McDonald v. Wockner, 32389

• Decision Date: 19 February 1954
• Docket Number: No. 32389,32389
• Court: Washington Supreme Court
• Parties: McDONALD, v. WOCKNER et al.

Page 261

44 Wn.2d 261

267 P.2d 97

McDONALD, v. WOCKNER et al.

No. 32389.

Supreme Court of Washington, Department 2.

Feb. 19, 1954.

Rehearing Denied April 9, 1954.

Pomeroy, Yothers, Luckerath & Dore, Seattle, for appellant.

Bassett, Geisness & Vance, Seattle, for respondents.

DONWORTH, Justice.

This action was brought by an employee to recover from his former employer the amount of wages allegedly rebated to the latter in violation of chapter 195, Laws of 1939, as amended by chapter 72, Laws of 1941, cf. RCW 49.52.050 and 49.52.070, colloquially known as the 'Anti-Kickback' statute.

The period involved in the controversy begain in December, 1946, and ended in July, 1948. During this time plaintiff was employed by defendant husband as a salesman in his automobile sales agency. The answer, besides denying that plaintiff had paid back any portion of his wages or commissions to the defendant employer, contained two affirmative defenses: first, that the action was barred by the statute of limitations and second, that the labor union (of which plaintiff was a member) was the real party in interest and that there was another action pending between the defendants and the union involving the same subject matter.

A trial to the court sitting without a jury resulted in findings and a judgment for plaintiff in the sum of $3990.84. Defendants' motion for a new trial was denied and they have appealed.

In this opinion Eugene R. Wockner will be referred to as though he were the sole appellant.

The testimony bearing upon the principal issue of fact involved in this case, to wit, whether respondent actually paid back to appellant any portion of his wages or commissions, is in direct conflict. The only witnesses who testified on this issue were the two parties to this suit.

Respondent testified that shortly after receiving his commissions each month he would go into appellant's private office where, with the blinds down, he would pay appellant in cash the amount by which his commissions exceeded the sum of three hundred fifty dollars.

Appellant denied that he ever received any money from respondent, except payments on a mortgage on respondent's home, to which further reference is made later in this opinion. Appellant even denied that there were any blinds on his office windows.

The trial court took the case under advisement for two days and then orally announced its decision in favor of respondent upon this vital issue of fact, thus passing upon the relative credibility of the two parties. Later the court entered its findings accordingly.

The evidence relating to other matters was not in serious dispute and may be briefly stated as follows:

Appellant for seventeen years prior to the trial had been engaged in the business of selling new and used automobiles in Seattle. In December, 1946, he was a member of the Seattle Automobile Dealers' Association (herein called the Association), which had a collective bargaining contract with the Automobile Drivers and Demonstrators Local 882 (herein called the Union) of which respondent was a member.

This contract which prescribed the commissions payable to union salesmen for sales of automobiles became effective as of April 1, 1946, for a period of one year and was automatically renewed each year, unless either party thereto should give a written notice to the contrary to the other party thirty days prior to the anniversary date. No such notice was given during the years material to this case.

Appellant contends that he ceased to be a member of the association on December 31, 1947, because he paid no dues thereafter. He never notified either the association or the union that he had given up his membership and the records of the association show that he was a member until at least March 30, 1948. The trial court found that appellant was bound by this contract until May 6, 1948.

Shortly before that date the union learned that appellant claimed that he was no longer bound by the association's contract, and its agent approached him for the purpose of getting him to sign a separate contract directly with the union. Consequently, appellant on May 6, 1948, executed a contract with the union which contained the same provisions regarding commissions as were provided for in the contract with the association.

Respondent had previously been employed by appellant in 1940 and 1941. In the fall of 1946, respondent was living in Bremerton where he was employed in defense work. He came to Seattle about December 1, 1946, and applied to respondent for re-employment as a salesman. He was hired and began working December 3.

