Spotswood Arms Corp. v. Este

133 S.E. 570, 147 Va. 1047, 1926 Va. LEXIS 303
CourtCourt of Appeals of Virginia
DecidedJune 10, 1926
StatusPublished
Cited by10 cases

This text of 133 S.E. 570 (Spotswood Arms Corp. v. Este) is published on Counsel Stack Legal Research, covering Court of Appeals of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spotswood Arms Corp. v. Este, 133 S.E. 570, 147 Va. 1047, 1926 Va. LEXIS 303 (Va. Ct. App. 1926).

Opinion

Chinn, J.,

delivered the opinion of the court.

This is an action brought by the defendant in error, Charles Este, against Spotswood Arms Corporation (plaintiff in error) to recover damages for an alleged wrongful discharge.

The parties will be hereinafter referred to according to the positions they occupied in the court below.

It seems that in the early part of 1924, W. 6. Maupin, H. L. Lindsay, W. W. Weaver, A. T. Riddick, Jr., and H. R. Furr formed the corporation above named for the purchase of a hotel at Virginia Beach called the Spotswood Arms. The officers and directors of the corporation were all business or professional men of affairs without any previous experience in the hotel business, and desiring a manager to run the hotel during the summer season, engaged the services of the plaintiff for that purpose. Both the plaintiff and defendant prepared a contract in writing which they respectively claim to contain the terms of the agreement, but neither of these papers were ever signed by either party, and the terms of the contract, in certain particulars, are disputed. It is conceded on both sides, however, that plaintiff was to receive a salary of $50.00 per week during the period of his employment, board and lodging for himself and family, and a bonus of 20% of any net income derived from the operation of the hotel during the season of 1924, after deducting therefrom 10% on the investment represented by the property. It is also undisputed that said season of 1924 should be considered as beginning on the day the hotel was opened for business and ending the Tuesday [1050]*1050following Labor Day, or the 8th of September of that year. It was afterwards agreed between the parties that it would probably be beneficial to the venture if plaintiff were on the ground in order to generally oversee and familiarize himself with the repairs and improvements which the hotel was then undergoing, and likewise make his preparations for the coming season. Plaintiff, accordingly, moved on the premises with his family on the 13th day of March, with the understanding he should receive $50.00 per week, and pay his own living expenses, until the repairs were completed and the hotel opened. Both parties thoroughly understood that this agreement was independent of plaintiff’s employment as manager, and it was so treated by them. The hotel was formally thrown open for business on the 24th of May, and the term of plaintiff’s term as manager began on that date. It is undisputed that within a week or two after his said term began, considerable dissatisfaction existed on the part of the board of directors of the defendant corporation on account of plaintiff’s violation of its directions with respect to the financial affairs of the hotel, of which he was notified and remonstrated with from time to time, as occasion arose; and some friction also developed between Mr. Gagnon, the bookkeeper installed by the defendant, on the one part, and plaintiff on the other, in regard to the same subject. As a result of what had occurred defendant had general survey of the operations of the hotel made by a certified accountant, who, on July 10th, returned a detailed statement of its financial condition, accompanied by a written report, which is as follows:

“On July 9th there were about fifteen guests in the house, some about to leave, with a total income of about $100.00 per day, $42.62 of which was being paid [1051]*1051out in salaries and wages, to say nothing of the cost of food, ice (using 1,800 lbs. per day at a cost of $9.00, more in hot weather) and other expenses.
“It looks like you had a waiter for every two guests. It is evident that it does not require two cooks, two kitchen help and six waiters, besides the head waiter, to serve fifteen or less guests, neither does it require four maids to care for the rooms. As a matter of fact it seemed to me the help had very little to do, as most of them could only be found at meal time.
“You will note an item of $209.54 payable to H. It. Woodhouse in list of invoices payable, $127.50 of this bill, which is for meats, was incurred sometime prior to the opening of the hotel, and it is possible that all or at least a part of this amount is a charge against the account of Mr. Este.
“I note that purchases and receipts are not properly placed and made. It is absolutely impossible to know just where you stand if you don’t know just what your invoices payable are, nor what you have received. This you cannot know under the present method of doing things, which is not in accordance with the system. Everything should be properly received, and records made daily, and the chef should not be permitted to buy ‘upon his say so’ or memorandum. This is very important.
“The petty cash vouchers are rather freely handled. In a good many instances they do not form properly receipted vouchers. The cash receipts have not been deposited as taken in — this should be done without any variations.
“In view of the uncertainty of the amounts owing various creditors, I suggest securing an itemized statement from all creditors from whom anything has been purchased, especially those in and around Virginia Beach; [1052]*1052if you don’t do this, and at the same time put some strict regulations into effect regarding purchase, you will find yourself heir to numerous bills long after the hotel has been closed for the season.
“The records show that approximately 1,721 meals were served to guests during June, as compared with 1,723 to employees and office help and management. The cost of the food consumed was $1,383.39 or $46.21 per meal for food. I charged board of employees on this basis, although the average cost thereof may have been slightly less — but I doubt it. However, if such is a fact, the cost of food served guests would be proportionately higher. You can readily see, however, that the ratio of meals served to guests as compared with employees is far from being a healthy one — except for the employees.
“All conditions point to a poor season for the beaches. I suggest that you cut out the expenses to a minimum. You are losing money daily, and unless conditions change it .would be cheaper to close the doors or operate a rooming house and the baths.
“It seems that the bookkeeper has not had the time nor place to keep his books and records. It might be well to have some definite understanding as to just what his duties are, and provide a place for the books and records.
“Much more might be said in connection with the operation. However, I have touched upon the most important things. Should you so desire I will be glad to discuss the matter further in person.”

On the day this report was received the board of directors held a meeting, at which plaintiff was present and the report discussed, and the next day defendant delivered to plaintiff the following communication:

[1053]*1053“Norfolk, Va., July 11, 1924.
“Mr. Charles Este;
“Spotswood Arms,
“Virginia Beach, Va.
“Dear Sir:
“For your information and for our files at Virginia Beach I am inclosing herewith copy of letter from J. D.

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Bluebook (online)
133 S.E. 570, 147 Va. 1047, 1926 Va. LEXIS 303, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spotswood-arms-corp-v-este-vactapp-1926.