Olmstead v. Bach

McShbretj J.,

delivered the opinion of the Court.

The declaration in this case alleges that the plaintiff and defendants entered into a written contract under seal, whereby the latter agreed to pay to the former a salary of fifty dollars per week, payable weekly, as compensation for the services of the plaintiff as cutter in the business of the defendants, and that the plaintiff agreed, in consideration of said salary, to devote his time and attention to the business of the defendants, as is usual in conducting a merchant tailoring business. The agreement further provided that the contract should continue in full force for one year from February the first, 1892, to February the first, 1893. The declaration also avers that the plaintiff entered into the service of the defendants under the above contract, and performed his duty thereunder until April the fifth, 1892, when the defendants refused to permit him to perform his part of said contract or to pay him the salary to which he was entitled thereunder after April the niuth, 1892. It further alleges that the plaintiff has always been ready and willing to perform his part of the contract, and to render the services which he agreed thereby to perform, and has always held himself in readiness, and offered to perform said services according to said contract, but that the defendants have refused to permit him to perform the contract on his part, and have refused, and still do refuse to pay him the salary of fifty dollars a week, as therein provided, since April the ninth, 1892. It concludes with a claim by the plaintiff “that there is due and unpaid to him of the amount payable to him under said contract, the sum of two hundred and fifty dollars, being the amount of said weekly salary stipulated .to be paid by said contract to the twenty-fifth of May, 1892.”

Among the defences relied on the defendants pleaded that on April the fifth, 1892, they dismissed the plaintiff from their service, and at the same time paid him all wages or salary due to him under the contract down to April the ninth, the end of the week terminating four days after his dismissal; that nine days after said-dismissal the plaintiff brought suit against the defendants before a justice of the peace upon the identical contract and cause of action sued on in the case at har, and that thereafter the plaintiff recovered judgment in that suit for the sum of fifty dollars and costs, which judgment was fully paid and satisfied by the defendants before the pending action was brought. To this plea the plaintiff replied, that after the pretended dismissal of him by the defendants, he, notwithstanding the dismissal, presented and offered himself to the defendants as ready and willing to perform his part of the contract set forth in the declaration, and did in fact continuously so offer to perform the same, and that the suit mentioned in said plea was a suit for his salary for one week under said ■contract. This replication was demurred to. The Baltimore City Court sustained the demurrer and entered judgment thereon for the defendants. The plaintiff thereupon took this appeal from that judgment.

It is apparent from this outline of the pleadings that the wages or salary now sought to he recovered as well as those sued for before the magistrate, were not wages or salary which had been actually earned, but were wages or salary for work and labor that the plaintiff was ready and willing, but had not been allowed, to perform. That the contract declared on was broken by the defendants when they dismissed the plaintiff is conceded, or at least is not denied, by the pleadings. For that breach the plaintiff was clearly entitled to recover. But to what extent and how often ? The answer to these inquiries involves at the very outset an examination ■of the scope of the agreement set forth in the declaration, as to whether it is an entire or divisible one; because if it be entire and indivisible, and there has been but a ■single breach, but one action can be brought therefor.

The contract is one of hiring. Under it the plaintiff was employed as a cutter at fifty dollars per week, payable weekly, and it was expressly provided that this employment, and this weekly payment of wages should continue for one year. The duration of the employment was as much an integral part of the agreement as the stipulation relating to the amount of the compensation, and the stated periods for its payment. It was not a hiring by the week payable weekly, because it was explicitly declared that it should continue for a year. It was not fifty-two separate, independent contracts, but one indivisible agreement covering the period of a year and making provision for the weekly payment of wages. The consideration for the plaintiff’s undertaking was the defendants’ agreement to pay him fifty dollars a week and to employ him as a cutter for one year. The latter was as much a part of the consideration promised him for entering the service of the defendants as the former; for it would be wholly unreasonable to assume, as any other construction must, that it was the intention of the parties that the hiring should be for a week determinable by notice, or else merely a hiring at will as it undoubtedly would have been had there been no stipulation as to its duration. McCullough Iron Co. vs. Carpenter, 67 Md., 554. The good sense and reasonableness of the particular case must always guide and govern Courts in determining whether a contract is divisible or entire. Dugan vs. Anderson, 36 Md., 585; Jones vs. Dunn, 3 W. & S., 109; Robinson vs. Green, 3 Metc., 159. Whether a contract must be sued on as an entirety or is divisible and can become the foundation of separate suits for the infraction of independent stipulations depends on its terms; and in order to arrive at a correct construction due regard must be had to the intention of the contracting parties as revealed by the language which they have employed, and the subject-matter to which it has reference. Broumel vs. Rayner, 68 Md., 47; Brewster & Spratt vs. Frazier, 32 Md., 308; Brantly’s Law of Contract, 216.

