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Perlberg v. Geminder

Decided: June 11, 1952.


McGeehan, Jayne and Goldmann. The opinion of the court was delivered by Goldmann, J.A.D.


[20 NJSuper Page 193] Plaintiff appeals from a judgment of dismissal entered in favor of the defendants at the close of plaintiff's case. The substantial question to be decided is

whether the trial court erred in not submitting to the jury the issue of the reasonable value of plaintiff's services. The contention that there was also error in taking from the jury the question of whether plaintiff was entitled to damages by reason of defendants' fraud and deceit, was abandoned at the argument.

The background of the action is derived from plaintiff's testimony. For some time defendants had discussed with him some of the problems of their bulk nut business. On June 7, 1950, the talks culminated in his becoming associated with defendants under an oral agreement that a separate company would be established for the sale and distribution of nuts packaged in smaller quantities, the plaintiff to have a 50 per cent interest in that business and to receive a salary of $100 a week plus expenses. It was agreed that until production began his salary would be only $50 a week, and this amount was regularly paid him until October, 1950.

The agreement was modified in September, 1950, to give plaintiff a one-third interest in the proposed company. The marketing of packaged nuts began that month. There was a further modification of the agreement in October to provide for the establishment of a separate packaged nut division of the defendant company, plaintiff to have a one-third and the individual defendants a two-thirds interest in such enterprise, and plaintiff to receive a salary of $80 a week plus $20 expenses for a trial period of one year. Defendants' attorney was to prepare the final draft of the agreement for execution by all the parties. Such written agreement was never executed. However, plaintiff's salary was changed from $50 to $80 a week, plus $20 expenses.

At the end of October plaintiff made a 1,315-mile motor trip to Albany, Utica and Buffalo, N.Y., and Pittsburgh, Harrisburg and Reading, Pa., contacting food brokers to handle the packaged nuts. In mid-December he and defendants discussed the auditing of the business records. Differences arose over the calculation of the sales and net profits, and on December 22, 1950, plaintiff quit the business.

Plaintiff now claims that relying on defendants' promises, he had associated himself with them and performed services in establishing the packaged nut division, including supervising the design of the packages, setting up a sales organization and getting the new line into production. He admits receiving the weekly salary payments orally agreed upon, but alleges he has not been paid the promised share of the profits. He sued, demanding judgment of $50,000 for the reasonable value of his services and damages sustained because of defendants' fraud and deceit and their breach of agreement. Plaintiff further sought an accounting of all profits made from the packaged nut division.

Defendants' motion for judgment of dismissal at the conclusion of plaintiff's case necessarily admits the truth of plaintiff's evidence and every inference of fact that can logically and legitimately be drawn therefrom in favor of the plaintiff. Cauco v. Galante , 6 N.J. 128, 132 (1951). The challenge of such a motion is that upon the facts and the law the plaintiff has shown no right to relief. Rule 3:41-2.

Recovery in this action was not sought on the basis of an express contract, but on a quantum meruit for the reasonable value of the services furnished defendants. Both parties proceeded on the assumption that if there was any agreement, it was unenforceable under the statute of frauds because not in writing and therefore void. R.S. 25:1-5(e). The law is settled that in an action for services performed under a contract invalid by the statute, the plaintiff cannot sue upon the contract; he can only seek his remedy upon a quantum meruit for the value of the services rendered. McElroy v. Ludlum , 32 N.J. Eq. 828, 833 (E. & A. 1880); 2 Williston on Contracts (Rev. ed. 1936), § 536, p. 1553; Restatement, Contracts , § 355 (Illustrations of subsection 1).

In order to be entitled to recovery of the reasonable value of his services the plaintiff must in the circumstances of this case prove such value. 58 Am. Jur., Work and Labor , § 62, p. 560. Plaintiff did not resort to the terms of the

alleged agreement as competent evidence to affect the amount of the compensation recoverable. Our courts have held that where a contract is within the statute of frauds, it can no more be used for the purpose of influencing the amount of the recovery than it can be made ...

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