Before WILBUR K. MILLER, DANAHER and BASTIAN, Circuit Judges.
UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT.
Petition for Rehearing Denied May 13, 1959.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BASTIAN
Appellant [plaintiff] filed this action for breach of contract for personal services and damages resulting therefrom. The complaint alleges that on September 30, 1956, appellant discussed with appellee Orsinger, in the presence of witnesses, the terms of the contract. Appellant was to assume the duties of resident manager of an apartment development operated by Tyler Gardens Incorporated, of which corporation Orsinger is president, for which services appellant was to receive $75.00 per week in addition to a rent-free apartment for the duration of the contract. This proposed agreement was to continue "until the plaintiff [appellant] completed his law studies as a student duly matriculated in Georgetown University Law Center, Washington, D.C. or was obliged to discontinue these studies." This agreement was confirmed orally the following day in the offices of appellees. On October 12, 1956, appellant assumed his duties as resident manager. On November 17, 1956, he received a letter*fn1 terminating the contract, and this termination was confirmed by Orsinger in an oral conference on December 1, 1956.
Orsinger, in his answer to the complaint, denied having entered into any contract on his own behalf but admitted that there was an oral contract with Tyler Gardens, whose agent he claimed to be in the making of the contract. He denied, however, that the contract was to last for any definite period alleging that it was terminable at the will of either party. Tyler Gardens admitted entering into a contract of employment with appellant but denied that it was to last for any stated period of time, claiming that it was terminable at the will of either party. Among other defenses, including the charge that appellant was properly discharged, appellees urged the defense of the statute of frauds. After the taking of appellant's deposition, appellees filed a motion for summary judgment (Fed.R.Civ.P. 56, 28 U.S.C.A.), which the court granted.This appeal followed.
Appellant's complaint and his deposition, construed most favorably for appellant (as they must be in this posture of the case), present no genuine issue of fact to be tried by a jury. Assuming, as we must, the truth of all his allegations, the suit is barred by the statute of frauds. The pertinent parts of the statute read as follows:
Title 12, D.C.Code, § 302 (1951): "No action shall be brought whereby to charge . . . any person upon any agreement . . . that is not to be performed within the space of one year from the making thereof, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, which need not state the consideration, and signed by the party to be charged therewith or some other person thereunto by him lawfully authorized." [Emphasis supplied]
Appellant contends that the statute of frauds is not applicable to his alleged contract of employment with appellees since it could be performed within a year.This would result, it is contended, if appellant were obliged to discontinue his law studies because of "deficient scholarship or for some similar reason," *fn2 a contingency which could occur within a year.
That contingency contemplates an annulment of the terms of the contract and would operate as a defeasance, thereby terminating and discharging the contract. Further performance under the contract would be impossible by either party. This annulment or defeasance provision does not contemplate the performance of the contract but only its termination and cancellation. Although it could be annulled within a year, it was none the less a personal service contract to last for more than a year, e. g., until appellant completed his studies at Georgetown University Law School. Although this annulment or defeasance provision relieves the parties from further performance of the contract, it is not the type of performance that is necessary to take the case out of the operation of the statute.
". . . The statute looks to the performance and not the defeat of the contract, and a defeasance within a year would not constitute a performance according to the express intent of the parties, that performance should continue longer than a year.
"It is generally held that a contract for a definite period extending over a year is not taken out of the statute by an option allowing either party to terminate it within a year. The performance contemplated by the statute is a full and complete performance, and a cancellation is not such a performance. [Citing cases]
"Much of the confusion in considering the applicability of the statute apparently arises from failing to keep in mind the distinction between a contingency of such a nature as fulfills the obligation and one that defeats or prevents it from being performed . The one that depends upon the defeasance or matter of avoidance is within the statute, while the other is not." [Emphasis supplied]
In Union Car Advertising Co. v. Boston Elevated Ry. Co., 1 Cir., 1928, 26 F.2d 755, 58 A.L.R. 1007, the court held that the fact that a contract may be terminated, or further performance rendered impossible, within the period of one year, does not take it out of the statute where the obligation is one which cannot be performed within the year; that discharge from liability under a contract is not performance thereof. Citing, among others, ...