Case ID: ad_157/html/0412-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward Eicke, Respondent, v. The Wittemann Company, Appellant.
    First Department,
    June 13, 1913.
    Corporation — master and servant — action by officer of corporation for breach of contract fixing salary — effect of re-election to office without resolution as to amount of salary—payments conditioned upon business of corporation.
    Action against a corporation brought by its secretary and treasurer to recover damages for an alleged wrongful discharge from employment. The plaintiff, having been elected to said office, had a certain salary assigned him by resolution of the directors with an additional sum payable semi-annually for preparing financial reports and an additional compensation not exceeding a certain sum as in the discretion of the president the business might warrant. Having been re-elected under the same contract for several years, he was finally re-elected to office under a general resolution re-electing all the corporation officers “for the ensuing year,” there being no resolution as to his salary. Subsequently the business of the corporation was removed to another city and the plaintiff rendered no further services to it but acted for another corporation associated in business with the defendant and thereafter was by resolution removed from office. On all the evidence,
    
      Held, that although the resolution at the last election did not specify the salary to be received by the plaintiff, he was, under the circumstances, entitled to the same compensation as he had previously received;
    That he was not entitled to recover such additional compensation as had been previously left to the discretion of the president depending upon the business of the company.
    
      Appeal by the defendant, The Wittemann Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of New York on the 11th day of December, 1912, upon the verdict. of a jury, and also from an order entered in said clerk’s office on the 10th day of January, 1913, denying the defendant’s motion for a new trial made upon the minutes.
    
      Charles B. Sears [Ansley W. Sawyer with him in the brief], for the appellant.
    
      George B. Keeler, for the respondent.
   Laughlin, J.:

The plaintiff alleges in three separate counts three causes of action. A verdict was directed in favor of the defendant on the first cause of action. In the second count the plaintiff alleges that the defendant employed him as its secretary and treasurer for the year 1911, and agreed to pay for his services the sum of $1,000, $600 thereof in twelve equal monthly payments at the end of each month, and $400 thereof in two equal payments on the thirtieth of June and the thirty-first of December, and that he entered upon the performance of his duties and continued to perform them until the third day of May, when he was wrongfully discharged; and he claims that there was a balance of $150 owing on the monthly installments at the time he was discharged, and that he was damaged in the sum of $800. The third count is for salary at the rate of $1,000 per annum, for the period from January first to May third, less $50 paid to apply thereon for the month of January, leaving a balance of $291.66.

On the 15th day of January, 1906, the plaintiff was elected secretary and treasurer of the defendant, and it was left to the president to adjust the salary according to the time required. In January, 1907, he was re-elected, and his salary was duly fixed by resolution of the board of directors at $600 per annum, and the additional sum of $125 semi-annually for preparing semi-annual statements of the affairs of the company. He was re-elected in 1908, and the salary and compensation for the semi-annual reports were fixed the same as before, and the resolution further provided that he should receive “ such additional compensation not exceeding the sum of $400, as, in the opinion and at the discretion of the president, the business may-warrant. ” In 1909 he was re-elected, and the resolution provided that he should receive the same compensation and allowance for semi-annual reports, “and the same additional compensation at the end of the year as last year.” In 1910 he was re-elected, and a resolution was adopted to the effect that he should draw the same salary and receive the same additional compensation as the year before. On the 17th of January, 1911, all the officers were re-elected by one general resolution “for the ensuing year.” No resolution was adopted at that meeting with respect to the plaintiff’s salary, and if he was not present at the meeting he was informed after it, that he had been again elected secretary and treasurer, and nothing was said about salary. The plaintiff had regularly received $50 on the last day of each month, and the additional compensation for the semi-annual statements semi-annually at the expiration of each six months, and the allowance which the president was authorized to make at the end of each year. At the end of the month of January, 1911, he received $50 for his salary for that month, and thereupon and on the first or second of February, the offices of the company were moved from New York to Buffalo, and he neither rendered nor tendered any further services for the company. Prior to this time the plaintiff had been in the employ of Wittemann Brothers, another corporation, which apparently was intimately connected with the defendant, and with its consent accepted this position of secretary and treasurer of the defendant, and performed services for both corporations during the same period. After the defendant removed to Buffalo the plaintiff devoted all of his time to the business of Wittemann Brothers, but received no increased compensation therefor. He made no further demand on the defendant for salary until the twenty-ninth of April. On May third thereafter the board of directors of defendant adopted a resolution removing him from the offices of secretary and treasurer and declaring the offices vacant. Evidence was adduced in behalf of the defendant tending to show that the plaintiff was advised in advance of the meeting of the board of directors in January, 1911, and at that meeting of the intended removal of the company’s offices to Buffalo, and that his services would only be required until that time, and that he acquiesced therein; but that evidence was controverted. We are of opinion that the verdict of the jury thereon in favor of the plaintiff is against the weight of the evidence. It is quite probable that there was an understanding between the parties to the effect claimed by the defendant, and that such was the fact is indicated by the plaintiff’s remaining in Hew York without offering to accompany the defendant to Buffalo.

By the resolution, however, re-electing the officers the plaintiff was re-elected secretary and treasurer for the year 1911, and he was.not formally removed and the offices were not declared vacant until May third. There is, therefore, some basis for his claim for services for the months of February, March and April. The learned counsel for the appellant contends that, since no salary was fixed by the last resolution, the plaintiff was only entitled to recover for the value of the services rendered, and that, inasmuch as he was paid for the month of January, and rendered no services thereafter, he was not entitled to recover anything. We are • of opinion, in the circumstances, that on his re-election he became entitled to a salary on the same basis as before. (See Adams v. Fitzpatrick, 125 N. Y. 124; Mendelson v. Bronner, 124 App. Div. 396.) That is the rule as declared by the authorities cited with respect to the salary of an employee who continues in the employ in the same capacity after the expiration of his term of service, and although the Court of Appeals, in Gaul v. Kiel & Arthe Co. (199 N. Y. 472, 477), declined to express an opinion on the point, we think it should apply to an officer of a business corporation.

The plaintiff recovered a verdict of $366.67, which shows that the verdict was rendered upon the theory that the plaintiff was entitled to recover salary for five months at the rate of $1,000 per annum, less the $50 paid for the month of January, and that no damages were allowed for his discharge.

We are of opinion that plaintiff was not entitled to recover any part of the $400 additional compensation which originated in the resolution by which payment thereof was left to the discretion of the president, depending on the business of the company. It was not intended by the subsequent resolution to eliminate such discretion with respect to the additional compensation and to make it part of the fixed annual salary. The resolutions standing alone might give rise to doubt on this subject, but all doubt is removed by the course of business between the parties under which the plaintiff, instead of receiving one-twelfth of $1,000 monthly, received, as before, $50 per month, and the additional compensation at the end of the year. We think that the recovery of salary as such should have been limited to $50 per month for the months of February, March and April.

The judgment and order should, therefore, be reversed, with costs to appellant to abide the event, and a new trial granted, unless the plaintiff stipulates to reduce the recovery to $150 and interest thereon from the time of his discharge, and if he shall so stipulate the judgment is modified accordingly and affirmed, without costs.

Ingraham, P. J., McLaughlin, Clarice and Scott, JJ., concurred.

Judgment and order reversed, new trial ordered, costs to appellant to abide event, unless plaintiff stipulates to reduce recovery to $150, with interest; in which event judgment as modified and order affirmed, without costs. Order to be settled on notice.