Agnew v. Cameron

• Decision Date: 05 January 1967
• Citation: 247 Cal.App.2d 619,55 Cal.Rptr. 733
• Court: California Court of Appeals Court of Appeals
• Parties: , 32 A.L.R.3d 796 E. C. AGNEW, doing business as Santa Ana Neon Company, Plaintiff, Cross-Defendant, and Appellant, v. Morey CAMERON, Defendant, Cross-Complainant, and Respondent. Civ. 8203.

Page 733

55 Cal.Rptr. 733

247 Cal.App.2d 619, 32 A.L.R.3d 796

E. C. AGNEW, doing business as Santa Ana Neon Company, Plaintiff, Cross-Defendant, and Appellant, v. Morey CAMERON, Defendant, Cross-Complainant, and Respondent.

Civ. 8203.

Court of Appeal, Fourth District, Division 2, California.

Jan. 5, 1967.

[247 Cal.App.2d 620] Willis J. Clemons and Hugh L. Wright by Willis J. Clemons, Santa Ana, for plaintiff, cross-defendant, and appellant.

Thurman & Barrett by Thomas W. Thurman, Santa Ana, for plaintiff, cross-complainant, and respondent.

OPINION

KERRIGAN, Justice.

In 1959 plaintiff, as the owner and operator of a neon sign company, employed defendant as a salesman for the purpose of selling and leasing electric signs. Originally, under oral agreement, defendant received for his services a fixed salary of $100.00 weekly and an expense account, plus a 4% Commission on cash sales negotiated. Defendant's salary was later increased to $150.00 weekly. Subsequently, in October 1960 the parties entered into a new oral agreement respecting the compensation to be paid defendant under which arrangement defendant was to receive as compensation a straight 10% Commission on all cash sales and pursuant to which agreement plaintiff was to advance defendant the sum of $150.00 weekly. The 10% Commission was based on the cash selling price of a sign, and in the event of the leasing of a sign, the parties agreed as to the method by which the cash value of the lease would be established for the purpose of computing defendant's commission. Later in 1962 the parties agreed orally defendant would be paid a stipulated bonus for neon sign leases negotiated by defendant.

In April 1963 the defendant left plaintiff's employ and at the time of his termination, he had received the sum of $5,470.60 in advances or 'draws' over and above the amount of commissions earned. Plaintiff then filed suit to recover for advances made in excess of earnings, and defendant filed a cross-complaint for commissions allegedly due. The cause came on for trial before the court sitting without a jury, and after plaintiff rested his case, the defendant made a motion for judgment in conformity with the provisions of section 631.8 of the Code of Civil Procedure, which motion was granted. The trial court found the advances made by plaintiff exceeded the earnings of defendant by the sum of $5,470.60, but inasmuch as defendant had made no promise, either express or implied, to repay the funds advanced except through sales commissions earned, plaintiff was not entitled to recover the advances made to defendant. Judgment was thereupon entered decreeing plaintiff take nothing by virtue of his complaint and defendant take nothing pursuant to his cross-complaint.

Plaintiff appeals from the judgment on the following grounds: (1) insufficiency of the evidence; and (2) where an employer advances funds to an employee to be repaid out of commissions earned, the employee is liable as a matter of law for the difference between the advances made and the commissions earned, even though the employee, expressly or impliedly, makes no promise to repay the difference.

Plaintiff attacks the findings of the trial court to the effect the employee made no promises, either express or implied, to repay the advanced funds other than from commissions earned, and contends there was ample evidence the advances constituted a Loan of money to be repaid by the employee to the employer. While there was testimony indicating that the employer, during a short period of defendant's tenure, made entries on his business books and records indicating that the advances were 'loans,' there was substantial evidence adduced from the testimony of plaintiff's witnesses to the effect the advances were 'draws' against future commissions, and there was further credible evidence to the effect no written or oral promises were ever made by defendant to repay the advances other than through his future commissions. It is a fundamental principle of review that in examining the sufficiency of the evidence to support a challenged finding an appellate court must accept as true all evidence tending to establish the correctness of the findings made, and the power of the appellate court begins and ends with the determination of whether there is any substantial evidence to support the finding inasmuch as the reviewing court possesses no power to judge the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or the reasonable inferences that may be drawn therefrom. (Primm v. Primm, 46 Cal.2d 690, 693, note 1, 299 P.2d 231; Overton v. Vita-Food Corp., 94 Cal.App.2d 367, 370, 210 P.2d 757; Pfaff v. Fair-Hipsley, Inc., 232 Cal.App.2d 274, 278, 42 Cal.Rptr. 624; Curtis v. Mendenhall, 208 Cal.App.2d 834, 838--839, 25 Cal.Rptr. 627; Broadbent v. Modern Imperial Cattle Co., 208 Cal.App.2d 433, 441, 25 Cal.Rptr. 92; Anchor Casualty Co. v. Surety Bond Savings & Loan Ass'n, 204 Cal.App.2d 175, 185, 22 Cal.Rptr. 278.) Because there was substantial evidence clearly indicating that the money advances constituted draws and were not loans, the trial court was fully justified in entering its finding based on such evidence.

While it is clearly the law in California that a salesman is required to repay the excess of advances made over commissions earned when there is an express agreement on the part of the salesman to repay such excess (Korry of California v. Lefkowitz, 131 Cal.App.2d 389, 391--392, 280 P.2d 910), the cardinal issue involved in this appeal has apparently never been squarely decided in California. The specific issue to be resolved is whether an employee is liable to his employer where the employer makes cash advances against future commissions with no express or implied promise the employee repay the amount of such advances in excess of commissions earned.

The majority rule in the United States is when the contract of employment provides for advances to the employee, which are to be deducted from commissions earned, as the same may accrue, the employer cannot recover excess advances from the employee in the absence of an express or implied agreement or promise to repay any excess of advances made over commissions earned. Argonaut Builders, Inc. v. Dare (1961) 145 Colo. 424, 359 P.2d 366; Trenchard v. V. J. Dunton Realty Co. (1959) 141 Colo. 360, 347 P.2d 959; Sutton v. Avery (1945) 132 Conn. 397, 44 A.2d 701, 165 A.L.R. 1364; Kennesaw Life & Accident Ins. Co. v. Hendricks (1963) 108 Ga.App. 148, 132 S.E.2d 152; Roxy Furniture & Novelty Co. v. Brand (1962) 106 Ga.App. 104, 126 S.E.2d 295; Foster v. Union Central Life Insurance Company (1961) 103 Ga.App. 420, 119 S.E.2d 289, reh. den.; Srere v. Rapp (1924) 233 Ill.App. 190; Hibbs-Kiefer Hat Co. v. Schneiderhan (1930) 236 Ky. 470, 33 S.W.2d 304; Shushan Bros. & Co., Inc. v. Ortego (La.Ct.App.1964) 160 So.2d 800; Landry v. Huber (La.Ct.App.1962) 138 So.2d 449, 95 A.L.R.2d 499; Rex-Metallic Casket Co. v. Gregory (La.Ct.App.1959) 115 So.2d 639, reh. den., cert. den.; Perma-Home Corp. v. Nigro (1963) 346 Mass. 349, 191 N.E.2d 745; Leighton v. Bancamerica-Blair Corp. ...