AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Attorney(S)
Judges
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Attorney(S)
Judges
Smart Summary

Factual and Procedural Background

The plaintiff, Al Shenn, alleges that he entered into a written employment contract with defendant Fair-Tex Mills, Inc. on August 22, 1958, for a term ending October 31, 1959, at a weekly salary of $200 plus 1% commission on sales. After the contract term expired, plaintiff claims he continued working under the same terms without a new express agreement, resulting in implied annual renewals through 1964, including a salary increase to $300 weekly that year. Plaintiff was discharged on April 9, 1965, and seeks damages for unpaid salary from that date to October 31, 1965, and an accounting of commissions from November 1, 1964, to October 31, 1965. The defendants moved to dismiss the complaint, and this appeal arises from the denial of that motion by the Supreme Court, New York County.

Legal Issues Presented

  1. Whether the continued employment beyond the fixed term of the original contract created an implied annual renewal of the employment contract at the same or modified terms.
  2. Whether the existence of a fixed weekly salary (as opposed to a fixed annual salary) precludes the presumption of an annual contract renewal.
  3. Whether the written contract’s provision prohibiting oral modifications affects the inference of an implied annual contract.
  4. Whether the complaint states a viable claim to survive a motion to dismiss based on the alleged implied contract for one year following the original term.

Arguments of the Parties

Respondent's Arguments

  • Plaintiff contends that after the original contract expired, he continued employment under the same terms without a new express agreement, creating an implied contract for one year.
  • Claims annual renewals of the employment contract occurred, including salary increases and commission arrangements.
  • Seeks damages for unpaid salary and commissions through October 31, 1965, based on this implied contract.

Appellants' Arguments

  • The written contract expressly prohibited oral modifications and expired on October 31, 1959.
  • There was no fixed annual salary, only a fixed weekly salary, which does not support an inference of an annual contract renewal.
  • The presumption of annual renewal applicable where there is a fixed annual salary does not apply here.
  • Therefore, the complaint fails to state a cause of action and should be dismissed.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Adams v. Fitzpatrick, 125 N.Y. 124 Presumption that employment continuing beyond a fixed term with stated annual salary implies renewal for another year at the same salary. The court distinguished this case because the plaintiff’s contract had a fixed weekly salary, not an annual salary, and thus the presumption did not apply.
Mason v. New York Produce Exch., 127 App. Div. 282, affd. 196 N.Y. 548 Supports the principle that employment contracts with fixed annual salaries imply continuance for another year if employment continues. The court cited this precedent to reinforce the general rule but found it inapplicable due to the absence of a fixed annual salary in the present case.
Carter v. Bradlee, 245 App. Div. 49 Employment for a fixed period at stated annual salary payable monthly. The court rejected the respondent’s reliance on this case, distinguishing it because the present contract involved a fixed weekly salary only.

Court's Reasoning and Analysis

The court analyzed the nature of the employment contract, focusing on the salary payment terms and the contract’s express prohibition against oral modifications. The court noted the general rule that employment contracts with fixed annual salaries create a presumption of annual renewal when employment continues beyond the fixed term. However, the court found that this rule did not apply here because the contract provided only for a fixed weekly salary plus commissions, not a fixed annual salary. The court further emphasized that the written contract expired by its terms on October 31, 1959, and no evidence supported an inference or legal implication of an annual contract renewal thereafter. Consequently, the court concluded that the complaint failed to state a cause of action on the basis of an implied one-year contract renewal, justifying dismissal.

Holding and Implications

The court REVERSED the order denying the motion to dismiss and GRANTED the defendants' motion to dismiss the complaint, with costs and disbursements awarded to the appellants. The court allowed the respondent leave, in its discretion, to apply to the Special Term for permission to serve an amended complaint alleging the existence of a one-year contract.

The direct effect of this decision is dismissal of the respondent’s claim based on the alleged implied annual renewal absent further amendment. The opinion does not establish new precedent but clarifies the application of the presumption of contract renewal in the context of employment contracts specifying weekly rather than annual salaries.

AL SHENN, Respondent, v. FAIR-TEX MILLS, INC., et al., Appellants.

Per Curiam.

This appeal is from an order entered January 14, 1966, which denied defendants' motion to dismiss the complaint.

Plaintiff seeks damages for the amount of unpaid salary from April 9, 1965, the date of his alleged wrongful discharge, to October 31, 1965, the date plaintiff claims his contract of employment expired, and an accounting for commissions from November 1, 1964, to and including October 31, 1965.

The complaint alleges that plaintiff and defendant Fair-Tex Mills, Inc. (herein Fair-Tex) entered into a written contract of employment August 22, 1958, whereby plaintiff was employed by Fair-Tex as a salesman for a period up to and including October 31, 1959, at a weekly salary of $200 plus 1% commission on sales. The agreement is attached to and made a part of the complaint. Plaintiff alleges that at the expiration of the term he continued in the employ of Fair-Tex "without any new express agreement * * * on the same terms and conditions" and by reason thereof an agreement was created between the parties for plaintiff's employment for one year. The complaint continues that there were like annual renewals in 1961, 1962, 1963 and 1964 except that in 1964 his weekly salary was increased to $300 though the commission remained the same. After plaintiff's discharge on April 9, 1965, he commenced this action. He claims that in each year set forth, including the year involved in this suit, there was an implied renewal of his contract of employment for one year, and that he is entitled to salary from the date of discharge to October 31, 1965, and to commissions as stated.

The general rule is that where one enters the employment of another for a fixed period at a stated annual salary, and the employment continues beyond that period, the presumption is continuance of the relationship for another year at the same salary ( Adams v. Fitzpatrick, 125 N.Y. 124; Mason v. New York Produce Exch., 127 App. Div. 282, affd. 196 N.Y. 548). In the Adams case, the court quoted with approval from Story on Contracts "But when wages are payable at a stipulated period, as per week, or month, or half year, such circumstances, standing alone, indicate that the hiring is for such a period" ( Adams v. Fitzpatrick, supra, p. 129). Nor is Carter v. Bradlee ( 245 App. Div. 49) cited by respondent, to the contrary. In that case plaintiff was employed for a fixed period, at a stated annual salary payable monthly.

In the case before us there is no provision for a fixed annual salary, merely a fixed weekly salary. The written agreement upon which plaintiff relies expressly provided that it could not be modified orally, that no oral agreement, understanding, etc., could bind Fair-Tex unless in writing. Such agreement by its terms expired October 31, 1959. The contention that the contract might be considered as "equivalent to a general hiring, which means from year to year" (see Adams v. Fitzpatrick, supra, p. 127) is rejected both because of the absence of a fixed annual salary and because of the inclusion of a specified weekly salary only, plus commissions. Nothing is shown to warrant an inference of fact or implication of law that there was an annual contract.

The order appealed from should be reversed on the law, the motion to dismiss the complaint granted, with costs and disbursements to appellants, but with leave to respondent, in the exercise of our discretion, to apply to Special Term for leave to serve an amended complaint if plaintiff is so advised, as to the existence of a contract for one year.

BREITEL, J.P., McNALLY, STEVENS and CAPOZZOLI, JJ., concur.

Order, entered on January 14, 1966, unanimously reversed, on the law, with $50 costs and disbursements to the appellants, and defendants' motion to dismiss the complaint granted, with $10 costs, with leave, however, to respondent, in the exercise of discretion, to apply at Special Term for leave to serve an amended complaint if respondent is so advised, as to the existence of a contract for one year.

Use AI to get other relevant cases.

Comments

SHENN v. FAIR-TEX MILLS
(Oct 20, 1966)