Blatt v. Star Paper Co.

• Decision Date: 29 December 1970
• Citation: 276 A.2d 786,160 Conn. 193
• Parties: Louis BLATT et al. v. The STAR PAPER COMPANY.
• Court: Connecticut Supreme Court

Page 786

276 A.2d 786

160 Conn. 193

Louis BLATT et al. v. The STAR PAPER COMPANY.

Supreme Court of Connecticut.

Dec. 29, 1970.

Louis Evans, with whom was Mark G. Sklarz, New Haven, for appellants (plaintiffs).

Ivan A. Hirsch, Bridgeport, with whom, on the brief, was Edgar W. Krentzman, Bridgeport, for appellee (defendant).

Before ALCORN, C.J., and HOUSE, COTTER, THIM and RYAN, JJ.

COTTER, Justice.

The plaintiffs, Louis Blatt, hereinafter referred to as the plaintiff, and his wife, Toby Blatt, brought this action asking for money damages and for a decree compelling the defendant to perform a written contract between the parties to make payments to the plaintiff or his wife. The court rendered judgment for the defendant and the plaintiffs have appealed. They have assigned error on the grounds that the special finding of facts made by the court is insufficient to support the judgment; that the court failed to find certain facts as set forth in the draft finding; and that certain portions of the court's finding are of doubtful meaning and inconsistent with the provisions of the contract as set forth in certain paragraphs of the court's finding. The plaintiffs also assign error in the conclusions of the court, in certain rulings of the court on evidence, and the overruling of the plaintiffs' claims of law.

The court decided the case without causing the facts upon which it founded its judgment to appear on the record and the plaintiffs requested a finding that the court specially set forth such facts. Practice Book § 260; see General Statutes § 52-231. The plaintiffs assign as error the court's special finding of facts on the ground that the special finding is insufficient to support the judgment. 'The purpose of a special finding is to place upon the record the material facts upon which the judgment is based; other matters have no place in it and can only be presented in a finding made for the purpose of an appeal.' Practice Book § 265; see Berry v. Hartford National Bank & Trust Co., 125 Conn. 615, 622, 7 A.2d 847. 'When a material fact is found from more detailed or subordinate facts, not as a conclusion of law but as a conclusion of fact, only the main or resulting fact should be set forth in the (special) finding.' Practice Book § 266. Paragraph 5 of the special finding is as follows: 'The defendant corporation continued to pay, and has paid to date, the sum of $100 per week as per agreement dated December 28, 1962.' That conclusion of a main fact is sufficient to support the judgment in favor of the defendant. ¹

The material facts found by the court relating to this appeal, which are not subject to correction, may be summarized as follows: The plaintiff, Louis Blatt, is a brother-in-law of Benjamin and Stanley Scholsohn, stockholders of the defendant, the Star Paper Company. Between 1945 and December 28, 1962, the plaintiff was employed by the defendant and he also held a one-twelfth interest in the capital stock of the defendant. The plaintiff, however, we unable to work from May, 1962, to October 1962, due to a heart attack. On December 28, 1962, he entered into a written agreement with the Star Paper Company and Benjamin and Stanley Scholsohn. The express purpose of the agreement was to provide for the sale of the plaintiff's stock in the defendant corporation to Benjamin and Stanley Scholsohn and to provide for an amicable settlement of certain claims that he claimed he had against the corporation; and to recognize 'the many long years of faithful service of Blatt' to the corporation. The terms of the agreement provided that the Scholsohns would pay the plaintiff the sum of $12,750 for his shares of stock. In addition, the defendant corporation agreed to pay Louis Blatt $100 per week for the remainder of his life and upon his death, to continue the payments to the plaintiff's wife. ²

After the execution of the contract Blatt continued in the employ of the defendant at an agreed salary of $75 per week, which was increased shortly thereafter to $100 per week. Between 1963 and October, 1968, he received a check from the defendant corporation of $160 per week less F.I.C.A. and withholding taxes, plus a car allowance of $40 per week, except from October, 1967, to April, 1968, when he was ill and unable to work, he received a portion of the weekly payment as a payment from a major medical policy, and during a period in March, 1963, when he took an unauthorized three-week vacation during which time he received $100 per week. Blatt was discharged from the defendant corporation in October, 1968, and since October 18, 1968, he has received $100 per week less F.I.C.A. and withholding taxes. Following his discharge the plaintiff claimed and demanded the $100 per week as provided for in 2 of the contract, for the first time, six years after the contract was executed, even though the plaintiff was in need of more money after January, 1963, and requested and received an increase in salary.

