Case Name: FLORENZ TREU, Respondent, v. ROBERT C. KIRKWOOD, as State Controller, et al., Appellants
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1954-04-01
Citations: 42 Cal. 2d 602
Docket Number: Sac. No. 6282
Parties: FLORENZ TREU, Respondent, v. ROBERT C. KIRKWOOD, as State Controller, et al., Appellants.
Judges: 
Reporter: California Reports
Volume: 42
Pages: 602–621

Head Matter:
[Sac. No. 6282.
In Bank.
Apr. 1, 1954.]
FLORENZ TREU, Respondent, v. ROBERT C. KIRKWOOD, as State Controller, et al., Appellants.
Edmund G. Brown, Attorney General, Wilmer W. Morse and Marcus Vanderlaan, Deputy Attorneys General, for Appellants.
James H. Phillips for Respondent.

Opinion:
EDMONDS, J.
From 1947 to 1949, Florenz Treu was a noneivil service employee in the office of the lieutenant governor. By writ of mandate, the state controller and the treasurer have been ordered to approve and pay her claim "for overtime worked . . . for which petitioner was not compensated and was not given compensating time off." The appeal is from that judgment.
In her petition for a writ of mandate, Miss Treu alleged that, prior to the time the work was performed, the lieutenant governor had established normal office hours and promised her compensating time off for work beyond those hours. All overtime work was authorized by the lieutenant governor, she said, and she did not receive time off or any other compensation for such work, nor was any offered to or refused by her. According to the petitioner, a payroll claim for the cash equivalent of the accumulated overtime hours at the time of her separation was filed by the lieutenant governor and approved for payment by the State Personnel Board, but the controller refused to issue a warrant.
By their answer, the controller and treasurer denied that any amount was due for overtime. They alleged that Miss Treu was exempt from, and never held a position in, the state civil service. Her salary, they said, was fixed by the .lieutenant governor with the approval of the Department of Finance at a monthly rate which was paid in full and no salary or compensation on any other basis, or in any form other than cash, was authorized by the department.
Miss Treu was appointed secretary to the lieutenant governor on March 1, 1947, in which capacity she served for one year. She then became executive secretary. Her employment was terminated by resignation on August 1, 1949. In both positions she was exempt from civil service. During her employment, her salary, fixed on a monthly basis with the approval of the Department of Finance, progressively increased from $275 to $436 per month.
When Miss Treu commenced her work for the lieutenant governor, he fixed office hours from 9 a. m. to 5:30 p. m. on week days and from 9 a. m. to noon on Saturdays. At the beginning of her employment, he told her, she testified, "that there was a terrific amount of work in the office and he knew I was going to work a lot of overtime, and that I was going to be paid for the overtime that I worked. ' ' She was informed ' ' that she would be paid for the overtime as it would be impossible for her to take any time off because of the increased amount of work."
Thereafter, the lieutenant governor wrote to the Department of Finance requesting a salary increase for his staff upon the basis that two employees "have taken over and are doing the work that a staff of three people performed previous to my administration. Because of their willingness to assume this additional responsibility, I feel they should be compensated accordingly." He suggested that the appropriation for his office was sufficient to increase their salaries and stated: "I do not intend to further add to my staff as long as Mr. Mydland and Miss Treu continue doing the work that has required three people." In response to this request, the director of finance approved a salary increase for Miss Treu. All of her salary was paid in full.
Prior to the filing of the claim which is the basis of this proceeding, the Department of Finance had not fixed or approved salary or compensation for Miss Treu on other than a monthly basis, or in amounts different than her agreed monthly salary, nor did it approve compensation in any form other than cash or fix normal working hours for her. An official record was maintained in the lieutenant governor's office showing hours which she worked in addition to normal office hours. All such work was authorized by the lieutenant governor, and she was at no time granted compensating time off for these hours.
Upon her separation from service, a claim for payment for overtime was approved by the State Personnel Board. While the claim was pending in the controller's office, a letter from the attorney general was forwarded to the controller by the director of finance. The attorney general's letter set forth seven facts upon which it said the validity of the claim would depend. Among these were that the lieutenant governor had established normal hours of work for Miss Treu and that he promised her compensating time off for extra hours worked. The covering letter from the director of finance stated that: "The seven items . . . already have been substantiated, and there is available in our files the required letters and affidavits making the required substantiation." Thereafter, the claim was rejected by the controller and this proceeding was commenced.
