Ben-Hur Manufacturing Co. v. Empire Factors

Appellant Empire Factors Corporation appeals from a judgment holding it liable for payment for freezers which, pursuant to an oral agreement between appellant and respondent, respondent shipped to McCormack Corporation and for which it sent invoices to appellant. Appellant claims respondent’s judgment cannot stand because, first, the oral contract succumbs to the statute of frauds and, second, the court erroneously permitted respondent, after the expiration of the period of limitations, to amend its complaint, which originally alleged a common count for moneys received for the use and benefit of plaintiff, to include a cause for goods sold and delivered. These are the basic defenses to the judgment ; they raise technical objections which can stand neither upon strict application of the law nor the inherent fundamental equities. Appellant’s two subsidiary objections that the demurrer to the fourth cause should have been sustained and that the testimony as to the delivery of the goods fell outside the issues do not improve its position.

Respondent Ben-Hur Manufacturing Company devoted its

Respondent shipped the freezers to McCormack and sent invoices to appellant. At the trial the court admitted the invoices into evidence despite appellant’s objection that their “introduction . . . departs . . . from the issues raised by the pleadings. ...” However, the invoices were explanatory of the bill of particulars filed by respondent in response to the demand of appellant. Appellant did not object to the admission of the bill of particulars.

Appellant’s Ludlam admitted that the invoices represented specified carloads of freezers for which he had authorized payment “by Empire Factors.” The payments, however, according to respondent’s Denger, “came from McCormack Corporation.” Ludlam further testified that Empire Factors did not make the payments; that it ‘ ‘ did not pay these invoices or statements direct” but “[w]e paid against the trust receipts to McCormack Corporation.” To the question of respondent’s attorney, “So that the money is channeled or tunneled through McCormack Corporation back to Ben-Hur?” Ludlam replied, “That’s right.” As to the partial payments of invoices, the treasurer of McCormack, Mr. Hansen, testified that the payments were made with McCormack checks which he had signed and which were drawn on the McCormack bank account; that the money in the account came from the sale of freezers described in the invoices. Hansen affirmatively answered the query that the money “came . . . through Empire Factors into the McCormack Bank Account ? ... So the money substantially came from Empire Factors ? ’ ’

At the close of the case the trial court posed the question,

The court permitted an amendment to the pleading to set out a cause for goods sold and delivered. The original complaint consisted of three causes of action: (1) that appellant received for the “use and benefit of . . . plaintiff . . . the sum of $8,807.94 . . . demand has been made upon . . . defendants . . . for the repayment of said sum . . . ,” (2) “an account stated as between plaintiff and defendants . . . ,” (3) said defendants “became indebted to plaintiff upon an open book account. ...” Appellant’s answer denied these allegations. After the conclusion of the trial respondent moved to reopen the case and file the amendment to the complaint; the court, over appellant’s objection, granted the motion. As a fourth cause of action the amendment set forth, “That on or about October 13, 1955, said defendant orally promised to pay plaintiff herein for and on account of certain goods shipped and delivered on its behalf to one McCormack Corporation; . . . that said goods were duly shipped and delivered and portions thereof paid for on behalf of defendant; that the . . . balance due on said account, has not been paid after demand and remains due and owing....”

Appellant first demurred to the fourth cause, pleading the defenses of the statute of limitations and the statute of frauds; when the court overruled the demurrer appellant answered, setting forth the same defenses and admitting that “on or about October 13, 1955, . . . defendant orally promised to pay plaintiff for and on account of that certain merchandise set forth in the bill of particulars . . . other than the merchandise set forth therein under Invoice No. 11497; and . . . that the merchandise specified in said bill of particulars was shipped by plaintiff to McCormack Corporation. ...”

Appellant’s second claim that the amended complaint establishes a new cause of action, and that its nunc pro tunc filing after the duration of the period of the statute of limitations worked error, cannot stand against the right to change the form of a pleading under such circumstances as those presented here.

Many cases state the principle that a party may properly file an amended complaint alleging a cause otherwise barred by the statute when such amended complaint does not alter the facts composing the basic right or wrong of the action but merely projects a different legal theory for redress. To this the courts append the corollary proposition that a party may not introduce a new theory to the surprise or prejudice of his adversary without offering him an opportunity to meet it. (2 Witkin, California Procedure, p. 1623.) Thus in Wennerholm v. Stanford University School of Medic

The recent decision of the Third District Court of Appeal in granting a writ of mandate to compel the respondent court to permit a plaintiff to file an amended complaint which alleged willful and wanton misconduct in the place of an original allegation of mere negligence points out that “ [w]hen the basic facts are the same a mere change in the legal theory underlying the plaintiff’s complaint will not subject the amended complaint to the bar of the statute of limitations.” (Saari v. Superior Court (1960), 178 Cal.App.2d 175 , 178-179 [ 2 Cal.Rptr. 856 ].) Closer to the instant case is Wyndham, Inc. v. Wilmington Trust Co. (1948 ) 44 Del. 299 [ 58 A.2d 419 ], which involved a situation in which a complaint consisted of common counts for money had and received but the evidence disclosed only an account “ ‘for money lent and advanced, paid, laid out and expended. ’ ” In permitting leave to amend, the court states, “Plaintiff is not even attempting to change the form of action but only the particular category of common counts. It is not the function of common counts to narrate the facts upon which liability is predicated. Their informative function is little more than to indicate that the cause of action falls within the particular classification of contract actions. ” (P.420.)

