The obligation is one ‘created by law for reasons of justice.’ Restatement of the Law of Contracts, § 5.

Applying these principles to the facts shown by the respondent, it is apparent that any recovery by her must be upon a quasi contract, not upon the invalid and unenforceable express contract. Therefore, evidence of the express contract is admissible only for the limited purpose of proving that the services which the respondent rendered were not performed gratuitously. Grant v. Grant, 63 Conn. 530, 29 A. 15, 38 Am.St.Rep. 379; Wallace v. Long, 105 Ind. 522, 5 N.E. 666, 55 Am.Rep. 222. The respondent cannot rely upon the terms of the oral invalid contract. Therefore, she must recover, if at all, upon the duty to pay for her services which the law implies. That duty defines the contract of the parties. ‘The whole theory of allowing a recovery upon quantum meruit where the contract is found to be void under the statute proceeds upon an elimination of the contract. There is no contract in existence to be availed of by either the plaintiff or the defendant to fix their several rights, duties, or obligations. The action is based upon the equitable doctrine that the defendant having received the benefit should pay the therefor what it was reasonably worth; that the implied promise to pay became enforceable when the services were rendered. * * * If, although the statute declared the contract to be void and incapable of enforcement, it could still be made use of to fix the respective liabilities of the parties, the statute would become a nullity.’ Thacher v. New York, W. & B. R. Co., 1912, 153 App.Div. 186, 138 N.Y.S. 463, 466. By the bringing of the action on quantum meruit the plaintiff in such a case repudiates the express contract, and the right to recover rests upon the same principles where a contract made in violation of the statute of frauds is voidable as it does where the contract is void. See note to Fabian v. Wasatch Orchard Co., 41 Utah 404, 125 P. 860, L.R.A.1916D, 901.

Disregarding then the terms of the invalid express contract, the respondent has proved a quasi contract to pay the reasonable value of her services with no time fixed for payment. If the services may be said to have been rendered for a continuous term, rather than upon a month to month basis payment became due at the time when they were completed. It is upon this theory that the courts have allowed a plaintiff to recover in an action upon quantum meruit where services were performed for an extended period prior to the death of the one for whom the services were rendered. The case of Etchas v. Orena, 127 Cal. 588, 60 P. 45, 46, presented the first opportunity for this court to state the rule. In that case the jury was instructed ‘that when one is employed continuously to perform personal services, without any time being fixed in the contract for its termination, the statute of limitation does not begin to run until the services are terminated.’ While the decision turned on the form of the probate claim which was presented, it may be said that the court, by inference, approved this instruction as a correct statement of the law. In the later case of Hagan v. McNary, 170 Cal. 141, 148 P. 937, L.R.A.1915E, 562, the plaintiff sued upon an invalid express contract. However, the court recognized ‘the somewhat familiar rule that, where services are to be performed for a given period for a stated sum, without any agreement as to when the payment is to be made, and the contract is entire, * * * the obligation to pay does not become matured, and payment is not due until the services are completely performed.’ Under such circumstances, it said, ‘the plaintiff's remedy, if any, is an action for the value of the services rendered, and not an action for the sum alleged to have been agreed to be paid therefor.’