Obviously the appellant expected and contracted for continuous employment for a year, and not for a weekly or still more precarious hiring at will; and the appellees contemplated securing a permanent cutter in their tailoring business. Certainty in the duration of the employment as well as exemption from the annoyance incident to frequent changes in such an employé, were manifestly within the contemplation of both of the parties to the contract when it was entered into, and with these considerations before them it seems to us clear that the appellant never supposed himself only hired by the week or at will, and equally clear that the appellees never understood that their employe was at liberty to terminate the engagement upon a week’s notice. The hiring was for a year, and the wages were payable in weekly instalments of fifty dollars each. The subsidiary provision as to the payment of the wages each week does not split up the contract into as many agreements as there were payments or periods named for payments to be made, Norrington vs. Wright, 115 U. S., 188; nor is it inconsistent with a yearly hiring, Norton vs. Cowell, 65 Md., 362; Fawcett vs. Cash, 5 B. & Ad., 908; for, as said by Lord Kenyon in The King vs. Inhabitants of Birdbrooke, 4 T. R., 245: “Whether the wages are to be paid by the week or the year can make no alteration in the duration of the service if the contract were for a year. ” The contract is, then, an entire, and not a divisible one. It does not consist of distinct and independent subjects which admit of being separately executed and closed. A dismissal during the year was consequently a breach of the contract as an entirety, and furnished the party not in default with a good cause of action. The contract being entire, and having created the relation of master and servant and the latter having been, as averred in the pleadings, dismissed before the expiration of the term for which he had been engaged, what redress was open to him? Obviously but one remedy for the recovery of the whole damage sustained by him. In Keedy vs. Long, 71 Md., 389, this Court said: “A servant wrongfully discharged has only two remedies open to him at law, either of which he may pursue immediately on his discharge. First, he may treat the contract as continuing, and bring a special action against the master for breaking it by ■discharging him; and this remedy he may pursue whether his wages are paid up to the time of his discharge or not; or, secondly, if his wages are not paid up to the time of Ms discharge, lie may treat the contract of hiring as rescinded, and sue his master on a quantum meruit for the services he has actually rendered. These two alternative remedies are the only ones open to him. Mayne on Damages, 159. Upon a quantum meruit he can only recover for the services actually rendered. Archard vs. Hornor, 3 Carr. & P., 349; Smith vs. Hayward, 7 Adol. & El., 544. In an action for damages for a breach of the contract he will be entitled to recover the actual damages he has sustained, in addition to the wages earned; and in case he has by diligence been unable to secure other employment, during the entire term, he can recover the entire wages, less the amount he has actually earned during the interim, or the amount he might have earned by the exercise of proper diligence in seeking for employment in the same or similar business. Wood on Mas. & Serv., 249; Mayne on Damages, 158; Elderton vs. Emmens, 6 C. B., 160; Goodman vs. Pocock, 15 Q. B., 516.” Jaffray vs. King, 34 Md., 217.

