Fothergill v. McKay Press

• Court: Michigan Supreme Court
• Writing for the Court: BLACK; Since submission of this case of Fothergill; SMITH; DETHMERS, C. J., and CARR, KELLY, EDWARDS, KAVANAGH and SOURIS, JJ., concurred with SMITH
• Citation: Fothergill v. McKay Press, 106 N.W.2d 215, 361 Mich. 666 (Mich. 1960)
• Decision Date: 01 December 1960
• Docket Number: J,No. 6,6
• Parties: Alfred J. FOTHERGILL, Plaintiff and Appellant, v. McKAY PRESS, Defendant and Appellee. une Term.

Page 215

106 N.W.2d 215

361 Mich. 666

Alfred J. FOTHERGILL, Plaintiff and Appellant, v. McKAY PRESS, Defendant and Appellee.

No. 6, June Term.

Supreme Court of Michigan.

Dec. 1, 1960.

Francis & Wetmore, Midland, for plaintiff and appellant; James W. Baker, Bay City, John E. Riecker, and Floyd E. Wetmore, Midland, of counsel.

Currie & Currie, Midland, for defendant and appellee.

Before the Entire Bench.

BLACK, Justice (concurring in reversal).

In Warner v. Texas & Pacific R. Co., 1896, 164 U.S. 418, 17 S.Ct. 147, 41 L.Ed. 495, the Supreme Court had occasion to review generally the authoritative history of this particular provision of the statute of frauds. The following conclusion was reached (at pages 422, 423, 17 S.Ct. 147, 149):

'It thus appears to have been the settled construction of this clause of the statute in England, before the Declaration of Independence, that an oral agreement which, according to the intention of the parties, as shown by the terms of the contract, might be fully performed within a year from the time it was made, was not within the statute, although the time of its performance was uncertain, and might probably extend, and be expected by the parties to extend, and did in fact extend, beyond the year.

'The several states of the Union, in re-enacting this provision of the statute of frauds in its original words, must be taken to have adopted the known and settled construction which it had received by judicial decisions in England.'

Since submission of this case of Fothergill, Mr. Justice Kavanagh has called attention to that line of Michigan cases, starting with Smalley v. Mitchell, 1896, 110 Mich. 650, 68 N.W. 978, which in steady seriation discloses Michigan's alignment with the foregoing settled construction of such statutory provision. Smalley states the rule this way (at page 652, 68 N.W. at page 979) 'The mere fact that the contract may or may not be performed within the year does not bring it within the statute. The rule is that if, by any possibility, it is capable of being completed within a year, it is not within the statute, though the parties may have intended and thought it probable that is would extend over a longer period, and though it does so extend.' ¹

I agree, then, solely on strength of Mr. Fothergill's actual right (as against defendant's motion for directed verdict) to recover for breach of a valid oral contract the parties agreed might be terminated on six months' notice, that the judgment of the circuit court should be reversed. There is more to be said, however, if we are to be fair to the trial judge.

This plaintiff did not urge below the true ground for his presently apparent right of recovery, that is, breach of an oral contract which, by its terms, was terminable at will of either party on the giving of notice of less than a year's time. Neither did he cite below (nor here for that matter) a single authority to the point of such right. Instead, plaintiff planted in the trial court (as here) his theory of recovery on affirmative answers to these questions:

'I.

'Did plaintiff's exhibit I satisfy the requirements of the statute of frauds, as a 'memorandum' of a contract, where the writing, signed by the defendant, was not delivered back to defendant with plaintiff's signature?

'The lower court answered 'No'.

'Plaintiff and appellant contends the answer should be 'Yes'.

'II.

'Did the contract of employment between plaintiff and defendant (as evidenced by plaintiff's exhibit I) satisfy the requirement of mutuality?

'The lower court answered 'No'.

'Plaintiff and appellant contends the answer should be 'Yes'.' ²

Thus was Judge Holbrook left to ferret out and brief the right of plaintiff's case, and thus was he led to belief (as was the present writer on first impression of the case) that the rule of Wilkinson v. Heavenrich, 58 Mich. 574, 26 N.W. 139 called for holding that the agreement of the parties was wanting of mutuality in that Mr. Fothergill was never bound to do that which formed the consideration for defendant's promise.

Nevertheless, all this considered, it is clear that plaintiff did make out, as against defendant's motion for directed verdict made at close of his proofs, an apparent case for recovery of the amount he would have earned--during the orally and validly agreed termination period--had defendant given him the stipulated notice of termination. This put the defendant partnership to its pleaded defenses and required denial of its motion for peremptory verdict.

