Spotswood Arms v. Este

• Decision Date: 10 June 1926
• Citation: 147 Va. 1047
• Parties: SPOTSWOOD ARMS CORPORATION v. CHARLES ESTE.
• Court: Virginia Supreme Court

Page 1047

147 Va. 1047

SPOTSWOOD ARMS CORPORATION v. CHARLES ESTE.

Supreme Court of Virginia, Richmond.

June 10, 1926.

1. MASTER AND SERVANT — Discharge of Servant — Sufficient Cause — Questions of Law and Fact. — What constitutes a good and sufficient cause for the discharge of the servant is a question of law, and where the facts are undisputed it is for the court to say whether the discharge was justified. But where the facts are disputed, it is for the jury to say upon all the evidence whether there were sufficient grounds to warrant the discharge.

2. MASTER AND SERVANT — Discharge — Duty of Servant to Obey Master. — The duty of a servant to comply with all lawful and reasonable orders given by his master with respect to the performance of such functions as fall within the scope of the employment is one of the fundamental obligations which are deemed to be impliedly undertaken as an incident of every contract of hiring. A promise by the servant to obey the lawful and reasonable orders of his master within the scope of his contract is implied by law. Submission to the master's will is the law of the contract.

3. MASTER AND SERVANT — Discharge — Disobedience. — It is fundamental of the employee's duty that he shall yield obedience to all reasonable rules, orders and instructions of the employer. Disobedience, as a general rule, justifies a rescission of the contract of service and the preemptory dismissal of the employee, whether the disobedience consists in a disregard of the express provisions of the contract, general rules or instructions, or particular commands.

4. MASTER AND SERVANT — Discharge — How Right to Discharge Determined. — The right of an employer to discharge an employee and terminate the relation of master and servant is to be determined with a view to the nature of the service, the duties imposed upon the employee and the terms of the contract of employment. But the question whether, in a given instance, the servant was chargeable with unjustifiable disobedience, is not only to be determined from the provisions of the contract and the nature of the employment, but the circumstances attending the incidents relied upon as evidence of misconduct, and such other elements as may bear upon the issue, should also be considered.

5. MASTER AND SERVANT — Discharge of Servant for Disobedience — Manager of Hotel — Disobedience Warranting Discharge — Case at Bar. — In the instant case plaintiff, the manager of a hotel, had repeatedly violated the reasonable rules and regulations of his employer in regard to the financial affairs of the hotel, without valid excuse. He positively refused to discharge a head waiter, who had had a difficulty with a guest, when ordered to do so by his employer. His employer learned that he had consulted the guests and other servants as to whether he should discharge the head waiter. In anticipation of his own discharge he had retained funds of the hotel which he should have deposited. Other acts of disobedience appeared in the evidence.

Held: That the employer as a matter of law was justified in discharging the manager.

6. MASTER AND SERVANT — Discharge for Disobedience — Other Acts of Disobedience. — In an action by a servant for wrongful discharge it was argued that defendant condoned all previous acts of disobedience by retaining plaintiff in its employ, and that they should not, therefore, be considered. But a master may overlook breaches of duty in the servant, hoping for a reformation; and, if he is disappointed and the servant continues his course of unfaithfulness, he may act, in view of his whole course of conduct, in determining whether the contract of employment should be terminated.

7. MASTER AND SERVANT — Discharge of Servant — Sufficient Cause for Discharge Existing Unknown to Master as Defense to Action by Servant. — It is well settled that where a sufficient cause exists for the discharge of a servant, although not the inducing motive to the discharge, or even known to the master, it will justify the discharge. The law only requires that there should be an actual breach of the express or implied conditions of the contract in order to justify the discharge, and, if such cause in fact exists, the master may avail himself of such breach in defense of an action brought against him for damages resulting from an alleged wrongful dismissal.

Error to a judgment of the Law and Chancery Court of the City of Norfolk, in proceedings by motion for a judgment for money. Judgment for plaintiff. Defendant assigns error.

The opinion states the case.

James E. Heath, for the plaintiff in error.

W. R. Ashburn, for the defendant in error.

CHINN, J., delivered the opinion of the court.

