Summary
In Weber, the employment contract included a term requiring the employer to provide notice prior to terminating the employee and also limited the employer's right to terminate only for cause. 21 S.E.2d at 193.
Summary of this case from White v. Roche Biomedical LaboratoriesOpinion
15442
July 9, 1942.
Before G.B. GREENE, J., Orangeburg County, October, 1941, affirmed.
Action by G.L. Weber against W.E. Perry to recover damages for the alleged breach of an oral contract of employment. From judgment order overruling his demurrer to the complaint, the defendant appeals.
The Circuit order of Judge G.B. Greene, required to be reported, follows:
This action was commenced on or about the 28th day of August, 1941, to recover damages for the alleged breach of an oral contract of employment. In due time, the defendant filed a demurrer to the complaint which came on to be heard before me at the October term of the Court. At that time, I took the questions presented under advisement.
In brief, the complaint alleges the following facts pertinent to the issues before me:
In the fall of 1938, plaintiff, who is an expert in farm management, was induced by the defendant to abandon an established business in the State of Michigan and to move with his family to the State of South Carolina, there to undertake the management and development of a large plantation for the defendant. The terms of the contract under which this was done are set forth in the complaint as follows:
"(1) That plaintiff should abandon his business in the State of Michigan and move with his family to South Carolina.
"(2) That plaintiff should undertake the development and operation of defendant's farm, having full authority and responsibility for the erection of suitable buildings and improvements, the selection of proper animals, the upbuilding and improvement of the soil, the establishment and execution of breeding and rotation programs and, in general, the scientific conversion of the predominantly cotton farm into a predominantly dairy and stock farm, and that defendant should furnish all necessary capital.
"(3) That plaintiff should be discharged only if he failed to properly perform his duties and obligations under the contract, and that if it became necessary for defendant to discharge him, he should be given such notice as would be reasonable and proper under the circumstances.
"(4) That if plaintiff's family should become dissatisfied with its new home, or if plaintiff should have an opportunity to improve his position by accepting new employment, he should have the right to terminate the contract upon giving thirty days' notice to the defendant.
"(5) That plaintiff should receive as compensation for his services the sum of $2500.00 per annum and after November 1, 1941, if the contract had not been sooner terminated under the aforementioned provisions thereof, he should, in addition to his salary, receive 50% of the net profits of the enterprise, after allowing 4% interest on defendant's investment.
"(6) That plaintiff and his family should reside on the farm in a house to be furnished by the defendant and should receive such sustenance as the farm should afford."
According to the allegations of the complaint, the plaintiff fully performed the contract on his part and successfully managed and developed the farm; but, on or about the 5th day of August, 1941, he was notified by the defendant that his employment would not be continued after September 1, 1941.
The grounds of the demurrer are as follows:
"1. Because such contract as is alleged in the complaint is void under the Statute of Frauds in that the same is not capable of being performed within one year, as appears upon the face of the complaint.
"2. Because the contract sued on and set forth in the complaint reserves an absolute right to cancel and terminate the same at any time by the plaintiff but does not grant the same right to the defendant."
THE FIRST GROUNDThere can be no dispute as to the well-established principle that the statute applies only to those contracts which are impossible of performance within a year and that a contract on a contingency which may occur within the year need not be supported by a writing.
This rule has a particular application to contracts of employment for an indefinite term or on a contingency.
"Where under the terms of an oral agreement an employment is to cases upon a contingency which may happen within a year, the oral agreement is not within the statute of frauds. Thus the statute does not apply to an oral agreement to give employment so long as the employee does faithful, honest, and satisfactory work, or so long as the employer keeps his mills running, or is engaged in a certain business, or until the employee sees fit to quit, or so long as the employer's contract with a third person shall remain in force, or so long as the employee's disability continues. A contract of employment for a fixed period longer than a year, or so long as a certain person shall continue to be an agent of the employer, is construed to be an agreement to serve as long as the agency continues, not exceeding the fixed period, and as so construed is not within the statute." 27 C.J., 188.
