Gelb v. Benjamin

BARNARD, P. J.

The defendants operated a wholesale beauty supply business, with headquarters in Los Angeles and branches in five other cities. About May 1, 1942, they employed the plaintiff as manager of their Fresno branch under an oral agreement, with a certain salary and commission. In order to carry out its original purpose, this agreement was orally modified by the parties about July 1, 1942, by providing that if the business done by the plaintiff in this branch amounted to $100,000 or more during the first year of his operation thereof the defendants would pay him an additional 5 per cent on the amount of businéss done. It was stipulated that the business done in this branch for the first year of the plaintiff’s employment totaled $132,930.11 and that 5 per cent of that figure amounts to $6,646.50.

The plaintiff remained as manager of this branch until June 5, 1946, when it was closed by the defendants and his services terminated. While the other portions of the plaintiff’s compensation were paid in accordance with the agreement, the 5 per cent on the amount of business done during the first year was not paid, and this action was' brought to recover that portion. The only defense set up in the answer was th.at no agreement to pay the extra 5 per cent was made,

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and that all monies due to the plaintiff had been paid. The defendants also filed a cross-complaint seeking to recover approximately $350 for various items for which it was alleged the plaintiff was indebted to them. The action was tried before a jury which brought in a verdict in favor of the plaintiff for $6,332.24, being the amount sued for less certain allowances made to the defendants in accordance with their cross-complaint. Judgment was entered accordingly and the defendants have appealed.

The appellants’ main contention is that the contract here sued upon was subject to the provisions of the Emergency Price Control Act of 1942, as amended, and that it was, therefore, illegal and unenforceable. The appellants rely on the amendment to the Price Control Act passed by Congress on October 2, 1942, and on the various executive and departmental orders and regulations issued for the purpose of carrying out the provisions of the act, as amended. The orders relied on had the effect, where applicable, of freezing wages and salaries as of certain dates in October, 1942, and of prohibiting increases in salaries or wages after those dates except as provided in the act and in the various regulations, rulings and orders made thereunder, and except where any such increases were approved or permitted by the officers or departments authorized to pass thereon. Among other things, it was provided in these orders that the burden of justifying an increase in a salary rate should be upon the employer seeking to make such increase and that, unless otherwise expressly exempted, any change in a salary rate which was provided for in any agreement in existence on certain dates in October, 1942, which change was to take effect at a future date or on the happening of some future event, was subject to the provisions of the regulations regardless of when the agreement was made. It is argued, therefore, that the agreement here in question, although made some months before these laws and regulations were enacted and issued, comes within their terms and is illegal and unenforceable.