Upon this evidence, the trial court found the allegations of the petition to be true. Judgment was entered directing that a peremptory writ of mandate issue commanding the respondents to approve and pay her claim.
In support of their appeal, the respondents contend that the finding that Miss Treu was promised compensating time off for overtime work is not supported by the evidence. In addition, they say, the judgment may not be sustained upon the theory of a contract to pay cash compensation for overtime work because no such contract was approved by the department of finance as required by statute. They argue that, in the absence of either a valid contract or a statutory provision, Miss Treu's monthly salary was payment in full for all of her services during each month, regardless of the number of hours worked. Other objections made by the respondents are that the trial court failed to find upon certain material issues and that other findings are not supported by the evidence. This court is requested to make findings of fact to conform to the proof. A final contention is that, even if Miss Treu is entitled to a cash payment for overtime work, it should be computed upon the basis of her salary at the time the work was performed, rather than her salary at the time of separation.
Miss Treu relies upon Howard v. Lampton, 87 Cal.App.2d 449 [197 P.2d 69], and Clark v. State Personnel Board, 56 Cal.App.2d 499 [133 P.2d 11], holding that in the absence of statute, a state employee is entitled to payment upon separation from service for properly authorized overtime work. She also contends that a promise of compensating time off is not a prerequisite to payment for overtime. Even if it is, she says, the promise by the lieutenant governor to pay her for overtime work may be construed as a promise to give her compensating time off. In addition, she disputes each of the other contentions of the respondents.
In Martin v. Henderson and Redwine v. Henderson, 40 Cal. 2d 583 [255 P.2d 416], the Howard and Clark decisions were disapproved insofar as they determine that a state employee, in the absence of specific statutory authority, is entitled to payment for accrued overtime upon separation from service. Therefore, the question here is whether there was contractual or statutory authority for payment to Miss Treu for overtime services.
The petition specifically alleges a promise by the lieutenant governor to give Miss Tren ' ' compensating time off for overtime hours worked in addition to her normal hours of work." The court found that the promise was made. However, the letter from the lieutenant governor to the Department of Finance and Miss Treu's own testimony, shows conclusively that she was not promised time off. She was told that "it would be impossible for her to take any time off because of the increased amount of work." The promise made to her was "that she would be paid for the overtime."
The respondents contend that this amounted to a failure of proof within the meaning of section 471 of the Code of Civil Procedure, rather than a mere variance. They rely upon Gillin v. Hopkins, 28 Cal.App. 579, 580-582 [153 P. 724], which held that evidence of a contract to accept payment in stock constituted failure of proof of a cause of action upon an agreement to pay a designated sum of money. The situation is analogous to that here. Obviously, a promise to grant compensating time off is far different from a promise to pay cash for overtime work. However, " (n)o variance between the allegation in a pleading and the proof is to be deemed material, unless it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits. ' ' (Code Civ. Proc. § 469.)
"The code also provides that the court must, in every stage of an action (and that means on appeal, as well as in the trial of the cause), disregard any error, improper ruling or defect in the pleadings or proceedings, which, in the opinion of the court, does not affect the substantial rights of the parties. It must appear from the record that the error, improper ruling or defect was prejudicial and caused substantial injury before the judgment rendered may be reversed or be held to be affected by it; and it must further appear that a different result would have been probable if such error, ruling or defect had not occurred or existed. (Code Civ. Proc. § 475.) Not only do these code sections require this court, under such circumstances, to determine from an examination of the entire record, whether or not there has been a miscarriage of justice before reversing a judgment, but the state constitution is equally mandatory and imperative. (Const. §4½, art. VI.) It therefore indubitably follows that it is not every variance that will necessitate the overthrow of a judgment." (Murname v. Le Mesnager, 207 Cal. 485, 495 [279 P. 800].)
It is obvious from a review of the record in this case that the respondents were not misled to their prejudice. They anticipated proof of a contract for payment for overtime work and introduced evidence to show that no such contract had been approved. In addition, the pleading adequately apprised the respondents of the claim which they would be called upon to meet. It alleged that "at the time of said separation from said State employment petitioner herein had accumulated and was entitled to be paid in cash by the State of California for overtime worked while an employee of the said Lieutenant Governor in the total sum of $3,076.53." Construed liberally, as must be done (Code Civ. Proc. § 452), the petition.demanded payment for overtime work for which compensation in some form had been promised. Under the circumstances, it cannot be said that the variance is so material as to require a reversal of the judgment. (Hayes v. Richfield Oil Corp., 38 Cal.2d 375, 382 [240 P.2d 580].) '
Although there is no evidence to support the finding that Miss Treu was promised compensating time off for overtime work, the record includes evidence tending to prove an agreement for payment in cash for work beyond normal office hours. However, the respondents argue that the judgment cannot be sustained upon this theory because no such contract was approved by the Department of Finance as required by statute.
