Eluschuk v. Chemical Engineers Termite Control, Inc.

Plaintiff sued defendant corporation and Van D. Powell for money arising out of breach of contract and for declaratory relief; the complaint was dismissed as to Powell but defendant corporation answered and filed a counterclaim (defendant did not proceed on the counterclaim). The action was tried on the first and fourth causes of action—in the first, plaintiff sought recovery of $12,000 for services rendered defendant corporation as a termite control salesman between April 23, 1963, and January 31, 1964, and in the fourth a declaration of the rights of the parties under paragraphs 9, 10, 11, 14, 15 and. 16 of a written employment agreement of April 26, 1963, which he alleged are void on the ground of lack of mutuality and force and duress. Plaintiff appeals from judgment denying him recovery on his complaint and awarding defendant corporation $300 attorney’s fees and $87.95 costs'.

We view the evidence in a light most favorable to the respondent. .(Estate of Bristol, 23 Cal.2d 221 , 223 [ 143 P.2d 689 ]; Berniker v. Berniker, 30 Cal.2d 439 , 444 [ 182 P.2d 557 ].) Prior to April 23, 1963, plaintiff had worked off and on as a solicitor and salesman for defendant Chemical Engineers Termite Control, Inc., during which he was employed under a contract. On April 23, 1963, he returned to defendant corporation for a job; Mr. Powell told him that he could go to work for him but he would have to sign an employment contract. Inasmuch as plaintiff needed the job he agreed to do so. On that day (April 23, 1963) he was hired by Powell as a termite control salesman for a 15 percent and 20 percent commission. While plaintiff’s previous work for defendant corporation had been as a solicitor and salesman, he did not like soliciting and did not want to work as a solicitor. He then had no solicitor’s license, but could have obtained one had he desired; neither did he have an inspector’s license. On April 23, 1963, .he entered his duties for defendant corporation as a salesman; he worked as such for three days when, on April 26, 1963, Powell' again advised him that he would have to sign a written employment contract and would have to do so before he could be paid for the week. Thus, on that day (April 26, 1963) he" took plaintiff to the offices of the corporation attorney where a-, written employment contract was signed (Exh. 2).

In his testimony plaintiff conceded that on April 26, 1963, after the employment contract was signed, he and defendant corporation mutually orally agreed that plaintiff, instead of performing the dual job—field representative-salesman or solicitor-salesman—as provided in the written contract, would continue to perform the lesser services as salesman and receive therefor a lesser compensation (15 percent and 20 percent of gross sales) rather than the compensation set forth in the contract (30 percent of gross sales). Powell told him that in case he got his inspector’s license and took the dual job of inspecting and selling he would get 30 percent. The change of duty and in the rate of pay therefor was the only change made in the written contract. In accord therewith plaintiff continued as a salesman and was paid and received his agreed-upon commissions (15 percent and 20 percent) without any objections of any kind; he at no time ever discussed the contract relative to his work as a salesman with defendant corporation. Thus, plaintiff worked from April 23, 1963, as a termite control salesman for defendant corporation earning and collecting the commissions therefor when, on January 31, 1964, without legal excuse and notice to defendant corporation, he terminated his employment and a month later went to work for a competitor in the pest control business, all during the term of the written employment contract of April 26, 1964. At that time there was due plaintiff on defendant corporation’s records $1,444.58 which it retained as damages under paragraph 14 of the written employment contract.

The trial court held that immediately after entering into the written contract of employment on April 26, 1963, the parties modified the same by an oral agreement which they later executed, and that the written employment agreement, together with the executed oral agreement; determined the relationship between the parties; that all of the terms and conditions, except as modified by the executed oral agreement, contained in the employment agreement of April 26, 1963, are valid and legally enforceable; and that plaintiff breached the employment agreement by prematurely leaving defendant’s employ, refusing to perform his duties as a salesman and competing with defendants during the term of the agreement.

These legal conclusions were based on the following findings

‘ ‘ 1. plaintiff would not solicit;

“2. plaintiff would not expect compensation for soliciting;

“3. defendants would not expect or require that plaintiff solicit;

“4. plaintiff would act in the capacity of a salesman only;

“5. defendants would compensate plaintiff as a salesman at a lesser commission rate of either fifteen (15%) or twenty (20%) per cent” (No. VI); “That plaintiff and defendants hy their words and conduct continually reaffirmed to each other, the aforementioned relationship that they had established up until the time when plaintiff left the employ of defendants” (No. VII) ; that on January 31, 1964, plaintiff left defendant’s employment without legal excuse and without notice (No. VIII), refused to perform his duties (No. IX) and competed with defendant corporation (No. XIII)—all prior to the natural termination of the employment contract; and that all moneys due plaintiff for services rendered had been paid to plaintiff by defendant (No. XI).

