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DOW v. SHOE CORPORATION OF AMERICA

September 16, 1959

JOHN DOW, PLAINTIFF,
v.
SHOE CORPORATION OF AMERICA, MID-STATES SHOE CO., AND MID-STATES SHOE CO., D/B/A THE HOUSE OF CROSBY SQUARE, DEFENDANTS.



The opinion of the court was delivered by: Poos, District Judge.

This cause was previously submitted to the Court upon the original complaint which complaint the Court held failed to state a cause of action. Thereupon the plaintiff, John Dow, filed an amended complaint in which the complaint, by Count III, alleged that at all times hereinafter mentioned defendant, Mid-States Shoe Company, was and is now a corporation organized and operating under the laws of the State of Wisconsin, doing business as the House of Crosby Square; that Mid-States Shoe Company is engaged primarily in the advertising, promotion and sale of shoes; that plaintiff, John Dow, was employed by defendant, Mid-States Shoe Company, and its predecessor, Walter Booth Shoe Company, as a salesman for a period of approximately 22 years until said employment was terminated by said Mid-States Shoe Company on or about September 30, 1957; that prior to entering into said employment plaintiff had been engaged in the manufacture of shoes with The Florsheim Shoe Company in Chicago, Illinois, and other shoe manufacturers for a period of approximately six years, and thereafter and immediately preceding said employment with Walter Booth Shoe Company plaintiff had been engaged as a shoe salesman with the St. Louis Shoe Manufacturing Company for approximately seven years; that on or about January 10, 1935 at Milwaukee, Wisconsin, and during the existence of plaintiff's prior employment as a salesman as above set forth, and well knowing of such employment and of plaintiff's experience in the shoe business as a manufacturer and salesman, and desiring to avail itself of plaintiff's services and to gain the benefit of plaintiff's knowledge, ability, experience, good name and reputation in the shoe business, and also desiring to deprive its competitors of plaintiff's valuable services:

(a) Said employer, Walter Booth Shoe Company, agreed orally with plaintiff to employ plaintiff as a salesman for life on a 6% commission basis, and plaintiff agreed thereto or in the alternative,

(b) Said employer, Walter Booth Shoe Company, further desiring to establish relatively new territory in the State of Illinois as a market for its shoes, agreed orally with plaintiff to employ plaintiff as a salesman for life in said territory on a 6% commission basis, provided plaintiff increase the amount of said employer's sales in said territory, and plaintiff agreed thereto and fully performed said provision, or in the alternative,

(c) Said Walter Booth Shoe Company agreed orally with plaintiff to employ plaintiff as a salesman for life on a 6% commission basis provided plaintiff confine his sales to said employer's shoes, and plaintiff agreed thereto and fully performed said provision, or in the alternative,

(d) Said Walter Booth Shoe Company agreed orally with plaintiff to employ plaintiff as a salesman for life on a 6% commission basis provided plaintiff pay his own sales expenses, including travel, board and room expenses as well as promotion and advertising expenses, and plaintiff agreed thereto and fully performed said provision; that said employment contract as above set forth was entered into for and on behalf of said Walter Booth Shoe Company by and through its duly authorized agent and employee, Harold Leiser, its then sales manager, acting within the scope of his employment, or in the alternative, purporting to act within the scope of his employment which employment contract was ratified and affirmed by said Walter Booth Shoe Company, and thereafter was assumed or ratified and affirmed by defendant, Mid-States Shoe Company; that in reliance upon said contract and pursuant thereto plaintiff relinquished his position with the St. Louis Shoe Manufacturing Company as a salesman, and commenced his employment for said Walter Booth Shoe Company on or about January 10, 1935, and devoted all his energy, knowledge, talent and skill thereto, and by so doing and by expending his own funds and monies for expenses and advertising, and promoting the sale of said employer's shoes, plaintiff thereby built up good will for said employer's name and products, increased his list of customers and accounts from approximately 18 to more than 100 in number, and increased the amount of said employer's sales in said territory; that at all times during the period of said employment plaintiff conducted himself in said employment with efficiency, honesty and punctuality, was and continued to be in excellent health, and was able to and did perform his agreements and duties according to the terms of said employment contract, and performed all conditions precedent thereto, and was ready and willing to perform such agreement, but for the wrongful breach thereof by defendant, Mid-States Shoe Company, as hereinafter set forth.