Miss Treu was appointed under the authority of section 12101 of the Government Code which provides: "The Lieuten'ant Governor may appoint and, subject to the approval of the Director of Finance, fix the salaries of one secretary and such clerical assistants as the Lieutenant Governor deems necessary for his office." The salary basis fixed by the lieutenant governor for Miss Treu and approved by the director of finance was one for monthly compensation without any authorization of additional payment for overtime.
Miss Treu contends that no approval by the Department of Finance is necessary to permit the payment of compensation for overtime. Her position, however, is directly contrary to the express provisions of section 18004 of the Government Code. At the time she commenced her employment, that section read: "Unless the Legislature specifically provides that approval of the Department of Finance is not required, whenever any State agency . . . fixes the salary or compensation of an. employee . . . which salary is payable in whole or in part out of State funds, the salary is subject to the approval of the Department of Finance before it becomes effective and payable." The office of lieutenant governor is included within the term ' ' State agency." (Gov. Code, § 11000.)
The words "salary" and "compensation" are, in general usage, interchangeable and are synonymous in most definitions. "Compensation" is " [t]he remuneration or wages given to an employee or, especially, to an officer. Salary, pay, or emolument." (Black's Law Diet., 4th ed., p. 354.) Likewise, "salary" is defined as "a stated compensation, amounting to so much by the year, month, or other fixed period, to be paid to public officers and persons in some private employments, for the performance of official duties or the rendering of services of a particular kind." (Black's Law Diet., 4th ed., p. 1503.) "While the term salary in its original and strict sense signifies a fixed compensation it is frequently used in our constitution and laws as the equivalent of compensation." (Martin v. County of Santa Barbara, 105 Cal. 208, 212 [38 P. 687].)
From the wording of section 18004 read with reference to related statutory provisions, it is obvious that "salary" and "compensation" are there used as being synonymous. Section 13070 of the Government Code provides that the Department of Finance "has general powers of supervision over all matters concerning the financial and business policies of the State. " The purpose of the latter section "is to conserve the financial interests of the state, to prevent improvidence, and to control the expenditure of state money by any of the several departments of the state. (Ireland v. Riley, 11 Cal.App.2d 70, 72 [52 P.2d 1021].)" (State v. Brotherhood of R. Trainmen, 37 Cal.2d 412, 422 [232 P.2d 857].) Therefore, a contract fixing rates of pay and working conditions, which has not been approved by the department in accordance with section 18004, is invalid. (State v. Brotherhood of R. Trainmen, supra.)
Any doubt concerning the necessity for the department's approval of contracts for "compensation" and "salary" is dispelled by reference to section 13370 of the Government Code which, at the time Miss Treu was hired, provided: "All contracts entered into by any state agency . . . for services . . . are of no effect unless and until approved by the Department of Finance." Under this section, a contract to pay Miss Treu for her services beyond normal working hours, regardless of whether payment be considered "compensation" or "salary," or both, would be invalid if lacking the approval specified by the statute.
In her petition in this proceeding, Miss Treu did not allege that the Department of Finance had authorized the payment to her of any amount for overtime work. The respondents pleaded in defense of her claim that no such authorization had been made.
The evidence concerning the action taken by the Department of Finance shows that while Miss Treu's claim was pending before the controller, several letters were written to the controller regarding it. Although in some of them, a request was made to the controller to withhold payment pending the determination by the department of certain facts, none of them placed the request upon the ground that the department had not given its approval to the working of extra hours. From this correspondence, it might reasonably be inferred that the department tacitly approved the claim except for the specific irregularities mentioned. One letter to the controller referred to an opinion of the attorney general listing the items necessary to establish the validity of the claim. Included in these prerequisites was proof "that the employee was authorized to and did work the extra hours claimed." The department stated to the controller that the authorizations enumerated by the attorney general "have been substantiated, and there is available in our files the required letters and affidavits making the required substantiation." Although the documents received in evidence tend to show that the authorization to which reference was made was only that of the lieutenant governor, they do not compel that conclusion, and it might reasonably be inferred that the department had also approved the arrangement made by him.
