Opinion
34056.
DECIDED SEPTEMBER 13, 1952. REHEARING DENIED OCTOBER 17, 1952.
Complaint; from Fulton Civil Court — Judge Parker. March 3, 1952.
Powell, Goldstein, Frazer Murphy, for plaintiff in error.
Willingham, Gortatowsky Morrison, contra.
1. A material amendment to a petition reopens the entire petition to demurrer, and where the demurrer, instead of renewing all grounds of demurrer theretofore filed, merely renews specified grounds, all other grounds of demurrer are in law abandoned and will not be considered.
2. "A person who has been previously employed by the year or other fixed interval, and who is permitted to continue in the employment after the period limited by the original employment has expired, `will, in the absence of anything to show a contrary intention, be presumed to be employed until the close of the current interval, and upon the same terms.' Such a presumed renovation of the contract from the period at which the former expired `is held to arise from implied consent of the parties, and in consequence of their not having signified their intention that the agreement should terminate at the period stipulated. . . Whether the first hiring has its duration fixed by express or implied contract, if it be fixed in either way, the term (if not longer than one year) admits of duplication by tacit as well as express agreement.'" National Manufacture c. Corp. v. Dekle, 48 Ga. App. 515, 521 ( 173 S.E. 408).
3. Counts 1 and 2 of the petition as amended showed a contract, partly oral and partly written, for a period of one year, for services to be rendered the defendant by the plaintiff, and a tacit renewal thereof by the parties for a second and also a third year period. Count 1 set forth a cause of action for commissions due the plaintiff under the three separate contracts, and count 2 set forth a cause of action for damages for breach of contract in the third year period.
DECIDED SEPTEMBER 13, 1952 — REHEARING DENIED OCTOBER 17, 1952.
Herman L. Moore brought suit against Empire Box Incorporated in two counts. After certain demurrers were filed by the defendant, the plaintiff, with the consent of the court, rewrote the entire petition. Demurrers, general and special, were then filed to the rewritten petition. The court sustained several grounds of the demurrers and overruled others, giving the plaintiff ten days in which to amend. Exceptions pendente lite were filed to the overruling of certain special demurrers. The plaintiff, within the time allowed, filed an amendment to each of the counts of the petition, the petition then reading in count 1 as follows: Empire Box Incorporated is a corporation with its principal place of business in Atlanta, Georgia, engaged in the manufacture and sale of paper set-up, folding, corrugated and cardboard boxes and other packaging items. The selling of the defendant's items requires a detailed knowledge of the packaging trade and production, including the manufacture of the items, the method of measuring the materials going into the items, and their prices, and also salesmanship and knowledge of users and their needs. From January, 1946, until the latter part of May, 1948, the plaintiff was employed by and served the defendant as its general manager. In April, 1948, S. J. Zusmann bought a large block of stock in the defendant corporation and commenced working for it. In the latter part of May, 1948, when the plaintiff was relieved of his duties as general manager, the defendant placed S. J. Zusmann in charge of its business and gave him the powers and duties of general manager. On July 8, 1948, the defendant, acting through its duly authorized agent, S. J. Zusmann, and the plaintiff, reached an agreement for the employment of the plaintiff by the defendant and the serving of the defendant by the plaintiff for a period of one year, beginning on July 1, 1948, and ending June 30, 1949. The plaintiff orally agreed to serve the defendant during this employment period as salesman to solicit orders for the defendant's products from its customers and prospective customers, and further as sales manager of the defendant's "corrugated department," to train the sales personnel in this department, to generally supervise the selling done in the corrugated department, and to assist in the designing of packaging items to meet the requirements of the defendant's customers, and the defendant agreed to employ the plaintiff for this period of time as salesman to solicit orders for the defendant's products from its customers and prospective customers, and further as sales manager of the defendant's corrugated department, to train the sales personnel in this department, to generally supervise the selling in the corrugated department, and to assist in the designing of packaging items to meet the requirements of the defendant's customers. The basis of the plaintiff's remuneration, as a part of this agreement, was set forth by the defendant in its letter written on its stationery and delivered to the plaintiff. A copy of the letter is attached to the petition as Exhibit "A" and made a part thereof. The basis of remuneration set forth in this letter was agreed to by the plaintiff, who signed a carbon copy of the letter and delivered it to the defendant. Notice was given to the defendant to produce this carbon copy on the trial of the case.