Primarily appellant claims that finding No. Ill—that plaintiff rendered said services (as salesman) for defendant pursuant to a written agreement signed by the parties on April 26, 1963, and an executed oral agreement entered into on the same date—is erroneous because the written employment agreement did not bind him since the oral agreement constituted a novation rendering the written contract invalid. He argues that the written employment contract was never modified in writing or by an executed oral agreement; that he never performed as a field representative-salesman or solicitor-salesman and he did not receive 30 percent commissions

The oral agreement substituting duties and salary for those provided in the written employment contract alone is not sufficient to effect a novation; there must be an intent to extinguish the written contract. (Civ. Code, §§ 1530-1532.) The intention to discharge the old contract must be clearly indicated. (San Gabriel Valley Ready-Mixt v. Casillas, 142 Cal.App.2d 137 , 140 [ 298 P.2d 76 ]; Producers Fruit Co. v. Goddard, 75 Cal.App. 737 , 755 [ 243 P. 686 ]; Columbia Casualty Co. v. Lewis, 14 Cal.App.2d 64 , 72 [ 57 P.2d 1010 ]; Ayoob v. Ayoob, 74 Cal.App.2d 236 , 250 [ 168 P.2d 462 ]; Alexander v. Angel, 37 Cal.2d 856 , 862 [ 236 P.2d 561 ].) It is a factual question whether each of the parties intended, by discontinuing performance under the several provisions of the written contract and entering into the new oral arrangement relative thereto, to release the other and to be released from the remaining provisions of the written contract. There is nothing in the evidence to show that the parties during plaintiff’s employment ever considered the oral agreement a novation ; to the contrary, it appears that they intended to and did by their conduct continue under the terms of their written employment contract not directly affected by the oral change of plaintiff's duties and rate of pay, believing that all of the terms of the written contract not so affected would determine the relationship between them.

Appellant relies primarily on Anderson v. Standard Lumber Co., 64 Cal.App. 410 [ 221 P. 686 ], Therein, plaintiff was hired by defendant under a written contract as an all-around yardman at $250 per month; thereafter plaintiff came to California and upon his arrival and after looking over the premises, told defendant that he did not feel competent to be a green lumber yard foreman and asked defendant to keep on the man who was then doing that work. He said he could not handle the job and “didn’t know sugar pine from white pine.” Plaintiff .then agreed to take charge of the green lumber chain at nights

The record, however, does support a change in the provisions of the written employment agreement relating to plaintiff’s duties and salary by an oral modifying agreement fully executed. An executed oral agreement will serve as a modification of a written agreement without regard to the presence or absence of a consideration. (Civ. Code, § 1698; Julian v. Gold, 214 Cal. 74 , 76 [ 3 P.2d 1009 ]; Estate of Morrison, 68 Cal.App.2d 280 , 285 [ 156 P.2d 473 ].) Section 1698, Civil Code, provides: “A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise. ’ ’ An executed oral modification of a term or provision of the contract does not wholly extinguish the contract; the effect is to alter only those portions of the written contract directly affected by the oral agreement leaving the remaining portions intact. (Keeble v. Brown, 123 Cal.App.2d 126 , 129 [ 266 P.2d 569 ].) “An ‘alteration’ is a modification or change in one or more respects which intro-, duces new elements into the details of the contract, or cancels some of them, but leaves the general purpose and effect undisturbed.” (Grant v. Aerodraulics Co., 91 Cal.App.2d 68 , 74 [ 204 P.2d 683 ].) “Whether a writing has been modified by an executed oral agreement is a question of fact.” (Keeble v. Brown, 123 Cal.App.2d 126 , 132 [ 266 P.2d 569 ]; MacIsaac & Menke Co. v. Cardox Corp., 193 Cal.App.2d 661 , 670 [14 Cal; Rptr. 523].) The finding herein, that the written contract of April 26, 1963, was amended by an executed oral agreement to the extent only that plaintiff was not to perform the services of field representative-salesman or solicitor-salesman and was not to receive as compensation therefor 30 percent commission but in lieu thereof was to perform services as a salesman and receive 15 percent and 20 percent leaving all other provisions in effect, is supported by the record.

Too, the oral agreement was fully executed—the object thereof was accomplished—the contemplated services thereunder were fully performed by plaintiff and his commissions earned therefor were ascertained by defendant corporation. For eight months plaintiff worked as a salesman; defendant corporation concedes that when he quit it owed him $1,444.58 as payment for services rendered and would have paid him

While the oral agreement was fully executed and the presence of consideration is not an issue herein, the record shows that the oral modification was made before performance was started under the written employment contract which plaintiff was required to sign before he could continue working for defendant corporation; and the substitution of new rights and duties based upon work and salary different from that specified in the written contract resulted in relinquishment of the reciprocal rights of the parties under the applicable provisions of the written employment contract. Plaintiff, who did not like to solicit and who did not want to engage in that kind of work, was relieved of his duties as a field representative-salesman or solicitor-salesman provided for in the written employment contract. Thus, it appears that there is adequate consideration to validate the oral modification under section 1698 even if it can be said that there was performance by only one party. (See D. L. Godbey & Sons Constr. Co. v. Deane, 39 Cal.2d 429 , 431-433 [ 246 P.2d 946 ]; Chohon v. Kersey Kinsey Co., 173 Cal.App.2d 548 , 552 [ 343 P.2d 614 ]; Townsend Pierson, Inc. v. Holly-Coleman Co., 178 Cal.App.2d 373 , 377 [ 2 Cal.Rptr. 812 ]; MacIsaac & Menke Co. v. Cardox Corp., 193 Cal.App.2d 661 , 670 [ 14 Cal.Rptr. 523 ].)

The judgment is affirmed.

Wood, P. J., and Fourt, J., concurred.