Zwolanek v. Baker Manufacturing Co. , 150 Wis. 517 ( 1912 )

Bauites, J.

There are a number of questions discussed, in the briefs of counsel which it is unnecessary to consider in view of the conclusion reached. The case deals with a transaction which is somewhat uncommon, but raises no novel points. 'While the practice initiated by the defendant is beneficial to its employees, it is- not difficult to see wherein it is also beneficial to the employer. It tends to induce employees to remain continuously in the employ of the same master and to render efficient services so as to minimize the possibility of discharge. It also tends to relieve the employer of the annoyance of hiring and breaking in new men to take the place of those who might otherwise voluntarily quit, and to insure a full working force at times when jobs are plentiful and labor is scarce.

It is argued at considerable length by -the respondent that the profit-sharing plan of the defendant was initiated by means of the passage of a by-law, and that by-laws are made for the internal government and regulation of the corporation and its stockholders, and that third parties can assert no rights thereunder. The general rule contended for has its limitations, and it is not claimed that it would apply to a case where the by-law was communicated to the employee with the design and purpose of having him act upon it and where he in fact did rely and act upon it. To allow the employer in such a case to repudiate liability on the ground stated would come perilously near conniving at the perpetration of a fraud, and no court should say that in such a case the by-law merely affected the corporation and not third persons. The rule contended for was not established to meet such a situation and does not meet it. If corporations desire to have their so-called by-laws affect only the corporation and its shareholders, then they should refrain from exploiting them to third persons for the purpose of inducing such persons to act in reliance thereon.

We regard this by-law as being simply the offer of a reward to employees for constant and continuous service. The defendant made an offer of extra or additional compensation to any employee who performed a certain number of hours’ service within a given period, provided net profits wfere earned and provided the employee did not quit or was not discharged before a stated time. There is no dispute upon the point that this offer was communicated to the plaintiff when he made his original contract of employment, and the evidence tends to show that when the contract was modified in December, 1908, the plaintiff advised the defendant that the raise made in wages was satisfactory, provided he would be permitted to share in the profits, and that he was informed that he could participate therein.

“A reward is a sum of money or other compensation offered to the public generally, or to a class of persons, for the performance of a designated service.” 34 Oyc. 1730.

A reward is a recompense or premium offered by the government or. an individual in return for special or extraordinary services to be performed, and may be made in writing or orally, either to a particular person or class of persons, or to any and all persons complying with its terms. Kinn v. First Nat. Bank, 118 Wis. 537, 95 N. W. 969.

A binding and enforceable contract to pay a reward rests on one side upon a valid offer, and on the other side upon an acceptance of such offer, including its terms and conditions, by a performance of the services requested in the offer before the offer lapses or is revoked. Until acceptance by performance of the services it is merely a proposition, but when accepted by performance it becomes a binding contract, subject to the laws governing contracts generally. Reif v. Paige, 55 Wis. 496, 503, 13 N. W. 473; 34 Cyc. 1731, and cases cited in notes 4 to 11 inclusive.

. An offer and promise to pay a reward is a proposal merely, a conditional promise on the part of the offerer, and not a con-' summated contract.. Haskell v. Davidson, 91 Me. 488, 40 Atl. 330; Janvrin v. Exeter, 48 N. H. 83; Pierson v. Morch, 82 N. Y. 503; Cummings v. Gann, 52 Pa. St. 484; Wilson v. Stump, 103 Cal. 255, 37 Pac. 151; Williams v. West Chicago St. R. Co. 191 Ill. 610, 61 N. E. 456; Besse v. Dyer, 9 Allen, 151.

The offerer may prescribe whatever terms be sees fit, and such terms must be substantially complied with before a recovery can be bad. Gardner v. Hartford, 14 Conn. 195; Williams v. West Chicago St. R. Co., supra; Haskell v. Davidson, supra; Besse v. Dyer, supra; Jones v. Phœnix Bank, 8 N. Y. 228; Freeman v. Boston, 5 Met. (Mass.) 56.

Performance constitutes acceptance of tbe offer, and after performance it cannot be revoked 'so as'to deprive a person wbo bas acted on tbe faitb thereof of compensation. Bronnenberg v. Coburn, 110 Ind. 169, 11 N. E. 29.

An offer of a reward may be accepted by .any part of tbe public if it be offered to the public, or by any particular person or class of persons if such proposition is made to them. Campbell v. Mercer, 108 Ga. 103, 33 S. E. 871; Butler Co. v. Leibold, 107 Pa. St. 407; First Nat. Bank v. Hart, 55 Ill. 62.

