Foulke v. San Diego & Gila Southern Pacific Railroad

By the Court, McKinstry, J.: Section 10 of the act of 1861, concerning railroad corporations, provides: “No contract shall be binding upon the company unless'made in writing.” In Pixley v. W. P. R. R. Co. (33 Cal. 198), it was held that the clause above quoted referred to executory and not to executed contracts, and that when a corporation takes and holds the benefit derived from the performance of a contract not in writing, it is liable to the extent of the benefit received. There are indeed dicta in the opinions delivered in Pixley v. Western Pacific Railroad Company, to the apparent effect that where all has been done by the other contracting party which the contract requires of him, the corporation should be held to have ratified the express contract, and a recovery be had according to the terms of such contract. But these were not called for by the circumstances of that case, which ivas an action on the quantum meruit. The true rule to be deduced from the opinions in Pixley v. Western Pacific Railroad Company, is, the provision of the statute must be limited to contracts wholly executory. It cannot refer to those liabilities which the law itself implies from benefits received and actually enjoyed, where the services have been performed on the one side and received and enjoyedy on the other. In the last class of cases, however, the action must be brought upon the implied promise, and the recovery must, be limited to the value of the actual benefit received. The record of the case before us contains no finding of the value or reasonable icorth of the services performed by plaintiff’s' assignor. Judgment and order reversed, and cause remanded for a new trial.