Hollwedel v. Duffy-Mott Co.

• Decision Date: 21 November 1933
• Citation: 188 N.E. 266,263 N.Y. 95
• Parties: HOLLWEDEL v. DUFFY-MOTT CO., Inc.
• Court: New York Court of Appeals Court of Appeals

263 N.Y. 95

188 N.E. 266

HOLLWEDEL

v.DUFFY-MOTT CO., Inc.

Court of Appeals of New York.

Nov. 21, 1933.

Action by Charles F. Hollwedel against the Duffy-Mott Company, Inc. A judgment of the Trial Term was modified, and, as modified, affirmed by the Appellate Division (238 App. Div. 468, 264 N. Y. S. 745), and defendant appeals.

Judgment of the Appellate Division and that of the Trial Term reversed, and a new trial granted, with provision for modification and affirmance of judgment if plaintiff stipulates to reduce the verdict.Appeal from Supreme Court, Appellate Division, Fourth department.

Louis S. Weiss and Myer D. Mermin, both of New York City, for appellant.

Albert Von Weigen, Gustav Lange, Jr., and Charles B. Bechtold, all of Rochester, for respondent.

LEHMAN, Judge.

In September, 1928, the plaintiff entered the employment of the defendant corporation at an annual salary of $12,000. He was discharged in October, 1930. Claiming that the defendant had agreed in writing to retain him as manager for a period of ten years, the plaintiff brought this action to recover damages for his wrongful discharge.

The agreement fixing the terms and conditions of the plaintiff's employment is embodied in a tripartite written contract whereby Standard Apple Products Company, Inc., agreed to sell its property, good will, and business to the defendant corporation, and the plaintiff, who was the owner of substantially all the common stock, and had been the manager of the vendor corporation, covenanted that ‘he will not, for the period of ten years from the date hereof, directly or indirectly * * * engage in any business * * * having to do with purchase and sale of apples or of any apple products,’ etc. The provisions for the plaintiff's employment are intertwined with this covenant. In consideration of that covenant, the defendant corporation agreed that, if it ‘fails, without good and sufficient cause * * * during the term of this agreement, to retain the party of the second part (the plaintiff) as one of its managers * * * then this stipulation, covenant and agreement on the part of the party of the second part is to be of no further force and effect.’

Here there is no express agreement by the defendant to retain the plaintiff in its employ during the period of the contract. Literally the defendant has agreed only that, if it fails to retain the plaintiff as manager, then the plaintiff's agreement not to engage in a competing business should terminate. The defendant contends that the plaintiff's employment was, subject to this condition, only at will, and might be terminated without a breach of contract.

If there were nothing else in the written contract, the defendant's contention would have great force. These provisions must, however, be read with the clauses immediately following: ‘It being understood that it is the express intention of the parties hereto that the said party of the second part (the plaintiff) will become and remain a manager of the party of the first part, and that the party of the first part (the defendant) would not enter into the arrangement with Standard Apple Products, Inc., were it not for such expectation, and that the party to the second part would not enter into this covenant were he not assured that he would become and remain a manager of the party of the first part at a remuneration figured during the term of this agreement as above referred to.’ That ‘express intention’ might be frustrated and the assurance given to the plaintiff might be defeated unless the plaintiff bound himself to remain as manager and the defendant bound itself to retain him in that capacity for the period of the contract. An agreement that each should be so bound is implicit in these provisions read in the light of the circumstances surrounding the making of the contract. At least the trier of the fact might so hold.

The jury has determined all contested questions of fact in plaintiff's favor and brought in a verdict for him in the sum of $118,762.53, which was reduced by the trial judge to the sum of $113,484.75 and further reduced by the Appellate Division to the sum of $88,752.78. Except for erroneous rulings which permitted the jury to find damages which are clearly excessive, we should be constrained to affirm the judgment.

The plaintiff is entitled to damages which will compensate him for the defendant's breach of contract. Prima facie the measure of such damage is ‘the wage that would be payable during the remainder of the term’; but this is only the prima facie measure. The actual damage is measured by the wage that would be payable during the remainder of the term reduced by the income which the discharged employee has earned, will earn, or could with reasonable diligence earn during the unexpired term. McClelland v. Climax Hosiery Mills, 252 N. Y. 347, 358, 169 N. E. 605.

The wage that would be payable under the contract of employment after the discharge, during the unexpired term, amounts to $106,900. At the time of the trial, the plaintiff had concededly earned the sum of $5,800, which the trial judge properly charged must be deducted from the unpaid wages. Almost seven years of the term of the contract was still unexpired at that time, and from the evidence presented at the trial the jury might well find with reasonable degree of certainty that the plaintiff would earn a substantial sum of money during that unexpired term. Under instructions from the trial judge the jury was permitted to fix the amount of such probably earnings. Though that amount could not be fixed with absolute certainty, the evidence was certainly sufficient to enable the jury to determine the sum that should be allowed as a deduction. Their verdict shows on its face that the damages were calculated on an erroneous basis, for the sum awarded is greater by about $12,000 than the total amount of unpaid wages, though some of those wages would not have been payable till nine years after the breach, and though the plaintiff had earned a substantial sum of money before the date of the trial.

Upon a motion to set aside the verdict, the defendant presented an affidavit of a juror showing how the jury calculated the damages. The trial judge ruled that this affidavit was incompetent. We need not consider whether that ruling was correct, for, even without the affidavit, it is quite apparent how the calculation was made. At the trial the plaintiff was permitted, over defendant's objection and exception, to show that interest at 6 per cent. on the unpaid wage, calculated to the date of the expiration of the contract seven years after the trial, would amount to the sum of $52,662.53. Of course under no possible theory could the plaintiff be entitled to an acceleration of the date when payment of wage would have become due and interest for the unexpired term. Doubtless the ruling of the trial judge was made through inadvertence, but the error was not corrected at the trial and was emphasized by the charge, in which the jury was informed that the plaintiff's claim was for salary of $106,900 due him under the contract, less the sum of $5,800 which he had earned up to the date of the trial, to which interest in the amount of $52,662.53 should be added, making a total claim of $153,762.53. These figures were fixed and could not be varied, except that, as the trial judge charged, the amount that the plaintiff ‘may reasonably be expected to earn during the balance of this term of employment’ must be deducted in fixing the damages. That was the only uncertain factor in the measure of damages as charged by the trial court, and, when the jury brought in a verdict for $118,762.53, exactly $35,000 less than the $153,762.53 claimed by the plaintiff, it is evident that the jury fixed the plaintiff's...