Richmond Dry Goods Co v. Wilson

• Decision Date: 21 February 1928
• Docket Number: (No. 6146.)
• Citation: 141 S.E. 876
• Court: West Virginia Supreme Court
• Parties: RICHMOND DRY GOODS CO. v. WILSON.

141 S.E. 876

RICHMOND DRY GOODS CO.

v.WILSON.

(No. 6146.)

Supreme Court of Appeals of West Virginia.

Feb. 21, 1928.

(Syllabus by the Court.)

Error to Circuit Court, Mercer County.

Action by the Richmond Dry Goods Company against C. B. Wilson. Judgment for plaintiff, and defendant brings error. Modified and affirmed.

Sanders, Crockett, Fox & Sanders, of Blue-field, for plaintiff in error.

Arthur F. Kingdon, of Bluefield, for defendant in error.

HATCHER, J. This is an action brought by a wholesale merchant against its traveling salesman to recover of him advances in excess of earned commissions. The contract between the parties stated a schedule of commissions the salesman was to receive, and then provided:

"It is understood and agreed that you arc to pay all expenses. We agree to advance weekly expense account, which amounts are to be charged against earned commissions. We agree to pay a drawing account of $200.00 per month, payable semimonthly, which is to be charged against your earned commissions."

The employment continued for four years. Accounts of his expenditures were turned in weekly by defendant, which were promptly paid by plaintiff. The advances consistently exceeded the earned commissions throughout the entire period. No demand for the excess was ever made of defendant until his relation with plaintiff terminated.

Plaintiff sued for $5,2.32.73. This amount is composed of the excess with interest, and $160.50 admittedly due plaintiff on a note of defendant. Upon a demurrer to the evidence by the defendant, the jury found for the plaintiff the amount demanded, if the law be for it as to the excess, and $160.50 for it, if the law be for the defendant thereon.

The law, supported by the weight of authority in respect to such contracts, is stated in Labatt's Master and Servant (2d Ed.) vol. 2, § 461, pp. 1358, 1359:

"Such contracts do not, in the absence of an express stipulation to that effect, impose upon the employee a personal obligation to return the sums advanced to or withdrawn by him, in the event of his not earning enough in commissions to offset them. Accordingly if the amount of the advances or withdrawals exceeds the amount of the commissions earned by him, an action will not lie against him to recover the excess."

A like statement of this law is made in 2 C. J. tit. "Agency, " § 452, p. 787. It is restated with larger annotation in 39 C. J. tit. "Master and Servant, " § 207, pp. 153, 154. Leading cases upholding this rule are Nelson v. Am. Bus. Bureau, 241 Ill. App. 432; Schlesinger v. Burland, 42 Misc. Rep. 206, 85 N. Y. S. 350; Luce v. Plantations Co., 195 Mass. 85, 80 N. E. 793; Newton W. & W. Co. v. Hocker (Tex. Civ. App.) 220 S. W. 233; Lieberman v. Weil, 141 Wis. 635, 124 N. W. 262; Arbaugh v. Shockney, 34 Ind. App. 268, 71 N. E. 232, 72 N. E. 668; Roofing Sales Co. v. Rose (N. J. Sup.) 137 A. 211. A few decisions are not in harmony with the rule. Strauss v. Cohen Bros., 169 Ill. App. 337; Martinez v. Cathey (Tex. Civ. App.) 215 S. W. 370; Clarke v. Eastern Adv. Co., 106 Me. 59, 75 A. 303; and Snellenberg v. Levitt, 282 Pa. 65, 127 A. 309. The first three may be differentiated from the general rule under the terms of thecontract or the facts of each case. However, the Pennsylvania decision bluntly held the employee personally liable for the excess of advances over commissions, for the reason that the contract failed to exonerate him from personal liability. The silence of a contract in this respect is regarded quite differently by proponents of the majority rule. Their view is forcefully expressed in N. W. Ins. Co. v. Mooney, 108 N. Y. 118, 123, 124, 15 N. E. 303, 305, as follows:

"There is no express agreement on the part of Mooney to pay back the money; there is no agreement that its advance shall create an indebtedness on his part; no word signifying that he is to be a borrower, nor that the plaintiff will lend to him any money. * * * It would have been much more natural to insert words signifying that to be the true character of the transaction, if it was so intended, than omit them. * * * It would have been a simple matter to have said that Mooney would repay the money, if that was the agreement, and that such or similar words were not used is one proof, among others, that the parties never intended to enter into such an agreement."

Counsel for the plaintiff relies upon the statement in the contract that defendant is to pay all expenses The course pursued by the parties does not indicate that they considered the defendant to be personally obligated. He did pay the expenses in the first instance, thereby doing what the strict letter of the contract exacted. But, upon receipt of his expense accounts, the plaintiff...