Case Name: E. Porter Fraker, Appellant, v. A. G. Hyde & Sons, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-07-08
Citations: 127 A.D. 620
Docket Number: 
Parties: E. Porter Fraker, Appellant, v. A. G. Hyde & Sons, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 127
Pages: 620–624

Head Matter:
E. Porter Fraker, Appellant, v. A. G. Hyde & Sons, Respondent.
First Department,
July 8, 1908.
Contract of employment — consideration for supplementary agreement giving share of profits — evidence — resolution of directors.
A resolution of the hoard of directors of a corporation providing for the employment and compensation of employees is evidence of such employment.
Where a written contract of employment at a stated salary provides that it may be annulled at any time by either party on giving thirty days’ notice, the abrogation of the privilege of the employee to annul the contract is a sufficient consideration to support a new agreement by the employer giving the employee a percentage of the net profits in addition to the salary previously agreed upon, and the employee having continued his employment upon the faith of the latter agreement and having fully performed upon his part is entitled to recover the percentage of the profits.
Appeal by the plaintiff, E. Porter Fraker, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Hew York on the 14th day of Hovember, 1907, upon the dismissal of the complaint by direction of the court at the close of the plaintiff’s case upon a trial at the Hew York Trial Term, and also from an order entered in said clerk’s office on the 16th day of Hovember, 1907, denying the plaintiff’s motion for a néw trial made upon the minutes.
John, J. Lenehan of counsel [Lenehan & Dowley, attorneys], for the appellant.
James J. Allen of counsel [Decker, Allen & Storm, attorneys], for the respondent.

Opinion:
Clarke, J.:
The complaint alleges that the defendant is a domestic corporation ; that between January 8,1905, and March 5,1905, the plaintiff entered into an agreement with the defendant to work for the defendant for one year from January 1, 1905, to December 31, 1905 ; that the defendant promised and agreed to pay to the plaintiff for his said services the sum of $10,000 per annum and seven per cent of the net profits of the business of the defendant for the year 1905, after allowing for the dividend of six per cent upon the capital stock; that the plaintiff entered upon the performance of his duties and duly performed the same; that defendant paid plaintiff the sum of $10,000, but has paid no part of the said net .profits, although demanded.
The plaintiff testified that he worked for the defendant during the entire year of 1905 ; that he had charge of the selling of the goods, the entire charge of all the salesmen, and that it was his duty as treasurer to countersign checks or such documents as were put before him to countersign. He offered in' evidence a letter dated March 4, 1905, addressed to him :
"We take pleasure in advising you that at a meeting of the Board of Directors of this company, held on March 4th, it was decided to apportion to you seven per cent of the net profits of the business for the year 1905, after allowing for the usual dividend of six per cent. This is done in recognition of faithful services rendered to the company in the past, and as a stimulus for you to put forth your best energies in your future conduct, thereby showing the company that they have not misplaced their confidence by the action taken. Trusting that the year may be an exceedingly successful one, we are,
"Yours very truly,
" A. G-. HYDE & SONS,
" Per Sevmoue J. Hyde,
" Presidents
He was then asked, " Did you have a conversation with Mr. Hyde prior to the signing of that letter; if so, when ? " To which he answered, "Yes, sir, on the 9 th of January. Q. In reference to a percentage of profit of the defendant's business ? A. Yes, sir. Q. Will you please state that conversation ? " That was objected to, and thereupon the defendant offered in evidence the following paper :
" Agreement between A. G. Hyde & Sons and Mr. E. P. Fraker. This agreement witnesseth, that A. G. Hyde & Sons have agreed to employ Mr. E. P. Fraker and that Mr. E. IV Fraker has agreed to serve A. G. Hyde & Sons for the term of one year from Jan. 1st, 1905, to Dee. 31st, 1905, both inclusive. A. G. Hyde & Sons agree to pay Mr. E. P. Fraker a salary of $10,000 per annum, payable semi-monthly on the fifteenth and thirtieth of each month. It is understood that this contract can be annulled at any time by either party giving thirty days notice in writing to the other party.
"E. P. FRAKER.
" Dated, Hew York, Jariy. 9, 1905."
Counsel for the defendant said: " This instrument is complete on its face, and whether or not it is complete or partial is a question of law, and your honor on looking at this paper will say whether or not it is a complefe contract between the parties." It is quite evident it is not complete on its face because it is simply signed by Fraker. There is no signature of Hyde & Sons and no indication upon its face of its ever having been accepted. But perhaps we may assume that a similar paper signed by A. G. Hyde & Sons was in possession of the plaintiff. The claim of the plaintiff was that the suit was brought for a percentage of the net profits; that the paper dated January 9, 1905, only covered the salary; that the part of the contract relating to the $10,000 was put in writing, but the part relating to the seven per cent, although agreed to, was not put in writing until the fourth of March, and that he was entitled under the circumstances to supplement the writings by oral testimony to show the entire transaction and the whole contract. After considerable discussion, the court having ruled out all conversations, the minutes of the board of directors at a special meeting held March 4, 1905, were put in evidence. " The following resolution was then offered by Mr. Hyde : That in recognition of services to the company in the past and as a stimulus for further effort in the future be it Eesolved that the Board of Directors apportion the following named gentlemen the specified percentage of net profits of the business for the year 1905 (after allowing for the annual dividend) set opposite their respective names : W. W. Coreill, 11 per cent; E. P. Fraker, 7 per cent; E. S. Lucas, 1 per cent; H. Williams, 1 per cent. It having been regularly moved and seconded the resolution was adopted. The President also recommended that a letter be addressed to each of the above named gentlemen informing them of the resolution and the respective percentage apportioned to them. The question of the President's salary was then considered by the Board, and on motion duly made and seconded, the President having retired from the room, it was resolved that the President's salary for the year 1905 be fixed at the sum of $60,000. The board in like manner fixed the salaries of the other officers as follows: Vice-President, $12,500; Treasurer, $10,000; Secretary, $4,000." The plaintiff was the treasurer of the company.
The defendant being a corporation, the board of directors controlled its affairs. The resolution of said board providing for the employment and compensation of the plaintiff was evidence thereof. If we assume that the president, as the executive head of the corporation, had the power of employment, and if we assume that the paper writing dated January 9, 1905, was complete upon its face, and evidence of a prior or collateral agreement with the president for further or other compensations than that expressed therein was improper, yet the board of directors had the power to confirm or ratify or enlarge. That paper provided that it could be annulled at any time by either party giving thirty days' notice in writing to the other party. The abrogation of that privilege to the plaintiff was a sufficient consideration to support the new agreement made by the resolution of the board of directors, under which he was to receive, in addition to the $10,000 a year as salary as treasurer, seven per cent of the net profits, and having continued in the employment of the company for the whole year upon the faith and promise of the company, so expressed by the resolution of the board of directors, having fully performed the contract upon his part, he yvas entitled to receive the amounts so provided.
' We are dealing, not with an executory contract, but with an executed contract, and as we read this record, the plaintiff sustained the cause of action set up in the complaint.
It was error, therefore, to dismiss the complaint, and the judgment should be reversed and -a new trial ordered, with costs to- the appellant to abide the event.
Ingraham, McLaughlin, Houghton and Scott, JJ., concurred.
Judgment reversed, new trial ordered, costs to appellant to abide event.