It is not necessary that tbe person performing tbe service for which a reward is offered generally should give notice to the offerer that be accepts tbe offer,-for in such case tbe party making tbe offer impliedly dispenses with actual notice, and tbe doing of tbe act completes the contract. Reif v. Paige, supra; First Nat. Bank v. Hart, supra; Wilson v. McClure, 50 Ill. 366; Hayden v. Souger, 56 Ind. 42; Morse v. Bellows, 7 N. H. 549; Patton’s Ex'r v. Hassinger, 69 Pa. St. 311; Shuey v. U. S. 92 U. S. 73.

“■While a mere offer not assented to d'oes not constitute a contract, an acceptance of tbe terms of an offer of a reward by any person wbo complies therewith by performing tbe service creates a complete and valid contract, provided tbe performance takes place prior to tbe withdrawal of tbe offer.” 34 Cye. 1739, $nd cases cited in notes 67, 68, and 69.

Acting upon an offer and complying with its terms and conditions constitute an acceptance. Wilson v. Stump, 103 Cal. 255, 37 Pac. 151; Bull v. Talcot, 2 Root (Conn.) 119; Vigo A. Soc. v. Brumfiel, 102 Ind. 146, 1 N. E. 382; Haskell v. Davidson, 91 Me. 488, 40 Atl. 330.

Literal performance is not necessary. Haskell v. Davidson, supra; Besse v. Dyer, supra.

Substantial compliance witb tbe terms of tbe offer is in general sufficient. Gilkey v. Bailey, 2 Harr. (Del.) 359; Williams v. West Chicago St. R. Co. 191 Ill. 610, 61 N. E. 456; Louisville & N. R. Co. v. Goodnight, 10 Bush, 552; Salbadore v. Crescent Mut. Ins. Co. 22 La. Ann. 338.

Substantial compliance witb tbe conditions of tbe offer must be shown in order to authorize recovery. Burke v. Wells, F. & Co. 50 Cal. 218; Williams v. West Chicago St. R. Co., supra; Smith v. Vernon Co. 188 Mo. 501, 87 S. W. 949; Shuey v. U. S., supra.

And it has been held that where tbe claimant has performed part of tbe service and is prevented by tbe offerer, or by those for whose acts be is responsible, from completing tbe work, be is entitled to tbe whole reward, or at least to compensation on quantum meruit. 34 Oye. 17 50.

. It 'is manifest that tbe statute of frauds has no application to tbe case. Until tbe offer made was accepted by performance there was no contract, executory or otherwise. When the contract came into existence the only remaining obligation was that of the defendant to pay at once what was due under it. Neither was it essential that the plaintiff should inform tbe defendant that be relied on tbe offer in continuing bis work.

The only obstacle in the way of the plaintiff’s right of recovery is the fact that he was discharged one day before he had earned his reward, the further fact that defendant contends that he was discharged for sufficient cause, and the still further fact that it is asserted that plaintiff consented to his discharge.

•We bold tbat tbe jury might have found from tbe evidence tbat tbe plaintiff bad substantially performed bis contract at the time of tbe discharge and was entitled to recover on this ground. Tbe jury might also have found that tbe defendant violated its contract with tbe plaintiff in discharging him when'it did; tbat there was no justification for tbe discharge, and tbat defendant’s sole object and purpose in making it was to prevent plaintiff from securing bis share of tbe profits offered to its employees; and finally that tbe plaintiff did not consent to bis discharge. Under-such a state of facts tbe plaintiff is entitled to recover. It is true as a general proposition tbat a party making an offer of a reward may withdraw it before it is accepted. But persons offering rewards must be held to tbe exercise of good faith and cannot arbitrarily withdraw their offers for tbe purpose of defeating payment, when to do so would result in the perpetration of a fraud upon those who in good faith attempted to perform tbe service for which tbe reward was offered. First Nat. Bank v. Hart, 55 Ill. 62, and cases heretofore cited.

Tbe fact tbat tbe plaintiff bad a written contract does not change tbe situation. Tbat contract ran for one year subject to renewal, but might be terminated by either party on three months’-notice. Tbe plaintiff was not obligated by this contract to remain in defendant’s employ until tbe reward was earned, unless be saw fit to do so. Tbe reward related to an independent subject not covered by tbe contract, and one tbat did not affect its terms in any way.

By the Ooutrt. — Tbe judgment of tbe circuit court is reversed, and tbe cause is remanded for a new trial.