Gerkhardt v. Mandarin Co.
Gerkhardt v. Mandarin Company
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Summary
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Opinion of the Court
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Vinje, C. J.
We have reached the conclusion that the judgment must be affirmed because the agreement constitutes a contract of hiring and not a lease. Some of the *15 parts of the agreement that unmistakably point to such conclusion are these: “The party of the first part places the second party in complete charge of its café and restaurant “the second party is to assume complete management of said café and restaurant.” Then it is provided what shall constitute “full payment of any and all claims due or to become due him as salary or compensation for acting as the manager of said business under this agreement;” and it is provided that the second party shall indemnify the first party against all claims arising out of his conducting the business, and must render a weekly account of all receipts and disbursements, and must take care of all claims for which the first party’s credit shall have been pledged by the second party. It also contains an option “for an additional year’s employment under this contract.” These and other provisions so aptly express a,contract of hiring and are so foreign to the terms of a lease that we are clearly of the opinion that the contract was correctly interpreted by the trial court and by the circuit court.
It was not error to show that in another suit the defendant claimed the agreement constituted a contract of hiring and not a lease, though the fact is so clearly apparent from the terms of the instrument itself that evidence of construction by the parties.was not necessary.
By the Court. — Judgment affirmed.
Dissent
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Owen, J.
(dissenting). This case was argued and seems to have been decided on the theory that if the contract between the parties can be given a name the case is solved — that if it be called a contract of employment the defendant is liable, while if it be called a lease the defendant is immune from liability. Without affirming that the document is ajease, I am clearly of the opinion that it is not a contract of employment. While the contract contains provisions not usually found in a lease, it likewise contains numerous provisions utterly inconsistent with a contract of *16 employment: notably the provision that the party of the second part (employee) is to pay the party of the first part (employer) $300 per month of the net profits óf the business; that the party of the second part (employee) is to furnish all capital necessary for conducting the business; and that the party of the second part (employee) is to furnish the funds, not exceeding $800, to properly equip' the premises for restaurant purposes! It seems to me that it is a renting on shares and is more analogous to a “cropper’s contract” than any other familiar to the law. However, it is the terms of the contract which must be examined and analyzed in order to determine defendant’s liability.
Plaintiff’s claim arises from the performance of certain carpenter work in and about the restaurant at the special instance and request of the party of the second part. He testified that after he did the work he found out that Mr. Adams was not the true owner of the restaurant, and he seeks to hold the Mandarin Company on the theory that it was an undisclosed principal. In order to hold defendant liable as an undisclosed principal it must first be established that Adams was acting as the agent of the Mandarin Company in respect to the carpenter work so rendered. Presumably the carpenter services were rendered in the matter of equipping the premises for restaurant purposes. With reference to this the contract between Adams and the Mandarin Company provides as follows:
“As it will require the expenditure of a considerable sum of money to alter said premises and properly equip' said premises for restaurant purposes, the second party agrees to furnish the funds for that purpose not exceeding $800, and the net profits mentioned herein shall be paid over to the second party until all sums so advanced by him shall have been paid.”
It is then provided that if the contract be terminated before such equipment is paid for, Adams should remove “as his own any and all equipment installed by him under *17 this agreement, or such proportionate part thereof as he shall not have been repaid for under the foregoing provisions.”
The sum and substance of this provision is that Adams agreed to install certain equipment in the restaurant not to exceed $800; that he was to be paid therefor out of the profits of the business in excess of the $300 per month which was first to be paid to the Mandarin Company; and that, if he was not so- paid and the contract was terminated, he should be permitted to remove the property as his own. In other words, the title to the property remained in Adams until paid for. In installing this equipment Adams was not acting as the agent of the Mandarin Company. He was doing that which he had obligated himself to do by contract. The title to the equipment thus installed remained with him until paid for, and until such time the Mandarin Company acquired no title thereto*.
Under such circumstances I am at a loss to understand how the relation of principal and ag-ent can be said to have existed between the Mandarin Company and Adams. The work was performed at the request of Adams and upon his credit. There was no purpose on the part of the plaintiff to hold the Mandarin Company liable until long after the services were rendered. As I see no theory upon which the defendant can be held liable, I must dissent.
I am authorized to state that Mr. Justice DoerfleR concurs in these views.
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