Milwaukee Corrugating Co. v. Flagge

• Decision Date: 08 April 1924
• Citation: 198 N.W. 394,184 Wis. 139
• Parties: MILWAUKEE CORRUGATING CO. v. FLAGGE ET AL.
• Court: Wisconsin Supreme Court

184 Wis. 139

198 N.W. 394

MILWAUKEE CORRUGATING CO.

v.FLAGGE ET AL.^a1

Supreme Court of Wisconsin.

April 8, 1924.

Appeal from Circuit Court, Milwaukee County; Gustave G. Gehrz, Judge.

Action by the Milwaukee Corrugating Company against P. F. Flagge and others and H. W. Krueger and others. Judgment for plaintiff, and defendants last named appeal. Affirmed in part, reversed in part, and remanded.

See, also, 180 Wis. 274, 193 N. W. 69.

This is an action to recover damages; to restrain defendants Krueger and Northern Corrugatng Company from carrying out an alleged conspiracy with defendants Flagge and Smith; to restrain defendants from building certain machines useful in plaintiff's industry; to compel the assignment of certain patents; and for an accounting of profits realized on the use and sale of certain machines.

Plaintiff is a corporation, with its principal office in Milwaukee, engaged in the business of manufacturing many articles made from sheets of metal. Flagge was in the employ of plaintiff from 1907 until October 1, 1918, and for some time had been superintendent of its mechanical department. Defendant Smith had been in the employ of plaintiff as sales manager for several years, when, as claimed by plaintiff, he was discharged for misconduct.

Defendants Krueger resided in Green Bay; were laborers employed by others until they formed a partnership about 1910, the principal business of which was contract roofing in which they did manual labor; their business as partners had been successful until the formation of a corporation in December, 1918.

Flagge left the employment of plaintiff on or about October 2, 1918, and about a month afterward Flagge and Smith entered into negotiations with the defendants Krueger, which resulted in the formation of the Northern Corrugating Company, when Smith and Flagge received stock of that company and assisted in carrying on its operations.

The following was the agreement between Flagge and the plaintiff:

“This agreement, entered into this 16th day of November, 1917, by and between the Milwaukee Corrugating Company, a Wisconsin corporation of Milwaukee, Wisconsin, and Frank Flagge, of the same place, witnesseth:

That said company hereby continues to employ said Flagge as superintendent of their machinery department in the city of Milwaukee and town of Greenfield, to perform such duties in relation thereto as said company shall direct from time to time, and as are ordinarily performed by a superintendent of a machinery department. The said company agrees to pay the said Frank Flagge during the fiscal years 1918, 1919, and 1920 the sum of $375.00 per month; for the year 1921, $395.83 per month; for the year 1922, $415.66, and such other period after 1922 as the parties may mutually agree, unless terminated by the death of said Frank Flagge.

And in consideration of said agreement on the part of said company the said Frank Flagge agrees to faithfully and diligently devote all his time, best efforts and energies to the service of said company as hereinbefore mentioned, and to perform such duties as may be assigned to him faithfully, honestly and diligently, satisfactorily to said company, and to acquaint said company with all new mechanical ideas or suggestions occurring to him, to improve their tools, machines and implements or any goods desired to be manufactured by them.

And it is further mutually agreed that should the said Flagge, during said time, invent any new device which the said company desires to makes use of in their business, he shall assign any and all inventions and devices by him to them, and shall execute any and all papers desired by them for the procuring of patents in the United States or any foreign countries, at said company's request, and shall assign said patents when issued, in due or proper form of law so as to transfer said patents, when issued, to said company, and this agreement shall apply to any and all inventions heretofore devised or constructed by said Flagge while in the employ of said company.

The said Frank Flagge further agrees not to enter into any other employment during the term of this agreement or to devote any of his time or attention to any other business or to represent or work for any other firm or corporation.

In case said Flagge shall devise anything of unusual merit, and of great benefit to the business of said company which is not now manufactured by said Milwaukee Corrugating Company, the said company agrees to give him a bonus therefor, the amount to be determined by Louis Kuehn and August Luedke, individually, according to their judgment of its value and utility.

In witness whereof the parties have duly executed this agreement, this 16th day of November, 1917.”

