Brookes v. Adolph's Limited

• Decision Date: 28 May 1959
• Citation: 339 P.2d 879,170 Cal.App.2d 740
• Court: California Court of Appeals Court of Appeals
• Parties: John S. BROOKES, Plaintiff and Respondent, v. ADOLPH'S LTD., a corporation, Defendant and Appellant. Civ. 23544.

Page 879

339 P.2d 879

170 Cal.App.2d 740

John S. BROOKES, Plaintiff and Respondent, v. ADOLPH'S LTD., a corporation, Defendant and Appellant.

Civ. 23544.

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

May 28, 1959.

Shaw & Miller, and Simon Miller, Beverly Hills, for appellant.

S. Dell Scott, No. Hollywood, and Forrest Latiner, Beverly Hills, for respondent.

HERNDON, Justice.

Appellant seeks reversal of a judgment which sustains respondent's claim to a $3,000 bonus under the terms of a contract of employment evidenced by a writing in the form of a letter.

Appellant is a California corporation engaged in the business of selling a product described as a 'meat tenderizer'. In 1955 respondent was an advertising executive residing in Chicago, Illinois. In the fall of that year appellant and respondent entered into negotiations which led to an agreement under which respondent was required to move to California and undertake the duties of an employment in appellant's organization. The agreement was reached after a series of meetings and discussions, and the terms thereof were confirmed in a letter dated November 21, 1955, addressed to respondent and signed by Mr. Rigler, appellant's president. This letter stated that Mr. Rigler and Mr. Deutsch, appellant's secretary-treasurer, had 'both concluded that we would be happy to have you join our organization as soon as it is conveniently possible for you and would assume that you would be out here ready for work the first week in January.' The parties are in agreement that the determination of this appeal must turn upon the proper interpretation of the following paragraph of said letter:

'As for compensation, we are agreed to the terms discussed at our last meeting which would be a base pay of $15,000 per year, with a bonus of $3,000 at the end of the first year if we feel that you have satisfactorily filled our requirements of increasing our sales, or at least not having them fall below the rate that they were before you came--plus, of course, our mutual desires to have you continue on with us.' (Emphasis added.)

The letter also contained a provision that respondent's moving expenses would be reimbursed within a limit of $1,500, and that respondent would assume the title of director. The closing sentence stated: 'I would appreciate your finalizing your decision and confirming this letter to us as soon as possible and let us know when you expect to arrive here.' Respondent replied to the foregoing in his letter dated November 26, 1955, stating, among other things, 'I am glad to be able to accept your kind offer in essence, and will report early in January, not later than the 9th.'

Respondent commenced working for appellant early in January, 1956, and continued in the employment until the latter part of November of that year. It appears to be undisputed that sales of appellant's product during 1956 exceeded those of the preceding year. On or about November 23, 1956, respondent was informed that his services were no longer needed and was tendered a check for his last month's salary bearing the notation 'Balance of Salary in Full to 12-31-56.' This check did not include the $3,000 bonus. Because appellant refused to remove the restrictive legend, respondent refrained from cashing the check. Subsequent to the trial, however, the parties entered into a stipulation that respondent might cash his last salary check without prejudice to his other claims, and that the issues in the litigation would be limited to respondent's right to receive the $3,000 bonus. It was further agreed that if respondent's right to the bonus was ultimately established, he would be entitled to recover the further sums of $308.39, representing accrued interest on the bonus to the date of judgment and $129.21, representing interest on the last installment of respondent's salary check to the date of judgment, together with trial court costs in the amount of $55.90.

At the trial, appellant's counsel took the position that since the employment contract was within the statute of frauds, it was necessary that the rights of the parties be determined solely by reference to the language of the writing; that parol evidence could not properly be admitted in aid of its interpretation, and that the writing in question was clear, unambiguous and susceptible of only one reasonable interpretation. Appellant urged in the trial court, as it urges here, that the only reasonable construction of the language in question is that payment of respondent's bonus was subject to the fulfillment of two independent conditions: (1) respondent's satisfactory fulfillment of appellant's requirements regarding sales, and (2) that there be a mutual desire of the parties to have the employment continue beyond the first year.

Respondent, on the other hand, took the position (a) that the only condition precedent to his right to the bonus was that appellant's sales in 1956 should exceed those of 1955; and (b) that the 'plus' clause in appellant's letter of November 21, 1955, was intended merely to allay respondent's apprehension that he was being hired only to accomplish a certain limited objective without favorable prospect of long term employment.

In the face of these conflicting contentions, the trial court ruled that the language of the writing was sufficiently unclear to admit of different interpretations, and, therefore, that extrinsic evidence should be admitted to aid the court in arriving at the true intent of the parties. Accordingly, evidence was admitted over appellant's objection which included respondent's testimony as to his understanding of the purpose and meaning of the clause in question. This parol evidence also related to the circumstances of the parties at the time the agreement was negotiated, and to some of the oral discussions which preceded it. We shall briefly set forth the substance of this evidence:

In 1955 respondent was employed as an advertising executive by a Chicago firm at a yearly salary of $21,000 but was interested in living in Los Angeles. At a meeting in Burbank with appellant's principal officers, respondent's background and experience in the marketing field were discussed. Respondent stated that he would be willing to come to California to work for appellant at a salary of $18,000 per year. Thereafter, in September of the same year, respondent met with Mr. Rigler in Chicago. Rigler explained to respondent that appellant's sales had fallen severely, and that the object of having respondent join the company was to stop the falling trend of sales. Rigler stated that he and Mr. Deutsch considered the figure of $18,000 to be rather high but that they felt that if that amount were to be paid, it should be paid on the basis of $15,000 for the year in equal monthly installments, plus $3,000 at the end of the year. Respondent expressed his belief that he could be helpful in reversing the adverse trend of sales, but stated that from what Mr. Rigler had said it appeared that the position being offered respondent was of a limited nature merely to stop the falling sales with no future beyond that. Rigler replied that this was not the situation, and assured respondent that a continuing position with future opportunity was being offered...