A few weeks later (according to respondent's testimony) appellant suggested to him that if the latter would accept a flat salary of $350 per month in lieu of regular commissions on the sales he made, he could be assured of continuous employment as long as appellant remained in business. Respondent accepted this arrangement because, as he testified, he needed employment at that time, and because appellant had given him, without cost, a home in Seattle. The circumstances surrounding this gift are hereinafter described.

During the eighteen months involved in this case, respondent received commissions totaling $13,493.34 on which he paid an income tax and from which deductions were made for social security and similar items. The total amount of these commissions which the court found to have been rebated to appelland was $7,090.84.

The transaction regarding the gift of the home to respondent is quite unusual, but, since it is claimed by respondent to have been a factor in his orally agreeing with appellant to accept the salary of $350 per month in lieu of commissions, we must refer to it in some detail.

When respondent was first employed by appellant in December, 1946, he was living in a rented house in Bremerton. He discussed with appellant the difficulty he was experiencing in finding a suitable home in Seattle. Appellant saw a newspaper advertisement wherein a house was offered for sale for $8,500. He called this advertisement to respondent's attention, and suggested that respondent look at the house. After doing so respondent reported that it had possibilities. Appellant gave respondent currency with which to make an offer to buy the house for cash.

The testimony differs slightly as to the amount of currency. Appellant said it was $6,500; respondent said it was $6000. The court accepted appellant's testimony and made a finding that it was the higher figure.

There is no dispute that the currency furnished by appellant was paid by respondent to the seller of the house and that, with appellant's approval, the property was deeded to respondent January 3, 1947, and that he has occupied the premises as his home at all times since.

In November, 1948, appellant asked respondent to quitclaim the property to him. Respondent declined, claiming that he had spent approximately $2,500 in improvements. He offered to purchase the property from appellant. Respondent finally gave a mortgage on the property to appellant's wife to secure his note for $5,900.

At this point there is another slight discrepancy in the testimony of the parties, each one testifying contrary to his own financial interest. Respondent contended that up to the time of the execution of the mortgage no payments were made by him to appellant in connection with the house. Appellant claimed, and the trial court so found, that respondent had at that time made payments aggregating $3,100, leaving a balance of $3,400 due on the original purchase price of the property.

The trial court in computing the amount of the unlawful rebates deducted therefrom the sum of $3,100 which reduced the amount thereof to $3,990.84 (the amount of the judgment).

Later, after a dispute arose with appellant regarding the receipt by him of certain payments made on the mortgage, respondent obtained an FHA mortgage on the property and paid off appellant's wife's mortgage in full.

Appellant makes ten assignments of error which we discuss in the order in which they are treated in his brief.

The first assignment is directed to the portion of finding of fact No. 2 wherein the court found that respondent was employed by appellant pursuant to the two collective bargaining contracts hereinbefore described. It is argued that respondent's own testimony is to the effect that he entered into a negotiated agreement to work for appellant as long as he was in business for a salary of $350 per month (regardless of whether he sold any cars or not) plus the gift of the home.

It is undisputed that at all times during the period of employment appellant paid respondent in full the commissions provided for in these collective bargaining contracts. He is hardly in a position now to contend to the contrary. Furthermore, the arrangement regarding the salary of $350 per month was not made until after respondent had been employed for several weeks. On cross-examination respondent testified: 'When I first went to work * * * there was no agreement. I was on the regular Union basis.' There was no contradiction of this statement.

The second assignment attacks finding No. 3 wherein the court found that the association had authority to negotiate and enter into collective bargaining contracts on behalf of its members and that appellant was bound by the existing contract until May 6, 1948. This assignment is without merit for the reasons hereinafter stated in connection with our discussion of appellant's ninth assignment of error.

The next assignment relates to finding No. 4 in which the court found that the oral agreement was made between the parties to pay and accept a salary of $350 per month in lieu of the commissions provided for in the collective bargaining contract between the association and the union.

This assignment, and the following assignment, which challenges finding No. 6 (in which the court found that respondent actually paid back to appellan...