Rodgers v. Seidlitz Paint & Varnish Co., 51386

Decision Date13 June 1966
Docket NumberNo. 2,No. 51386,51386,2
Citation404 S.W.2d 191
PartiesGeorge RODGERS, Appellant, v. SEIDLITZ PAINT AND VARNISH COMPANY, a Missouri corporation, and Conchemco, Incorporated, a Missouri corporation, Respondents
CourtMissouri Supreme Court

Fain & Rea, Charles J. Fain, Peter H. Rea, Branson, William L. Mason, Jr., Galena, for appellant.

Theodore C. Beckett, Hudson Lee McGuire, Guire, Jr., Kansas City, Brewer & Myers, Kansas City, for respondents.

EAGER, Presiding Judge.

Plaintiff, George Rodgers, sued to recover commissions which he claimed were due to him with interest, for services rendered to defendants from November 1, 1958, to April 1, 1962, when his employment terminated. The jury found in his favor for the full amount of such commissions $17,663.22, but disregarded the question of interest. Upon after-trial motion of defendants the trial court set aside the judgment and entered judgment for the defendants 'for the reason that, under the law and the evidence, plaintiff is equitably estopped from asserting his claim.' It appears that 'Conchemco, Inc.' was the product of a change of name upon merger of Seidlitz with others, that a division is still operated as Seidlitz Paint and Varnish Company, and that the defendants are, in fact, 'one and the same company,' as stipulated. We shall, for convenience, refer to defendant in the singular, or perhaps to 'Seidlitz,' although the judgment is actually for the 'defendants.' The petition originally consisted of two counts but the second count was dismissed. It will not be necessary to digest the pleadings; plaintiff was permitted to file and did file, after verdict, an amended petition to conform to the evidence. Defendant denied all of plaintiff's substantive allegations, and pleaded accord and satisfaction and that plaintiff was estopped by the knowing acceptance of compensation under and upon a changed basis. The only real issue here is whether a submissible case was made by plaintiff, or whether the court was correct in deciding that there was an estoppel as a matter of law.

As of December 1, 1952, plaintiff was employed by defendant as Manager of a so-called 'Industrial Finishes Division,' which, in fact, he was to create. The terms of his compensation, as expressed in a letter from defendant, were: an annual salary of $12,000, the sum of $3,000 per year for expenses in the Kansas City Metropolitan Area (with some inference that this could be drawn regardless of his actual expenses), his actual expenses elsewhere, and a commission of 3% 'on all sales credited to the Industrial Finishes Division in excess of $250,000 annually.' At that time the fiscal year ran from December 1 through November 30; it was later changed so as to run from November 1 through October 31. Plaintiff had been for a number of years an officer of a corporation engaged in that particular type of work in the Chicago area. His contacts in effecting this employment were with Mr. G. R. Seidlitz, Vice President and General Manager, who was generally known as 'Dick' Seidlitz. Plaintiff immediately began his work in Kansas City, established a laboratory, gradually built up a sales force, and actively solicited the trade himself. Actually, he started from 'scratch,' with a new line of products. For several years the results were somewhat disappointing; for instance, in the fiscal year ending in 1957 total sales were $139,880.03, and in 1958, $230,322.25. The fiscal year ending in 1959 was the first one in which total sales exceeded $250,000; they were then $274,908. In 1960 they were $316,073 (for eleven months of the changed fiscal year); in 1961, $576,967, and for five months to April 1, 1962 (the end of plaintiff's duties as Manager) $274,991. At no time was plaintiff paid a 3% commission.

