defendant's liability on the covering note would be absolutely extinguished.

The respondent contends further that while the appellant surrendered the covering note in ignorance of the fact that a loss had occurred, it did so knowing that a loss might have occurred. No doubt it was open to the plaintiff to consent to cancel the reinsurance, agreeing at the same time to take the chance of any loss that might have occurred in the meanwhile. "Where parties knowingly predicate a settlement upon uncertain or contingent matters or circumstances, and where the consequent risk which each is to encounter is taken into consideration in the stipulation assented to, the contract will be valid notwithstanding the mistake of one of the parties." (20 Am & Eng Ency. of Law, 2d ed., 815.) This principle is applied in cases where a policy is issued insuring property from a date anterior to the execution of the policy. The insurer is bound to pay a loss occurring between the date fixed for the commencement of the insurance and the actual execution of the policy, although the fact of such loss was not known when the policy was issued. And this stands upon the ground that the risk is one expressly contracted for. (Commercial Ins. Co. v. Hallock, 27 N. J. L. 645, [72 Am. Dec. 379].) But the facts of the present case do not bring it within this rule. We see no reason why the intent to surrender an accrued claim, the existence of which was not known, should be imputed to the plaintiff in the absence of an express understanding to that effect, and there is nothing here to evidence such understanding. In this respect, as in its main features generally, the case bears a close resemblance to Riegel v. American Life Ins. Co., 140 Pa. St. 201, [23 Am. St. Rep. 225, 21 Atl. 392]. There the defendant had issued to Riegel, the plaintiff's intestate, a policy of insurance for six thousand dollars on the life of one Leisenring. Riegel died after paying the premiums for some years. The plaintiff, his widow and administratrix, in order to be relieved from the burden. of the annual premiums, surrendered the policy to the company, taking in exchange a paid-up policy for $2,500. In fact, although the fact was not known to either the plaintiff or the company, Leisenring had died before the exchange of policies was made. It was held that the mistake under which both parties had acted, entitled the plaintiff to be relieved

from the exchange and to be reinstated to her rights on the original policy. This view was restated by the court on a second appeal. (Riegel v. American Life Ins. Co., 153 Pa. St. 134, [25 Atl. 1070].) It is argued by the respondent that in the Riegel case there was no consideration for the surrender by plaintiff, she being then under no obligation to pay further premiums, whereas here plaintiff was by the cancellation relieved from its existing liability to pay a premium. But this distinction does not affect the principle upon which the Riegel case was decided. As was said by the supreme court of Pennsylvania on the second appeal, "In many cases prominence is given to failure of consideration resulting from mutual mistake or ignorance of material facts, but entire failure of consideration is not an essential ingredient in any case.

Much stress is laid by respondent on the dealings between the plaintiff and the Norwich Union Fire Insurance Company, it being claimed that plaintiff transferred its reinsurance from the defendant to the Norwich Union, and that this conclusively shows plaintiff's intent to release defendant from any possible liability, past or future. But the covering note of the Norwich Union did not begin until January 25th, and could not cover a loss occurring on the 24th. If the plaintiff intended to substitute the new insurance for the old, such intention was based on the belief that no loss had yet occurred. And while the plaintiff subsequently applied to the Norwich Union for a policy running from January 16, 1901, the undisputed testimony shows that this application was never acted upon or accepted. Even if it could be said that the Norwich Union did reinsure fifteen hundred dollars of the risk from January 16, 1901, such reinsurance was not effected until January 29th. At that time the transactions between plaintiff and defendant had been closed, and a subsequent dealing between plaintiff and a third company could not destroy the rights vested in plaintiff upon the surrender of the covering note to defendant on January 25th.

The order appealed from is reversed.

Angellotti, J., and Shaw, J., concurred.

Hearing in Bank denied.

[S. F. No. 3995. Department Two.-January 29, 1907.]

J. C. BROWN, Respondent, v. CROWN GOLD MILLING COMPANY, Appellant.

ACTION FOR SERVICES-PLEADING-QUANTUM MERUIT-IMPLIED PROMISE -EXPRESS PROMISE-SURPLUSAGE.-A complaint stating that plaintiff performed certain services for the defendant and alleging their reasonable value, and that they were rendered at the special instance and request of the defendant, states a sufficient cause of action on quantum meruit. From these facts the law implies a promise to pay the reasonable value, and an averment of an express promise to that effect is surplusage which will not vitiate the pleading. ID.-VARIANCE EVIDENCE OF CONTINGENT CONTRACT-BREACH WITHOUT CAUSE SUPPORT OF QUANTUM MERUIT-NONSUIT.-Although proof of a contingent contract would be a fatal variance, where a contract to pay a definite sum absolutely is alleged; yet where the cause of action is upon a quantum meruit, and a contingent contract has been broken, proof of such contingent contract and of its breach without cause, shows no variance justifying a nonsuit, but supports the quantum meruit.

