Goldsmith & Co. v. Latz

Harrison, J.,

delivered the opinion of the court.

The court is of opinion that the proper construction of the contract in writing between the parties to this controversy is that Latz, the defendant in error, was to serve Goldsmith & Co., the plaintiffs in error, as manager of their mercantile establishment in Danville, Va., for one year, beginning April 16, 1894, and ending April 16, 1895, and that the contract should continue in force upon the same terms and conditions for like successive periods of one year from the first term until abrogated by one of the parties, in which event a written *684 notice should be given not less than sixty days in advance of the period at which it was proposed to terminate the contract; that for his services, as manager, Latz was to receive $50 per month, to be charged in equal proportions to the individual accounts of Joseph and Henry Goldsmith, and was to receive, as additional compensation, one third part of the net profits of the business for the year ending January 15,1895, as shown by the books of Goldsmith & Co., in such ratio and proportion as the time of such services rendered by said Latz bore to the whole fiscal year beginning January 15,1894, and ending January 15, 1895, with the privilege to said Latz of drawing on account of his interest in the profits a sum not exceeding $900 per annum.

The 15th of January was the time for taking the stock and ascertaining the net profits of the business for the preceding year. This could not be done in April without detriment to the business, as shown by the letter of Latz to Goldsmith & Co. written before the contract was made, and attached thereto. The contract was made in April. • It was, however, clearly contemplated thereby that the net profits were to be ascertained as of the 15th of January, 1895, and the interest of Latz ascertained therein for the nine months then ending; and that thereafter his annual compensation was to be ascertained on the 15th of January in each year. Hence the provision in the second clause of the contract that on the 15th of January, 1895, nine months after the contract was entered into, Latz should receive one third part of the net profits for the year ending January 15, 1895, in such ratio and proportion as the time of such services rendered might bear to the whole fiscal year beginning January 15,1894, and ending January 15,1895. A further provision of the contract is that in case it is abrogated by either party, the compensation of Latz, for the time intervening between January 15 next previous thereto and the termination of the contract, shall be a sum equal in amount per month to the average amount received per month for the previous year ending January 15 next prior to the abroga *685 tion of the contract; thus showing that the period of profit sharing was from January to January oí each year. This view is still further confirmed by the construction the parties have themselves put upon the contract. In March, 1895, Goldsmith & Co. enclosed to Latz, in a letter written from Baltimore, a full statement of the business for the year ending January 15, 1895, in which they say: “You will note that your part of the earnings amount to $2,149.82 for the nine months which you have been engaged in the business, which would indicate an average of $2,687.28 per annum.” In the statement rendered, the balance is struck, showing the amount due Latz for his nine months’ servive to be:

Interest in profits...........$1,699 82

Hine months’ salary at $50 ....... 450 00

Earnings of Geo. Latz for nine months . . $2,149 82.

The words quoted from the letter, “ which would indicate an average of $2,687.28 per annum” were not intended as a statement that the sum named would be his compensation for the twelve months’ service ending in April, 1895, but were merely intended, as stated, to indicate that upon the basis of $2,149.82 for nine months, at a like ratio of profits his compensation would be $2,687.28 for twelve months. (It is agreed that the figures $2,687.28 should have been $2,866.42.) This letter and statement, which were received by Latz, and not objected to, clearly show that, while his term of service was from April to April of each year, his term of profit sharing was from January to January of each year. This is the most reasonable construction of the contract, and does no injustice to either party thereto.

The court is further of opinion that it was error to give the first instruction asked for by the plaintiff in the court below. That instruction excludes from the jury all consideration of the question whether Latz was discharged by Goldsmith & Go., or voluntarily, and in violation of his contract, left their service. There was evidence tending to show that he voluntarily aban *686 doned their service without cause. This was a question of fact that should have been submitted to the jury for their determination.

There is no error in the second instruction given for the plaintiff. Latz was entitled to have interest from January 15, the end of each current year, upon any balance then due him until paid. He was not a partner in the concern, but an employee whose compensation was measured by a share in the profits on th'e amount of business he succeeded in doing each year, and if his compensation remained in the hands of his employers after it Was due he was entitled to interest thereon.

The court is further of opinion that it was error to refuse the fourth instruction asked for by the defendants in the court below. That instruction tells the jury that if they believe from the evidence that the plaintiff received fro.m the defendants a statement of the account between them, showing the exact amount of compensation for his services in the year beginning in January, 1894, and ending in January, 1895, and accepted the same without complaint or objection, and thereafter continued for more than a year in the employment of the defendants, without objection or complaint of the amount of profits awarded him in the statement, such conduct, without explanation satisfactory to the jury, on the part of Latz, raises a strong presumption that he had agreed to the correctness of such settlement, and, unless the jury should believe that such presumption was rebutted by Latz, they should find for the defendants on that question. This instruction was based upon the letter of March, 1895, and the statement therein, already adverted to, and other evidence in the cause, and was a correct statement of the law,, if the jury should believe the facts upon which it was predicated, and ought to have been given.

For these reasons, the judgment complained of must be reversed, the verdict oí the jury set aside, and the cause remanded for a new trial, in accordance with the views herein .expressed.

Reversed.