Hall v. Hall

• Decision Date: 04 December 1957
• Docket Number: No. A-6314,A-6314
• Citation: 158 Tex. 95,308 S.W.2d 12
• Parties: J. D. HALL, Jr., et al., Petitioners, v. H. D. HALL, Respondent.
• Court: Texas Supreme Court

Page 12

308 S.W.2d 12

158 Tex. 95

J. D. HALL, Jr., et al., Petitioners, v. H. D. HALL, Respondent.

No. A-6314.

Supreme Court of Texas.

Dec. 4, 1957.

Rehearing Denied Jan. 22, 1958.

Robert A. Kilpatrick, Cleburne, Grady, Johnson, Bell & Lee, Dallas, for petitioners.

James & Mahanay, Cleburne, L. L. James, Tyler, for respondent.

GARWOOD, Justice.

The respondent-plaintiff, H. D. Hall, sued the petitioners-defendant, J. D. Hall, Jr., et al., a manufacturing partnership, for breach of an oral contract whereby the respondent-plaintiff was to represent the partnership in 'developing' a theretofore untapped sales territory, consisting of approximately the northeast quarter of the United States, and selling therein at a 12% commission a principal product of the petitioners-defendant, being a door light called a 'Visador'. Among other defenses the petitioners-defendant pleaded paragraph 5 of Art. 3995, Vernon's Tex.Civ.Stats., barring action upon a promise or agreement 'which is not to be performed within the space of one year from the making thereof' unless the same 'be in writing and signed by the party to be charged therewith * * *.' The applicability of this statute to the contract in the light of jury findings presents the principal question in the case.

The respondent-plaintiff pleaded and introduced evidence to show that such contract was made, and that nothing was said about how long his agency should last, but that, by reason of the character and size of the undertaking and the large responsibility and freedom of action delegated to him in this connection, it was necessarily implied in the contract that the term thereof should be for a reasonable time, as distinguished from being terminable at will. He also pleaded and introduced evidence to prove that such a reasonable time was five years, but that after he had entered into and performed his duties for about two years, during which he invested some $17,000 of his own funds in the sales development work and had been paid all except about $900 of the several thousand dollars of commissions earned by him up to that time, the petitioners-defendant repudiated the contract, depriving him thereby of the large amount of additional commissions, which he would have earned had he been allowed to continue his agency, and also failing to pay him the $900 of earned commissions.

The trial court submitted sundry jury issues, in accordance with the foregoing theory of the case, the answers to all of which were in substance favorable to the respondent-plaintiff, including findings that the agency was terminated without good cause, and that plaintiff's damages as to future commissions were $27,000. The issues relevant to the principal question before us are Nos. 1 and 2, which with their respective answers are as follows:

'Special Issue No. 1: Do you find that at the time of the contract between H. D. Hall and J. D. Hall, Jr., on or about October 13, 1953, it was mutually understood by them both, whether expressed in words or not, that H. D. Hall should develop and sell Visador products in the northern territory for a reasonable time thereafter, or that such arrangements could be terminated at the end of any month by either party?'

To this the jury answered 'For a reasonable time.'

'Special Issue No. 2: How long do you find from a preponderance of the evidence, after October 15, 1953, was a reasonable time for such agreement, under all the circumstances?'

To this the jury answered '3 yrs.'

The court, following motions for judgment on and notwithstanding the verdict, gave judgment for the respondent-plaintiff for the before-mentioned item of $900 accrued commissions, but rendered judgment against him as to the item of $27,000 future commissions on the ground of Art. 3995, supra. The respondent-plaintiff appealed from this latter portion of the judgment, but the petitioners-defendant neither appealed nor filed cross-assignments of error with regard to the $900 item or otherwise.

The Waco Court of Civil Appeals 'affirmed' the $900 recovery, from which no appeal had been taken. As to the $27,000 item, the Court held that the statute did not apply to the contract and that, even if it did, it was satisfied by reason of certain correspondence of the petitioners-defendant written between the date of the contract and its repudiation. The court accordingly reversed this portion of the judgment of the trial court and rendered judgment on the verdict for the respondent-plaintiff for $27,000. With this latter decision we find ourselves unable to concur for the reasons below given.

Considering first the question of whether the contract was or was not within the purview of the statute, we find no authority in the briefs, or by our own research, that is very helpful. The basic rule is, of course, that, in order to fall within the statute, it must appear from the terms of the contract that performance cannot be completed within one year. See citations and discussion in Chevalier v. Lane's, Inc., 147 Tex. 106, 213 S.W.2d 530, 6 A.L.R.2d 1045; also the strong statement of the rule in Goodwin v Southtex Land Sales, Inc., Tex.Civ.App., 243 S.W.2d 721, 725, wr. of er. refused, 'no reversible error'. A corollary to the foregoing is that where the term of performance is uncertain in the sense that the contract merely provides for the performance of a particular act or acts, such as the building of a house, which can conceivably be performed within one year, the statute does not apply, however improbable performance within one year may be. Lennard v. Texarkana Lumber Co., 46 Tex.Civ.App. 402, 94 S.W. 383. In some cases, it is doubtless also correct to say that, if no period for performance is stated, the statute is inapplicable. See the language in Wright v. Donaubauer, 137 Tex. 473, 477, 154 S.W.2d 637, 639. The difficulty about the instant case is that, although admittedly no period of performance was expressly mentioned, the respondent-plaintiff has recovered on the contract as one lasting three years, and has procured a jury finding that it lasted three years.

His reasoning as to why the contract falls without the statute is that, since it lacks an express provision as to duration of performance, the term of a reasonable time is implied; that a contract providing a term of a reasonable time is one of uncertain duration and therefore not within the statute; that the finding of a reasonable time to be three years does not alter the status of the contract as one of indefinite duration-does not make it a contract which, by its terms, cannot be performed within one year.

Now it is doubtless true that, in contracts of the general type of the instant one, a term of reasonable duration may be implied, with the result that they are not void for lack of an essential provision and are not terminable at will. Erskine v. Chevrolet Motors Co., 185 N.C. 479, 117 S.E. 706, 32 A.L.R. 196. See also Hamilton v. Shirley-Self Motor Co., Tex.Civ.App., 202 S.W.2d 952, wr. of er. refused, 'No Reversible Error'; Cheek v. Metzer, 116 Tex. 356, 291 S.W. 860; 10 Tex.Jur., p. 413. Agreements such as in the Erskine case are perhaps distinguishable from those of a more simple type of employment, which have been held terminable at will for lack of a term provision in decisions such as East Line & R. R. Ry. Co. v. Scott, 72 Tex. 70, 75, 10 S.W. 99, and Advance Aluminum Castings Corp. v. Schulkins, Tex.Civ.App., 267 S.W.2d 174. But where the result of implying a term is in effect to extend performance beyond one year, is not the contract necessarily within the statute of frauds?

As above indicated, we find no case very helpful in the matter of whether an implication of a reasonable time means that, for statute of frauds purposes, the contract is to be regarded as one of indefinite duration or, to the contrary, as one in which such performance period in terms of days or years as is later found to be reasonable is fully stated in the contract. Erskine v. Chevrolet Motors Co., supra, did involve an agency situation somewhat like the instant one, did imply the duration of a reasonable time and did hold the North Carolina statute inapplicable. However, the decision does not purport to analyze the foregoing problem and does not even disclose the terms of the statute The matter must thus be resolved largely on principle.

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