Spinney v. Hill

COLLINS, J.2 On the pleadings and a stipulation entered into between the parties judgment was ordered in favor of defendant in this action, and this appeal is from an order denying plaintiff’s motion for a new trial. The facts appearing .from the pleadings and stipulation are that in January, 1898, defendant was the owner of all of the stock shares [321] of a newspaper corporation, which, shares were and are of the par value of $100 each. At that time plaintiff and defendant entered into a verbal agreement, by the terms of which the former was forthwith to be elected president and general manager of said corporation for the full term of three years, and for said period of time was to have full power and authority to manage, transact, and carry on the business of the corporation in the publication of its newspaper. As compensation for his services, plaintiff was to be paid by defendant $200 per week; $100 thereof in cash, payable weekly, and $100 thereof in stock shares of said corporation at the aforesaid par value, also payable weekly. The plaintiff was, as agreed upon, elected president and general manager of the corporation, and at once entered upon the performance of his duties, and continued to perform them, until he was discharged by defendant in March, 1899. He was paid the money compensation as agreed upon, except the sum of $128.52. This balance defendant refused to pay, and he also refused to turn over or transfer to plaintiff any part of the stock shares. This action was brought upon the contract for the purpose of recovering the alleged damages, namely, the amount of money which he would have earned if he had rendered services for three years, less the sum paid him, and the par value in money of the stock shares to which he would have been entitled. Counsel for both parties concede that the agreement, wholly resting in parol, and according to its terms not to be performed within one year, was within the provisions of the statute of frauds (G. S. 1894, § 4209), and that an action to enforce it cannot be maintained. They differ as to what remedy is available to plaintiff, who has not been paid in full for his services if the agreed value of such services is to control; counsel for defendant contending that in the present form of action he is not entitled to recover at all. It is further contended by defendant’s counsel that the agreement for compensation in stock shares was in fact one for the sale of chattels of the value of more than $50, and therefore void under the provisions of section 4210, no requirement, of that section having been complied with, and the court below seems to have been of that opinion. 1. Taking the facts as alleged in the complaint and as stipulated [322] for the purposes of this motion, we regard the plaintiff’s right to recover for services actually performed at the rate fixed by the oral agreement, he not being in fault for failure to complete the term of three years, as settled and disposed of by former decisions of this court, and they seem to be in accord with decisions in England and in the states where agreements within the statute are simply declared nonenforceable, not absolutely void. It was held in La Du-King Mnfg. Co. v. La Du, 36 Minn. 473, 31 N. W. 938, when considering a like nonenforceable agreement, that, while such a contract could not be enforced by action, it was not void, “And, in so far as it had been voluntarily executed, the terms thereof might be referred to and considered in determining the measure of compensation which ought justly to be allowed to the defendant.” And in Kriger v. Leppel, 42 Minn. 6, 43 N. W. 484, it was said that “An oral agreement for services not to be performed within one year is not wholly void, though no action can be maintained on it. It will control the rights of the parties with respect to what they have done under it.” . The same rule has been followed in cases where parties have entered into possession and occupied premises under parol leases for terms exceeding one year, which by G. S. 1894, § 4215, are declared absolutely void. Evans v. Winona L. Co., 30 Minn. 515, 16 N. W. 404; Finch v. Moore, 50 Minn. 116, 52 N. W. 384; Steele v. Anheuser-Busch Br. Assn., 57 Minn. 18, 58 N. W. 685. The doctrine adopted by these decisions is undoubtedly that, while no action can be maintained on an oral agreement for services not to be performed within one year, such an agreement controls the rights and remedies of the parties with respect to what has been done, and fixes the value of services rendered under it, when the person rendering such ■ services is discharged after part performance, without fault on his part. We are compelled to admit that the reasoning on which the doctrine is based is not satisfactory, and has often been criticised as illogical, because, although the statute denounces such agreements and deprives them of all legal validity, the doctrine itself validates them to some extent, and measures some of the rights of the parties by them. [323] 2. We do not agree with counsel in the claim that, in any event, such part of the oral agreement as provided for compensation in stock shares was obnoxious to the terms of section 4210, and for that reason no recovery can be had. No strained or forced construction has ever been put upon the language used in that section, which, unlike section 4209, declares all contracts “void” which fall within its terms. To agree with counsel on this point we should have to hold that every contract for personal services or labor for which compensation was to be made in goods, chattels, or choses in action, at the price of $50 or more, is within the statute, and void. An agreement to pay for one’s services in goods, chattels, or choses in action is not a sale, within the letter or the spirit of the statute of frauds. It is a mere agreement as to the method of compensation. Instead of payment in money, the parties agree that he who renders the services. shall be paid therefor in another manner, — in goods, chattels, or choses in action. In the case at bar it was stipulated that plaintiff should be compensated in the sum of $200 per week, one-half thereof to be paid in money, one form of property, and the other half in stock shares of the corporation, another form of property, at their par value, which it is alleged, and must be taken as true on this appeal, was and is $100 for each share. Defendant having refused to turn over and assign the shares of stock, this plaintiff is entitled to recover their money value instead. 3. The parol agreement, in itself and as such, was and is nonenforceable under the statute. If. plaintiff had declined to enter upon the performance of his duties as manager of the corporation, or if defendant had refused to allow him to render any services, no action whatever could have been maintained by either party. Both would have been remediless. So plaintiff’s right is limited to a recovery for services actually rendered up to the time of his discharge. He cannot recover anything by way of damages for his loss of employment thereafter. Judgment reversed, and a new trial granted. Footnotes [2] BROWN, J., absent, took no part.