The testimony was very voluminous. Plaintiff sought to prove that this agreement was known to the Kruegers, and that they conspired with Flagge and Smith to make use of the fruits of Flagge's labor while in plaintiff's employ.

The testimony showed that the connection of both Flagge and Smith with the defendant corporation was very unfortunate, and that after a time they left the company, which resulted in much litigation between the company and Flagge.

The trial court found in favor of the plaintiff, and judgment against Flagge in a considerable amount was rendered for damages. From this judgment no appeal was taken.

The court also found that the Kruegers had knowledge of facts sufficient to put them upon inquiry concerning the former relation and contracts between Flagge and the plaintiff, and that the defendant company was liable for an accounting for profits made, and bound to make assignments with respect to certain patents obtained by Flagge.

The question on which the case is decided in this court renders it unnecessary to state in detail, or even in substance, the very large amount of testimony given at the trial which bore upon the matters above referred to.

Other facts will be stated in the opinion.

Doerfler, J., dissenting.

Minahan, Minahan, Minahan & Duquaine, of Green Bay, for appellants.

Glicksman, Gold & Corrigan, of Milwaukee (M. K. Whyte, of Milwaukee, of counsel), for respondent.

JONES, J. (after stating the facts as above).

The main question of law involved is whether the agreement between Flagge and the plaintiff was a contract by plaintiff to employ Flagge for five years and by him to accept such employment, or whether it was an agreement for five years, if Flagge continued in the employment for that length of time without an agreement to stay for any specified time, and without plaintiff agreeing to employ him for any specified time.

That agreement formed the basis of any right of action plaintiff might have against the Northern Corrugating Company and against the Kruegers. That this was so understood is shown by the fact that counsel for both parties presented very able and elaborate arguments on the subject. This makes it necessary to briefly review the decisions of this court bearing on the question.

The first case on the subject is Prentiss v. Ledyard, 28 Wis. 131. In this case the plaintiff testified that the agreement was that he was to be paid at the rate of $900 per year. The defendant stated the contract to be as follows:

“After he (the plaintiff) had been in my employment some days or weeks, we had a conversation. I told him if he would serve me faithfully and would be strictly temperate, I would give him $700 per year; and, after six months, if he did not drink, and served me faithfully, I would give him $900 per year.”

On this testimony it was held by the court that no definite time of service was agreed upon; that the agreement was merely that, if the plaintiff continued in the employment, serving faithfully and keeping strictly temperate, he should receive for the first six months at the rate of $700 per year, and after six months at the rate of $900 per year, providing he did not drink, and was faithful in the service; that either party was at liberty to terminate the service at any time, no definite period for which the service was to continue having been agreed upon.

In Irish v. Dean, 39 Wis. 562, the contract was not a hiring contract, but one to furnish milk to a hotel. In the opinion the court said:

“In a contract for personal services, or for the sale of personal property to be delivered from time to time, if the contract is silent as to its duration, either party may terminate it at pleasure by giving reasonable notice to the other party of his intention to terminate it.” Irish v. Dean, 39 Wis. 562, 568.

In Stubbe v. Waldeck, 78 Wis. 437, 47 N. W. 833, the complaint was to the effect that the parties made an agreement whereby the plaintiff was to work for the defendant one year, and was to receive $1,000 and $6 per day for expenses; that he was discharged without cause, to his damage.

The answer denied that the employment was for one year, but alleged that plaintiff was to receive payment at the rate of $1,000 per year on conditions. The case was submitted to the jury on the facts. The evidence is not fully reported. The court held that there was evidence to support the verdict for the plaintiff.

In Kellogg v. Citizens' Ins. Co., 94 Wis. 554, 69 N. W. 362, it was held:

“When one serves another under a contract for a year's service, and holds over, continuing in the service after the expiration of the year, there is a presumption, analogous to the presumption in the case of a yearly lease, that the parties consent to the continuance, through another year of the contract of service.” Kellogg v. Citizens' Ins. Co., 94 Wis. 554, 557, 69 N. W. 362.

This was another case where the plaintiff was discharged, but the case turned on the question whether the finding that a contract was made for a year's service was warranted. The evidence showed that plaintiff had worked for a yearly salary for several years before the contract was made, and it was held that on this testimony the conclusion of the trial court...