Shaler Umbrella Co. v. Blow

227 N.W. 1, 199 Wis. 489, 1929 Wisc. LEXIS 293
CourtWisconsin Supreme Court
DecidedOctober 8, 1929
StatusPublished
Cited by17 cases

This text of 227 N.W. 1 (Shaler Umbrella Co. v. Blow) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shaler Umbrella Co. v. Blow, 227 N.W. 1, 199 Wis. 489, 1929 Wisc. LEXIS 293 (Wis. 1929).

Opinion

Owen, °J.

This action is brought by plaintiff to recover from the defendant moneys advanced to him in excess of commissions earned by the defendant at a time when he was in the employ of the plaintiff selling its products upon commission. It involves the question whether an agent working upon a commission is personally liable for advances made to him in excess of commissions earned, in the absence of an express agreement on his part to repay such excess. There is a division of authority upon the subject. In the following cases it is held that under such circumstances the obligation of the employer is limited by the commission agreed to be paid, and that when advances are made in excess of commissions earned, an agreement on the part of the agent to repay such excess will be implied: Clarke v. Eastern Advertiser Co. 106 Me. 59, 75 Atl. 303; Strauss v. Cohen Bros. Co. 169 Ill. App. 337; Williams Mfg. Co. v. Michener, 13 Ontario Weekly Rep. 46; Martinez v. Cathey (Tex. Civ. App.), 215 S. W. 370; Snellenburg C. Co. v. Levitt, 282 Pa. St. 65, 127 Atl. 309.

In 2 Corp. Jur. p. 787, it is said: “In the absence of a special agreement, an agent who receives advances on account of commissions cannot be held to a personal liability for such advances, although the commissions earned by him do not equal the advances, and although his employment has ceased.” This rule finds support in the following well reasoned cases: Roofing Sales Co. v. Rose, 103 N. J. L. 553, 137 Atl. 211; Luce v. Consolidated Ubero P. Co. 195 Mass. 84, 80 N. E. 793; Arbaugh v. Shockney, 34 Ind. App. 268, 72 N. E. 668; Northwestern Mut. L. Ins. Co. v. Mooney, 108 N. Y. 118, 15 N. E. 303; Schnabel v. American Educational Alliance, 79 Misc. 624, 140 N. Y. Supp. 369; Louis Auerbach, Inc. v. Ramer, 80 Misc. 645, 141 N. Y. Supp. 848; Lester C. Hebberd & Co. Inc. v. Blake, 175 N. Y. Supp. 478; Goldberg v. Kleinberg, 179 N. Y. Supp. 364.

[491]*491The reasoning supporting the conclusion that there is no personal liability on the part of the agent for excess advances may be epitomized as follows: An undertaking whereby an employer sends out an agent to work upon a commission is in the nature of a joint adventure from which both hope to profit. The employer profits by the development and enlargement of its business and the agent by remunerative employment. The undertaking may prove a success or a failure. If the agent be required to repay all the advances made in excess of his commissions earned, the entire risk of the adventure is his, and a construction leading to this result will not be indulged where there is no express agreement on the part of the agent to repay such excess. It is pointed out that such a liability on the part of the agent does not necessarily arise from the agreement on the part of the employer to make certain advancements. To advance does not necessarily mean to loan. In Northwestern Mut. L. Ins. Co. v. Mooney, 108 N. Y. 118, at p. 124, 15 N. E. 308, it is said:

“To advance is to bring forward. Standing by itself it means nothing more than that the company will ‘forward’ to Mooney this money; they will take it from their treasury and put it in his hands. For what purpose must be elsewhere ascertained. It may characterize a gift; it may be in anticipation of a debt to mature at a future time; it may characterize an act by which a consignee is put in funds for the management of the business of the consignor, or any transaction by which an agent, through the use of money, is desired to promote the business of the employer. In other words, the use to which it is to be put will determine the nature and qualify the character of the advance.”

In Arbaugh v. Shockney, 34 Ind. App. 268, at p. 275, 72 N. E. 668, the court says :

“An advance is something which precedes. It might be, as between these parties, made in anticipation of expected commissions, and, in such event, would no more create a [492]*492debt than would an advancement made by a father to a son in anticipation of the expected inheritance by the latter.”

In a consideration of this as well as all other contracts the purpose is to discover the intent of the parties. Where it is the intent of both parties that the agent shall repay the excess of advancements it is a simple matter to expressly so provide. Where there is no such express provision it is not necessarily to be implied from the term “advancement,” and ought- not to be implied in view of the general character of the undertaking. Where the liability of the agent must rest upon construction, neither reason nor justice would seem to- support a rule which would place upon the agent the entire burden of a venture designed for the benefit of both .parties. We hold that there is no personal liability upon the part of an agent employed upon a commission basis to repay advances made to promote the venture, or pursuant to the terms of the contract of employment, in excess of commissions earned, in the absence of an express agreement on his part to make such repayment, and in all such cases the employer is limited to the commissions actually earned for recoupment.

Having settled upon the law applicable to the case we must now ascertain the contract between these parties. The contract rests in parol, and, as usual, the parties do not agree as to what the contract was. We must determine this upon the conflicting evidence given upon the trial by David W. Jones, the president of the plaintiff company, Frederick Edward Rikkers, who was vice-president at the time the defendant was employed, and the testimony of the defendant himself. Mr. Jones is the only one who testified in behalf of the plaintiff -with reference to the terms of the contract of employment. His testimony is brief and terse and consists altogether to'o much of his conclusions. He testified -that Rikkers, although vice-president of the company, was also one-of its traveling salesmen. He said that Blow had a talk with Rikkers and understood how he was working, “and [493]*493he came to us and wanted a position under the same arrangement, which was a straight commission; which means a man pays all his own expenses and gets a commission on the goods he sells. Q. Was there anything said about advancements of traveling expenses or money of that kind? A. No, at the time he got ready to start out he said that he had loaned his father all his ready cash and he didn’t have the ready cash to start himself on the road and he wanted to know if he couldn’t borrow it from us, and we loaned him $100 to start him out and took his note for it.” He, Jones, explained to Blow how their traveling men traveled, and Blow said he had talked with Mr. Rikkers and understood it, and Jones told him it was on a straight commission, and he, Blow, was to pay all expenses, - and the drawing account would be fifty per cent, of his commission, payable immediately upon the acceptance of the order in the future, and the other fifty per cent, when the goods were shipped, but that they often waived that rule with their traveling men and forwarded the greater portion of it before the goods were shipped. “I think he understood thoroughly the terms and conditions as I stated them after that, as he undoubtedly talked it over with Mr. Rikkers, because he said he had.” Blow testified that “I asked Mr. Jones how about expense money, and he told me at that time to write ahead one Sunday where I would be the next Sunday; that they would send my expense money to me. Mr. Rikkers and Mr.

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Bluebook (online)
227 N.W. 1, 199 Wis. 489, 1929 Wisc. LEXIS 293, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shaler-umbrella-co-v-blow-wis-1929.