257 P. 685 | Or. | 1927
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *362
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *363 In Banc.
This is an action for damages resulting from the discharge of plaintiff by Elton C. DeForce, deceased. Plaintiff was manager of the DeForce Oil Works, which was owned by said DeForce. Plaintiff and said Elton C. DeForce entered into a written contract on the twenty-eighth day of June, 1923. By the terms of that contract plaintiff was employed as business manager of the said DeForce Oil Works for a period of three years from the first day of January, 1924, to the first day of January, 1927, at *364 a flat salary of $3,000, plus a bonus of 10 per cent upon the net profits of said business for each and every year of said term. Said DeForce was first party and plaintiff second party in said contract. It is further provided in said contract that plaintiff should be paid said annual salary "at the end of each calendar year of the said term, and to pay said bonus annually at the end of said calendar year." In consideration of said employment the plaintiff covenanted and agreed "to use his best efforts to operate and conduct said business for the best interests and greatest profit he can for the first party, to give all the time necessary for the proper operation, care and management of said business, to have kept proper books of account which shall at all times be open to the inspection of the first party, and to render to the first party quarterly statements of all receipts and expenditures made by him in the operation of said plant." The contract further provides that plaintiff "guarantees and agrees to obtain from Union Fishermen's Co-operative Packing Co., Sanborn-Cutting Co., Columbia River Packers Association and Booth Fisheries, contracts for the offal from their respective canneries for a period of five years from the expiration of their present contracts and in any event before the commencement of the fishing season following the date of the expiration of said contracts." The contract further provides for the duties respectively of plaintiff and said Elton C. DeForce in the conduct and management of said business. At the time said contract was entered into plaintiff was the administrator of the estate of J.H. DeForce, deceased. At that time the parties contemplated that the estate would be closed and finally settled by the first day of January, 1924, the date on which *365 plaintiff was to enter upon his duties as manager. The estate of J.H. DeForce, deceased, was not finally settled, however, until March, 1924. Plaintiff entered upon the performance of his contract and continued in such performance until June 29, 1925, when he was discharged by said Elton C. DeForce. Friction had arisen some time prior to that date in consequence of which the said Elton C. DeForce and his wife Mary assumed, against plaintiff's will, control of that part of the business plaintiff undertook to perform. Prior to that time Elton C. DeForce had sold and assigned one-half interest in said oil works to his wife Mary. Elton C. DeForce had inherited said business and property from his father, the said J.H. DeForce, deceased. After Elton and Mary had assumed control of that part of the business undertaken to be performed by plaintiff under said contract, to wit: on June 4, 1925, plaintiff instituted a suit in the Circuit Court in the State of Oregon for Clatsop County against said Elton C. DeForce and Mary H. DeForce, husband and wife, to enjoin them from interfering with his performance of his contract. In his complaint in said suit he alleged that said Elton C. DeForce and Mary H. DeForce, defendants therein, "contrary to the terms of said agreement, have so interfered with plaintiff and his duties under said contract, that he, the said plaintiff, has for several months past and now is unable, by reason of such interference, to perform the duties required of him under said contract, in that defendants have demanded and made plaintiff deliver to them the key to the Post Office lock box, and have received all mail addressed to the said DeForce Oil Works, and have refused to return the same or permit plaintiff to see the said mail and *366 thus plaintiff has been unable to attend to the correspondence or the many business orders and matters needing immediate attention; * *." The complaint contained other allegations which will be set out in the opinion.
A temporary injunction was issued by the Circuit Court. This injunction was later dissolved upon a hearing. The sole purpose of that suit was to enjoin the defendants therein from interfering with plaintiff's management of the oil works. After the contract was entered into between plaintiff and said Elton C. DeForce, plaintiff learned that he could not secure a contract for the offal from Union Fishermen's Co-operative Packing Co. and Columbia River Packers Association for a period of five years because the plaintiff's term of management was limited to three years. Thereupon the contract was modified by interlineation, changing the period for which plaintiff undertook to secure the offal from said two last-named canneries from five to three years. Plaintiff was unable to obtain said offal from the said last two named canneries at all and claims that a verbal contract was entered into between him and said Elton C. DeForce whereby the written contract was altered as a result of plaintiff's securing offal from other canneries aggregating about the same amount as the Union Fishermen's Co-operative Packing Co. and Columbia River Packers Association, also by plaintiff waiving claim to the 10 per cent bonus of the profits during the year 1924 and agreeing to do "some other things." One of the issues to be determined on this appeal is the validity of the alleged modification of the original contract by a verbal contract. After the commencement of this suit Elton C. DeForce died. Defendant E.P. Parker was duly *367 appointed his administrator and after serving several months Mary H. DeForce succeeded him as administratrix of the estate. After filing the complaint in this action plaintiff executed and filed an ordinary affidavit and undertaking for an attachment. The writ was duly issued and the property of the defendant Elton C. DeForce attached. Defendant moved to have the attachment dissolved for the reason that the action was for damages resulting from an alleged breach of contract and that defendant was a resident of the State of Oregon, and for that reason no lawful writ of attachment could issue. The court overruled this contention and thereupon the defendant Parker, then administrator, executed a bond releasing the attachment. The defendant James Bremner was surety on said bond. The assigned errors are:
First, issuing of a writ of attachment and the court's order refusing to dissolve the attachment; second, admission of evidence to support the alleged verbal modification of the written contract between plaintiff and said Elton C. DeForce, defendant, claiming that the original contract was within the statute of frauds and that a modification thereof must be in writing as well as the original contract; third, the conduct of the trial judge in submitting to the jury the question of whether or not the discharge of plaintiff by defendant's decedent was justified. The defendants contend that the institution of the suit to enjoin the DeForces from interfering with plaintiff's management was of itself sufficient justification for plaintiff's discharge. A copy of the complaint in the suit to enjoin the DeForces from interfering with plaintiff's management was attached to the answer in this action and made a part thereof *368
by appropriate averment. A copy of the complaint in the suit for injunction was also introduced in evidence. It is claimed on this appeal that it was the duty of the court to instruct the jury that the complaint in the suit of equity on its face displayed sufficient lack of loyalty to said Elton C. DeForce, plaintiff's employer, to justify his discharge. Other assignments are based upon instructions given by the court and certain instructions requested by the defendant but refused. REVERSED.
