## Facts

- Smith procured export-related business and alleged dealings with Kirkpatrick, who operated an export business as W. S. Kirkpatrick Co.
- In an initial lawsuit, Smith alleged an oral employment contract under which he would devote full time to Kirkpatrick’s business and receive 50% of income from accounts he obtained.
- The initial complaint was dismissed on summary judgment because the alleged oral agreement was unenforceable under the Statute of Frauds (not performable within one year).
- The dismissal order granted Smith leave to amend to sue for the value of his services.
- Smith amended within the same action but pleaded (1) an oral, terminable-at-will arrangement for using Kirkpatrick’s office with a 50% gross-profit split on business handled through that office, and (2) an oral joint venture based on profit-sharing from business Smith procured; he did not plead quantum meruit expressly.
- After a non-jury trial, the amended complaint was dismissed for insufficient evidence; Smith did not appeal.
- Smith then filed a second, separate action seeking the reasonable value of his services in quantum meruit for procuring export business.
- Kirkpatrick moved to dismiss the second action as barred by res judicata and election of remedies; Special Term denied the motion, the Appellate Division reversed and dismissed, and Smith appealed.

## Issues

1. Whether a prior judgment dismissing claims premised on an alleged oral contract/joint venture bars a later action seeking the reasonable value of services in quantum meruit.
2. Whether pursuing contract and joint-venture theories in the first action constituted an election of remedies that precludes a later restitutionary claim.

## Decision

- The Court of Appeals reversed the Appellate Division and affirmed Special Term’s denial of the motion to dismiss.
- The Court held the quantum meruit action was not barred by res judicata because the earlier judgment did not finally adjudicate a claim for the reasonable value of services.
- The Court rejected application of election of remedies to bar the later quantum meruit claim under these circumstances.

## Legal Principles

- Claim preclusion applies only to the same cause of action; a judgment resolving the existence, enforceability, or proof of an alleged express contract or joint venture does not necessarily preclude a later, distinct claim in quantum meruit.
- Quantum meruit seeks restitution for the reasonable value of services when no enforceable contract governs; failure of a Statute of Frauds-barred contract theory does not, by itself, determine entitlement to restitution.
- A prior judgment precludes only matters actually and necessarily determined; where the earlier case did not determine the right to recover for services rendered apart from the alleged contract/joint venture, a later quantum meruit claim may proceed.
- Election of remedies does not bar a later quantum meruit claim merely because the plaintiff previously pursued unsuccessful contract-based theories, where the earlier judgment did not establish that no recovery of any kind is available.

## Conclusion

The Court of Appeals allowed Smith’s separate quantum meruit action to proceed, holding that the earlier, unsuccessful litigation of oral contract and joint-venture theories did not preclude a later claim for the reasonable value of services because that restitutionary claim had not been actually and necessarily decided, and election of remedies did not apply to bar it.


Smith v. Kirkpatrick, 305 N.Y. 66, 111 N.E.2d 209 (N.Y. 1953)