Another instance of an action successfully maintained by one who had rendered services over a period of many years is found in the much cited case of Mayborne v. Citizens' T. & S. Bank, 46 Cal.App. 178, 188 P. 1034, 1039. The evidence in that case showed that for 20 years continuously prior to the death of C. P. Dutton the plaintiff had rendered constant service in maintaining a home for him. In affirming the judgment the court said: ‘The services were continuous for a period of 20 years, and it is a fair inference that it was the intention or expectation that they should be rewarded when terminated. They did not cease until the death of Mr. Dutton. The case falls clearly within the rule announced in Krumb v. Campbell, 102 Cal. 370, 36 P. 664; Hagan v. McNary, 170 Cal. 141, 148 P. 937, L.R.A.1915E, 562; Furman v. Craine, 18 Cal.App. 41, 121 P. 1007; Clark v. Gruber, 74 W.Va. 533, 82 S.E. 338 [supra]; Morrissey v. Faucett, 28 Wash. 52, 68 P. 352. They are all to the effect that where the contract is for an indefinite time and no time for payment is specified, the statute does not begin to run until the services end.’ Mayborne v. Citizens' T. & S. Bank, supra. These conclusions were approved by this court in Corato v. Estate of Corato, 201 Cal. 155, 255 P. 825, 826, as being a correct statement of the law applicable to a situation ‘where it is understood, expressly or by reasonable implication, * * * that the compensation should be paid at the termination of the rendition of the services.’ In the Mayborne Case the intention to compensate the plaintiff upon the termination of her services by the death of the employer was inferred from his will, which, although insufficient in form to be admitted to probate, gave the plaintiff certain property ‘for care and failthful services rendered.’ But in the Corato Case, because there were no facts from which such an intention might be drawn, the presumption of a hiring from month to month was applied (section 3002, Labor Code, St.1937, p. 262, formerly section 2011, Civ.Code), with the statute of limitations running accordingly. The reasoning which led to the conclusion that the servant was entitled to a judgment on the action of quantum meruit is not entirely satisfactory in some of these cases. However, in each of them the controlling fact of continuity of service to the date of the employer's death is emphasized. For example, this was the situation shown in Warder v. Hutchison, 69 Cal.App. 291, 231 P. 563. So, in Robinson v. Chapman, 98 Cal.App. 278, 276 P. 1081, a recovery was allowed for services rendered continuously for a period of nine years immediately prior to the death of the employer because it could be reasonably inferred from the facts there shown that payment was to be made upon the termination of the employment rather than at an earlier time. Another District Court of Appeal said that, where one had continuously performed services for a person over a long period of time, the law implies a promise to pay at the termination of the services. Lauritsen v. Goldsmith, 99 Cal.App. 671, 279 P. 168. The same conclusion was reached in Burr v. Floyd, 137 Cal.App. 692, 31 P.2d 402, 404, where continuous services had been rendered by an employee for some 7 years upon an agreement that the employer would make compensation therefor by will. The court said: ‘Not only does the law, under the circumstances disclosed by the record herein, imply a promise to pay the reasonable value of the services but the implication of the law is that payment shall take place upon the termination of the services.’ This statement of the rule was relied upon in Wax v. Adair, 16 Cal.App.2d 393, 60 P.2d 904, 905, as authority for affirming a judgment in favor of the plaintiff where ‘practically without conflict in the evidence, and as declared in the court's findings of fact, the services that were rendered by plaintiff * * * were ‘continuous.”

Reference should also be made to the case of Seib v. Mitchell, 10 Cal.App.2d 91, 52 P.2d 281. There the trial court found that services had been rendered continuously over a period of years except that on a number of occasions there was a cessation of those services caused by the wrongful temporary discharge of the plaintiff. Upon appeal it was held that, because the trial court also found that the plaintiffs were at all times, ready, able, and willing to perform the services, the finding of a temporary wrongful discharge was tantamount to a holding that the employer, during the periods of cessation of services, did not desire the plaintiff's assistance; therefore, there was only one term of service which terminated with the death of the employer. In this case the court recognized that the statute of limitations commences to run at a date in no event later than the termination of the services, and only because the facts warranted an inference that there was a continuous term of employment, notwithstanding the fact that services had been temporarily discontinued for periods within that term, were the plaintiffs able to avoid the bar of the statute of limitations. Nelson v. Christensen, 169 Wis. 373, 172 N.W. 741, presents the distinction more definitely. That action was brought to recover the value of services which had been rendered by a daughter to her mother. These commenced in 1893 and, except for the period between 1899 and 1907, continued until 1909, when the mother died. It was held that as there had not been a continuous period of service, the statute of limitations barred a recovery for services rendered during the entire period.

The services for which Meta Klatt seeks compensation in this action terminated more than 16 years before she presented her claim to the executor of the estate of Ida Fricke. If under the facts shown by her it may be said that the term of her service was a continuous one, rather than from month to month, it ended when she married and left the home of the Frickes. Consequently, in my opinion, the statute of limitations commenced to run at that time and her action is barred.

The judgment should be reversed, with directions to the trial court to render judgment for the appellant.

PER CURIAM.