Title: Scott v. Lane
Citation: 409 So. 2d 791
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: January 22, 1982

409 So. 2d 791 (1982)
Dorothy Mae SCOTT
v.
Martin L. LANE, et al.
80-476.

Supreme Court of Alabama.
January 22, 1982.
Douglas Inge Johnstone of Johnstone &amp; Newton, Mobile, for appellant.
Brock B. Gordon and Celia J. Collins of Johnstone, Adams, May, Howard &amp; Hill, Mobile, for appellees Martin L. Lane, Edward L. Bryant, J. Russell Eubanks, Jr., Frank M. Dulaney and Mobile Anesthesiologists.
Frank McRight and Michael L. Fees of McRight, Sims, Rowe &amp; Stewart, Mobile, for appellee Jeff Lousteau.
MADDOX, Justice.
What constitutes sufficient consideration to prevent a contract of permanent employment from being terminable at the will of the employer? That is the sole issue presented by this appeal.
Plaintiff/appellant, Dorothy Mae Scott, filed a suit against several doctors and Mobile Anesthesiologists, an unincorporated association, in which she claimed that they had offered her permanent employment if she would resign from her employment with two other doctors.[1]
As is apparent from the allegations of the complaint, which are set out in the footnote, *792 the plaintiff claimed that the defendants offered her permanent employment, that she accepted it, and that as consideration for the contract of permanent employment, she resigned her previous employment, and that the defendants had knowledge that she would resign her previous employment.
Plaintiff relies almost entirely upon the case of Alabama Mills, Inc. v. Smith, 237 Ala. 296, 186 So. 699 (1939). Because many of the principles of law relating to contracts of permanent employment are summarized in the Alabama Mills case, we set out extensively portions of the opinion in that case:
The defendants contend that the statement in Alabama Mills that "... if the hirer knows that the person being employed then has employment, and that he is giving it up to engage in his new work under the new contract, a valuable consideration is shown ...," is dictum, and is "inconsistent with the holding which is evident from reading the case in its entirety." The defendants argue that Alabama Mills, "read in its entirety and interpreted according to the legal authority upon which it relies and subsequent statements of the Alabama Supreme Court," holds that something more than an employer's knowledge that an employee is relinquishing his former employment to engage in new employment is required to constitute consideration sufficient to render a contract for permanent employment enforceable.
This Court has had occasion to consider the question of permanent employment contracts on several occasions. The cases which discuss in some detail the principles of law regarding contracts of employment for an indefinite duration are: Alabama Mills, supra; United Security Life Insurance Co. v. Gregory, 281 Ala. 264, 201 So. 2d 853 (1967); National Union Life Insurance Co. v. Ingram, 275 Ala. 310, 154 So. 2d 666 (1963).
In United Security Life Insurance Co., this Court quoted the following passage from National Union Life Insurance Co.:
"`In regard to a contract for life employment, the majority rule seems to be that two elements must be shown to exist before such a contract can be held enforceable. First, it must appear that there was a consideration of substantial value, independent of any service to be performed, and in making that determination the courts inquire into the actual value of the consideration. Second, where the promisor is a corporation, in the absence of ratification or estoppel, it must appear that the individual or individuals who acted on behalf of the corporation had actual, as opposed to implied, authority to bind the corporation. Alabama Mills [Inc.] v. Smith, 237 Ala. 296, 186 So. 699; Chesapeake &amp; Potomac Tel. Co. of Baltimore City v. Murray, 198 Md. 526, 84 A.2d 870; Heaman v. E. N. Rowell Co., 261 N.Y. 229, 185 N.E. 83; Carney v. New York Life Ins. Co., 19 A.D. 160, 45 N.Y.S. 1103, affirmed 162 N.Y. 453, 57 N.E. 78; Rennie v. Mut. Life Ins. Co. of N. Y., 1 Cir., 176 F. 202; * * * [further citations omitted].'"
This Court has said on at least three occasions that:
United Security Life Ins. Co. v. Gregory, 281 Ala. 264, 266, 201 So. 2d 853, citing Alabama Mills, Inc. v. Smith, supra, 237 Ala. at p. 299, 186 So. at p. 702; National Union Life Insurance Co. v. Ingram, 275 Ala. 310, 317, 154 So. 2d 666, 672 (1963).
We are aware that some courts will not recognize that knowledge by the employer "that the person being employed then has employment, and that he is giving it-up to engage in his new work under the new contract" is valuable consideration. Alabama does; therefore, the trial court erred *795 in granting defendant's motion to dismiss plaintiff's "fourth cause of action."
REVERSED AND REMANDED.
TORBERT, C. J., and JONES, SHORES and BEATTY, JJ., concur.
[1]  The allegations of the complaint, which the trial court dismissed for failure to state a claim, are as follows:

