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Donnellan v. Halsey

Decided: January 10, 1935.

MICHAEL DONNELLAN, PLAINTIFF-APPELLANT,
v.
VAN R. HALSEY, CHARLES D. HALSEY, GERALD V. HOLLINS, SHIRLEY P. AUSTIN, GEORGE W. LESLIE, JAMES S. AUSTIN, ALLEN W. AMES, PHILIP A. S. FRANKLIN, JR., AND JAMES MITCHELL, PARTNERS, TRADING AS C. D. HALSEY & COMPANY, DEFENDANTS-RESPONDENTS



On appeal from the Supreme Court (Hudson County Circuit) based on a directed verdict in favor of respondents, defendants below, of no cause of action. Affirmed.

For the appellant, Richard Doherty.

For the respondents, Applegate, Stevens, Foster & Reussille (John Milton, of counsel).

Perskie

The opinion of the court was delivered by

PERSKIE, J. This is a suit by an employee against his employers for services rendered based on a claim for a percentage of profits. The gravamen of the complaint is set forth in paragraph 2 thereof. It is as follows:

"January 1st, 1927, and hitherto, the plaintiff was employed by the defendants as general manager of their business and their main office located at the city of New York, county and State of New York, upon the terms, relating to his compensation, that he would be paid for such service a salary of $7,000 per year and a commission and percentage of the profits of the said partnership, as earned through the plaintiff's management of said New York office, at the rate of three per cent. of said profits, payable respectively on the 30th day of June and the 31st day of December, in each year."

Among the several defenses filed by the respondent, in addition to the denial thereof, it was alleged (first separate defense) in substance, that the employment on January 1st, 1927, was for an indefinite period of time and that it was verbally agreed that respondents would pay appellant at the rate of $7,000 a year plus one and one-half per cent. of the

net profits of respondents' business earned during the period of appellants' employment; that the contract of employment was made in the city of New York and therefore governed by the laws of the State of New York; that the contract was wholly performed until the partnership was dissolved, at or about March 1st, 1929; that, in effect (second separate defense) on July 1st, 1929, the respondents again employed appellant under the same terms set out under the first separate defense, except that the rate of the net profit was reduced to three-quarters of one per cent.; that this contract was also wholly performed on their part until the same was terminated by the appellant in July of 1932.

The proofs adduced disclosed that respondents' firm (a partnership) was engaged in the business of stock brokers. That appellant was first employed in 1896 by the then respondent firm as a runner. He was advanced from time to time and in 1922 was employed as a general manager. His compensation was then fixed at a definite sum plus three per cent. of the net profits; this arrangement continued until it was changed in 1927 and 1929, as more fully detailed, under the first and second separate defenses, by the respondents.

The personnel of the firm changed several times during the period that appellant worked for respondents. Van R. Halsey succeeded his father, Charles D. Halsey, as head of the firm and was the spokesman for his co-partners. Thus, it appears that late in 1926, Halsey talked with appellant (referred to in the testimony as "Matt") and said: "Matt, my partners are making a kick because you are getting nearly as much as they are. My brother Charlie and Leslie claim they have got their money in the firm and that you are getting nearly as much out of it on your three per cent. interest as they are, and I am going to cut your percentage to one and half per cent." Appellant complained that it was unfair, but Halsey replied: "Well, I am going to cut it to one and half. When I can fix it up with my brother Charlie and Leslie, I will see that you get it back." The court then said, "you accepted that proposition, did you?" and the witness

replied, "with the provisions that I was to get it back when he fixed up with his brother Charlie and Leslie, his partner." The court then asked, "then you accepted the proposition of one and a half per cent. for ...


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