Case ID: ohio-st_54/html/0157-01.html
Source: Caselaw Access Project
Author: {"author": "Minshall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Tiffin Glass Company v. Stoehr.
    
      Practice — Pleading—Statement of facts in petition — Claim for amount due as wages instead of as damages — Not material as to right of recovery — Liability of corporation in damages to agent — Section 5684, Revised Statutes.
    
    1. Where, on the facts stated in a petition, a plaintiff is entitled to a judgment for money, the fact that in his petition he claims the amount to be due him as wages on a contract of employment, instead of as damages for the breach of it, is not material, to his right of recovery. A misconception of this kind must be disregarded in passing judgment upon the pleading.
    2. Where a corporation is liable in damages to an agent for having wrongfully discharged him from- its service under a contract for a definite period, and is subsequently dissolved by the judgment of a court on the petition of its stockholders, it remains liable to the party injured notwithstanding the dissolution. ■ Section 5084, Revised Statutes.
    (Decided February 25, 1896.)
    Error to the Circuit Court of Seneca county.
    Noble, Keppel <& Noble, for plaintiff in error.
    1. We claim that when a corporation is found to be clearly insolvent, it has no right to go on incurring liabilities which it is unable, and has no prospect of ever being able to pay. But that, in such case, it has the legal power, and the legal right, to discharge its employes; and that it is its duty to do so. This it did, by notifying the plaintif below to quit and seek other employment.
    2. We claim that when a court of competent jurisdiction has rendered a judgment, or decree dissolving a corporation, and placing all its property and effects in the hands of a receiver to close up its business — from that time forth it has no power, as a corporation, to receive or pay for services, and all contracts for such services must end with its existence.
    3. And even if the contract between the'parties was not legally canceled, by such dissolution of the corporation, we claim that when the plaintiff below received notice, that the corporation had ceased to do business, and could go no further, and notifying him of his discharge from such employment, he was bound to seek other employment, and was not at liberty to refuse it, because the amount offered was not as much as he contracted for with the defendant, nor because the offer of employment was for less than a year, or because accepting for a shorter term might interfere with his chances for a permanent position. But he was bound to accept in good faith, and use his time to the best advantage.
    It really seems that there could be no question that death, or dissolution ought to end all contracts for service. A dead servant certainly could not serve a live master; nor could alive servant serve a dead master. This we take for granted. ■
    The question of death or dissolution is a mere question of fact, and like any other fact is to be alleged and proved. The death of a servant could easily be proved, but how is it as to the death or dissolution of a corporation ? It may be said that this requires the actions of a court, to give it force and effect. The statutes of Ohio relating to the dissolution of corporations will be found in Chapter V, and embraces sections from 5651 to 5688, inclusive.
    As the death of a natural person revokes all authority given to his agents, or servants, so must the dissolution of a corporation, whether brought about by limitation, forfeiture of charter rights, or judgment of a court of competent jurisdiction, for then there is no master to serve or pay for services. Angel and Ames on Corporations, section 289; Wood’s Master and Servant, 189, par. 95; Wood, 306, section 158; Wood 532, section 276. Dissolution of a firm by death ends the contract for service on both sides. Wood, section 163; Wolf v. Hoos, 20 N. Y., 197. In this case the plaintiff below has entirely mistaken his remedy, if any he has.
    In both his original and supplemental petitions, he brings his actions upon a memorandum of agreement, entered into between himself, on the one part and The Tiffin Glass Company, by Joseph K. Brown — not so designated but supposed to be an agent of The Tiffin Glass Company — on the other part.
    In his supplemental petition he admits, that on the 26th day of December, A. D. 1890, the said defendant below notified him that it had no further use for his services, and that he should seek other employment.
    And we claim, that, thereupon he recognized the fact that he had been discharged, by seeking, and, after a time, accepting other employment. But at the same time he continued to pursue his remedy upon the contract, the same as-if it had been fully kept and performed by him.
    That his employer had the legal power to dismiss or discharge him from his service, there can be no question.' The employment of one, as a servant, or an agent, implies such confidence on the part of the employer, that the law recognizes his absolute power to dismiss or discharge him, with or without good reason therefor. If the discharge is for good and sufficient reasons, then the agent or servant has no right of action, unless it be on quantum meruit, for • any amount due for past services. But, if the discharge, on the contrary, be wrongful, then the remedy of the employe is by action for the breach of his contract. Meachem on Agency, section 204; James v. Allen County, 44 Ohio St., 226.
    
