Isaac v. Gerretson Co.

191 N.W. 55, 179 Wis. 417, 1923 Wisc. LEXIS 10

• Court: Wisconsin Supreme Court
• Decided: February 6, 1923
• Status: Published

Opinions

The following opinion was filed December 5, 1922:

Crownhart, J.

This case presents questions of fact, very largely, rather than questions of law. The court found the facts favorable to the plaintiff, and his findings must be sustained unless we can say that such findings are against the great weight or clear preponderance of the evidence.

The first question is to determine the intent of the parties in making the contract. The contract was oral and quite indefinite. It must be interpreted to some extent from the surrounding facts and circumstances. Prior to making the contract both parties had been in the same line of business, the plaintiff at Fond.du Lac and the defendant at Milwaukee. It is clear that the plaintiff had an established good will in and around Fond du Lac, and that the defendant was desirous of securing not only his services as manager but the good will that he would bring to the company. The direct salary of $50 per week was very modest and evidently intended to take care of his immediate necessities, while the percentage of profits was iñtended to secure from the plaintiff his best efforts in producing profits for the company. The profits were intended to enhance the plaintiff’s income. It seems to have' been the contemplation of the parties that the relationship thus established would continue for a long time, and it is only fair to infer that the plaintiff expected and would need his profits from year to year in his personal affairs, and it is also fair to presume that the company would follow the usual custom of making yearly inventories and balances and declare dividends. It follows that it might well have been intended that the yearly period of inventory and accounting would be followed by a distribution of plaintiff’s share of the profits. The contention of the plaintiff is supported by the fact that the parties did talk over the matter of profits for the year 1918, and that it was agreed that owing to the heavy expense of establishing the business no profits should -be considered for that year. The testimony of plaintiff and that of defendant does not agree as to what actually occurred, but the fact is plain that they did talk the matter over, and one of the Gerretsons said “What is the use of talking about profits — there are no profits.” He did not say and did not contend that the period of accounting was not at hand, but he did contend that there were no profits to be divided. The inventories were not completed and balances struck for the year 1919 until about January 15th. At that time the defendant entered upon its books for the plaintiff a reserve of twenty-five per cent, of the profits as it determined, showing an intention on the part of the defendant to make yearly accounting of the profits to the plaintiff. Prior to this time one of the officers of the company tried to induce plaintiff to take stock in the company in payment of his percentage of profits. This would indicate his understanding that such profits would be presently due.

Reliance is had by the defendant on Thomas v. Columbia P. Co. 144 Wis. 470, 129 N. W. 522. That case may be distinguished from this in that the holding there that the profits were not to be distributed till the close of the period of adventure was unnecessary to the decision of the case, for the court held that the parties had made a settlement in full. Further, the court held that the parties had made a practical construction of the contract by their method of accounting extending over three years. The Thomas Case is authority for determining the intent of the parties to the contract by their subsequent practical construction of it.

We conclude that the inference of the trial court was properly drawn, to the effect that the accounting period should be as of January 1st each year, and that it was not intended or expected by either party that the plaintiff should wait until the dissolution of the contract for the payment to him of his profits. This finding of the court entitled the plaintiff to a recovery of his profits for the year 1919, independent of any losses that may have resulted in the year 1920.

The defendant contends that the plaintiff was instructed, and it was a part of his duty, to secure full insurance up to ninety per cent, of the value of the property in the business, and that he failed and neglected to do this, whereby the defendant, suffered a fire loss of nearly $7,000. Here again the facts were in dispute, and the court found for the plaintiff. It is very apparent that while the plaintiff was designated as manager of the defendant’s store at Fond du Lac his management was quite limited and that he was not allowed to exercise his judgment generally. The defendant, through its officers, visited the store on an average of once a week, went over the matters of business in detail, and gave the plaintiff instructions from time to time. Shortly after they went into business plaintiff was instructed to procure insurance, and he was advised to divide the insurance among the local agents in such a way as to promote the company’s business. No definite amount of insurance was stated, and the plaintiff procured insurance and forwarded the policies to the defendant at Milwaukee, and the defendant paid the premiums. In May, 1919, one of the defendant’s officers came to Fond du Lac, took all the policies of insurance, and had them rewritten on a uniform basis, and inserted the standard ninety per cent, co-insurance clause, which materially reduced the amount of insurance carried.' Plaintiff was not consulted with reference to this, and did not know of the change made in the contract or the legal effect thereof. The policies were taken back to Milwaukee and a record made of the insurance carried, which record was kept in the Milwaukee office. It is significant on the subject of the defendant’s' control and knowledge of the business that the company sent one of its employees from Milwaukee to Fond du Lac to make .reports direct to the company. She did this, and the plaintiff exercised no control over her. Daily reports were made from the Fond du Lac store to the Milwaukee office as to the business carried on, and the defendant had the information in its Milwaukee office, available to it at all times, to determine whether or not additional insurance should be effected. Officers of the company kept in close touch with the business at Fond du Lac by frequent visits, and knew in general and in detail the business situation. They frequently talked the matter of insurance over with the plaintiff, and advised him when they wanted additional insurance. When so advised the plaintiff carried out their instructions to the best of his judgment. He did not have the policies with him, did not have the policy record, and did not know in detail how much insurance was being carried. It would seem that the finding of the trial court is amply sustained by the evidence. The defendant can hardly be heard to say, in view of its full knowledge of the amount of insurable property and the amount of insurance carried and its absolute control of the affairs of the company, that the plaintiff was responsible for the failure to carry full insurance.

The defendant claims it did not have complete knowledge of the business for insurance purposes, and cites the fact that the plaintiff conducted a fur-repairing department and such furs were not included in the reports made to the Mil- < waukee office. We think the evidence shows that the company had full knowledge as to this department, and that the goods were included in the coverage under the policies of insurance. Mr. W. F. Gerretson testified:

“I knew that there was fur repair going on at Fond du Lac, and I knew in a general way the kind of furs that were used for that purpose. When I and other Gerretsons came to Fond du Lac and looked over the store, as far as I know, we usually went around the fur and other departments. We knew that the insurance that we had was blanket insurance to cover furs and merchandise of all descriptions. I know of no instructions that were given to Albert Isaac by the Gerretson Company to make any particular or definite report as to the amount of goods for alteration of furs, for repair.”

The plaintiff seeks to bring up for review certain findings to which he took exception in the court below. Defendant objects on the ground that the notice was served too late. The case was assigned for hearing September 16, 1922, but themotice for review was not served until October 2d. Under the recent case of Milwaukee Western Fuel Co. v. Industrial Comm., ante, p. 223, 190 N. W. 439, the notice was too late.

By the Court. — The judgment of the circuit court is affirmed.