Appellant would contort an amendment of pleadings falling within the generic term of common count into a radically different cause. In answer to respondent’s argument that a common count lies to enforce an agreement as to which plaintiff has performed all obligations'and no more remains to be performed than payment, appellant refers to the following quotation in 5 California Jurisprudence 2d 539: “ ‘One recognized exception to the general rule that the plaintiff must declare specially upon an express contract arises where a party to a special contract has performed his part, and nothing remains to be performed but the payment of the money due him on the contract. Under such circumstances, he can main

While no California case applies the common count of money had and received to the collection of the amount due for goods sold and delivered, the authorities at the minimum disclose the common origin and similarity of the former and latter counts. Ferro v. Citizens Nat. Trust & Sav. Bank (1955), 44 Cal.2d 401 [ 282 P.2d 849 ], points out that “if the plaintiff owes no further performance under the contract and nothing remains to be done thereunder except the payment of money by the defendant . . . [p]ayment can then be recovered under a complaint stating a common count for money had and received.” (P. 409.) See also Castagnino v. Balletta (1889), 82 Cal. 250 , 257-258 [ 23 P. 127 ]. In illustrating the type of cause to which common count applies, Lord Mansfield in Moses v. Macfarlan (1760), 2 Burr 1005, 97 English Reports 676, mentions the payment of money by mistake, the payment of money upon a consideration which fails, the acquisition of money through extortion, operation or undue advantage and sums up, “ ‘. . . In one word the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.’ ” (Philpott v. Superior Court (1934), 1 Cal.2d 512 , 518-519 [ 36 P.2d 635 , 95 A.L.R. 990 ].) See also Minor v. Baldridge (1898), 123 Cal. 187 , 190-191 [ 55 P. 783 ] ; Fox v. Monahan (1908), 8 Cal.App. 707 , 709 [ 97 P. 765 ] ; 14 So.Cal.L.Rev. (1940-1941), 288, 310.

We cannot hold here that respondent by the amendment introduced a radically different cause of action; it fell within the generality of the pleaded cause; respondent seeks redress for the wrong which arose from the “general state of facts” (Wennerholm v. Stanford University School of Medicine, supra (1942), 20 Cal.2d 713 , 718), which generated the first cause. These facts embrace the promise of appellant to pay for freezers shipped by respondent to McCormack Corporation which gave rise to the original complaint. While a cause of action may be garbed in cloaks of many different colors, the cloak does not create the issue. Here the issue, and the basic

No one deluded appellant as to the issue projected by the “general set of facts” or as to the basic nature of respondent’s contention. Appellant’s general manager received, and admitted receipt of, the invoices listed in the bill of particulars. The bill of particulars described the invoices. It is axiomatic that a bill of particulars “is in the nature of an amplification of the pleading to which it relates, and is to be construed as part of it for certain purposes” Ames v. Bell (1907), 5 Cal.App.1, 4 [ 89 P. 619 ] ; see also Edelman v. McDonell (1899), 126 Cal. 210 , 213 [ 58 P. 528 ]; “ its purpose [is] ... to apprise defendant of the specific demand of his adversary ...” (Campbell v. Rice (1913), 22 Cal.App. 734 , 737 [ 136 P. 512 ]). In the pretrial conference respondent described the action to be one for the recovery of the purchase price of freezers manufactured by respondent and delivered to appellant. Appellant can make no valid claim of surprise or unfairness on the part of respondent.

We have surely outgrown that stage of formalism in the law when each pleading congealed into an immutable and fixed document. As Pound points out, technical procedure “is a remnant of the mechanical modes of trial in the beginnings of our law, developed in the 18th century in an age of formal overrefinement....” (The Spirit of the Common Law, p. 128.) Repugnance to this rigidity inspired the observation in Buxbom v. Smith (1944), 23 Cal.2d 535 , 542 [ 145 P.2d 305 ]: “While orderly procedure demands a reasonable enforcement of the rules of pleading, the basic principle of the code system in this state is that the administration of justice shall not be embarrassed by technicalities, strict rules of construction, or useless forms.” Since the amended complaint merely stated a different theory for recovery on the same general state of facts and since appellant suffered no surprise or prejudice by its introduction, the refusal of a court to permit it would have been a retreat into an atavistic concept of procedure.

Appellant’s objections that the demurrer to the fourth cause of action should have been sustained without leave to amend and that testimony as to the delivery of the goods fell beyond the issues fail in the light of the above discussion.

Appellant’s case is a composition in dual rigidities. It would rigidly apply the bar of the statute of frauds because the goods were accepted by the agent of the buyer instead of the

We affirm the judgment.

Bray, P. J., and Duniway, J., concurred.

A petition for a rehearing was denied June 13, 1960, and appellant’s petition for a hearing by the Supreme Court was denied July 12, 1960.