Baker v. D. Appleton & Co.

Rich, J.: This is an appeal from a judgment of the trial court in favor of the plaintiff, entered upon the direction of a verdict at the close of plaintiff’s case and from an order denying defendant’s motion for a new trial. Prior to November, 1888, William H. Appleton, Daniel Sidney Appleton, William W. Appleton and Daniel Appleton were engaged in business as copartners under the- firm name and style of D Appleton & Co., and the plaintiff, who had been the manager of the business of the copartnership at Chicago, Ill., was, on the 16th [360] day of November, 1883, employed by William H. Appleton by the year beginning December 1, 1883, at an annual salary of $5,000 and transferred to the city of New York. He continued with the copartnership firm till March, 1897, when the corporation of D. Appleton & Co. was formed. After that he remained in the employ of the corporation at the same compensation, and continued to render the same services, with no new (or actual) arrangement or agreement, however, as to his compensation or the duration of the term of his employment. On or about March 21, 1900, the corporation of D. Appleton & Co. passed.into the hands of a receiver, who, on that day, discharged the plaintiff and terminated his employment.. On September twenty-fourth of that year the defendant was incorporated under the laws of the State of New York, and in October said receiver transferred to the defendant in this action all of the assets and property of the corporation that came into his possession, “ Subject, nevertheless, to the payment of the business indebtedness of this Company and of J. Hampden Dougherty as Receiver of this Company, all of which indebtedness, principal and interest, the party of the second part hereby assumes and covenants to pay as a part of the consideration for this sale and conveyance.” The plaintiff brings this action to recover the unpaid salary accruing during the year 1900, subsequent to his discharge, upon the theory that his original employment by the firm of D. Appleton & Co. was for one year — from December 1, 1883, to December 1, 1884—and that such contract was continued from year to year, and that m each successive year thereafter he continued in the employ of the firm and first corporation, rendering the same services and receiving the same compensation: At the close of the evidence counsel for the defendant moved for the dismissal of the complaint upon the ground that there was no proof of an original hiring by the firm of D. Appleton & Co. of the plaintiff for a term of one year; that there was no proof of the hiring by the corporation of D. Appleton & Co., organized in 1897, of the plaintiff for a term of one year ; that there was no evidence upon which a presumption of either, law or fact could be based as to such hiring' by the corporation, which motion was denied and exception taken. Defendant then moved for the direction of a verdict in its favor. The plaintiff also moved for the direction of a verdict. This motion was granted, to which [361] ruling and the denial of his motion counsel for defendant excepted, but did not request the court to submit any question to the jury. It is the well-settled law of this State that when a verdict is directed by the court, after both parties have requested such direction, and the unsuccessful party has not asked to go to the jury, the decision of the trial justice upon the facts has the same conclusive effect upon appeal as if the verdict had been found by the jury upon submission of the case to them. (Adams v. Roscoe Lumber Co., 159 N. Y. 176.) All facts and inferences necessary to support the judgment, which could fairly have been derived from the proof given, must be deemed to have been found in favor of plaintiff, and our inquiry is limited, on this branch of the case, to the determination of whether such findings are justified by the evidence to an extent sufficient to support the judgment. (Davis v. True, 89 App. Div. 319.) If the action were between the plaintiff and the firm of D. Appleton & Co. there would be no ground for contention, but it is claimed that, granting this, the evidence is insufficient to charge the defendant with the knowledge imputable to the firm, and does not furnish a sufficient or proper foundation for such conclusions of law or fact as is necessary to establish the liability of defendant in this action, and the question thus presented for our consideration is whether the evidence justified the conclusion reached by the trial justice that there was an existing yearly contract between the first corporation of D. Appleton & Co. and the plaintiff, which was renewed yearly during the existence of such corporation and operative and in force at the time of plaintiff’s discharge, and if so, whether the damages sustained by plaintiff by its breach were assumed by defendant when it succeeded the first corporation. As between the plaintiff and the firm the latter were chargeable with knowledge of the contract made by the plaintiff with one of its members, to the extent of fixing the liability of the firm for damages resulting from its breach. Although the question presented is a close one and not entirely free from doubt, we are of the opinion that the liability assumed by the corporation was not limited to the payment of the existing indebtedness of the firm it succeeded. A fair construction of the instrument under which the property of the firm was transferred to the corporation charges the corporation, [362] as matter of law, with knowledge of existing contracts of the firm, and the obligations and liabilities attaching to such contracts were assumed by the corporation. As to such contracts the effect of the transfer and execution of the instrument referred to was to substitute the corporation in the place of the firm-, with all the knowledge. that the firm had or was chargeable with regarding them and with all the liabilities arising therefrom that rested upon the firm. The corporation became charged with knowledge of the plaintiff’s original contract; that it had been renewed from year to year ; that he was then in the employ of the firm under a yearly contract expiring on December 1, 1897, at an annual salary of $5,000, and his retention after that date, under the circumstances disclosed by the evidence, renewed the existing yearly contract which became operative and binding upon both parties until December 1, 1898. . The contract was on each December first thereafter renewed by the retention of plaintiff at the same rate of compensation, and at the time of his discharge was an existing valid contract by the- provisions of which he was entitled to employment by the corporation until December 1, 1900, and to compensation for his services during that period of time at the rate of $5,000 per year. It necessarily follows that his discharge without justifiable cause-on March 21, 1900, was a breach of the contract, and for the damages resulting therefrom the first corporation was liable. This obligation and liability the defendant assumed when it succeeded the first corporation. The learned trial justice was justified in directing a verdict for the plaintiff; the judgment is supported by the evidence, and the order appealed from .must be affirmed, with costs. Bartlett and Woodward, JJ., concurred; Jerks, J., not voting.