"On or about January 1, 1970, the Defendants offered the Plaintiff permanent employment with the Defendants, and the Plaintiff accepted said employment, and the Plaintiff and the Defendants thereby made a contract for said employment, under the mutually agreed terms that the Plaintiff would then resign from the gainful employment she then had with Doctors Abel L. Johnson and Julia Box, hereinafter sometimes called "Johnson and Box," that the Defendants would employ the Plaintiff as a nurse-anesthetist for the Defendants for as long as the Plaintiff should wish to continue said employment with the Defendants, and that the Defendants would pay the Plaintiff compensation for her said employment with the Defendants, said compensation to consist of salary at the rate of one thousand dollars ($1,000) per month plus commissions at the rate of thirty percent (30%) of all sums charged to and collected from the Defendants' patients in all cases wherein the Plaintiff rendered services to those patients in the performance of the Plaintiff's said employment with the Defendants, said compensation to be paid the Plaintiff monthly throughout her said employment;
"In return and as consideration for the aforesaid contract and for the Defendants' aforesaid promises of permanent employment and compensation therefor, the Plaintiff resigned her gainful employment by and with Johnson and Box, where she was gainfully employed at the time she and the Defendants made and entered the aforesaid contract;
"When the Defendants made the aforesaid contract with the Plaintiff as aforesaid, the Defendants knew that the Plaintiff then had the aforesaid employment with Johnson and Box and that the Plaintiff would necessarily resign said employment with Johnson and Box to engage in the Plaintiff's new employment with the Defendants under the aforesaid contract made by the Defendants with the Plaintiff;
"The Defendants' aforesaid knowledge that the Plaintiff would necessarily resign from her employment with Johnson and Box together with the Plaintiff's aforesaid actual resignation from said employment to engage in her new employment with the Defendants as aforesaid constitute the Plaintiff's consideration to the Defendants for the aforesaid contract and for the Defendants' aforesaid promises of permanent employment and compensation;
"The Plaintiff faithfully performed her aforesaid employment with the Defendants from January 1, 1970, or thereabout until March 9, 1979, or thereabout, on which later date the Defendants breached the aforesaid contract by discharging the Plaintiff from her aforesaid employment with the Defendants without reasonable cause for such discharge and by terminating the payment of the compensation theretofore promised, as particularly stated herein, by the Defendants to the Plaintiff for such employment;
"Before the Plaintiff's aforesaid discharge by the Defendants, the Plaintiff and the Defendants had mutually amended the aforesaid contract for permanent employment in the sole particular that the salary portion of the Plaintiff's aforesaid compensation was increased from one thousand dollars ($1,000) to twelve hundred dollars ($1,200) per month, and the Plaintiff and the Defendant had retained and continued all other terms of said contract and compensation in full force and effect;
"Pursuant to the aforesaid contract for permanent employment, as amended as aforesaid, the Plaintiff was earning approximately twenty-seven hundred dollars ($2,700) per month from the Defendants at the time of her aforesaid discharge;
"At the time of the Defendants' aforesaid breach of contract, the Plaintiff was ready, willing and able to continue performing her aforesaid employment with the Defendants pursuant to the aforesaid contract for 15 more years;
"The Defendants' aforesaid breach of contract has damaged the Plaintiff by depriving her of the compensation due to accrue to her pursuant to the aforesaid contract following the date of the Plaintiff's aforesaid discharge from employment and cessation of compensation by the Defendants;
"Throughout the time the Plaintiff performed her aforesaid employment with the Defendants as aforesaid, they failed to pay her all she was due in commissions accruing pursuant to the aforesaid terms of the aforesaid contract, and the Defendants refused to allow the Plaintiff to inspect the Defendants' records on the data from which the Plaintiff's said commissions were to be calculated, even though the Plaintiff duly demanded full payment of said commissions and inspection of said records;
"WHEREFORE the Plaintiff demands an accounting by the Defendants and judgment against the Defendants, jointly and severally, in the sum of Seven Hundred Thousand Dollars ($700,000) as damages plus interest and costs of court."