      Seney ds Scq/ler, for defendant in error.
    In the case at bar the question whether Stoehr may recover in damages for his loss, resulting from the dissolution of the Glass Company depends upon whether the dissolution resulted from the act of the stockholders. If the company was dissolved by the voluntary agreement of its stockholders, or dissolved upon their petition therefor by the order of a court, the agreement in suit is in full force, and the loss to Stoehr may be recovered from the company. Woods, Master and Servant, section 165.
    But the agreement is in force and the loss of Stoehr may be recovered from the company although dissolved either by the order of a court or by the act of the stockholders. The record shows that the company committed a breach of the agreement in discharging Stoehr from its service without cause, in December, 1890. Two months after his discharge (in February, 1891), the order of dissolution was made. Surely, during these two months the company was liable to Stoehr for this breach and as surely, the liability was not discharg’ed by the subsequent dissolution of the company.
    The agreement, it will be observed, obligated Stoehr to serve the company until January, 1892, and obligated the company to- pay him wages for that period. Where the servant is employed for a definite period, the master is bound to provide the servant with labor for the whole period. The fact that the business is unprofitable, is no excuse. If the master chooses to quit business he may do so, but he must pay the servant his damages for failing- to give him employment for the whole period. Woods, Master and Servant, section 97; Angell and Ames on Corporations, section 318; Story on Agency, section 339; Lewis v. Atlas Insurance Co., 61 Mo., 534; Reeve v. Boston Coffee Co., 15 Pick., 351.
    Now in the case at bar, it will be borne in mind, that The Glass Company dismissed Stoehr from its service without legal cause when the company had full corporate life and was conducting the business for which it was incorporated. In other words, the breach of the agreement — namely, the discharge of Stoehr without leg-al cause, was committed two months before the order dissolving- the company was made by the court. It will be borne in mind, also, that The Glass Company was not dissolved by the act of the state, but, by the agreement of all of the stockholders and. upon their petition therefor.
   Minshall, J.

The action below was brought by Daniel H. Stoehr against the Tiffin Glass Comyany for the amount due him upon a contract of service. By the contract the company had employed the plaintiff as a traveling salesman in its business at thé rate of $150 per month from July 1, 1890, to January 1, 1892, and his expenses. The plaintiff entered upon his employment and continued to serve the defendant until December 26, 1890, when the company, being in embarrassed circumstances and having no further use for his services, discharged him. On March 5, 1891, he commenced suit for the amount, $486.74, then due him, 'March 1— being the difference between his salary and expenses at that time and the amount that had been paid him. After the expiration of his term of service, on January 15, 1892, he filed a supplemental petition, in which he averred that after diligent effort to obtain employment he had been able to earn but $875.72, that in his efforts to obtain employment he had expended $134.92, and so that, allowing a credit for what he had earned, there was due him the additional sum of $759.18, with interest, for which, with the original sum claimed, he asked judgment. The defendant answered. The making’ of the agreement was admitted ; but issue was taken upon many of the other averments; and, as a separate defense, it 'was averred that on February 1, 1891, the Glass Company was, by order of the court of common pleas of Seneca county, in a proceeding duly instituted, declared dissolved, and that it thereafter had no legal existence or power to do business or to accept or pay for the services of the plaintiff. The case was tried to the court, which found the averments of the petition and supplemental petition to be true; and, whilst it did not allow the plaintiff for the expenses incurred by him in his efforts to obtain employment, rendered judgment in his favor for the amount due according to the agreement, less the amount paid him and what he had earned, making $1,187.32.