In the case at bar the pleadings show that all wages earned by the appellant had been paid to him in full up to the end of the week during which he was dismissed. When he brought suit before the justice of the peace he had earned no wages which had not been paid him, for he had rendered no services after his dismissal. He was therefore at that time in no position to sue upon a quantum meruit for the value of services actually performed; and he could only recover in that suit damages for a breach of the entire contract, unless the contract was divisible into fifty-two independent agreements each capable of being separately executed and closed. His wages having been paid in full up to the time of his dismissal he had no option as to the remedies which he might pursue. He was confined to an action for the recovery of damages which he had sustained hy a breach of the contract, because successive actions instituted for the recovery of fractions of the same aggregate damages cannot be supported. His suit before the magistrate was, whatever it purported to be, a suit for the breach of the contract of hiring. It could have been for nothing else, except for services never rendered, the value of which was measured by the price agreed to be paid for them when actually performed. There was but one dismissal and but one breach, and the plaintiff could not split up his cause of action, recovering a part of his damages in one suit and the remainder afterwards in other suits for that single breach. “It is an ancient and familiar rule of law that only one action can be maintained for the breach of an entire contract, and the judgment obtained by the plaintiff in one suit may be pleaded in bar of any second proceeding. Sedgwick on Damages, 224.” Dugan vs. Anderson, 36 Md., 584. It was the appellant’s plain duty to include all that belonged to that cause of action — that one breach — in the first suit, so that one proceeding and one recovery should settle the rights of the parties. It would be at his own risk and peril if he negligently or ignorantly omitted a part of what might properly have been embraced in the cause of action, in the first suit. Or as expressed by Lord Campbell in Clossman vs. Lacoste, 28. Eng. L. & Eg. R., 140, “if the contract is entirely broken, and the relation of employer and employed put an end to, I agree that the party suing ought to allege in his declaration the whole gravamen that he suffers by such breach of contract, and that he may recover therein all the damages that may ensue to him inconsequence.” Again, as clearly put by the Supreme Court of Ohio in James vs. Allen County, 44 Ohio St., 226: “As a result of the authorities, as well as upon principle we are satisfied that in such a contract as the one in the case at bar, where the employe is wrongfully dismissed, but all wages actually earned up to that time are paid, the only action the employe has, whether he brings it at once, or waits until the entire period of time has expired, is an action for damages for the breach of the contract; and the measure of damages will be the loss or injury occasioned by that breach, and one recovery upon such claim whether the damages be denominated loss of wages or damages for breach, is a bar to a future recovery.” Wood’s Mas. & Serv., 246.

It is to be observed that the case at bar is distinguishable from a class of cases alluded to in Clossman vs. Lacoste, supra, where there having been no dismissal of the servant, the only breach of the contract consisted in the failure of the master to pay when due, the wages or instalments of wages actually earned. In those instances the contract not having been broken by the dismissal of the servant, and he not having been prevented.from performing his work and the relation of master and servant still continuing, an action on the contract could be maintained to recover the salary or wages due for a past stated period. Keedy vs. Long, 71 Md., 392. But a dismissal of the servant, or differently stating the same thing, a refusal to allow him to continue to work, whilst not a rescission of the contract, is a breach of it that will authorize a recovery of damages for the whole injury which the servant may have sustained. And such a suit may be instituted though the time for the completion of the service' has not elapsed. Keedy vs. Long, supra. This conclusion does not involve an application or adoption of the principles laid down in Hochster vs. Le Latour, 20 Eng. L. & Eq. R., 157. The law of the case just cited relates to cases where there is a pre-contract for future services, or the performance of some act or duty at a future period, and where performance cannot be commenced, and was not by the contract contemplated, until that period arrives, and wThere the promiser prior to that time announces his intention not to abide by the contract. But that is not this case, where performance had been commenced, and the plaintiff was prevented by the defendants’ from further executing the contract.

