Hamilton Depositors Corporation v. Browne

• Decision Date: 12 February 1940
• Docket Number: No. 4-5766.,4-5766.
• Citation: 136 S.W.2d 1031
• Parties: HAMILTON DEPOSITORS CORPORATION v. BROWNE et al.
• Court: Arkansas Supreme Court

Page 1031

136 S.W.2d 1031

HAMILTON DEPOSITORS CORPORATION v. BROWNE et al.

No. 4-5766.

Supreme Court of Arkansas.

February 12, 1940.

Rehearing Denied March 11, 1940.

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor.

Suit by Edgar J. Browne and another against the Hamilton Depositors Corporation for alleged commissions and bonuses earned by plaintiffs while in the employ of defendant. From a decree for plaintiffs, defendant appeals.

Affirmed.

Will G. Akers, of Little Rock, for appellant.

U. A. Gentry, of Little Rock, for appellees.

HOLT, Justice.

Appellant brings this appeal from a decree of the Pulaski chancery court in favor of appellees in the total sum of $1660.50 for alleged commissions and bonuses earned by appellees while in the employ of appellant.

Appellees alleged in their complaint that while employed by appellant, first as salesmen and later as district sales managers, under contracts providing for certain commissions and bonuses, they were wrongfully discharged by appellant and that appellant without cause refused to pay to them commissions and bonuses alleged to be due.

The complaint further alleged that the amounts due plaintiffs were unknown to them and asked for an accounting to determine these amounts and for judgment.

The contracts relied upon were made a part of the complaint and those provisions material here will be set out and considered hereafter in this opinion.

Appellant first demurred to the complaint on the ground that equity was without jurisdiction. The court overruled the demurrer and appellant answered denying every material allegation set up in appellees' complaint, and alleging that appellees had breached the contracts in question, had forfeited any and all rights to any alleged commissions and bonuses thereunder and were not entitled to recover anything from appellant.

The learned chancellor found the issues in favor of appellees and from this decree comes this appeal.

The record in this case is voluminous, however, the material facts are to the following effect:

Appellees, Edgar J. Browne and Roy E. Bell, were first employed by appellant under similar contracts on April 18, 1936, and on October 3, 1935, respectively. Under these contracts they were engaged as salesmen to sell Hamilton Trust Shares for cash and on the installment plan. In case of installment purchases, appellees were paid when investors made their installment payments to appellant. Each of these contracts provided that if the contract should be terminated while the salesman was in good standing he should be paid all earned commissions and bonuses even though they might accrue after the termination of the contract. These contracts terminated on August 1, 1936, and February 3, 1936, respectively, and there is no evidence that appellees violated their terms.

On the dates last above mentioned, appellees entered into another contract with appellant in all respects similar to the first except as to commissions and bonuses, which were increased. These last mentioned contracts remained in force until January 3, 1938, when they were terminated by mutual consent and each of the appellees was given a contract as sales manager, increasing their bonuses and commissions, and in which the general provisions in all other respects were similar to those in the previous contracts.

These last mentioned contracts continued in force until June 1, 1938, when they were terminated and new contracts, omitting certain provisions in the prior contracts, were entered into between appellant and appellees in which appellees were employed as district sales managers and these were the contracts under which appellees were serving appellant at the time of their discharge, and which they are alleged to have breached.

The material provisions of these contracts of June 1, 1938, with which we are concerned here, are:

Section 1 provides: "Nothing contained herein shall be construed to create the relation of employer and employee between the Company and the District Manager. * *"

Section 6, Subdivision h, provides that appellees shall "Not engage in any business other than that covered by this contract during its continuance. In event the District Manager violates the provisions of this contract, the same shall constitute an immediate breach hereof, and the Company may cancel this contract and retain as liquidated damages all earnings accruing to the District Manager's account".

Section 12 provides: "This contract shall not be terminated by the Company without cause. The District Manager may terminate this contract after first having given the Company thirty days' notice in writing of his intention so to do, and in case he discontinues his services hereunder without giving such notice he shall forfeit all earnings that are then due or will later become due him and the Company shall retain and keep all such moneys as liquidated damages for losses sustained thereby. In case of dismissal of the District Manager for cause, this contract shall terminate immediately upon written notice to the District Manager at his last known address".

Section 13 provides: "If this contract is terminated while the District Manager is in good standing hereunder and not indebted to the Company, he shall receive any balance of earnings as the same accrue, even though they accrue thereafter. Further, that under the above circumstances, the District Manager shall receive bonus, provided he has been continuously and entirely in the service of the Company for at least one year at the time of termination hereof".

Section 19 provides: "This agreement revokes and cancels all former contracts which have existed between the parties hereto relative to the sale of Hamilton Trust Share Certificates".

One Erringer, prior to the employment of appellees by appellant, had been appellant's sales manager in Arkansas, and it was through him that appellees were first employed. Upon the death of the president of the appellant company, Erringer decided to organize a corporation known as the Arkansas Fund, Inc., patterned after that of appellant and made this known to appellees.

On August 8, 1938, appellees sent a letter on stationery of appellant to all the agents of appellant company in Arkansas, some thirty-five in number, urging them to attend an important meeting in Little Rock on August 17, 1938. Practically all of these agents attended this meeting at which they were informed of the organization of the Arkansas Fund, Inc. Appellee Browne was one of the incorporators and appellee Bell had agreed to become an officer and director.

On the part of appellant the testimony as to what transpired at this meeting tends to show that the salesmen assembled were urged to terminate their contracts with appellant. Other evidence presented by appellant tended to show that appellees, during their employment, neglected appellant's business to its damage, devoted time to the organization, and interest, of the new company, that their sales fell off before their discharge, and that thereafter appellant's business continued to grow smaller, and that the new company, which appellees helped to organize, and in which they were interested, prospered. The evidence is conflicting.

On the part of appellees, the testimony shows that these salesmen were merely informed of the new organization and its purposes. Appellees approved the plan, expressed their belief in the future possibilities of the new company and a desire to have those salesmen present, who so desired, to associate themselves with the new company. They were informed at this meeting that before they could terminate their contract with appellant company they must give thirty days' written notice in advance. It appears...