A motion for a new trial was made and overruled, • and, on error, the judgment was affirmed by the circuit court. Two errors are relied on: (1) That the plaintiff mistook his remedy, and (2) That by the dissolution of the corporation, it ceased to exist, and was no longer liable on its contract of employment with the plaintiff.

1. As to the first objection that the plaintiff mistook his remedy; this is based, we think, on a misapprehension of the character of the plaintiff’s petition. It is claimed to be an action to recover the wages due the plaintiff on the contract, whereas it should have been to recover damages for the breach of it. We agree with the counsel that, on the facts’as pleaded, the plaintiff could not, properly speaking, recover for wages on the contract, and that his right of recovery was damages for the breach of it. But the facts pleaded, the making of the contract, his discharge, efforts to obtain. employment, and the allowance of what he earned thereby, entitled him to recover as damages the difference between what he earned and what he would have received, had he not been wrongfully discharged. James v. Allen County, 44 Ohio St., 226. And under the liberal principles of our code, it can make no difference what he termed the number of dollars he conceived himself entitled to recover, provided that on the facts stated, he was entitled to recover' something. The judgment rendered was in fact for damages and not for wages; it was for what the plaintiff lost by the breach of the contract by the defendant. The plaintiff then did -not mistake his remedy. He had but one, the civil action of the code. This simply required a statement of the facts on which he conceived himself entitled to a recovery of money from the defendant. The petition conformed to this requirement, and stated a cause of action. A prayer for relief is no part of a cause of action. It is the legal consequences which the plaintiff conceives the law attaches to his statement of facts; and if as a matter .of law, he is right, his petition states a cause of action.

2. As to the.second point, that the dissolution put an end to the life of the corporation, and terminated its liability on the contract to the plaintiff. What has already been said, in part answers this contention. By the breach of the contract an end was put to the relation of master and servant; and a new right accrued in favor of the plaintiff as against the defendant — a right to recover damages for the breach of the contract. This is called bj^ some authors a “sanctioning” and by others a “remedial” or “secondary,” right. Poste’s Gaius, Preliminary Definitions, 4; Pomeroy, Code Remedies, sections 1, 2. It was not then necessary to the remedy of the plaintiff that the relation of master and servant should have subsisted between the parties to the end of the time of employment in order to recover damages; and, therefore, the proposition that there can be no such thing as a servant without a master, misconceives the nature of the plaintiff’s right, and is without force.

The right of the plaintiff accrued at the moment of the breach of the contract by the defendant, which it will be observed, was before the dissolution of the corporation; and by the statute, section 5684 Revised Statutes, it is provided that: “Any such dissolved corporation may be sued by its corporate name, for or upon any cause of action accrued, or which, but for the dissolution, would have accrued against it, in the same manner, and with the like effect, as if it were not dissolved.” Hence, the dissolution of the corporation in no way affects the right of the plaintiff arising from the breach of the contract of employment. The defendant’s liability remains the same as if there had been no dissolution.

We are referred to the case of People v. Insurance Co., 91 N. Y., 174. That case is not in point here. There, at the suit of the state, the company was enjoined from doing any further business by reason of its non-compliance with the laws of the state; and Mix, an agent of the company, under an employment for a term of years, sought compensation for the balance of his time. It was denied him, on the ground that the injunction was a dissolution of the contract by the sovereign power of the state, rendering performance on either side impossible. The agent could not perform nor tender performance; to have done so, the court said, would have been a criminal contempt, and possibly a misdemeanor; and that this result must . be deemed an unexpressed condition of their agreement. Here the corporation was dissolved by the voluntary act of the stockholders. The petition was filed by the requisite member, and the prayer was then concurred in by all the others. Wliat might be the effect on such contracts, where at the suit of the state on a proceeding in quo warranto, a corporation is dissolved for some offense against the laws of the state, need not now be determined. Here, as we have said, the dissolution was a voluntary one by the act of the stockholders. They would have violated no law by continuing their business; and the liability of the corporation had been fixed by the act of discharging the plaintiff before it ceased to be a corporation.

Judgment affirmed.