ID.-WRONGFUL DISCHARGE OF EMPLOYEE RESCISSION OF CONTRACT RECOVERY OF REASONABLE VALUE OF SERVICES.-Where an employee is discharged by his employer without cause during the term of his employment, he may regard the contract as rescinded, and sue upon a quantum meruit, and recover the reasonable value of his services, as if the special contract of employment had never been made. ID.-IMMATERIAL INFIRMITIES IN CONTRACT-UNCERTAINTY.—A plaintiff in quantum meruit does not sue upon an express contract or for a specific performance of it; and it is immaterial what infirmities exist in the contract actually made, or whether it is or is not void for uncertainty, or for any other cause. ID.-EMPLOYMENT BY CORPORATION-MANAGER DE FACTO-KNOWLEDGE OF DIRECTORS-IMPLIED RATIFICATION.-A contract of employment by a corporation may be made by one who is its manager de facto; and where the terms of the contract of employment were known to the majority of its directors individually, and they did not disaffirm the contract, they are deemed in law to have ratified it. ID.-EVIDENCE-TERMS OF EMPLOYMENT-STATEMENTS OF MANAGER.Statements made by the manager of the corporation during the course of the continuous employment of plaintiff by the corporation under the manager's authority with reference to the terms of the employment were admissible as tending to show those terms. ID.-CONTINGENT EMPLOYMENT FOR LIFE-SUCCESS OF BUSINESS-DISCHARGE EVIDENCE OF PRESENT CONDITION.-Where, by the terms of the contract of employment, plaintiff, as an expert assistant in a

business, was to have a position for life when the business was successful, with ample remuneration, and meanwhile was to have a small weekly salary for living expenses, his discharge could be justified only by proof of cause therefor, or that the business was in fact a failure; and mere evidence that it had not paid expenses and that the company had present indebtedness not paid, without any pretense of failure of the enterprise, was inadmissible. ID.-RECEIPTS OF WEEKLY SALARY IN FULL-MEASURE OF COMPENSATION-EXPLANATION OF PURPOSE-INSTRUCTIONS.-In view of the circumstances and terms of the contract, the court properly refused an instruction that receipts for weekly salary "in full for account'' must be regarded as a deliberate admission that the rate of compensation stated therein was the rate expressly agreed upon, and properly instructed the jury "that a receipt is never conclusive; it is always open to explanation, and the purpose for which it was given may be shown."

ID.-SERVICES OUTSIDE SCOPE OF EMPLOYMENT-REASONABLE COMPENSATION-INSTRUCTION-QUESTION FOR JURY.-An employee in a particular service has the right to a reasonable compensation for services rendered outside the scope of his employment, although there is no express agreement therefor. Where plaintiff's evidence justified an instruction to that effect, it was properly given; and the question whether services were in fact rendered by plaintiff outside the scope of his employment was one for the jury to determine. ID.-INSTRUCTION AS TO WRONGFUL DISCHARGE-FACT NOT ASSUMEDDUTY OF DEFENDANT.-An instruction that if the jury found that the agreement was that plaintiff should work for two dollars and fifty cents per day until the company was in a condition to pay more, or until it got in a more prosperous condition, "then the defendant had no right to discharge the plaintiff without cause,' does not improperly assume that plaintiff's discharge by defendant was wrongful, or take that question from the jury. It was subject to a reasonable application by the jury to the evidence; and if defendant wanted it more clearly stated, it should have asked the court to make it so.

ID. INSTRUCTION AS TO EFFECT OF EMPLOYER'S ACTION.-An instruction "that where a servant has been wrongfully discharged during the term of his service, or where the term of service is otherwise closed by his employer's action, the employee may treat the contract as rescinded and sue on a quantum meruit for the reasonable value of the services performed" neither assumes a "wrongful discharge" nor is objectionable in the use of the words "or where the term of service is otherwise closed by his employer's action.''

APPEAL from a judgment of the Superior Court of the City and County of San Francisco. Thomas F. Graham, Judge.

The facts are stated in the opinion of the court.

Bigelow & Dorsey, for Appellant.

J. J. Scrivner, and Thomas M. Diviny, for Respondent.

LORIGAN, J.-This action was brought by plaintiff to recover from defendant the reasonable value of certain services performed for it from August 1, 1900, to December 14, 1901.

The case was tried before a jury, a verdict rendered for plaintiff for $2,955, and from the judgment entered thereon defendant appeals, the grounds urged for a reversal being presented upon a bill of exceptions accompanying the appeal from the judgment.

At the close of plaintiff's case defendant moved for a nonsuit, which was denied. This is the first error assigned, and in order to properly discuss it it is necessary to state portions of the pleadings and of evidence offered under them by plaintiff.

The complaint, after enumerating the various services performed by plaintiff at the instance and request of defendant, further alleged "that such services were so rendered and performed at the special instance and request of said defendant, and said defendant then and there promised and agreed to pay the plaintiff a reasonable compensation for the same," followed by an allegation of their reasonable value.

The answer admitted the performance of the services as alleged, but averred that plaintiff had agreed to perform them for fifteen dollars per week up to August 3, 1901, and for twenty dollars per week thereafter during the time claimed, which amounts had been paid him weekly and for which he had given receipts.

The evidence on the part of plaintiff showed that the defendant was a corporation organized to exploit a patented machine for the concentration of ores and was endeavoring to make the patent a success. It had a shop in the city of San Francisco, where the machine was manufactured, operated, tested, and shown to those interested in such processes, and it was in connection with the exploiting of this machine that the plaintiff was employed. The plaintiff had been en