This is an action brought by the defendant in error, Charles Este, against Spotswood Arms Corporation (plaintiff in error) to recover damages for an alleged wrongful discharge.

The parties will be hereinafter referred to according to the positions they occupied in the court below.

It seems that in the early part of 1924, W. G. Maupin, H. L. Lindsay, W. W. Weaver, A. T. Riddick, Jr., and H. R. Furr formed the corporation above named for the purchase of a hotel at Virginia Beach called the Spotswood Arms. The officers and directors of the corporation were all business or professional men of affairs without any previous experience in the hotel business, and desiring a manager to run the hotel during the summer season, engaged the services of the plaintiff for that purpose. Both the plaintiff and defendant prepared a contract in writing which they respectively claim to contain the terms of the agreement, but neither of these papers were ever signed by either party, and the terms of the contract, in certain particulars, are disputed. It is conceded on both sides, however, that plaintiff was to receive a salary of $50.00 per week during the period of his employment, board and lodging for himself and family, and a bonus of 20% of any net income derived from the operation of the hotel during the season of 1924, after deducting therefrom 10% on the investment represented by the property. It is also undisputed that said season of 1924 should be considered as beginning on the day the hotel was opened for business and ending the Tuesday following Labor Day, or the 8th of September of that year. It was afterwards agreed between the parties that it would probably be beneficial to the venture if plaintiff were on the ground in order to generally oversee and familiarize himself with the repairs and improvements which the hotel was then undergoing, and likewise make his preparations for the coming season. Plaintiff, accordingly, moved on the premises with his family on the 13th day of March, with the understanding he should receive $50.00 per week, and pay his own living expenses, until the repairs were completed and the hotel opened. Both parties thoroughly understood that this agreement was independent of plaintiff's employment as manager, and it was so treated by them. The hotel was formally thrown open for business on the 24th of May, and the term of plaintiff's term as manager gegan on that date. It is undisputed that within a week or two after his said term began, considerable dissatisfaction existed on the part of the board of directors of the defendant corporation on account of plaintiff's violation of its directions with respect to the financial affairs of the hotel, of which he was notified and remonstrated with from time to time, as occasion arose; and some friction also developed between Mr. Gagnon, the bookkeeper installed by the defendant, on the one part, and plaintiff on the other, in regard to the same subject. As a result of what had occurred defendant had general survey of the operations of the hotel made by a certified accountant, who, on July 10th, returned a detailed statement of its financial condition, accompanied by a written report, which is as follows:

"On July 9th there were about fifteen guests in the house, some about to leave, with a total income of about $100.00 per day, $42,62 of which was being paid out in salaries and wages, to say nothing of the cost of food, ice (using 1,800 lbs. per day at a cost of $9.00, more in hot weather) and other expenses.

"It looks like you had a waiter for every two guests. It is evident that it does not require two cooks, two kitchen help and six waiters, besides the head waiter, to serve fifteen or less guests, neither does it require four maids to care for the rooms. As a matter of fact it seemed to me the help had very little to do, as most of them could only be found at meal time.

"You will note an item of $209.54 payable to H. R. Woodhouse in list of invoices payable, $127.50 of this bill, which is for meats, was incurred sometime prior to the opening of the hotel, and it is possible that all or at least a part of this amount is a charge against the account of Mr. Este.

"I note that purchases and receipts are not properly placed and made. It is absolutely impossible to know just where you stand if you don't know just what your invoices payable are, nor what you have received. This you cannot know under the present method of doing things, which is not in accordance with the system. Everything should be properly received, and records made daily, and the chef should not be permitted to buy `upon his say so' or memorandum. This is very important.

"The petty cash vouchers are rather freely handled. In a good many instances they do not form properly receipted vouchers. The cash receipts have not been deposited as taken in — this should be done without any variations.

"In view of the uncertainty of the amounts owing various creditors, I suggest securing an itemized statement from all creditors from whom anything has been purchased, especially those in and around Virginia Beach if you don't do this, and at the same time put some strict regulations into effect regarding purchase, you will find yourself heir to numerous bills...