Mathews v. Knoll Associates, Inc.
| Decision Date | 16 March 1965 |
| Docket Number | No. 31824,31824 |
| Parties | Eileen MATHEWS, Plaintiff-Respondent, v. KNOLL ASSOCIATES, INC., a Corporation, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Switzer, Barnes & Toney, Thomas E. Toney, Jr., St. Louis, for defendant-appellant.
Lewis, Rice, Tucker, Allen & Chubb, Robert S. Allen, St. Louis, for plaintiff-respondent.
This is an action brought by plaintiff Eileen Mathews, respondent herein, for recovery of commissions under a contract of employment between plaintiff and defendant Knoll Associates, Inc., appellant herein. The cause was tried before the court and resulted in a finding and judgment for plaintiff against defendant in the amout of $1,964.15 plus interest. From this judgment defendant has perfected an appeal to this court.
Defendant Knoll Associates, Inc., which was engaged in the business of manufacturing and selling furniture and fabrics, employed plaintiff, Miss Eileen Mathews, for the period from 1958 to December 31, 1961. During the years 1960 and 1961, Miss Mathews was employed under written contract as the Regional Manager of the business in St. Louis. In the latter part of 1961 defendant offered plaintiff a new contract for the years 1962 and 1963 which called for a lower salary and lower commissions. In December of 1961 plaintiff rejected the new contract proposed by the defendant and her employment terminated at the expiration of her contract on December 31, 1961.
Miss Mathews' contract with Knoll for the years 1960 and 1961 provided for a salary of $8,000 plus commissions based upon sales in excess of specified quotas. She was paid her salary for 1961 and was paid commissions on all sales in excess of the quota on which shipments were made by Knoll prior to December 31, 1961. Miss Mathews claimed she was entitled to commissions on additional sales obtained by her which were confirmed by Knoll in 1961, but on which the merchandise was not shipped until after December 31, 1961. The defendant received payment in full for the merchandise invoiced and shipped. The parties stipulated that the amount of commissions in dispute was $1,964.15. The basic question raised in the case is whether plaintiff earned her right to commissions on sales obtained in 1961 even though the defendant shipped and received payment for the goods in 1962.
The pertinent portions of the written contract are as follows:
'1. Regional Managers subject to this plan will be paid a basic annual salary and commissions based upon sales.
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, will be computed in accordance with the principles set forth in '5', and will be paid at the times set forth in '6'.
'4. Commissions based upon sales will be at the following rates:
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'5. Commissions based upon sales will be computed in accordance with the following principles:
'A. Sales subject to commission will be:
(a) Net sales of merchandise bearing the 7 1/2% commission rate credited to your territory in excess of three-fourths (3/4ths) of your territory's quota for sales of merchandise bearing the 7 1/2% commission rate.
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'B.) 'Net sales' means invoiced shipments of merchandise less returns, allowances, credits and discounts (except cash discounts for customers' prompt payment) and exclusive of sales or other taxes.
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'6. Commissions based upon sales will be paid at the following times:
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The trial court in substance held in its findings that the contract was not clear and unambiguous and applied the rule that such a contract prepared by the defendant must be construed and interpreted adversely to the defendant on all points of ambiguity; that 'The fair and reasonable interpretation of this contract is that the word 'sales' should be construed in accordance with its usual and ordinary meaning for the purpose of a salesman's right to commissions * * *'; that plaintiff was entitled to commissions on sales which were made and confirmed by defendant during the period of the contract; that the definition of net sales in Paragraph 5-B was merely to exclude the possibilities of defendant being required to pay commissions on merchandise never shipped to customer or on merchandise which was later returned or on merchandise on which an allowance, credit or discount was granted; that the provisions of Paragraph 5-C indicating the date of crediting net sales on the Regional Manager's account to be the date of shipments showing on the invoice was to be properly construed as indicating in which quarter the commissions were to be paid as provided in Paragraph 6 and that it would not be just to construe this provision as making the shipment date equivalent to the sale date; that the provisions of Paragraph 9 that no commission shall be paid on sales made 'to customers on or after the date of termination even though such sales relate to orders confirmed prior to the date of termination * * *' does not refer to shipments after the date of termination but to sales made after date of termination; that the words 'relate to' merely mean that the later sales have a relationship with orders confirmed and sales made prior to the date of termination.
The defendant contends that the plaintiff is precluded from receiving commissions on orders no invoiced and shipped until after the date of termination of the contract even though the orders were obtained and confirmed prior to the termination because of the specific provisions in Paragraph 9 of the contract that: '* * * No commission or compensation whatsoever shall be paid by Knoll on account of sales made to customers on or after the date of termination even though such sales relate to orders confirmed prior to the date of termination. * * *' Defendant argues that the contract in clear and definite terms defines 'sales' as meaning 'net sales' (Section 5A) which are further defined as '* * * invoiced shipments of merchandise * * *' (Section 5B) and therefore under the specific provisions of the contract, the event which determines the earning of commissions by plaintiff is the shipment of merchandise by defendant on invoice. The defendant further argues that while in the case of the typical salesman, the taking of an order may be the commissionable event, however, in this case, the contract in clear and unambiguous language provided that invoiced shipments of merchandise would be the event which determines the earning of commissions and that the express provision of the contract must control, citing Baldwin v. Corcoran, 320 Mo. 813, 7 S.W.2d 967; and when the language of a contract is plain there can be no construction because there is nothing to construe, Hahn v. Forest Hills Construction Co., Mo.App., 334 S.W.2d 383, 385, and cases therein cited; and that a court should not and cannot, now reformulate the contractual agreement voluntarily arrived at between the parties, Chicago R. I. & P. Ry. Co. v. Maryland Casualty Co., 8 Cir., 75 F.2d 596.
We cannot agree with defendant's contention that the contract is so clear and unambiguous as not to require construction of its terms. The contract repeatedly uses the phrase 'commissions based upon sales' (Paragraphs 1, 3, 4, and 5) and in Paragraph 9 uses the phrase '* * * commission or compensation * * * on account of sales * * *,' all of which refer to the payment, rates and the method of computing commissions, but there is no provision to be found in the instrument which sets out or defines what services must be done to earn a commission based on sales or when such services need be...
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