Saunders v. DEC Intern., Inc., 76-240

• Decision Date: 03 October 1978
• Docket Number: No. 76-240,76-240
• Citation: 270 N.W.2d 176,85 Wis.2d 70
• Parties: Glenn T. SAUNDERS, Plaintiff-Respondent, v. DEC INTERNATIONAL, INC., f/k/a Dairy Equipment Company, a Wisconsin Corporation, Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 176

270 N.W.2d 176

85 Wis.2d 70

Glenn T. SAUNDERS, Plaintiff-Respondent, v. DEC INTERNATIONAL, INC., f/k/a Dairy Equipment Company, a Wisconsin Corporation, Defendant-Appellant.

No. 76-240.

Supreme Court of Wisconsin.

Submitted on Briefs Sept. 7, 1978.

Decided Oct. 3, 1978.

Thomas P. Solheim and Ross & Stevens, S. C., Madison, on briefs for defendant-appellant.

Gerald C. Nichol and Aagaard, Nichol, Wyngaard & Wilson, Madison, on brief for plaintiff-respondent.

HEFFERNAN, Justice.

The appeal is from an order denying a motion for summary judgment. The plaintiff, Glenn T. Saunders, brought an action alleging that defendant, DEC International, Inc., was obligated to him in the amount of $60,000 for commissions on the sale of equipment manufactured by DEC. Following defendant's answer denying the material allegations of the plaintiff's complaint DEC brought a motion for summary judgment, which demonstrated that plaintiff's cause of action accrued more than two years prior to the commencement of the action. It was asserted that any claim the plaintiff had was therefore barred by sec. 893.21(5), Stats., the two-year statute of limitations, because the claim is one for "unpaid salary, wages or other compensation for personal services."

The motion for summary judgment was brought before the court on stipulation of the parties. It is conceded that plaintiff's cause of action accrued prior to February 11, 1972, and would be barred by sec. 893.21(5), Stats., if the period of limitations set forth therein is applicable.

The trial court concluded that Saunders' cause of action was not barred by sec. 893.21(5), Stats., and that the six-year period of limitations prescribed by sec. 893.19(3) applied.

The subsequent order denying the motion for summary judgment is before this court on DEC's appeal.

The judge in his memorandum opinion stated that he accepted the legal theories of the plaintiff as set forth in his trial brief. The plaintiff's trial brief, which has been made a part of the record, relies upon the policy of this court to construe statutes of limitations narrowly and to bar only causes of action that clearly fall within the statute's ambit. Plaintiff also relied upon the theory expressed by this court in Estate of Javornik v. Vodnik, 35 Wis.2d 741, 151 N.W.2d 721 (1967), that the two-year statute of limitations, sec. 893.21(5), Stats., applies only to causes of action where "human labor itself is sought and is the object of the compensation" (at 749, 151 N.W.2d at 725), and is inapplicable to causes of action where the defendant's interest was to secure an end product, result, or fruits of the labor.

It is argued on this appeal by plaintiff, as it was at trial, that DEC had no interest in Saunders' labor in itself but was only interested in compensating Saunders in the event the end product of his labor was the sale of a DEC product. Only in that event the consummation of a sale was any payment due. The compensation was unrelated to the hours or amount of labor or effort expended by Saunders. It depended solely upon results. Saunders claims he was to receive a commission of five percent of sales made, irrespective of the time spent or labor expended.

We accept the plaintiff's position as a correct statement of the law of Wisconsin. Sec. 893.21(5), Stats., covers claims for "salary, wages or other compensation for personal services." We hold that the phrase, "other compensation for personal services," applies only when compensation is offered or promised for the labor itself, as opposed to the results or fruit of the labor. The defendant promised only to pay for results, I. e., to pay a commission on a completed sale, and the plaintiff seeks only to be paid for the results of his labor the commissions he claims to be due. The motion to grant summary judgment on the ground that the statute of limitations had run was properly denied. We affirm and remand the record to the circuit court for trial.

The normal period within which contract actions must be brought is six years (sec. 893.19(3), Stats.). The two-year-limitation period asserted in bar by the defendant is an exception to the general rule. Because numerous contracts involve an element of personal services, an overbroad interpretation of the term, "personal services," in the two-year statute of limitations would result in the exceptional circumstances swallowing up the general rule and would tend to make the shorter period of limitations the norm, rather than the six-year period.

To avoid the danger of subverting the legislative intent, this court, in accordance with generally accepted standards of jurisprudence, has interpreted statutes of limitation so that no person's cause of action will be barred unless clearly mandated by the legislature. This particular statute, therefore, has been construed "in favor of litigants to limit the number of actions which are barred." Lorenz v. Dreske, 62 Wis.2d 273, 214 N.W.2d 753 (1974).

In accordance with that general philosophy of insuring that litigants shall have their day in court unless clearly barred, words of doubtful or ambivalent import have been construed by this court to bar only those actions the legislature clearly intended to extinguish.

The definitive and properly narrow construction of the phrase, "personal services" at construction which we follow appears in Javornik, supra, 35 Wis.2d at 749, 151 N.W.2d at 725:

"We think 'personal services' as used in sec. 893.21(5), Stats., means human labor such as is commonly rendered in return for a salary or a wage in the case of an employee and for 'other compensation' in the case of an independent contractor or one not in an employee relationship. Such human labor must be in the nature of a service as distinguished from the end product or the fruit of the service. While some personal services may result in a salable article or an end-product, the distinguishing feature of personal services for the purpose of this section is whether the human labor itself is sought and is the object of the compensation or whether the end-product of the service is purchased."

This language in Javornik has been repeatedly invoked as a rule or test. E. g., Rupp v. O'Connor, 81 Wis.2d 436, 440, 261 N.W.2d 815 (1978); Sussmann v. Gleisner, 80 Wis.2d 435, 440, 259 N.W.2d 114 (1977); Green v. Granville Lumber & Fuel Co., 60 Wis.2d 584, 211 N.W.2d 467 (1973). The test is whether the compensation was paid for "human labor itself" or for "the end product or the fruit of the service." If the labor itself was purchased, the two-year statute applies.

We are satisfied that Saunders' claim fails to meet the test for application of the two-year statute. DEC purchased results or the fruits of labor, and not labor itself.

The defendant DEC offers two counter arguments to this proposition. The first is that the two-year-limitation statute was intended by the legislature to apply in all cases where the amount of compensation due was known, or could be readily known, by the claimant at the time, or shortly after, the services were rendered. While defendant makes a plausible argument that the legislature, acting in pursuance of that philosophy, could well have included commissions or sales within the class of claims that must be litigated promptly, it did not do so. Rather, it sought to enforce the prompt litigation of claims "for compensation for personal services." To construe commissions due upon the attainment of results, irrespective of the quantum of personal effort or services, as compensation for personal services would have the effect of barring litigants from their day in court when the legislature has not clearly mandated that result. Such result would be contrary to the consistent interpretative philosophy of this court to bar claims by invocation of statutes of limitation only when the legislature has spoken with clarity.

The defendant's second argument is that application of the "results" or "fruits of labor" test has the automatic consequence of excluding all claims of independent contractors from the application of the two-year period of limitation. Defendant, building upon that house of cards, points out that Javornik itself appears to recognize that some independent contractors may come within the two-year...