Durkin v. Everhot Heater Co.

• Decision Date: 03 April 1934
• Docket Number: No. 36.,36.
• Parties: DURKIN v. EVERHOT HEATER CO.
• Court: Michigan Supreme Court

266 Mich. 508

254 N.W. 187

DURKIN

v.EVERHOT HEATER CO.

No. 36.

Supreme Court of Michigan.

April 3, 1934.

Appeal from Circuit Court, Wayne County; Vincent M. Brennan, Judge.

Action by Thomas J. Durkin against Everhot Heater Company. From a judgment for plaintiff, defendant appeals.

Affirmed.

Argued before the Entire Bench.

Warren, Hill, Hamblen, Essery & Lewis, of Detroit (Crawford S. Reilley, Charles E. Lewis, and Thomas H. Adams, all of Detroit, of counsel,) for appellant.

Frederick B. Darden, of Detroit (William W. Brashear and Kenneth E. Raine, both of Detroit, of counsel), for appellee.

NORTH, Justice.

On February 7, 1930, defendant, a manufacturer of water heaters, at Detroit, Mich., employed plaintiff as a national director of its so-called home sales division for a period of ten years beginning March 1, 1930. The written contract was for a salary of $750 per month during the first two years and an additional provision for commission on sales; and during the remaining eight years compensation was wholly on a commission basis. In accordance with the contract, plaintiff's employment began March 1, 1930. His activities were largely, if not wholly, in eastern states. He continued until September 1, 1930. Defendant, by letter dated August 27, 1930, notified plaintiff of the termination of the contract as of September 1, 1930, and inclosed with the letter a check for $375 which was the amount of plaintiff's earned salary to September 1. In December following, plaintiff filed the declaration herein, alleging defendant's breach of the contract and seeking recovery of damages. Upon trial before jury plaintiff had verdict and judgment. Defendant has appealed.

Under its plea of general issue defendant gave notice of several special defenses, including accord and satisfaction. On this latter ground defendant moved the court for a directed verdict. This motion was taken under advisement and subsequently denied incident to defendant's motion for judgment notwithstanding verdict. The defense of accord and satisfaction is principally based upon the following facts: Plaintiff's employment contemplated the trying out of a new plan of selling defendant's water heaters by means of a house to house canvass. Plaintiff was to organize and train sales agencies. Trial of this plan lasting two or three months demonstrated that it was wholly unsuccessful. It resulted in the expenditure of a substantial sum of money by defendant without the sale of a single water heater. As the result of a conference between plaintiff and defendant's representatives, the house to house sales plan was abandoned; and thereupon plaintiff undertook to promote sales of defendant's heaters through gas companies. This effort was likewise wholly unsuccessful. On July 18, 1930, defendant's sales manager wrote plaintiff as follows: ‘When I saw you last I gave you some idea that the company was feeling your present contract with it as a burden. This, of course, would not be so had it been possible for you to accomplish something tangible. Neither would it be so bad if general business was good enough to enable the company to carry some extraordinary burdens. General business conditions are so different and the results obtained by you have been so different from anything contemplated at the time the agreement was entered into, I am wondering if you would at this time consider some kind of a revision as suggested to you the last time I saw you. Will you kindly advise?’ Again on July 24, defendant wrote plaintiff that owing to adverse economic conditions executives of defendant company had voluntarily accepted decreases in salary ranging from 25 per cent. to 50 per cent. ‘to help meet this emergency’; and plaintiff was urged to accept a 50 per cent. salary reduction. Plaintiff replied and declined to consent to a reduction of salary. On August 27 defendant, under advice of its attorneys, wrote plaintiff at New York: ‘This will constitute formal notice to you that the agreement between this Company and yourself, dated as of February 7th, 1930, and your employment by this Company is hereby terminated as of September 1st, 1930, and we are enclosing, herewith, our check to your order in the amount of three hundred and seventy-five ($375.00) dollars in full payment and satisfaction of all claims of any kind for compensation or otherwise which you may have against this Company.’ The inclosed check dated August 30 was in the usual form with the following notation on the back of the check: ‘8-30-30. Salary last half August $375.00.’ Plaintiff deposited the check to the credit of his own bank account. Before depositing the check plaintiff caused a photostatic copy to be made. It is appellant's contention that as a matter of law acceptance of the check by plaintiff forwarded under the conditions outlined in the letter of August 27 worked an accord and satisfaction; or at least that the record in this particular presents an issue of fact which should have been submitted to the jury. The trial judge ruled against each of these...