Shepherd v. Richmond Engineering Co.

36 S.E.2d 531, 184 Va. 802, 1946 Va. LEXIS 143
CourtSupreme Court of Virginia
DecidedJanuary 14, 1946
DocketRecord No. 2960
StatusPublished
Cited by4 cases

This text of 36 S.E.2d 531 (Shepherd v. Richmond Engineering Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shepherd v. Richmond Engineering Co., 36 S.E.2d 531, 184 Va. 802, 1946 Va. LEXIS 143 (Va. 1946).

Opinion

Campbell, C. J.,

delivered the opinion of the court.

This appeal brings here for review a decree entered by the Law and Equity Court of the city of Richmond, construing a written contract of employment entered into between the appellee and appellant. The contract involved is dated July 20, 1932, and sets forth the pertinent terms thereof as follows:

Appellant, under paragraph (2) of the contract, was to devote his time to his duties as sales manager of the appellee, but with the privilege of selling certain goods of the Fuel Economy Company, Inc., and acting as sales representative of the Armstrong Machine Works. His compensation was provided for.in paragraph (6) of the contract, which reads:

[804]*804“As compensation for his services, Allan T. Shepherd shall receive fifty per cent (50%) of the net profit on all merchandise sold by his agents or himself, and this profit shall be determined by deducting from., the gross selling price the cost of all labor and materials used in the manufacture of the articles sold, all commissions paid on sales made, and all royalties due for the privilege of manufacturing any of these articles, and also the operating overhead expenses of the Company, which shall be determined by applying to these articles the same rule applied by it to other articles of merchandise which it manufactures and sells.”

Paragraphs (7) and (8) are as follows:

“Settlements between the parties shall be made in cash as of January 1st and July 1st of each calendar year during the continuance of the relationship hereunder, but during the period of six months immediately following the date' of this agreement, Engineering Company will allow Allan T. Shepherd a monthly drawing account not to exceed Three Hundred Dollars ($300.00), which shall be deducted from his share of the profits at the first semi-annual settlement between the parties. In malting these settlements, profits are to be considered made only when customers shall have paid in cash all obligations or evidence of debt. After termination of drawing account referred to above, if there is not sufficient cash profit to give Shepherd as his share an average of Three Hundred Dollars ($300.00) per month, the Company will allow Shepherd to draw this amount against his share of profits, if any, for a further period of twelve months, during which period and for this purpose only, notes and other evidence of debt shall be treated as profits.

“8. All net commissions earned by the party of the second part under his contract with Armstrong Machine Works and other manufacturers shall be divided equally with the Company, just as profits made on sales effected through agents appointed by him, but, for his convenience, he shall not be required to make any accounting or settlement of these commissions or any payment to the Company [805]*805on account thereof until the semi-annual settlement as of July 1, 1933.”

This contract was terminated May 15, 1935.

On June 29, 1938, appellee brought an action at law against appellant, in the Law and Equity Court of the city of Richmond, to recover the sum of $6,913.61, claimed to be due by appellant under the terms of the contract.

The notice of motion for judgment contains this allegation:

“The sum so stated as owing by you represents the excess of advances made to you by the Richmond Engineering Company, Incorporated, over and above your share of the net profits realized on sales made by you or your agents during the period of your employment by the Richmond Engineering Company, Incorporated, as its sales manager. These advances were made, and net profits were realized, pursuant to the provisions of a contract entered into between you and the Richmond Engineering Company, Incorporated, on the 20th day of July, 1932. After the execution of this contract, paragraph 7 thereof was modified so as to provide that advances made to you on your drawing account could properly exceed Three Hundred Dollars ($300.00) per month, and that such advances could properly be made over an indefinite period rather than for a limited period only, as was first provided in paragraph 7 of the contract. The construction placed on this contract at all times, both at the date of its execution, and after its modification, both by you and by the Richmond Engineering Company, Incorporated, was that you should be personally liable to the Richmond Engineering Company, Incorporated, for any excess of advances made to you on your drawing account over and above your share of the net profits earned, which construction you have, since the execution and modification of this contract expressly admitted to be correct.”

On the trial of this action a jury was waived and all matters of law and fact were submitted to the trial court for final determination. On April 3, 1940, the court being of opinion that the contract nowhere provided for the repay[806]*806ment of the funds charged to the drawing account of appellant, and that the contract created no obligation on appellant to repay to appellee the amount claimed in the notice of motion, entered a judgment in favor of appellant. No appeal was allowed from that judgment.

On the 3rd Monday in June, 1940, appellee instituted a suit in chancery in the Law and Equity Court, for the purpose of having an accounting and securing a judgment against appellant for fifty per cent, of the Armstrong commissions claimed to be due under paragraph (8) of the contract. In this suit the chancellor decreed a judgment against appellant in the principal sum of $4,320.72. It is from that decree this appeal was allowed.

Four errors are assigned. In the view we have of the cause, the determinative question is the action of the chancellor in overruling the plea of res adjudicata and estoppel filed by appellant which called for a construction of the contract herein involved.

The plea filed reads as follows:

“The defendant comes and says that the plaintiff may not maintain this suit against the defendant because in an action of law hertofore instituted, and conducted in the Law and Equity Court of the City of Richmond, Virginia, wherein the plaintiff herein was the plaintiff and the defendant herein was the defendant, the court in construing the contract asserted as the basis of the plaintiff’s claim herein, held that there was no obligation under the terms of the contract whereby the defendant was required to pay to the plaintiff any compensation which he had received pursuant to the provisions of the contract, all of which is shown by a certified copy of the order of the court, which is hereto annexed to be read and considered a part hereof.

“Wherefore the plaintiff says that the matters in issue in this suit have already been adjudicated.”

It is the contention of appellant that the contract between the parties was entire and indivisible, and the appellee’s election to proceed by notice of motion in the law forum is a complete bar to recovery in a chancery suit.

[807]*807In Buchanan v. Buchanan, 174 Va. 255, 6 S. E. (2d) 612, Mr. Justice Holt stated this applicable doctrine:

“Primarily the question of whether a contract is entire or severable is one of intention, which intention is to be determined from the language which the parties have used and the subject-matter of the agreement.

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Cite This Page — Counsel Stack

Bluebook (online)
36 S.E.2d 531, 184 Va. 802, 1946 Va. LEXIS 143, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shepherd-v-richmond-engineering-co-va-1946.