Home News, Inc. v. Goodman

• Citation: 35 A.2d 442,182 Md. 585
• Decision Date: 13 January 1944
• Docket Number: 63-68.
• Parties: HOME NEWS, Inc., v. GOODMAN (two cases). GOLDSTEIN v. SAME (four cases).
• Court: Maryland Court of Appeals

35 A.2d 442

182 Md. 585

HOME NEWS, Inc., v. GOODMAN (two cases).

GOLDSTEIN v. SAME (four cases).

Nos. 63-68.

Court of Appeals of Maryland

January 13, 1944

Rehearing Denied March 24, 1944.

Appeals from Circuit Court No. 2 of Baltimore City; Samuel K. Dennis Chief Judge.

Bill by Seymour P. Goodman against Home News, Inc., Joseph Goldstein and Walter Goldstein for an accounting to determine amount due plaintiff as commissions under a verbal contract of employment to solicit advertising and for an order directing payment of the amount found to be due. From a decree adjudging complainant entitled to commissions at certain rates on designated business and referring papers to court auditor to state an account and from a decree on the audit defendants appeal.

Decrees affirmed in part and reversed in part, and cause remanded for further proceedings in accordance with opinion.

GRASON J., dissenting.

Michael J. Manley, of Baltimore (Harley, Wheltle & Manley, of Baltimore, on the brief), for appellants.

J. Cookman Boyd, Jr., of Baltimore (Boyd & Boyd, of Baltimore, on the brief), for appellees.

Before SLOAN, C.J., and DELAPLAINE, COLLINS, MARBURY, GRASON, MELVIN, ADAMS, and BAILEY, JJ.

COLLINS Judge.

One Seymour P. Goodman, complainant below, appellee here, employed formerly as an advertising solicitor by the Baltimore Post, did not continue his position when that paper was absorbed by the Baltimore News in 1934. Messrs. Joseph and Walter Goldstein at that time were partners in a printing business using the name, Twentieth Century Printing Company. The Goldsteins had in their establishment a rotary press which they were anxious to keep busy. Goodman approached them with the idea of organizing a shopping paper in Baltimore to be owned and financed by the merchants and to be printed by the Goldsteins. The Goldsteins were interested in such a paper, but it later became apparent that the merchants were not interested. Later a shopping paper, known as the Home News, was organized and printed by the Twentieth Century Printing Company.

There is much dispute in the record as to the contract of employment made with the appellee, Seymour P. Goodman. It was verbal. The chancellor who heard the case below and who had the witnesses before him concluded from the conflicting testimony of the witnesses that the verbal contract of employment of Goodman, as an advertising solicitor, was substantially as follows: "I (Goldstein) will pay 20% commission on all advertising that you secure for the paper as long as those advertisers continue to place advertising in the paper.' That figure of 20% commission did not apply to National Advertising for which the rate was 15% commission.' Without reciting in this opinion the conflicting testimony offered to establish this contract, this court agrees with the chancellor that the contract of employment was as stated above.

Goodman continued to solicit advertising for Home News until 1938. At that time a dispute arose between him and Joseph Goldstein as to solicitation of new territory. Joseph Goldstein became irritated with Goodman and said that the paper belonged to him and told Goodman that he was going to run things around there to suit himself and if Goodman did not like it, he could get out, which Goodman did. Joseph Goldstein apparently regretted his action. Goodman later went back and had a conference with Joseph Goldstein, and Goodman agreed to come back with the understanding that his agreement was to continue on and that he was to receive commissions on all the advertising that he secured for the paper as long as those advertisers continued to place advertising in the paper. Seymour Goodman continued to work until April, 1941, when he became ill. He went to the hospital on April 22nd and remained there until July 21st when he went to Westminster, Maryland, for a rest. While in the hospital, he continued to receive weekly checks, based on his commissions on advertising which he had secured, until August 15, 1941, when he was sent checks for $50 per week for six weeks until September 26, 1941. He returned from Westminster and went to the office of the Home News on October 13, 1941. He questioned Joseph Goldstein as to why his checks had been reduced to $50 and Goldstein questioned him about the sum of $7,000 which he said Goodman was to pay for a one-third interest in the Home News. Goodman continued soliciting advertisements until October 21, 1941. On that day, he and Joseph Goldstein had an argument about soliciting the account of Food Fair and, as a result of that argument, Joseph Goldstein discharged Goodman.