I concur in reversal and remand for new trial.

SMITH, Justice.

In any case (such as this) where one man has worked for another in apparent harmony over a period of years, he who would resist further performance in accordance with the terms of the agreement they have lived under, or damages in lieu thereof, on the ground of non-compliance with the statute of frauds, has a heavy burden of persuasion to carry. We are not persuaded that it has been carried.

There is no need to re-state all of the facts. It is important, however, to note (according to the view of the testimony favorable to the plaintiff, against whom a motion for a 'directed verdict' was granted) that plaintiff Fothergill originally worked for defendant under the terms of a verbal understanding reached in December of 1953. As plaintiff testified, 'It was all understood verbally although it wasn't in writing.' The understanding included an escape clause:--either party might terminate the relationship upon six months' notice. Fothergill testified: 'I was coming to another country, I had my wife and family to think of I thought I had a six month period, give me an opportunity to look for another job if worse came to worse.' In March of 1955, Fothergill was tendered what was captioned an 'Agreement.' It purported on its face to be 'in confirmation of a verbal agreement made in December, 1953, and in consideration of the mutual covenants herein.' It contained the above described six-months' termination clause. It had already been signed on behalf of McKay Press, and it was requested that after Fothergill had signed, and at his convenience, it be returned to them. Fothergill signed it, he testified, after about 3 weeks, but the agreement, thus signed, was never returned to McKay, as requested, although the record is silent as to any insistence by McKay that it actually be returned to them or that they regarded its non-delivery as important. ¹ The legalits of Fothergill's discharge in 1957, in asserted violation of the six-months' clause, is the issue presented. Defendant was successful below, as above indicated.

The appellant raises the following issues (accepted 'for purposes of argument' ² by appellee):

'I.

'Did plaintiff's Exhibit 1 satisfy the requirements of the statute of frauds, as a 'Memorandum' of a contract, where the writing, signed by the defendant, was not delivered back to defendant with plaintiff's signature? * * *

',1. Was plaintiff's Exhibit 1 a 'memorandum'? * * *

'2. Did plaintiff's failure to sign the memorandum in the presence of defendant's manager impair the sufficiency of that writing as evidence of the 1953 employment contract? * * *

'3. Did plaintiff's failure to deliver or return the memorandum to defendant destroy the memorandum's value as evidence of the 1953 employment contract? * * *

'II.

'Did the contract of employment between plaintiff and defendant, as evidenced by plaintiff's Exhibit 1, satisfy the requirement of mutuality?'

The issue presented in this case is whether or not the contract of employment is enforceable. McKay Press says that it is for a 5-year term (with this view the trial court agreed) ³ and requires a note or memorandum thereof for enforceability, since it is not in writing. It denies that a valid note or memorandum exists. Fothergill, on the other hand, asserts that such note or memorandum is found in the 'Agreement' signed by both parties.

Underlying the controversy, then, is this issue, as phrased to us by the appellee: Was the alleged contract 'herein declared upon * * * for a term of five years and not capable of complete performance within a period of one year, hence void under the statute of frauds'? Absent such issue the note or memorandum question does not arise. The validity of the oral agreement is basic to the positions of both parties, indeed, it is of the essence of the controversy itself.

This is the question that must first be faced by any court considering the note or memorandum issue. It was considered, and ruled upon, by the trial court and must and will be considered and ruled upon by such court upon remand. It cannot be avoided. It is implicit in the issues presented and we will consider it.

It is suggested to us that the case is controlled by Wilkinson v. Heavenrich, 58 Mich. 574, 26 N.W. 139, 140. We cannot agree. The Wilkinson case is completely inapplicable on its facts and thus without value as precedent. Wilkinson went to work under an attempted (but defective) bilateral written contract purportin to prescribe an unconditional 3-year term of employment. He, however, had made no such commitment. As the court put it: 'Mr. Wilkinson was not bound to stay three years, and Heavenrich Bros. & Co. could not be bound to keep him three years * * *.' In addition, no note or memorandum was ever executed by both parties. Here, on the other hand, the trier of the facts would be justified in finding that Fothergill went to work under an oral contract fully descriptive of the mutual duties and obligations of the parties, for a period of time terminable upon six months' notice by either party, expressive of which either a later written contract, or memorandum thereof, had been executed by both parties. The language quoted from Wilkinson has legal significance only in respect of the material facts concerning which it was uttered. It is law only as to those facts. It cannot control decision here, however apt it may be within...