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Ryan v. Brown Motors Inc.

Decided: September 14, 1944.

BERNARD RYAN, PLAINTIFF-RESPONDENT,
v.
BROWN MOTORS, INC., DEFENDANT-APPELLANT



On appeal from the Supreme Court, Essex Circuit.

For the respondent, Lum, Fairlie & Wachenfeld (Charles S. Barrett, Jr., of counsel).

For the appellant, Joseph E. Conlon (Harold H. Fisher, of counsel).

Rafferty

The opinion of the court was delivered by

RAFFERTY, J. This appeal is from a judgment entered in the Supreme Court, Essex County Circuit, upon jury verdict in favor of plaintiff. Defendant appeals to this court alleging error by the trial court in its denial of motion for direction of verdict in favor of defendant upon the second separate defense to the complaint, hereinafter referred to, and, further, upon the immediately subsequent action of the trial court in striking out this defense upon motion of plaintiff. The particular contention as to the latter action of the trial court is that this defense at least raised a point for jury consideration and that the action of the trial court in striking the defense deprived defendant of its right in this respect.

Defendant had for some years conducted its business as a retail agency for the sale of automobiles and accessories at Maplewood, Essex County. The testimony indicates that in the year 1941 it did a net sales business of $476,000. The business generally consisted in the sale of new automobiles, taking used cars in exchange for resale, the sale of automobile accessories and the general servicing of automobiles. It appears that 576 used cars were sold in 1941, representing a business income of $132,000; that the receipts of the service department for that year were approximately $13,000, and of the parts and accessories department approximately $16,000.

Plaintiff was employed by defendant in 1932 as used car manager. In 1938 he first entered into contract with defendant under which he was appointed general manager of the entire plant and secretary of the corporation. The proofs indicate that upon plaintiff assuming the management and direction of the plant and until his separation from employment defendant's business progressively increased and in considerable proportions.

In the latter part of 1941 or the early part of 1942, plaintiff was advised by his physician to take a vacation from his employment because of a nervous breakdown. Plaintiff went to Florida and while there he received a telephone call requiring his return to the plant. Upon his return and while his contract was in effect, he was told by a subordinate, who was

a son of the president of defendant company, that he was discharged. He was then handed a letter dated February 10th, 1942, which was signed by the company president, notifying him that his services were no longer wanted by the company and that he was discharged as manager and relieved of his office as secretary as of that date. A successor to plaintiff as general manager of the business was immediately appointed. Defendant corporation was dissolved in July, 1942.

Plaintiff's contract with defendant invested in him the widest discretion and authority in the management of the entire business. He was given full charge and supervision of every detail of the business, including all bank accounts and cash on hand, with authority to negotiate loans on behalf of defendant and to maintain and extend the credit of defendant. The extent of the authority of plaintiff may be gleaned from these excerpts from the contract of employment:

"* * * (b) That nothing in this agreement shall be deemed, or construed as a surrender, or abandonment, by the Board of Directors of the Party of the First Part of any authorities, powers, or duties imposed upon such Board of Directors by law; or as a delegation of any authority, power, or duty that may not be lawfully delegated by the Board of Directors of the Party of the First Part; it being the intent hereof that the Party of the Second Part shall have, and shall exercise and perform, only such authority, powers and duties as might be lawfully delegated by the Board of Directors of the Party of the First Part to an individual employed by the Party of the First Part for similar purposes."

"* * * Nothing herein contained shall be deemed to limit the powers of the Board of Directors of the Party of the First Part to appoint and engage certified public accountants to examine and report concerning the accounts and financial affairs of the Party of the First Part, who shall not be subject to removal ...


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