On June 5, 1942, the appellee, Seymour P. Goodman, filed an amended bill of complaint in Circuit Court No. 2 of Baltimore City against Home News, Inc., Joseph Goldstein and Walter Goldstein, asking that court for proper accounting to determine the amounts due the complainant from the defendants, that the defendants be directed to pay the complainant the amounts found to be due, that the court retain jurisdiction of the cause for amounts coming due in the future to the complainant, and for other and further relief. After answer filed, testimony was taken in open court before the chancellor, who decreed on July 9, 1943, that (1) the complainant, Goodman, was entitled to commissions at certain rates designated in the decree on all business received by the defendants or any of them for advertising in the Home News from certain customers set out in the decree between the 15th day of August, 1941, and the 21st day of October, 1941; (2) the complainant was entitled to commissions on all business received by the defendants or any of them for advertising in the Home News from certain customers set out in the decree since the 15th day of August, 1941, to the date of the decree; (3) the complainant was entitled to commissions on all business received by the defendants or any of them for advertising in the Home News from the customers and at the rates set forth in (2) such right to commissions to begin as of the date of the decree and to continue on a weekly basis, when and as long as advertising business is placed in the Home News by said customers.

The chancellor referred the papers to the court auditor to state an account and ordered the defendants to pay the costs. An appeal is taken to this court from that decree. After the auditor's account was stated, certain exceptions were taken to that account, and from the decree of the chancellor on the audit, a further appeal is taken to this court.

Was the chancellor correct in decreeing against all of the defendants, Home News, Inc., Joseph Goldstein and Walter Goldstein? The appellee was entitled to compensation. When the appellee, Goodman, approached the Goldsteins about the organization of a shopping paper to be printed on their rotary press, they were much interested for the reason that they desired the printing business. They paid the cost of the luncheon for the merchants when the idea was presented to them and also paid for the circulars distributed at the luncheon. Goodman was paid a weekly salary by the Goldsteins during the promotional period. He acted as chairman of the luncheon meeting, and Mr. Joseph Goldstein attended and had his secretary take minutes of the meeting, which did not result in the merchants forming such a paper. The Goldsteins undertook to publish and produce such a newspaper. Later a corporation, Home News, Inc., was formed. Walter Goldstein ratified everything that his partner did concerning the corporation and the operation of the paper. The appellee Goodman, testifies that he was originally employed by Joseph Goldstein. The appellants offered testimony to the contrary. Although Joseph Goldstein testified that he had nothing to do with the paper until 1936, the record, however, reveals that he was the prime mover in the organization of the newspaper for the purpose of getting the printing and was elected a director of Home News, Inc., at the first meeting of the incorporators on September 27, 1934. All expenses incident to the publication of the newspaper before the incorporation were paid by the Goldsteins. The appellee testified that shortly before the incorporation was perfected, he, hearing of it, asked Joseph Goldstein about it and was told by him: 'Don't worry about that, that is merely a form to protect my interests in case I am sued, but I am the boss around here and you look to me.' Appellee further said: 'And I always did look to him up to the very last moment, and it continued all the time.' The certificate of incorporation was approved by the State Tax Commission on October 2, 1934, at which time the corporation came into existence. The first issue of the paper appeared September 28, 1934. The incorporators were Edward E. Ullrich, an employee of the Twentieth Century Printing Company; Howard A. Burman, an advertising solicitor; and the attorney, Albert A. Levin. None of these incorporators had any money invested in the concern. All expenses of the incorporation had been paid by the Goldsteins. Ullrich was paid by the Twentieth Century Printing Company and was never paid anything by the Home News, Inc. Speaking of the home News, he said: 'It was to be my baby. It operated under the rotary press which was under my jurisdiction.' At the first meeting of the incorporators held on September 27, 1934, Burman, Ullrich and Joseph Goldstein were elected directors. Home News, Inc., never had any assets or property of any kind. Mr. Ullrich testified that he thought that a drawing account for the Home News was put up by the Twentieth Century Printing Company and further testified that he was working for the Twentieth Century Printing Company, Home News and anything else that had anything to do with the...