Court Opinion

ID: 9538915
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:43:57.482306+00
Date Added: 2024-06-11T14:58:16.694841
License: Public Domain

TUCKETT, Justice:
This action was filed by the plaintiffs to recover bonuses claimed to be due by them from the defendant. Other issues of law and fact raised by the pleadings were disposed of by stipulation prior to trial. After a trial was had on the remaining issues, the court found in favor of the plaintiffs and from that decision the defendant has brought the case here.
The defendant, Wasatch Chemical Company, is a Utah corporation and has been doing business in the state of Utah for a long period of time. The corporation was closely held and all of its stock was owned by the Thatcher family and the Bradshaw family with approximately 50 per cent of the shares owned by each of the families. For a number of years it had been the practice of the defendant corporation to award annual bonuses to deserving employees. The annual bonuses were awarded by the directors to the directors, officers and employees at the close of each of the company’s fiscal years. It appears from the evidence that the company policy was to fix salaries on a conservative basis and to supplement the salaries by the giving of annual bonuses the amounts to be *191determined by the amount of income and profits earned by the corporation during the year. The plaintiffs were employed in the management of the corporation and had continued their employment from year to year with the understanding and expectation that their salaries would he augmented by an annual bonus.
The net income and profits from business operations during the year 1966 were the highest in at least ten years. On April 20, 1967, the board of directors of the defendant unanimously adopted a resolution that the plaintiff Lawrence E. Thatcher be paid a bonus of $4,000, and the plaintiff Winston L. Thatcher a bonus of $2,000. The directors who approved the bonuses, together with their wives, represented a majority of the outstanding shares of capital stock of the defendant corporation. At a meeting of the board of directors held on July 7, 1967, a resolution was adopted which rescinded the prior action of the board in approving the bonuses. The court below found that the bonuses had been earned by the plaintiffs and that payment of the same was unlawfully withheld by the defendant.
It appears from the record that the plaintiffs rendered valuable services to the defendant with the understanding that they would receive proper compensation therefor.1 We are of the opinion that the action of the trial court is amply supported by the record and the decision of that court is affirmed. Respondents are entitled to costs.
CALLISTER, C. J., and CROCKETT, J., concur.

. Church v. Harnit, 6 Cir., 35 F.2d 499.