On the other hand, there is evidence from which it reasonably could be concluded that the department gave no such approval. Fred W. Links, Assistant Director of Finance and chief of the division of budgets and accounts, was a witness for Miss Tren. He testified that his division handled her claim. Asked if the Department of Finance approved it, he answered that the function of his division was not to pass upon its validity; " [w]hat we did was merely to report to the State Controller, as we had requested him to withhold the drawing of the warrant for payment thereof until we had substantiated the facts." Asked if the department fixed or approved salary compensation for Miss Treu other than on her regular monthly basis, or if it fixed or provided for compensating time off for overtime hours, he replied that it did not do so. Although this testimony tends strongly to show a lack of approval, it too is not conclusive upon the issue. It may be that Links was speaking of a formal approval; also, there might have been a departmental approval made without his knowledge.
Miss Treu pleaded and tried her ease entirely upon a theory of contract but she now contends that no promise of time off was necessary to entitle her to recover. She concedes that section 18005 of the Government Code, authorizing payment upon separation for accumulated overtime, was inapplicable to employees exempt from civil service during the period in question. However, she refers to Government Code, sections 18023 and 18024, and rule 133 of the Personnel Board which provide for the adoption of rules governing hours of work and the granting of time off in lieu of cash compensation for overtime. But she does, not claim, nor does the record indicate, that she was within those statutory or regulatory provisions or that any statute entitled her to payment for overtime. Instead, she argues that no statutory authority is essential to permit her recovery. This point has been decided adversely to her in Martin v. Henderson, supra.
In the absence of either a valid contract or statute, there is no basis for a recovery by Miss Treu. Her monthly salary was payment in full for all of her services, without regard to the number of hours which she worked. (Martin v. Henderson, supra; Jarvis v. Henderson, 40 Cal.2d 600 [255 P.2d 426] ; Robinson v. Dunn, 77 Cal. 473 [19 P. 878, 11 Am.St.Rep. 297].)
In summary, from the evidence presented, conflicting inferences could be drawn as to whether or not the Department of Finance has approved Miss Treu's claim. The. issue is essential to a determination of this proceeding. It should have been alleged in the petition for mandate and determined by the findings. (Cf. Delany v. Toomey, 111 Cal.App.2d 570, 571-573 [245 P.2d 26].) However, no such finding was made. The trial court found that all of the allegations of the petition are true. But Miss Treu did not charge that her claim was for overtime approved by the department. The answer asserted, by way of defense, that there was no such approval, and the allegations in each paragraph of the answer were found to be untrue only "so far as they deny the allegations in" the particular paragraph of the petition being answered.
The situation then is that the issue as to approval by the department of finance, fully pleaded in the respondent's answer, was not considered by Miss Treu or the trial judge to be the determinative factor basic to any recovery. Her position, undoubtedly taken in reliance upon the Clark and Howard decisions, which since have been disapproved, was that authorization by the Department of Finance was not a prerequisite. In her brief she says: " The court is reminded that there was no legal requirement for the Department of Finance to approve the working hours of petitioner or the approving of compensation for overtime."
The memorandum opinion of the trial judge clearly shows that he did not believe that a promise to pay an employee additional compensation for extra time must be approved by the Department of Finance to make the state liable for the payment of it. As he construed section 18004 of the Government Code, it requires approval by the Department of Finance only of salary. "It is true," he said "that the statute states 'salary or compensation' but later each one of the clauses refers only to the word 'salary'. This court does not feel that that statute is subject to the broad interpretation which respondent puts upon it. We are of the opinion that the words 'salary or compensation' are used as interchangeable terms, but that a lump sum to be paid in lieu of compensating time off is not such 'compensation' as is meant there." Undoubtedly, that construction of the statute is the reason why no finding as to the approval by the department was made.
Although an appellate court is empowered to make findings of fact and to take evidence in support of a judgment (Code Civ. Proc., § 956a), generally it will not do so when the evidence before the trial court is conflicting. (People v. One 1949 Ford V-8 Coupé, 41 Cal.2d 123, 127 [257 P.2d 641].) This latter rule is not without exception (cf. Johndrow v. Thomas, 31 Cal.2d 202, 207 [187 P.2d 681] ; Gudger v. Manton, 21 Cal.2d 537, 547 [134 P.2d 217]), but where, as in the present case, the evidence in favor of one party is not clearly persuasive, and there is no indication as to the trial judge's appraisal of the evidence, the judgment should be reversed for a new trial in order that there may be a finding upon the issue.
The judgment is reversed.
Gibson, C. J., Traynor, J., and Spence, J., concurred.