The letter above referred to and dated July 8, 1948, reads as follows: "This letter confirms our understanding regarding a basis of remuneration between you and our company for the period starting July 1, 1948, and ending June 30, 1949. It is understood that the arrangement nullifies any written or verbal agreement that does not coincide with the following terms. The company will pay you a weekly salary of $126.92. The company will pay your traveling expenses on trips made for the benefit of the company and on presentation of an accepted, detailed voucher covering hotel charges, meals, rail, plane or bus transportation; also automobile expense at the rate of 6 cents per mile, provided that these expenses incur outside of the Atlanta area. Both the above salary and expense account is paid to you with the understanding that for the like period of one year you will obtain $250,000 worth of billing to your accounts for the company. In addition to the above salary and expense account provided for you, the company will pay you on billings in excess of $250,000 during the year period the following commission. 3 percent on set-up box shipments. 2 percent on corrugated box shipments. In consideration of your valuable aid in helping train a sales organization, and for your general interest in improving the operation of the corrugated department, the company, in addition to the above compensation, will pay you an over-all commission on all corrugated boxes sold by the company during the year period in the following manner: 1/2 percent on the net billings of corrugated boxes and material sold at our regular established selling prices. 1/4 percent on the net billing of corrugated boxes and material sold under our regular established prices. It is understood that the foregoing provisions, which are acceptable to you and the company, are art of our understanding as above outlined. 1. The accounts that will be considered as your accounts are attached to this letter, and any accounts added to this list shall be decided upon any mutual agreement between the company and yourself. 2. In the event it is necessary for the company to pay a commission or gratuity to persons other than yourself for an account considered as your account, the billing of that account will not be considered as part of your quota, or in the amount above your quota. However, if these sales are for corrugated material or boxes, they will be included in the total firm billings, and you will receive your commission of 1/4 percent or 1/2 percent on these sales, depending upon the selling price. 3. The company reserves the right to remove from the list of accounts we designate as your accounts such names or companies you have not sold for a 90-day period, or where the company considers the amount of business you have sold them as unsatisfactory. The company has the right to cancel this understanding in the event they are apprised of the fact that your connection with the company is found to be detrimental to its endeavor. If the above arrangements are in accord with our conversation, kindly acknowledge. [Signed] S. J. Zusmann."
It was further alleged in the petition: The list of accounts referred to in the quoted letter was not attached as stated therein, but was prepared and delivered by the defendant to the plaintiff several days after July 8, 1948, a copy being attached to the petition as Exhibit "B." On or about August 1, 1948, through mutual consent of the defendant, acting through its duly authorized agent, and the plaintiff, the following additional accounts were added: Haben Wholesale Florist Inc., Scripto Inc., and Westinghouse Electric Corporation. The plaintiff entered upon his duties as called for by the contract, and has performed his duties and obligations of the said employment contract from July 1, 1948, until the defendant wrongfully discharged him without cause on October 6, 1950. The defendant, acting through its duly authorized agent, and the plaintiff tacitly renewed the contract for the employment periods from July 1, 1949, to June 30, 1950, and from July 1, 1950, to June 30, 1951, and the plaintiff continued to perform his obligations of the said employment contract during the said periods until he was discharged, and the defendant continued to employ the plaintiff under the terms of the said contract and accepted the plaintiff's performance of his obligations during the said periods until the wrongful discharge. The plaintiff trained for the defendant and had as his subordinates in its corrugated department Jimmie Allen from July, 1949, until January, 1950, and Harold Frank from March, 1950, until the time of the plaintiff's discharge. These subordinates were employed by the defendant as salesmen on a straight salary basis. The defendant's net billing of corrugated boxes and material at regularly established selling prices amounted to the figures shown below during the periods of time hereinafter shown: $221,776.70 during the period July 1, 1948, to June 30. 1949; $251,502.49 during the period July 1, 1949, to June 30. 1950; $146,148.94 during the period July 1, 1950, to October 6, 1950.
During the said contract the plaintiff was entitled to one-half of one percent on the billings shown above, which total $619.428.13, thereby making a total of $3097.14 due the plaintiff by the defendant.
The defendant's net billing of corrugated boxes and material sold under regularly established prices amounted to the figures shown below for the periods of time hereinafter shown: $67,258.90 during the period from July 1, 1948, to June 30, 1949; $83,836.16 during the period from July 1, 1949, to June 30, 1950.