In November, 1957, defendant circulated a memorandum dealing with the attitude of the Internal Revenue Department on expense accounts. For this, and perhaps other reasons, plaintiff has an interview with Mr. G. R. Seidlitz (about whose authority there is no question) in December, 1957, probably about December 18. Much controversy has arisen over the substance and result of that interview. Plaintiff testified that he asked Mr. Seidlitz to change the $3,000 allowance for Kansas City expenses to straight salary, and that Seidlitz agreed; he further testified that they did not discuss the 3% commission on any question of a bonus; that thereafter he reported his actual expenses in the Kansas City area and elsewhere and received payments therefor. Mr. Seidlitz testified by deposition: that plaintiff originally suggested the $3,000 expense allowance; that in December, 1957, they had the preliminary figures of plaintiff's division for the fiscal year, that the sales had risen, but rather slowly, and that he and plaintiff discussed 'the desirability of placing him on a compensation basis exactly the same as * * * all other executives'; that his salary base was changed to $15,000, his actual expenses were to be paid and he was 'placed upon our key employee bonus arrangement' starting in fiscal 1958; that the bonus terms were discussed; that plaintiff assented to the new arrangement, and that it went into effect as of December 1, 1957. While we do not find that Mr. Seidlitz specifically testified that the 3% commission was eliminated at that conference and in the new arrangement, such is the almost necessary inference from his testimony. Thus, the factual controversy arises, plaintiff insisting that he was still entitled to the 3% commission when earned, and defendant insisting that it was wholly eliminated by the December, 1957, arrangement.

Beginning as of December 1, 1957, plaintiff received regularly the installments of a $15,000 salary, plus all his actual expenses. No bonuses were paid for the fiscal year 1958, nor would plaintiff have been entitled to any commission on sales; shortly after the end of fiscal 1959 he was sent a check for $750, with a form letter presumably indicating that this was a bonus; he accepted the check and his explanation at the trial was that the amount was substantially the same as the commission to which he was entitled ($747.24) and that he accepted it as such. Following the 1960 fiscal year (ending October 31, 1960), he was sent a bonus of $750 and accepted it; a 3% commission for that year would have been $1,982.19. Plaintiff's explanation for the acceptance of that check was that 'we were very busy. Seidlitz was merging at the time, going into these things, and I thought I was being considered for a top job in the corporate structure, and I thought that this time was a very poor time to start rocking the boat, and that was why I did not make a demand at that time.' Subsequently, and entirely inconsistently, plaintiff testified that he did not get a bonus for 1960, but plaintiff's brief concedes the payment of a 1960 bonus in the amount of $750. Following the 1961 fiscal year plaintiff received a bonus check for $1,500, which he accepted; a 3% commission would have been $9,809.01.

It is most difficult to tell from plaintiff's testimony just when he made any complaint concerning his compensation or any demand for commissions. The only formal demand he made was apparently on June 30, 1962, about three months after he was 'fired,' and on that date his compensation ceased. Defendant had continued to pay his compensation for three months after he was relieved of his duties in order to give him an opportunity to find other employment. Although much was made of the 'date of the demand,' we are not so much concerned with that matter as we are with ascertaining when plaintiff first made complaint of the new arrangement for compensation. At some time prior to March, 1962, plaintiff was 'angry' and went to 'Dick' Seidlitz's office and talked with him; his testimony indicates that he then discussed the 3% commission matter and his failure to receive commissions, also the 'money' problems generally, and the 'unsatisfactory relations' due to the fact that he had not been paid; he also stated that he told Mr. Seidlitz that he was doubtful whether he wished to remain with the company. No understanding was arrived at, and he did not quit the employment at that time. He testified that he 'felt' that this conversation was the primary reason he was fired, but the evidence indicates that the attitude of some of the affiliated company officials in Baltimore also entered into the termination. No complaint was shown to have been made of plaintiff's work at any time. In March, 1962, and probably around the first of March, 'Dick' Seidlitz called plaintiff in, told him that 'there was dissatisfaction in Baltimore' concerning him (Baltimore being the location of one of the affiliates) and that he was forced to let plaintiff go. His duties ceased as of April 1. Mr. Seidlitz thereafter wrote four letters of recommendation for plaintiff to other companies in the same line of business; he testified that plaintiff had never made any demand for the 3% commission.

The treasurer of defendant testified that after the December, 1957, conference, plaintiff was placed on the 'key employee bonus list,' and that he discussed the new system of compensation with plaintiff. The President testified that he had, on one or two occasions after the end of the fiscal year, discussed compensation with plaintiff, as with the other executives, and that the 3% commission matter was not 'brought to my attention.' The Treasurer of the Seidlitz Division of Defendant produced exhibits purporting to show what plaintiff would have received from the beginning of fiscal 1958 to the time of his termination, had he been paid in accordance with the original 1952 agreement, along with a compilation of the payments actually made to him. One, Defendant's Exhibit 17, showed that he had actually received $95,460.42 for this period, whereas a continuation of...

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