Swanson v. Tearney

BARNARD, P. J. This is an action for damages for an alleged breach of a contract of employment.

On October 1, 1945, the Swansons took possession of a store and living quarters owned by the Tearneys, under an agreement that they would manage the store for the owners "‘for one year with the option of a longer term, ’ ’ and that the net profits were to be divided equally between them each month. On October 18, 1946, the Swansons notified the Tearneys that they were exercising their option with the intention to extend the agreement to October 1, 1947, “as a proper exercise of their option.” On October 22, 1946, the Tearneys gave written notice to the Swansons that all their rights under the contract were “hereby terminated,” and demanding possession.

On November 6, 1946, the Tearneys filed an action against the Swansons entitled “Complaint for Injunctive Relief” and containing three counts, one for an injunction, one for declaratory relief, and one for possession and damages. An accounting was also prayed for, with judgment for any amount found due. A restraining order was issued on November 6,1946, and in obedience thereto the defendants vacated the premises on November 7, 1946.

The answer filed by the Swansons denied that they were wrongfully in possession or management of the property, admitted that a notice of termination had been served but denied that they were acting as employees of the plaintiffs, and as an affirmative defense alleged that under the agreement they were operating the business as a joint venture, that they had exercised their option for a longer term, and that the agreement was still in full force and effect. It was then alleged that the agreement attached to the complaint was not a true copy of the original agreement.

The action was first tried and submitted on November 14, 1946. Thereafter, the plaintiffs filed an amendment to their complaint alleging violations of the contract on the part of the defendants. A further hearing was then had on January 22,1947.

Findings were then filed in which it was recited that when the matter came up on November 14, 1946, upon an applica[193]tion for a restraining order, it was stipulated that the merits of the case should also be heard and determined and the court proceeded to the trial of the case; that oral and documentary-evidence was received, and the case argued and submitted; that thereafter, both parties requested “that an accounting be had and that the court find and determine their mutual liabilities one to the other”; that the plaintiffs then filed an amendment to their complaint and the defendants petitioned for a hearing on an accounting; and that a further hearing was then had on January 22, 1947. It was then found that the plaintiffs are the owners of this business; that they employed the defendants as managers under this agreement; that on October 18, 1946, the defendants served notice of their desire to continue as such managers; that on October 23, 1946, the plaintiffs notified the defendants that their employment and right of occupancy were terminated and requiring them to move; that the plaintiffs did not terminate or attempt to terminate that employment prior to October 23, 1946; that since that date the defendants have had possession of the books and records of said business to which the plaintiffs were entitled ; that subsequent to that termination the defendants have refused to surrender possession after demand made; that it is not true that this business was a joint venture of the plaintiffs and defendants; and “that after balancing the mutual accounts of these parties” the defendants owed certain amounts to the plaintiffs, but are entitled to certain credits, leaving a net amount due from defendants to the plaintiffs in the sum of $1,045.82, “all of which is now wholly due, owing and payable.” As conclusions of law, it was found that up to October 23, 1946, the defendants were employees of the plaintiffs; that the defendants were not wrongfully in possession prior to that time; that the employment of the defendants and their equitable rights were terminated on October 23, 1946; that since such termination the plaintiffs have been entitled to possession of the property “as a matter of right”; that upon the accounting made the plaintiffs are entitled to $1,045.82; and that the plaintiffs are entitled to a permanent injunction against the defendants. Judgment was entered on February 25, 1947, in favor of the plaintiffs for $1,045.82, and awarding them possession of the business without any interference from the defendants.