Under the said contract the plaintiff was entitled to one-fourth of one percent on the billings set forth above, totaling $151,095.06, thereby making the total of $377.73 due the plaintiff by the defendant. The total commissions due the plaintiff by the defendant as above shown amounted to $3474.87. The defendant paid the plaintiff $500 on July 20, 1949, for the purpose of having the said amount apply against the plaintiff's commission account. There is a balance of $2974.87 now owed to the plaintiff on the said commission account, and the defendant has wrongfully refused to pay the plaintiff any of this amount, although the plaintiff has made demands on the defendant therefor.
The prayer was for process and for judgment in the sum of $2974.87 with interest and costs.
In count 2 the allegations were the same as in count 1 as to the alleged contract of employment and the entering by the plaintiff upon his duties and his performance until discharged on October 6, 1950, but instead of the remainder of the allegations as in count 1 it was alleged as follows: During the year beginning July 1, 1948, and ending June 30, 1949, through mutual consent of the defendant, acting through its duly authorized agent, and the plaintiff, the following accounts were added as the plaintiff's accounts in addition to those appearing on the attached list: (Then follows a list of 17 accounts by name.) The defendant, acting through its duly authorized agent, and the plaintiff tacitly renewed the contract for the employment periods from July 1, 1949, to June 30, 1950, and from July 1, 1950, to June 30, 1951, and the plaintiff continued to perform his obligations of the said employment contract during the said periods until he was discharged, and the defendant continued to employ the plaintiff under the terms of the said contract and accepted the plaintiff's performance of his obligations during the said periods until the wrongful discharge. The advent of the Korean war in June, 1950, created a tremendous increase in the demand for the defendant's products. The defendant, through its duly authorized agent, knew that the plaintiff would earn and be entitled to large commissions under the said contract during the balance of the year ending June 30, 1951, and, in order to reduce its selling costs and deprive the plaintiff of his salary and commissions under the said contract, wrongfully discharged him. If he had not been wrongfully discharged, he would have been able to obtain during the period from July 1, 1950, to June 30, 1951, over $250,000 of billings to the accounts which had been allotted to him, and he would have been entitled to earn and receive under the said contract a total amount of $4569.12 as a total of his weekly salary for the unexpired contract period ending June 30, 1951. From October 6, 1950, through June 30, 1951, the defendant's net billings of corrugated boxes and material sold at regularly established selling prices amounted to $625,018.31. Under the terms of the said contract the plaintiff was entitled to receive as commissions one-half of one percent of the billings stated above, $625,018.31, the commissions amounting to $3125.09. Upon being discharged, the plaintiff sought other employment, and on November 1, 1950, was employed by the Gaylord Container Corporation, from which he received total remunerations as salary and bonus of $2142.65 for his service during the period from November 1, 1950, through June 30, 1951. The defendant breached the contract by wrongfully discharging the plaintiff and thereby damaged him in the amount of $5551.56, which is comprised of the $3125.09 in being deprived of commissions and $2426.47 representing the difference between the contracted-for salary during the unexpired term of the contract period, to wit, $4569.12 and the total commissions for services the plaintiff received from others during the said period, to wit, $2142.65.
The prayer was for process and for judgment in the sum of $5551.56 as actual damages and costs.
Demurrers, general and special, were filed to each count, as amended, after stating the following: "Now comes defendant, Empire Box Incorporated, and within the time allowed by law, files its demurrers and renewed demurrers to plaintiff's petition as amended and for grounds therefor shows to the court as follows: [Stating grounds.]" The court overruled all grounds of demurrer and the defendant excepted.
In addition to excepting to the judgment overruling all grounds of demurrer to the petition as finally amended on February 18, 1952, the defendant, on February 22, 1952, filed exceptions pendente lite to the overruling of several special demurrers to various paragraphs of the petition before last amended. Although error is assigned thereon, these exceptions pendente lite are functus officio and can not be considered for the following reasons. After the rewritten petition was amended in a material way on February 18, 1952, the entire petition as thus amended was reopened to demurrer. The defendant did, on February 27, 1952, redemur, but did not renew all previous grounds of demurrer, renewing only certain specified grounds and urging an additional general ground of demurrer to each count of the petition as amended. These grounds will be referred to in detail hereinafter. Where a demurrant renews all grounds of demurrer theretofore filed, he is entitled to have all of them passed upon, but where, instead of doing this, he specifies the grounds which he renews, all other grounds are in law abandoned. Peoples Loan Co. v. Allen, 199 Ga. 537, 557 ( 34 S.E.2d 811). The grounds the overruling of which was excepted to pendente lite were grounds of a demurrer filed on January 29, 1952, and after the petition was amended on February 18, 1952, and the petition thus reopened to demurrer, they were not renewed in the demurrer of February 27, 1952, and are, therefore, in law abandoned and can not be considered. The grounds of demurrer remaining for decision are:
To count 1, generally: (1) No cause of action is set forth. (2) There is no ground for recovery, there being no valid contract in existence between the parties at any time, that upon which the plaintiff relies being unilateral and too indefinite for enforcement. (3) The petition shows on its face that no commissions are due the plaintiff for the periods from July 1, 1949, to June 30, 1950, and from July 1, 1950, to June 30, 1951, since the petition shows on its face that no valid and enforceable contract existed between the parties during that time.