The trial court erred in refusing to discharge the attachment: Ruby v. Whitten,
The principal issue involved in the appeal is the validity of the oral modification of the written contract between plaintiff and Elton C. DeForce. It is not controverted that the contract is within the statute of frauds.
"* * Under the statute of frauds the rule is that parties to a written agreement coming within the provisions of the statute may not, by mere oral agreement, alter one or more of the terms thereof, and thus make a new contract, resting partly in writing and partly in parol. Nor does it matter that the oral agreement affects only particulars of the contract which are not material, provided only it appears that the modification, even though slight, is tantamount to the substitution of a new contract *369
for the old, and not merely to a waiver of its strict performance. * *" 27 C.J. 327, 328. 1 Williston on Contracts, §§ 593, 594, 599. In Neppach v. Oregon Cal. R.R. Co.,
"* * Ever since the decision of Lord Ellenborough in Cuff v.Penn, 1 Maule S. 21, holding that a subsequent parol modification of the time of performance specified in a contract within the statute of frauds was valid, there has been much learning exhibited by judges and textwriters in the discussion of such question. The settled doctrine in England now seems to be contrary to that case, and it is now held that an agreement required by the statute of frauds to be in writing cannot be subsequently changed or modified as to the time of performance, or in any other respect, by an oral executory contract: * * The courts in other states, and probably a majority, deny the validity of such an agreement, unless acted upon by the parties, and hold that a part of a contract required by the statute to be in writing cannot rest in parol."
In the cases of Sherman, Clay Co. v. Buffum Pendleton,
"As to the effect of a subsequent parol modification of an agreement of the sale of real estate, *370 the rule is that an agreement, required by the statute of frauds to be in writing, cannot be subsequently changed or modified as to the time of performance by any oral executory contract. * *"
To the same purport are Scott v. Hubbard,
A large number of the authorities cited and discussed in the briefs of the parties to this appeal permit the modification of a contract within the statute of frauds where not to do so would operate as a fraud upon the party relying upon the modification. This principle is well illustrated in Neppach v.Oregon Cal. R.R. Co., above. In the instant case the element of fraud is not present. Elton C. DeForce did nothing to induce the plaintiff to seek the modification. He simply acquiesced in plaintiff's continuing as manager for a time, notwithstanding his inability to secure the offal from two of the largest canneries. DeForce received no benefit from the modification. He has done nothing that estops him from claiming the benefit of the statute of frauds. No conduct on his part induced the plaintiff to seek the modification. On the contrary the plaintiff himself sought the modification of the contract and for his sole benefit. There is no element of estoppel to be found in the conduct of Elton C. DeForce.
"Where a party to a contract which is in force causes or prevents another party thereto from strictly performing the terms of the agreement, the former will not be permitted to avail himself of the default which he has thereby occasioned." Scott
v. Hubbard,
Cross v. Ramdullah, 274 Fed. 762, cited in the extensive note in 17 A.L.R. 13, 14:
"* * If the modification made by parol has been acted upon by the parties and the position of one of them has been changed for the worse in reliance on the modification, the other party will be denied the right to set up the statute of frauds and stand on the original agreement." Rogers v. Maloney,
In the instant case plaintiff was not put in any worse situation by the modification of the original contract. On the contrary he was released from performance in part of his covenants and guaranties. Defendants are, therefore, not prohibited from relying on the statute of frauds, except to the extent that the modified contract has been executed and the conduct of the parties thereunder constitutes an accord and satisfaction. The statutes of frauds does not operate on executed contracts.
