Dennis v. Thermoid Co.

• Citation: 19 N.J.Misc. 614,22 A.2d 535
• Decision Date: 18 October 1941
• Docket Number: No. 101.,101.
• Parties: DENNIS v. THERMOID CO.
• Court: New Jersey Circuit Court

22 A.2d 535

19 N.J.Misc. 614

DENNIS

v. THERMOID CO.

No. 101.

Circuit Court of New Jersey. Mercer County.

Oct. 18, 1941.

Action by Samuel K. Dennis against the Thermoid Company, a Delaware corporation, authorized to do business in New Jersey, to recover on an employment contract.

Judgment for plaintiff in accordance with opinion.

Homan, Buchanan & Smith, of Trenton, for plaintiff.

Ellis L. Pierson, of Trenton, for defendant.

OLIPHANT, Judge.

The above matter was heard by the Court without a jury pursuant to a stipulation entered into between the parties.

During the year 1936 and for at least eight years prior thereto the plaintiff Dennis was employed by the defendant company as Division Manager of its Southwestern Branch with headquarters at Dallas, Texas, where he had a home and was settled with his family. In October of that year, after some previous negotiations, he came to Trenton at the request of Frederick E. Schluter, the president of the defendant company, for which he had the power and authority to act, to confer concerning his taking the position of Director of Replacement Sales. This would necessitate his moving to Trenton, which he was reluctant to do.

Further negotiations took place and the final meeting between Dennis and Schluter occurred the latter part of October. At that time a memorandum of the terms ageed upon was made out and initialed by Mr. Schluter. Dennis wanted a salary of $7,500 a year, which figure appears on the memorandum, which Schluter would not pay and it was finally agreed that he should receive $500 per month beginning November 1, 1936 which was to be raised to $625 per month beginning July 1, 1937. In addition, he was to be paid his company expenses and the moving expenses of himself and family from Dallas to Trenton. He was further to receive "1% of all increased sales of the replacement division from October 31, 1936 over same periods previous year" plus "a participating share in any management bonus". As to this last item the sum of $1,500 was guaranteed. All of the foregoing appears on the memorandum.

As to the "management bonus" item I am of the opinion that the agreement between the parties contemplated that the guarantee of $1,500 applied only to the year 1937, that thereafter Dennis would share therein if there was any such bonus given by the Company. He was paid none for the year 1938 and thereafter never demanded same until the filing of the instant suit. There is no proof that there was any such bonus declared by the Company after the year 1937 or paid to others.

It was the practice of the company to figure increases and losses on sales on a yearly basis and likewise the practice to pay any bonuses shortly after the first of the year for the previous year's work.

I am convinced from the documentary and oral evidence the contract made between Dennis and Schluter on behalf of the company was a yearly hiring of the plaintiff by the defendant beginning January 1, 1937. I come to that conclusion largely by reason of the provision in the memorandum providing for a percentage on increased sales and a yearly bonus. Jones v. Manhattan Co., 91 N.J.L. 406, 103 A. 984; Lyons v. Pease Piano Co., 92 N.J.L. 592, 107 A. 66. Also in Willis v. Wyllys Corp., 98 N.J.L. 180, 182, 119 A. 24, 25, the Court said, "It is of some significance that the defendant proposed to, and in fact did, pay for the transportation of plaintiff's household effects from Cleveland, Ohio, a circumstance looking toward some degree of permanency in the employment".

It is conceded that the memorandum of October, 1936 did not meet the requirements of the Statute of Frauds, R.S. 25:1-5, N.J. S.A. 25:1-5, and if suit was brought on that instrument it would fail unless based on a quantum meruit. McElroy v. Ludlum, 32 N.J.Eq. 828, at page 833, citing Smith v. Smith's Adm'rs, 28 N.J.L. 208, 78 Am.Dec. 49. Where there is a hiring at a specified rate per year the English rule is followed in this State and that hiring is for a definite term, from year to year. The Court of Errors and Appeals in Willis v. Wyllys Corp., 98 N.J.L. 180, 119 A. 24, says, "There is great diversity of view in the different jurisdictions respecting this class of cases. The 'English view,' so called, tends to a construction establishing a contract for a definite term, if this can be spelled out of the language used. The 'American view,' favored by most of the states, tends toward a holding that the hiring is at will, unless the contrary be fairly plain. 26 Cyc. 973 et seq.; Williston on Contracts, § 39. Our own cases seem to favor the English view. * * *" This case has been followed in two recent decisions, one by the Court of Errors and Appeals in Donncllan v. Halsey, 114 N.J.L. 175, 176 A. 176, and the other by the Supreme Court in Essbee Amusement Corp. v. Greenhaus, 114 N.J.L. 492, 177 A. 562.

New York cases have been cited by both sides in their briefs with reference to several questions presented here. They are not pertinent as that jurisdiction follows the American rule.

In the instant case Dennis continued at his employment at the same rate of pay during the years 1937 and 1938 and began the year 1939 under the same conditions. He was discharged on April 7, 1939 without justifiable cause.

This suit is based upon the contract arising by operation of law by reason of the relationship of the parties continuing from year to year. In Passino v. Brady Brass Co., 83 N.J.L. 419, 84 A. 615, 616, the Court said, "The existence of a continuing contract of service from year to year, or from one definite period to another, may be implied from proved facts and circumstances, and the course of business between the parties, and is always a question of the intent of the parties". The following is found in Morris v. Z. T. Briggs Co., 192 Mo.App. 145, 179 S.W. 783, at page 785, "The effect of the continuation of the employment after the termination of the definite period, without any new agreement, was to raise the presumption of a renewal of the contract for the following year. * * * When one serves another under a contract for a year's service, and holds over, continuing in the service after the expiration of the year, there is a presumption, analogous to the presumption in the case of a yearly lease, that the parties consent to the continuance through another year of the contract of service".

In Williston on Contracts, par. 90, p. 155, it is stated: "Where a contract of employment for a definite time is made, and the employee's services are continued after the expiration of the time, without objection, the inference is that the parties have assented to another contract for a term of the same length with the same salary and conditions of service, following the analogy of a similar rule in regard to leases".

L.R.A.1918C, page 706 states the general rule to be as follows: "The great weight of authority is to the effect that an employee...