Court Opinion

ID: 7958574
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:25:42.042372+00
Date Added: 2024-06-11T16:34:21.314639
License: Public Domain

D. E. Holbrook, Jr., J.
In January, 1974, defendant became a salesman for plaintiff. He had previously been an employee of plaintiff in a number of salaried positions. Defendant was given an advance of $27,500 per year. He also received commissions equal to 50 percent of gross profit on sales made by him. Out of the advance and the commissions he paid his own expenses, withholding taxes and social security taxes. Although the annual advance was agreed to by plaintiff, the defendant pretty much set the amount. There was no written contract between the parties and no discussion as to what would happen in the event of termination of the relationship because, as defendant stated, he never contemplated termination. In January of 1977, defendant left plaintiff and went to work for another lumber company. Upon leaving plaintiff the defendant signed a note agreeing to repay plaintiff the amount by which his annual advances exceeded his commissions earned, which at the time was $19,545.63. This amount was subsequently reduced to $16,042.39, through credits to defendant’s account, by the time of trial.
*762The trial court found an implied promise on the part of the defendant to repay plaintiff the amount by which defendant’s annual advances exceeded commissions earned. The trial court predicated its reasoning primarily upon the fact that defendant never reported any of his advances on his income tax returns and the note executed by defendant to plaintiff at the time that their association was terminated. Judgment was accordingly entered in favor of plaintiff in the amount of $16,042.39. It is from this judgment that defendant appeals as of right.
On appeal defendant claims that there must be an express agreement to repay before he can be held liable. He specifically asks this Court to adopt the Wisconsin view set forth in Shaler Umbrella Co v Blow, 199 Wis 489; 227 NW 1 (1929), wherein it was held that an agent is not personally liable for advances made to him in excess of commissions earned in the absence of an express agreement to the contrary.
The general rule throughout the country is set forth in 53 Am Jur 2d, Master and Servant, § 74, p 149, wherein it is stated:
"where the contract of employment provides for advances to the employee, which are to be charged to and deducted from the commissions agreed by the employer to be paid to the employee, as the same may accrue, the employer cannot, in the absence of an express or implied agreement or promise to repay any excess of advances over the commissions earned, recover from the employee such excess.”
From the foregoing it is clear that under the majority view, which we adopt, an implied agreement is sufficient. Moreover, this view appears to have support in Michigan. SFA Studios, Inc v *763Docherty, 12 Mich App 170; 162 NW2d 670 (1968). Here the trial judge found that the defendant, himself, throughout the three years of the relationship, impliedly agreed to treat the advances as loans, rather than salary, since he never declared any of such advances as income, declaring only his earned commissions as income after having deducted his expenses therefrom. The trial court further found that defendant candidly admitted he signed the promissory note under his own free will. Accordingly an implied agreement to repay was found to exist.
While it is true that under the majority view, which we have adopted, convincing circumstances are required to uphold a finding of an implied agreement, 53 Am Jur 2d, Master and Servant, § 74, p 149, the trial court found such convincing circumstances to exist in the instant case. We will not disturb those findings unless clearly erroneous. Here the evidence was sufficient to support the trial court’s findings. They were not therefore clearly erroneous.
Affirmed. Costs to appellee.