The literal terms of the contract under consideration import at least two contingencies which might well have occurred within the year. In addition, the law writes into such a contract the contingency that the death of the employee might occur within one year. 27 C.J., page 188, § 118.
In 35 A.L.R., at page 1432, and in 62 A.L.R., at page 234, the annotator states: "A permanent employment contract is not within the Statute of Frauds, for it is deemed possible of performance within one year." Authorities from eight states are cited in support of the rule adduced and none is cited to the contrary.
Our own cases of Cline v. Southern R. Co., 110 S.C. 534, 96 S.E., 532, 538, and McGehee v. South Carolina Power Co., 187 S.C. 79, 196 S.E., 538, appear to be conclusive of the question and impel me to overrule the first ground of the demurrer.
THE SECOND GROUNDThe defendant complains that there is a lack of mutuality in the contract as alleged.
The general rule unquestionably is that under ordinary circumstances a contract to furnish employment permanently, or so long as the employee's services shall be properly performed, or for a similar indefinite period, is no more than an indefinite general hiring, terminable at the will of either party; and is, therefore, unenforceable as to its duration. But this rule does not apply where the employee has given a good consideration in addition to the services to be rendered. 35 Am. Jur., 460. And see the A.L.R. annotations which are cited above.
"The general rule undoubtedly is that, where an independent consideration passes from the employee in addition to the performance of services, the duration of the contract may be optional on his part without impairing its mutuality. This rule finds its most frequent application in the case of contracts, whereby, in consideration of the release of a claim for damages, the employer promises the employee employment, but the employee does not agree to serve. [Citing a number of authorities.]" Shealy v. Fowler, 182 S.C. 81, 188 S.E., 499, 502.
The abandonment by plaintiff of his business in Michigan in order to accept the employment which was offered him in a distant state constituted such an independent consideration as to take this case out of the general rule and to render the contract enforcible.
It is, therefore, ordered:
First: That the demurrer of the defendant be, and the same is hereby, overruled.
Second: That the defendant have leave to answer the complaint within twenty (20) days from the notice of filing of this order.
Mr. T.B. Bryant and Messrs. Felder and Rosen, all of Orangeburg, Counsel for Appellant, cite: As to contract for personal services coming within Statute of Frauds: Code of 1932, Sec. 7044; 60 S.C. 373, 38 S.E., 599, 181 S.C. 360, 187 S.E., 524; 27 C.J., 186; 27 C.J., 182; 27 C.J., 180; 46 S.C.L., 176; 187 S.C. 79, 196 S.E., 538; and cases therein discussed; 27 C.J., 176. As to lack of mutuality in alleged contracts for personal services: 182 S.C. 81, 188 S.E., 499.
Messrs. Zeigler and Brailsford, of Orangeburg, counsel for Respondent, cite: As to Statute of Frauds being a bar to this action: 110 S.C. 534, 96 S.E., 538; 187 S.C. 79, 196 S.E., 539; 27 C.J., 183; 27 C.J., 188, Secs. 117, 118; 25 R.C.L., 478; Annotations in 35 A.L.R., 1440; 62 A.L.R., 234; 129 A.L.R., 544, Annotations; 164 S.W., 416, 41 L.Ed., 495. As to contract being terminable at will of Respondent: 35 A.J., 461; 167 Mass. 544; 24 Pa. Co. Ct., 403; 109 Okla. 161, 235 P., 502; 182 S.C. 81, 188 S.E., 499; Annotations in 35 A.L.R., beginning at p. 1432, and in 62 A.L.R., beginning at p. 234.
July 9, 1942. The Opinion of the Court was delivered by
This Court is satisfied with the correctness of the conclusions of his Honor, Judge Greene, who heard the demurrer in this case on circuit. His order, dated December 22, 1941, will be reported. The exceptions have been carefully considered and are overruled.
Affirmed.
MR. CHIEF JUSTICE BONHAM, MR. ASSOCIATE JUSTICE FISHBURNE and CIRCUIT JUDGES PHILIP H. STOLL and E. H. HENDERSON, ACTING ASSOCIATE JUSTICES, concur.