McIntyre v. Smith-Bridgman & Co.

• Court: Michigan Supreme Court
• Writing for the Court: STARR
• Citation: McIntyre v. Smith-Bridgman & Co., 301 Mich. 629, 4 N.W.2d 36 (Mich. 1942)
• Decision Date: 18 May 1942
• Docket Number: No. 48.,48.
• Parties: McINTYRE v. SMITH-BRIDGMAN & CO.

301 Mich. 629

4 N.W.2d 36

McINTYRE

v.SMITH-BRIDGMAN & CO.

No. 48.

Supreme Court of Michigan.

May 18, 1942.

Action by Nelson H. McIntyre against Smith-Bridgman & Company for damages for alleged breach of oral contract of employment. From a judgment for the plaintiff, the defendant appeals.

Affirmed.

Appeal from Circuit Court, Genesee County; Philip Elliott, judge.

Before the Entire Bench.

Guy W. Selby, of Flint, for defendant and appellant.

McTaggart & Krapohl, of Flint, for plaintiff and appellee.

STARR, Justice.

Prior to about March 1, 1935, plaintiff was employed by Caswell, Inc., as manager of its branch retail household appliance store in the city of Flint. On about March 1, 1935, Caswell, Inc., sold its Flint store to defendant. At the time of such sale plaintiff and defendant entered into an oral contract whereby plaintiff was employed as manager of the household appliance department of defendant's store at a salary of $2,000 per year, payable in semimonthly installments of $83.33, plus 3 per cent. commission on the net sales of such department. The transactions for the purchase of the store by defendant and for the employment of plaintiff were concluded on about March 5, 1935, but were made effective from March 1.

Plaintiff continued as manager of defendant's household appliance department until about May 15, 1938, when he was discharged. His salary was paid to June 1, and his commission, to May 1, 1938. A few days after his discharge plaintiff tendered his services for the balance of the year period of March 1, 1938, to February 28, 1939. After his discharge he obtained other employment.

On December 18, 1939, plaintiff began suit against defendant for breach of an alleged contract of employment for the year period of March 1, 1938, to February 28, 1939. Plaintiff's claim and suit were based upon the theory that he was first employed for a one-year period beginning March 1, 1935, and ending February 28, 1936; that the continuation of his employment after the expiration of the first year period, without change in the terms of his oral contract, operated as a renewal of his contract on a year-to-year basis; and that the last renewal was for the year period from March 1, 1938, to February 28, 1939. Plaintiff claims the difference between the amount of his regular salary and commission and the amount he earned at other employment for the balance of the year period; that is, from the time of his discharge until February 28, 1939.

Defendant's answer denied liability and alleged in substance that the contract of employment was oral and not to be performed within one year and, therefore, was void under the statute of frauds; that the contract of employment was terminable at the will of either party; that defendant had the right to discharge plaintiff, because he did not perform his work and duties in a satisfactory manner; and that the duration of the contract was too indefinite and uncertain to form the basis for the assessment of damages for its breach.

The case was tried before a jury. At the conclusion of the testimony defendant's motion for directed verdict was taken under advisement. The jury returned verdict for plaintiff in the amount of $1,877.74, and judgment was entered on such verdict. Motion for judgment notwithstanding the verdict and motion for new trial were denied. Defendant appeals.

Plaintiff testified regarding the oral contract he made with defendant in March, 1935, in part as follows:

‘Mr. Jackson (president of defendant company) asked me on what basis I wanted to work. I told him $2,000 per year, plus 3 per cent. of the net business. * * *

‘The year was to begin March 1, 1935, and I was to be paid semi-monthly. The year was to end the last day of February, 1936. * * *

‘I continued to draw it (salary and commission) each month until March 1, 1936. There was nothing happened at that time and nothing said by Pitkethly (then secretary of defendant) or by Smith-Bridgman & Company (defendant), or by me and no change was made. I just continued right on with the work the same. There was no change made in my pay. I continued to receive my checks each two weeks and my bonus at the end of the month just the same.

‘Q. Now at the end of March 1, 1937, what if anything was said or done? A. There was no change. I continued to receive my checks each two weeks and my bonus at the end of the month just the same.

‘Q. March, 1938, March 1st, what, if anything, was said or done? A. There was nothing said or done. I continued. * * *

‘Mr. Pitkethly never gave me any specific reason for discharging me. I asked him point blank why I was being discharged. He just said, ‘Carelessness and inefficiency.”

On cross-examination plaintiff testified:

‘At the end of the year (February 28, 1936) when nothing further was said I kept on working. The period of the contract was for one year. The next year nothing was said and I kept on working.

‘Q. * * * Did you have a talk with them about how long this contract was to continue? A. No, sir.

‘Q. Nothing was said by them or by you? A. No, sir.

‘Q. It was just a contract that was to continue from year to year, indefinitely, is that right? A. Yes, sir.

Q. Until you were dissatisfied, or they were? A. Yes, sir, or terminated.

‘Q. That is after the first meeting nothing was ever said about a renewal of the contract? A. No, sir.’

Mr. Pitkethly, secretary-treasurer of defendant company in 1935 and president and general manager at the time of trial, was called for cross-examination. He testified, in part:

‘The plaintiff was an employee of the Caswell Company. Smith-Bridgman & Company (defendant) made an agreement with the plaintiff, Mr. McIntyre, to carry on as general manager of the department. * * * I very distinctly remember saying that ‘We don't pay on a yearly basis; we have no contracts on a yearly basis; we pay on a weekly basis, and a bonus, or a 3 per cent. bonus will be paid every month.’ * * *

‘Q. And what was he (plaintiff) discharged for? * * * A. Failure to cooperate with the management. * * *

‘Q. Well, now, will you tell us in what respect he failed to co-operate with the management? A. Attitude and lack of preparation in doing the things that we wanted done. * * *

‘For the good of the business I decided it was better that he find another job. * * *

‘Q. Was there every anything said at the end of that year (February 28, 1936) concerning his further employment? A. No, sir; not that I know of.

‘Q. In other words, he just went on working? A. I presume. * * *

‘Q. So it was clear at the time you hired him, he and you talked together concerning his employment that he was hired for one year? A. For one year.’

On cross-examination by defendant's attorney, Mr. Pitkethly testified: ‘A contract was made with Mr. McIntyre for a year at a certain salary and he continued after that without any further discussion. It was for an indefinite period so long as he was satisfactory.’

Plaintiff's testimony was, in part, corroborated by the testimony of a secretary to defendant's president, who was present at the time of the interview between plaintiff and Mr. Pitkethly in March, 1935.

The testimony presented questions of fact as to the terms of the oral contract between plaintiff and defendant and as to the renewal of such contract from year to year. Such questions of fact were submitted to the jury under proper instructions by the trial court.

The case of Sines v. Wayne County Superintendents of the Poor, 58 Mich. 503, 25 N.W. 485, involving the renewal of an oral contract of employment, presented a situation somewhat similar to the one now before us. In that case we said, page 506 of 58 Mich.,page 487 of 25 N.W.: ‘It is urged by defendants that the contract claimed by the plaintiff is void by reason of the statute of frauds; that the talk with the president in September, to continue work until he had laid the matter before the board, was a contract not to be performed in a year. But this is an erroneous view of the testimony. The contract had been previously made for a year's service, and under that contract defendant had gone on from year to year, and in such cases, if nothing is said or done by either party at the end of the year to terminate it, but, on the contrary, the person performing service is allowed to continue on without objection, the facts raise the presumption from which the jury have found that both parties have assented to the contract continuing in...