Scott v. J.F. Duthie & Co.

• Decision Date: 06 July 1923
• Docket Number: 17966.
• Citation: 216 P. 853,125 Wash. 470
• Court: Washington Supreme Court
• Parties: SCOTT v. J. F. DUTHIE & CO.

216 P. 853

125 Wash. 470

SCOTT v. J. F. DUTHIE & CO.

No. 17966.

Supreme Court of Washington

July 6, 1923

Department 1.

Appeal from Superior Court, King County; Mitchell Gilliam, Judge.

Action by F. C. Scott against J. F. Duthie & Co. From judgment for defendant, plaintiff appeals. Reversed, with instructions.

John F Dore and Howard Waterman, both of Seattle, for appellant.

Bogle Merritt & Bogle, of Seattle, for respondent.

MACKINTOSH J.

This appeal arises from the sustaining of a demurrer to a complaint which alleges that, on December 23, 1918, the appellant was a department foreman in the shipyard owned and operated by the respondent; that the employment was for an indefinite term; that on that date the respondent made a promise as follows:

'For the purpose of inducing the general department foremen of this company to continue their work with this company and to refrain from accepting employment elsewhere until this company shall complete the ships which it has contracted to build for the United States' Shipping Board, Emergency Fleet Corporation, J. F. Duthie &amp Co. promises the general department foremen now in its employment that upon the completion of its contract with the shipping board the company will divide as a bonus one-half million dollars among those of its general department foremen who continue in its employment until the completion of that contract.'

The complaint alleged further that in reliance on this promise the appellant remained continuously in the respondent's employment until October 15, 1920, when the contract referred to had been completed; that the appellant would not have continued in such employment except in reliance upon the promise, and that he has not been paid the bonus.

As stated by the appellant, the question here is:

'Where an employer promises a bonus or a share of the profits to an employee employed for an indefinite term, to be paid if he works continuously for a given period, is the employer bound by his promise when the employee accepts the offer by performance?'

The complaint states an enforceable contract, and the answer to the question is, 'Yes.'

The offer and its acceptance by compliance with its terms created a unilateral contract, which is binding upon the offerer. The principle of mutuality of obligation, as generally applied in the law of contracts, has no place in the consideration of unilateral contracts. Such contracts are not based on mutual promises or obligations.

'If the promisor has received a consideration, his promise is binding and may be aptly termed an obligation; but as there is no promise on the part of the promisee, there can be no mutual obligations. Accordingly, where one makes a promise conditioned upon the doing of an act by another, and the latter does the act, the contract is not void for want of mutuality, and the promisor is liable though the promisee did not at the time of the promise engage to do the act; for upon the performance of the condition by the promisee, the contract becomes clothed with a valid consideration, which relates back and renders the promise obligatory.' 6 R. C. L. 687.

See also, 23 R. C. L. p. 1115.

The promise here was therefore no 'nudum pactum' on that theory, nor is it one on the theory that the promise was one for additional pay to be given one already under contract to do the very work for which the additional pay was promised. The argument that the appellant cannot recover the bonus for the reason that he was paid his regular salary while in the respondent's employ overlooks the very idea conveyed by the word 'bonus,' which is 'an allowance in addition to what is * * * stipulated.' Standard Dictionary. The complaint shows that the appellant was free to quit his work at any time, and therefore was under no obligation to do the thing which the respondent was seeking to accomplish by its offer. The compliance with the terms of the offer created a contract supplementary to the contract of employment. By this supplementary contract the respondent agreed to reward the appellant for remaining in its employ and refraining 'from accepting employment elsewhere until this company shall complete the ships.' As was said in Zwolanek v. Baker Manufacturing Co., 150 Wis. 517, 137 N.W. 769, 44 L. R. A. (N. S.) 1214, Ann. Cas. 1914A, 793:

'We regard this by-law as being simply the offer of a reward to employés for constant and continuous service. The defendant made an offer of extra or additional compensation to any employé who performed a certain number of hours' service within a given period, provided net profits were earned, and provided the employé did not quit or was not discharged before a stated time. There is no dispute upon the point that this offer was communicated to the plaintiff when he made his original contract of employment; and the evidence tends to show that when the contract was modified in December, 1908, the plaintiff advised the defendant that the raise made in wages was satisfactory, provided he would be permitted to share in the profits, and that he was informed that he could participate therein. * * * A binding and enforceable contract to pay a reward rests, on one side, upon a valid offer, and, on the other side, upon an acceptance of such offer, including its terms and conditions, by a performance of the services requested in the offer before the offer lapses or is revoked. Until acceptance by performance of the services, it is merely a proposition; but when accepted by performance it becomes a binding contract, subject to the laws governing contracts generally. * * * Performance constitutes acceptance of the offer, and after performance it cannot be revoked, so as to deprive a person who has acted on the faith thereof of compensation. * * * It is not necessary that the person performing the service for which a reward is offered generally should give notice to the offerer that he accepts the offer; for in such case the party making the offer impliedly dispenses with actual notice, and the doing of the act completes the contract. * * * Acting upon

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