To count 1, specially: To the allegations as to the alleged agreement between the defendant, through its manager S. J. Zusmann, and the plaintiff for his services and the basis of remuneration, on the ground that such allegations are conclusions, the alleged contract not being an enforceable one.
To count 2, generally: (1) and (2). The same as to count 1. (3) No facts are shown which authorize recovery of damages. (4) The petition shows on its face that no valid contract existed between the parties during the period from July 1, 1950, to June 30, 1951.
To count 2, specially: The same as the special ground to allegations in count 1.
One general discussion will afford an answer to all of the grounds of demurrer. The inquiry involves the questions (a) whether or not the petition as amended shows that any legal and binding contract for one year was entered into and (b) if so, whether or not it was capable in law of being tacitly renewed between the parties and (c) whether or not there was in fact such a renewal. It would seem that there should be no doubt that under the allegations of the petition as amended, a contract partly oral and partly written for one year was entered into. It was alleged that on July 8, 1948, the defendant, acting through its manager, and the plaintiff reached an agreement for the employment of the plaintiff by the defendant and the serving of the defendant by the plaintiff for a period of one year, beginning on July 1, 1948, and ending June 30, 1949. It specifies the oral agreements of the parties as the work to be done, and then alleges that the basis of his remuneration was set forth by the defendant in its letter of July 8, 1948, written by the defendant's manager, S. J. Zusmann, a copy of which was set forth in the pleadings, and that a carbon copy thereof was signed by the plaintiff and delivered to the defendant. The letter confirmed the "basis of remuneration" for the period beginning July 1, 1948, and ending June 30, 1949. It provided, among other things, for payment of $126.92 per week during the period of the employment for one year, for refund of expense of traveling on business of the defendant and that "Both the above salary and expense account is paid to you with the understanding that for the like period of one year you will obtain $250,000 worth of billing to your accounts for the company." It is contended by the defendant that the language just quoted fixes a condition of employment, and by the plaintiff that it merely fixes a quota of business. It could not reasonably be treated other than as a quota. If intended as a condition, it could not be effective because it could not be determined until the end of the contract year whether or not the plaintiff had produced such an amount of business, and in the meantime the company would have paid him $126.92 per week throughout the period and where no forfeiture at any time of any part of his salary had been provided for. It is true that the word "understanding" when used in an instrument which is signed by both parties thereto may in some contexts be the equivalent of "agreement." Bullock v. Johnson, 110 Ga. 486, 491 ( 35 S.E. 703). For example, the use of the words "our understanding" in the letter relied upon as part of the original contract, where used in referring to commissions on billings in the corrugated boxes department, obviously means agreement of the parties, but it is clear that, although the letter was signed by the plaintiff he was not subscribing to any admission that the language, "with the understanding," as related to volume of business was anything more than an expression by the defendant that the plaintiff was being employed and paid the salary named because the defendant understood or expected that he would produce a volume of $250,000 and without providing for any forfeiture of any part of his salary in case he did not. In any event it is apparent that the defendant, if it originally intended to express a condition of employment, did not insist upon it, because it continued, after the first year, to accept his services and pay him the stipulated salary until he was discharged in the third year of employment. Inferentially, the plaintiff did not produce as a salesman any excess over such a volume, because he did not sue for any commission provided for in that event, a sales effort, but did sue for commissions of 1/2 of one percent and 1/4 of one percent respectively, on volume of business in the corrugated boxes department, to which he lent aid in an executive capacity as provided for in the contract. As negativing any theory that the engagement was one which was terminable at will by the defendant, and showing, on the contrary, a contract for the period of one year, as in fact expressed in the writing, the letter stated that, "The company has the right to cancel this understanding in the event they are apprised of the fact that your connection with the company is found to be detrimental to its endeavors." A contract, partly oral and partly written, for a period of one year is valid and enforceable. Code, § 38-504; Forsyth Mfg. Co. v. Castlen, 112 Ga. 199, 211 ( 37 S.E. 485).
