Lukens v. Goit

• Decision Date: 01 August 1967
• Docket Number: No. 3582,3582
• Citation: 430 P.2d 607
• Parties: 115 L.R.R.M. (BNA) 4828 Robert LUKENS, a/k/a R. E. Lukens, and Geraldine Lukens, Appellants (Defendants below), v. Sam C. GOIT, Appellee (Plaintiff below).
• Court: Wyoming Supreme Court

Page 607

430 P.2d 607

115 L.R.R.M. (BNA) 4828

Robert LUKENS, a/k/a R. E. Lukens, and Geraldine Lukens, Appellants (Defendants below), v. Sam C. GOIT, Appellee (Plaintiff below).

No. 3582.

Supreme Court of Wyoming.

Aug. 1, 1967.

Tosh Suyematsu, Cheyenne, for appellants.

Donald N. Sherard, Wheatland, for appellee.

Before HARNSBERGER, C. J., and GRAY, McINTYRE and PARKER, JJ.

Mr. Justice GRAY delivered the opinion of the court.

Plaintiff brought an action against the defendants for a money judgment. The complaint was in two counts. The first count declared upon a note dated January 27, 1965, in the sum of $2100, together with interest, which was signed by the defendants as makers and made payable on demand to the plaintiff. The face of the note bore the notation 'Wages from May 4, 1964 to Jan. 2, 1965.' In answer to the first count the defendants admitted execution and delivery of the note; alleged tender of payment in a just and true amount had been made and refused by plaintiff; and by way of an affirmative defense alleged, in substance, that the note was not intended to be absolute but was conditional in that it was subject to deduction for income taxes and social security contributions which defendants were obligated to withhold.

The second count, as amended, alleged that pursuant to an oral agreement plaintiff was employed continuously during the period January 2, 1965, to October 29, 1965, inclusive, except for two weeks' vacation, the same being the continuation of a prior existing oral agreement of employment and for which there was due plaintiff the sum of $2713.20. It was further alleged in the alternative that plaintiff had performed services for defendants during that period and under defendant's direction and that defendants were indebted to plaintiff for the amount stated above, 'which is the reasonable value of said services, which plaintiff claims.' The answer of defendants to this court denied each and every such allegation and by way of an affirmative defense alleged that after January 2, 1965, the services of the plaintiff were terminated but defendants gave plaintiff oral permission to come upon the premises and occupy himself during the time the defendant Robert Lukens was present and also gave to plaintiff 'the use of the machinery, equipment and utilities for puttering around and for any small chores he chose or was willing to favor the Defendants,' and that subsequent to said date there was no agreement or promise of the defendants to employ and pay plaintiff.

Upon trial of the case the trial court found generally for the plaintiff and against the defendants and entered judgment on the first count in the sum of $2100, and on the second count in the sum of $2362.50, and from that judgment the defendants appeal.

By way of general information concerning the entire controversy, the record discloses that for several years prior to 1961 plaintiff was the owner of a business carried on as an Allis-Chalmers agency near Wheatland, Wyoming, and also maintained a shop in connection therewith for blacksmithing and the repair of machinery. In 1961 plaintiff, who was then some 73 years of age, sold his business and retired. Defendant Robert Lukens, an industrial and manufacturing engineer who had engaged in that type of work for several years in the East, came to Wheatland in July 1962 for the purpose of commencing a business in his line of work, and according to Lukens the plaintiff approached him for employment, advising that he had retired from his own business, was widowed, 'and needed something to keep him occupied.' Thereupon defendants put plaintiff to work in renovating a building that was to be used for their business, and the employer-employee relationship continued for some time thereafter. Plaintiff testified that throughout his employment by defendants, which the trial court impliedly found ended on October 29, 1965, the matter of wages was never discussed and no fixed amount on an hourly, weekly, or monthly basis was ever agreed upon. When asked if it weren't true that every so often he would ask defendants to pay what he thought he had coming, he answered, 'No,' and said, 'We didn't agree on nothing on wages. He just paid me. He set the wages himself.' While plaintiff's version of the wage arrangement is somewhat conflicting with Lukens' version and that conflict was resolved in plaintiff's favor, it is nevertheless undisputed that from July 1962 to January 2, 1965, the defendants, at irregular intervals, recognized that a certain amount of wages was due plaintiff and they would meet that obligation by tendering a check for a certain amount, less the withholding above mentioned, or would deliver to plaintiff a demand note for the wages due. When such notes were paid the defendants would add to the principal the amount of interest due and then deduct for the withholding. That arrangement was satisfactory to and accepted by the plaintiff until the present controversy came into being.

In our consideration of the contentions of the parties with respect to the first count, the foregoing general statement must be supplemented to some extent. The defendant Robert Lukens testified that in January 1965, after plaintiff had returned from a vacation in California, the parties had a discussion concerning the amount due plaintiff, which the witness said was prompted by his desire to make a settlement inasmuch as that had not been done for some time. In fact, as we understand the record, no settlement had been made since March 1964. According to Lukens, the plaintiff thereupon produced some figures and said he had $6000 coming. Although plaintiff denies that such a conversation occurred, he did admit that on January 27, 1965, he was given a check in the sum of $3592.99, which the record reflects represented the amount due after withholding on a gross wage of $3900. At the same time he also accepted the note here in question in the sum of $2100, which bore a notation that it also was for wages. When these circumstances are considered, together with plaintiff's own insistence that it was Robert Lukens who 'set the wages' to be paid, we think there is no merit in plaintiff's argument that the note represented anything more than the balance of the $6000 gross wage that defendants agreed was due plaintiff in January 1965, and no inference could be drawn to the contrary.

Nevertheless, plaintiff strenuously argues that the note was absolute as to the amount to be paid and to subject it to withholding taxes would contravene the rule against alteration of the terms of a written instrument by parol evidence. In attempting to meet this argument defendants strongly contend that the note was conditioned as noted above and consequently the intention of the parties as to withholding could be shown by parol. As we view it, neither contention is of significance in disposing of the claimed error of the trial court in refusing to make any such deduction from the face amount of the note.

Where, as here, there is an employer-employee relationship involving the payment of wages, the employer is duty bound and legally obligated to withhold from wages and pay over to the Internal Revenue Service the amounts prescribed by the Internal Revenue Code and liability attaches whether or not the employer fulfills the obligation. United States Fidelity & Guaranty Co. v. United States, 10 Cir., 201 F.2d 118, 119-120; United States v. Crosland Construction Company, 4 Cir., 217 F.2d 275, 277; American Fidelity Co. v. Delaney, D.C.Vt., 114 F.Supp. 702, 711-712; Internal Revenue Code of 1954, 26 U.S.C.A., §§ 3402 (a) and 3403. The employer's failure to perform may result in severe penalties, and an employee is absolved from payment even though an employer fails to remit as required. Bolme v. Nixon, D.C.Mich., 239 F.Supp. 907, 911. The liability is imposed on the employer by virtue of the law and not by contractual arrangements between the parties, United States Fidelity & Guaranty Co. v. United States, supra. Under the statutory scheme related it seems clear that the duties of an employer and the duties of an employee are somewhat reciprocal. The employer is duty bound to withhold and to pay texes on behalf of the employee and the employee is duty bound to accept in satisfaction of his claim for wages against the employer the net amount due after withholding. Authorities reaching that result are Johnson v. United States, 9 Cir., 160 F.2d 789, 797, affirmed in part and reversed in part on other grounds 333 U.S. 46, 68 S.Ct. 391, 92 L.Ed. 468, motion to recall mandate denied 333 U.S. 865, 68 S.Ct. 788, 92 L.Ed. 1143; and P....