But it is insisted the pending suit is not for damages for dismissing the plaintiff, but that it is an action on the contract to recover the plaintiff’s salary for the five weeks following the one for which a recovery had been had before the justice of the peace. And the right to recover this salary as salary and not as damages for a breach of the contract, is based upon the plaintiff’s readiness and willingness to perform his work, and not upon his actual performance of it. In other -words, he seeks to recover instalments of salary for work which he never performed, and to recover them merely because he was willing to perform it but was prevented from doing so. As thus presented, under a contract that is indivisible, and which covers a hiring for a whole year at a salary payable in weekly instalments, it is a claim to recover for constructive services. Had the action been indebitatus assumpsit it is conceded the doctrine of constructive service would be involved, but as the suit is on an express contract prescribing the amount of each instalment of the compensation, it is urged that the defendants are liable for the stipulated price of the services the plaintiff agreed to perform, but never did perform, and that they are liable because the plaintiff was not permitted to perform them, though ready and willing to do so. In both indebitatus assumpsit and in an action on an express contract to recover wages for services which have not been performed, a recovery is sought for the amount that the plaintiff would have been entitled to recover had the services in fact been rendered; and such recovery is sought, not because the services have been rendered, but because the plaintiff was ready and willing to render them and the defendant prevented him. In both instances, therefore, the readiness of the plaintiff to perform and the refusal of the defendant to allow a performance constitute, when unearned wages are sued for, the ground of the actions, though the forms and the allegations of the pleadings are widely different. That which is sought to be recovered in both cases is the same thing, viz., wages as wages — though in the one case it is under the allegation of work and labor done, which allegation is attempted to be supported by the proof of a readiness and willingness to perform; and in the other it is under an allegation of a refusal to allow that work to be done which the plaintiff had agreed to do, and continues ready and willing to do. Salary as salary, definitivley fixed and agreed to, and not a sum of money as unliquidated damages for a broken contract of hiring, is what is sued for under the declaration in the case at bar. It is a suit to recover wages though no services have been rendered at all, and, if maintainable in that form, would preclude the defendants from showing by evidence that the plaintiff could have secured other similar employment during the time covered by the contract; because if wages, distinctively as wages, can be recovered under such conditions instead of damages for a wrongful discharge or dismissal, they must be recovered as specific, ascertained debts, the amount of which is fixed by the contract, and is in no way subject to abatement by circumstances which would reduce the damages in a suit founded on a refusal by the defendant to allow the plaintiff to perform his part of an indivisible contract of hiring. In other words, if under such a contract the plaintiff is entitled to recover wages as wages upon a mere offer to perform, he must be entitled to recover just precisely the wages named in the contract, even though he might have obtained other work of the same kind at the same price during the period for which he claims his wages under the contract. This would be recovering for constructive services. That doctrine has been altogether repudiated both in England and in this country. Keedy vs. Long, 71 Md., 389. “The doctrine of constructive service has in England, where it had its origin, been repudiated, and the law there established that a servant wrongfully discharged has not an action for zuages, unless something is due for past services actually rendered; and as to any other claim on the contract it is for the breach of it, and for his damages resulting therefrom, being the ordinary action for damages, and not the common law action of indebitatus assumpsit.” James vs. Allen County, supra; Howard vs. Daly, 61 N. Y., 362, where Gandell vs. Pontigny 4 Camp., 375, Thompson vs. Woods, 1 Hilton, 96, and the cases in Alabama, Mississippi and Wisconsin are distinctly dis-affirmed, and the doctrine of constructive service declared to be “so opposed to principle, so clearly hostile to the great mass of authorities * * * * that” it could not be accepted.

We hold, then, that the contract declared on is entire and indivisible. That for the breach of it by the defendants in discharging the plaintiff before the expiration of the year, or in refusing to allow him to work, a right of action arose, not for unearned wages or salary as such, but for damages for a breach of the contract, the measure of which damages would be the stipulated salary for the stipulated period of one year, less the amount the plaintiff actually earned or might by due and reasonable diligence have earned after his dismissal. Jaffray vs. King, 34 Md., 223. That as there was but one breach, but one action could be maintained therefor. That having recovered before the magistrate in a suit founded on that breach — for he could have lawfully recovered upon no other theory — he is barred, upon the satisfaction of that judgment, from again suing on the same contract, because he could have recovered in one action all the damages he sustained including that for which he now sues. And that if the pending action be treated as a suit to recover for instalments of salary under the contract, no services having been rendered by him, it must fail because the services were never rendered but were constructive. The plaintiff elected to sue before a justice of the peace for a portion of the amount he might have recoverd had he claimed more and sued in a different forum, and he must abide the result of that election. He is not at liberty to split up his cause of action into fragments and successively sue for each when there has been but one breach of an entire and indivisible contract.

(Decided 5th October, 1893.)

As we agree with the Court below, its judgment will be affirmed. • ,

Judgment affirmed, with costs in both Gourts.

Case Details

Case Name: Olmstead v. Bach

Court Name: Court of Appeals of Maryland

Date Published: Oct 5, 1893

Citation: 78 Md. 132

Court Abbreviation: Md.