The petition further shows that though there was no express agreement for employment after the yearly period ending June 30, 1949, the parties tacitly renewed the contract for employment for the period beginning July 1, 1949, and ending June 30, 1950, and for the period beginning July 1, 1950, and ending June 30, 1951, the plaintiff continuing to perform the same obligations as were required under the first yearly contract and the defendant accepting his services until he was wrongfully discharged on October 6, 1950. Such a contractual relationship may arise in law. "A person who has been previously employed by the year or other fixed interval, and who is permitted to continue in the employment after the period limited by the original employment has expired, `will, in the absence of anything to show a contrary intention, be presumed to be employed until the close of the current interval, and upon the same terms.' Such a presumed renovation of the contract from the period at which the former expired `is held to arise from implied consent of the parties, and in consequence of their not having signified their intention that the agreement should terminate at the period stipulated. . . Whether the first hiring has its duration fixed by express or implied contract, if it be fixed in either way, the term (if not longer than one year) admits of duplication by tacit as well as express agreement.' Standard Oil Co. v. Gilbert, 84 Ga. 714 ( 11 S.E. 491, 8 L.R.A. 410)." National Manufacture c. Corp. v. Dekle, 48 Ga. App. 515, 521 ( 173 S.E. 408). In the opinion cited in the Dekle case, Standard Oil Co. v. Gilbert, the contract for the first year was in writing and was entered into on October 1, 1880. It was expressly renewed for a second year ending October 1, 1882. In seeking to distinguish this case the plaintiff in error calls attention to the fact that the contract for the second year was expressly renewed. This assertion is, of course, true, but the basis for the holding of renewal by tacit agreement is not the express renewal for the second year, but the fact that though no negotiations took place after the second year the parties continued to deal with each other in harmony with the express agreement until December 5, 1886, when the defendant gave the plaintiff notice that, for reasons stated, the arrangements under which they had dealt with each other would not be continued. Reputable authorities were examined and approved in an opinion written by Chief Justice Bleckley in the Gilbert case, supra, from which Judge Jenkins quoted in the Dekle case, supra. See also Jackson v. Doolittle, 21 Ga. App. 483 ( 94 S.E. 595); 35 Am. Jur. 454, § 15; Id. 460, § 23; 1 Williston on Contracts (Rev. ed.) 255, § 90. In the present case there was not one contract, partly oral, for a period of more than one year. There were three contracts separately entered into. The plaintiff is not suing on one contract extending through the entire period of his employment. In count 1 he is suing for the total of commissions due under the three contracts to October 6, 1950, the date of his discharge, $3474.87 less $500 which he alleged was paid him on the commission account on July 20, 1949, a total of $2974.87. In count 2 he is suing for damages for breach of contract, based on commission of 1/2 of one percent on $625,018.31, the amount of billings from October 1, 1950, to June 30, 1951, $3125.09, and his salary for the same period, $4569.12, less $2142.65 which he was able to earn elsewhere after his discharge, $2426.49, a total of $5551.56. The suit is not subject to the objection that it is based on one contract which was partly oral and for more than one year and unenforceable as being within the statute of frauds. See in this connection Craig v. Baggs, 64 Ga. App. 850, 857 (14 S.E.2d . 156).
In each count the petition as amended set forth a valid, definite and binding contract for each of the three periods of one year as mentioned, and all of the grounds of demurrer are without merit for the reasons above stated.
It is urged that the payment by the defendant of $500 to the plaintiff on July 20, 1949, within the second year period, and no insistence by the plaintiff for more at that time should be regarded as conclusively negativing any theory that the plaintiff was then performing services under any such contract as he now seeks to set forth. The failure to complain in any manner at that time does not, however, bar the plaintiff from asserting the contracts, the presumption being, in the absence of a showing of contrary intent at the time of the payment of the $500, that it was simply on account. Dill v. Kucharsky, 212 Minn. 276 (3 N.W.. 2d. 585). Furthermore, it is specifically alleged in the petition that the payment was on the commission account.
Judgment affirmed. Sutton, C.J., and Felton, J., concur.