Defendants predicated error on the court's refusal to instruct the jury in effect that plaintiff's conduct in prosecuting the suit to enjoin the defendants' intestate from interfering with plaintiff's management of the oil works constituted sufficient cause for plaintiff's discharge. Defendants rely especially upon this allegation in plaintiff's suit to enjoin defendants from such interference:
"That said defendants, and both of them, are incapable of adequately or efficiently attending to the affairs and business details of the DeForce Oil Works, and that the various canneries now selling and delivering their offal to the DeForce Oil Works, obtained under said contracts, threaten to and will discontinue such sale and delivery in the event the said defendants continue to interfere with the duties to be performed by the said plaintiff under his said contract, and if the said defendants neglect to properly conduct said oil works and promptly care for all offal to be delivered."
The suit in equity was filed June 4, 1925. Some time prior to that date friction had arisen between the plaintiff and his employers, Elton C. DeForce and Mary H. DeForce. After the injunction was dissolved by the court, to wit: June 29, 1925, the DeForces *374 discharged plaintiff. Plaintiff seeks to avoid the effect of his suit in equity as a cause of discharge by pleading in his reply and adducing evidence tending to show that he was in effect discharged prior to the institution of the suit in equity. But plaintiff is bound by the allegation in his complaint. He alleges that he was discharged on the twenty-ninth day of June, 1925. That is the date of the formal discharge. The friction between plaintiff and his employers might have been eliminated if plaintiff had recognized his employers' authority and had not instituted that suit in equity. Plaintiff's discharge took effect on the date of the formal notice: 1 Labatt's Master and Servant, 582, 583.
We are of the opinion that plaintiff's charges against his employers, set out in the complaint in the suit for injunction, as a matter of law justified the discharge of plaintiff. For that reason we think the court erred in submitting to the jury the issue as to the right of defendants to discharge plaintiff. Plaintiff breached his contract expressly and impliedly by instituting the suit in equity, publicly charging his employers with incompetency. In his agreement with Elton C. DeForce plaintiff undertook and agreed:
"* * to use his best efforts to operate and conduct said business for the best interests and to the greatest profit he can for the first party, * *."
In addition to the excerpt set out above from the complaint in equity plaintiff alleged in said complaint:
"That said Defendant Elton C. DeForce had for a number of years just previous to June, 1923, neglected his said business and had so conducted his personal habits and his business affairs to such an *375 extent that he was unable and unwilling to take upon himself the active management of said plant and reorganize the same for the purpose of securing raw product and profitably selling the same or efficiently conducting said business."
The making of this complaint and publishing it to the world as plaintiff did was calculated to injure defendants' business. Plaintiff was the employee of the defendants' intestate and his wife. The charges plaintiff made against them displayed a lack of fidelity to their business and disloyalty to them. Plaintiff had expressly contracted to do his utmost to build up his employers' business. Every contract of employment implies an engagement on the part of the employee to be faithful to his employers' interests and loyal to his employers. The charges made by plaintiff against his employers are the opposite of his implied contract with them.
Where the facts are not disputed and different inferences from the facts admitted or proved cannot be drawn reasonably therefrom the question of whether or not the discharge of an employee by his employer is lawful is for the court. If there is any dispute in the facts the question must then be presented to the jury with proper instructions.
"* * But many cases have also been decided upon the specific ground that the commission by the servant of any act which produces, or in the natural course of events is likely to produce, such detriment, is itself a breach of duty on his part. On this footing, culpable misconduct has been predicated, where the servant * * had made a wilful and deliberate attempt to injure his master's business, where his acts or words had been such as to injure the master's standing as a business man; * *." 1 Labatt's Master Servant (2 ed.), 869. *376
"* * But, as a general proposition, any act of the servant which injures or has a tendency to injure his master's business, interests, or reputation, will justify his dismissal. * *" 39 C.J., § 79.
"What constitutes a good and sufficient cause for the discharge of a servant is a question of law, and where the facts are undisputed, it is for the court to say whether the discharge was justified. * *" 39 C.J., § 128.
Von Heyne v. Tompkins,
Defendants contend that this court should determine the issues joined regarding defendants' counterclaim. The counterclaim is for damages sustained by defendants for breach of the contract by plaintiff. We believe that a jury is better qualified to assess such damages, if any, than is this court. For that reason we decline to determine the question on the evidence brought here. It is not necessary to determine or discuss the other assignments of error.
The judgment is reversed and the case remanded for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
Addendum
"* * in all actions and proceedings a party entitled to recover disbursements therein shall be allowed and may tax and recover such sum paid a person or company for executing any bond, recognizance, undertaking, stipulation, or other obligation therein, not exceeding, however, one per cent on the amount of such bond, * * during each year the same has been in force." Or. L., § 6438, subd. 5.
The objection to the cost bill is for that reason denied and the cost bill as filed by appellants is allowed.
OBJECTION TO COST BILL DENIED. REHEARING DENIED.
