[2] The Supreme Court of California has held: Although such an action is one at law, it is governed by principles of equity.
It may be brought 'wherever one person has received money which belongs to another, and which "in equity and good conscience," or in other words, in justice and right, should be returned. . . .
Monitor, the subcontractor, told the Navy's project engineer that it needed substantial price increase for the additional 40 units as well as reimbursement for cost overruns which it was incurring in producing the initial 160 units; otherwise it would have to cease production.
No additional formal contract was signed, but the project went ahead and Monitor provided the 200 units.
The Comptroller General of the United States held that the courts and our Office have recognized that in appropriate circumstances payment may be made for services rendered on a quantum meruit basis (the reasonable value of work or labor), or for goods furnished on a quantum valebat basis (the reasonable value of goods sold and delivered).According to the ruling, the Navy ratified an agreement for the extra units and cost overrun.