Kerr v. Nelson

WASTE, C. J.

Plaintiff Kerr entered into two written contracts, one with defendant Nelson, pursuant to which defendant corporation was organized; the other with the defendant corporation. Under these contracts, plaintiff agreed to devote his time and attention exclusively to the business of the corporation for a period of three years, and to use his best efforts to promote the development, extension and upbuilding thereof. In return he was to receive the weekly sum of one hundred dollars, .and defendant Nelson was to issue in plaintiff’s name four thousand shares of the capital stock of the corporation, which were to be placed in escrow and delivered to him when Nelson should have received seventy-five thousand dollars out of the net profits of the business, Kerr, during the escrow period, to be entitled to one-

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half of the net earnings upon the stock. Provision was made for cancellation by either party upon notice for cause, and also for submission of disputes to arbitration.

Kerr was discharged long prior to the expiration of the term of employment. The question of whether he was discharged “with or without good cause” was submitted to arbitration, and. the finding was that no good cause existed for the termination of the contract. Kerr filed complaint for an affirmance of the arbitration award, and for an accounting. Judgment was for Kerr, awarding, in addition to amounts due on his weekly compensation of one hundred dollars, a dividend bn the four thousand shares of the capital stock, and ordering that the stock be impounded with the clerk of the court for delivery to Kerr when the defendant Nelson shall have received seventy-five thousand dollars, with interest, from the net earnings. The trial court denied a motion • for a new trial, but modified the findings and judgment, from which amended judgment the defendants appeal.

The defendants (appellants) admit the execution of the contracts, the discharge of respondent, the holding of the arbitration proceedings, and the making of the award, but deny that the award is valid. They sought to introduce evidence to show that the discharge of respondent was not wrongful, and also set up that the damages suffered by respondent, if any, were caused by the failure of respondent to use reasonable diligence to procure another position. These contentions present the principal issues to be considered on the appeal.