The plaintiffs also assign error in the conclusions of the court that: (a) the defendant did not breach its agreement of December 28, 1962, and that (b) the weekly payments made by the defendant to Louis Blatt after December 28, 1962, and while performing full-time services was allocated at $100 in accordance with 2 of the agreement and the remainder thereof to salary. The conclusion that Louis Blatt was paid after December 28, 1962, as a full-time employee is not supported by the findings of fact which show on the contrary that he was a part-time employee. This portion of the conclusion is corrected to show that Blatt was performing part-time services during that period. This correction, however, does not affect the result which we reach in this case. The court's conclusions are to be tested by the finding and must stand unless they are legally or logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law material to the case. Schurgast v. Schumann, 156 Conn. 471, 478, 242 A.2d 695; Johnston Jewels, Ltd. v. Leonard, 156 Conn. 75, 79, 239 A.2d 500.

The finding contains four subordinate facts which support the court's conclusions. First, the defendant was obligated under 2 of the agreement to pay the plaintiff $100 per week. Second, after December 28, 1962, the plaintiff continued in the employ of the defendant for an agreed salary of $75 per week for his part-time work which was increased to $100 per week. Third, while the plaintiff continued in the employ of the defendant after December 28, 1962, he was paid $100 per week in excess of the agreed wages; except during a three-week unauthorized vacation, when he was paid, without protest, $100 per week by the defendant. Finally, the plaintiff never advised the defendant that he was not receiving the $100 as per contract and the plaintiff never made a demand for $100 per week as a separate check during the six years subsequent to the execution of the contract.

The plaintiffs' principal argument which is not persuasive is that the defendant treated its contractual obligation as a payroll item because F.I.C.A. and withholding taxes were deducted, and not as part of the purchase price for the plaintiff's stock. The plaintiff places great emphasis on the characterization of the contract. He contends that the contract is for the sale of stock and that the court erred in characterizing the contract as an employment contract. The defendant, however, concedes that the contract is not an employment contract and argues that the court also made the same determination. The proper labeling of the contract is irrelevant and should not be the basis of the opinions. The question to be decided in this case is simply whether the defendant performed its contractual obligations. If the defendant made the required payments, the fact that for tax purposes the payment was treated as salary to allow a deduction under § 162 of the Internal Revenue Code (26 U.S.C. § 162), whether or not properly deducted, should not be a factor considered in this opinion.

The facts found support the court's conclusions in the following manner: The parties to the contract discussed the desirability of handling the payments as a payroll item subject to the normal deductions; while he was employed, the plaintiff accepted the weekly checks without protest for a period of six years and never requested that the $100 payments be made as separate checks; and the plaintiff testified that he did not complain about the failure to pay him $100 until he was discharged because he did not need the money. Sometime after January, 1963, however, the plaintiff complained that he did not have enough money, and the defendant gave him an increase of $25 per week. Finally, an examination of the contract supports the finding that the basis for the deductions from the plaintiff's check with respect to the $100 paid on the contract was remuneration for past services. In construing a written instrument, the entire document must be considered in the light of the situation of the parties and the circumstances connected with the transaction. Gellatly Construction Co. v. City of Bridgeport, 149 Conn. 588, 593, 182 A.2d 625. The contract expressly states that part of the consideration is the recognition of the past services of the plaintiff.

The conclusions of the court are based on unchallenged subordinate facts determined from conflicting evidence and are logically consistent with the facts found and therefore must not be disturbed. Schurgast v. Schumann, 156 Conn. 471, 478, 242 A.2d 695; Nair v. Thaw, 156 Conn. 445, 449, 242 A.2d 757; Johnston Jewels, Ltd. v. Leonard, 156 Conn. 75, 79, 239 A.2d 500; National Broadcasting Co. v. Rose, 153 Conn. 219, 222, 215 A.2d 123.

The plaintiffs next assign error in the failure of the court to find additional facts which they set forth in their draft finding. Paragraphs 8 through 13 of the plaintiffs' draft finding relate to his gross...