Case Name: Francis Riera, Respondent, v. Salo Art Metal Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-11-12
Citations: 134 A.D. 497
Docket Number: 
Parties: Francis Riera, Respondent, v. Salo Art Metal Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 134
Pages: 497–499

Head Matter:
Francis Riera, Respondent, v. Salo Art Metal Company, Appellant.
First Department,
November 12, 1909.
Contract — consideration — mutual promises — trial — charge — effect of refusal to charge.
Where in an action by the secretary of a corporation for unpaid salary, the only question is whether plaintiff and the president and treasurer of the defendant had mutually agreed to relinquish claims for a part of their salaries retained in pursuance of a prior agreement, it is error to refuse to charge tiiat if “ plaintiff promised to relinquish his claim and the president and treasurer promised at the same time in the presence of each other to also waive theirs, and they did so, they, being the directors of the company, as a matter of law the jury should find that that waiver was based on a valuable consideration,” namely, tlie mutual promises.
Nor is the error harmless because the court had previously given a correct instruction, for the refusal was equivalent to a charge that the mutuality of the agreement was not a sufficient consideration to support it.
Appeal by the defendant, Salo Art Metal Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 5th day of March, 1909, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 17th day of March, 1909, denying the defendant’s motion for a new trial made upon the' minutes.
T. B. Merchant, for the appellant.
Charles Stein, for the respondent.

Opinion:
Scott, J.:
Plaintiff has recovered a judgment for unpaid salary. Defendant appeals.
Plaintiff was the nephew of John B. Salo, who with his wife and plaintiff were stockholders in defendant, plaintiff holding stock to the amount of two thousand dollars. John B. Salo was president and was assigned a salary of fifty dollars per week. Mrs. Salo was treasurer and was assigned a salary of fifteen dollars per week. Plaintiff was appointed secretary but acted as foreman and performed no secretarial duties. His salary was fixed at twenty-five dollars per week. It was agreed between the three that each should draw only one-half the fixed salary, leaving the balance as a credit in the books. After a while negotiations were opened with some people in Binghamton looking to an increase of working capital and the moving of the business there. These negotiations were successful and the business moved accordingly. There was about three thousand dollars then due to plaintiff and Mr. and Mrs. Salo for retained salaries. There is evidence to the effect that Mr. Salo said to his wife and plaintiff that the Binghamton people would probably be unwilling to assume this debt, and proposed that they should all relinquish their claim for retained salaries and that they all agreed to do so. The only question in the case was whether or not plaintiff had agreed with the others to relinquish his back salary. The court having charged the jury as follows: " Even though you find that there was a consideration, that, in itself, would not creat-e a waiver or an' extinguishment or a discharge of the accrued salary. You must find in addition that the plaintiff actually agreed to waive, discharge and relinquish his back salary for a good, valid and present consideration, and unless you find that the plaintiff agreed to waive his salary, and also find that there was a new and present consideration for such waiver and relinquishment, you must find a verdict in favor of plaintiff," refused to charge as follows : " Defendant's Counsel: I would like your Honor to charge the jury that if they believe that plaintiff promised to relinquish his claim and the president and treasurer promised at the same time in the presence of each other to also waive theirs, and they did so, they being the directors of the company, as a matter of law the jury should find that that waiver was based on a valuable consideration. The Court: The promise of one to the other ? Defendant's counsel: Tes, the mutual promise. The Court: I decline to so charge because there must be a new present consideration."
This is a manifestly incorrect statement of the law, and the respondent so concedes. He argues, however, that it was harmless, because, as he says, it did not fit the facts of the case, and further because earlier in the colloquial charge the court had correctly instructed the jury on the subject. We cannot agree that the proposition of law involved in the request was inapplicable to the facts as they had been testified to. Here were three stockholders all having claims against the company the continued insistence upon which might, as it was represented, prevent the success of negotiations which promised to result in benefit to the company and its stockholders. In such a case the mutual agreement between the stockholders that each would waive his claim for the benefit of all was sufficiently supported by the consideration of its own mutuality. The refusal to charge as requested was equivalent to an instruction to the jury that the mutuality of the agreement furnished no sufficient consideration to support it. Whatever may have been said on the subject of consideration previously, the last word the jury heard was the refusal to charge this perfectly proper request. Their verdict justifies the belief that this had a potent influence upon their verdict.
The judgment and order should be reversed and a new trial granted, with costs to appellant to abide the event.
Ingraham, Laughlin, Clarke and Houghton,'JJ., concurred.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.