He then alleges on or about September 30, 1957, defendant, Mid-States Shoe Company, wrongfully discharged plaintiff from his said employment contract without any reasonable or probable cause, and has refused to employ plaintiff for the remainder of the period thereunder, and has thereby wrongfully prevented plaintiff from completing said contract.

Judgment is demanded for the sum of $150,000.

The second Count of the Complaint, in addition to the allegations above made, charges: that at all times during the period of said employment plaintiff conducted himself in said employment with efficiency, honesty and punctuality, was in excellent health, and was able to and did devote all his energy, knowledge, talent and skill to such employment, and was held in high esteem by all those with whom he dealt as such salesman, and as a result of his endeavors plaintiff secured and maintained many prosperous and profitable accounts and earned large sums of money for himself and his family; that for several months prior to the termination of plaintiff's employment said Mid-States Shoe Company, through its agents and employees, attempted to persuade plaintiff to voluntarily resign from said employment, and plaintiff refused to do so and informed said Mid-States Shoe Company that he did not then, or in the future, intend or plan to resign, but intended and planned to continue his employment, that he was financially unable to retire, and that he must continue working in order to support his family and himself; that well knowing that plaintiff had devoted approximately thirty years to the shoe business as a salesman, and if discharged by it would reasonably seek employment with another Shoe Company, or other shoe companies, in direct competition with defendant, Mid-States Shoe Company, said defendant maliciously and wickedly contrived and intended to injure and destroy plaintiff's good name, credit and reputation in his occupation as a shoe salesman, and to bring him into disgrace among his customers and accounts, and to cause him to be regarded as a person unfit, unworthy, and unable to perform his duties in said occupation, and to prejudice and injure him in his business, occupation and means of earning a livelihood, and defendant, Mid-States Shoe Company, by and through its duly authorized employee and agent, E.C. Wegner, acting within the scope of his employment and agency, falsely, maliciously and wrongfully wrote, published and mailed certain false, malicious and scandalous statements of and concerning plaintiff in the form of letters, which is in the words and figures as follows, to-wit:

    "It happens that our Mr. Dow, who has rendered 22
  years of loyal service, and who has reached
  retirement age, plans to take it a little easier. We
  naturally regret to make this announcement to our
  dealers, but we join all of his customers and friends
  in wishing him the best of health and happiness.
    "This letter affords the opportunity of introducing
  a young man by the name of Mel Newman as Mr. Dow's
  successor * * *"

Said letters were mailed, or caused to be mailed on or about September 25, 1957, by Mid-States Shoe Company by U.S. mails to approximately 100 customers and accounts of plaintiff including, but not limited to the following names at their respective addresses as follows: He then names ten customers with their respective addresses.

The complaint further alleges that following his discharge by Mid-States Shoe Company, plaintiff was employed by Plymouth Shoe Company as a salesman, and that he solicited business from some of his former customers and accounts as well as others on behalf of said Plymouth Shoe Company; that as a result of said wrongful discharge from his employment by Mid-States Shoe Company, and as a result of said false, malicious and scandalous statements in the form of letters as set forth above, defendant, Mid-States Shoe Company, has maliciously, wrongfully and unjustly interfered with plaintiff's right to engage in his calling and occupation as a shoe salesman, and his right to enter into contracts and make sales to his former customers and accounts as well as others, and plaintiff has thereby been deprived of great sums of money he would have otherwise earned and have been paid; and that as a result of said wrongful discharge and of said malicious, wrongful and unjust interference with said rights of plaintiff, plaintiff is entitled to recover from and against defendant, Mid-States Shoe Company, exemplary or punitive damages in addition to the actual damages sustained by plaintiff, and prays judgment in the amount of $150,000.

To this amended complaint defendant, Mid-States Shoe Company, makes its Motion to Dismiss Counts III and IV.

As to Count III defendant says: (1) the amended complaint fails to state a cause of action against this defendant upon which relief can be granted, (2) that it is alleged in plaintiff's amended complaint that a relationship existed between the Walter Booth Shoe Company and the plaintiff, that the Walter Booth Shoe Company is not a defendant herein, and such allegation cannot be a basis for recovery against this defendant; that all of said allegations with reference to Walter Booth Shoe Company should be stricken, (3) said amended complaint contains no allegation of sufficient authority for this defendant to have entered into a contract of the extent and nature of that alleged by the plaintiff since there is no allegation of any resolution of the Board of Directors of this defendant authorizing such a contract; that a contract of the nature complained of by the plaintiff would be void as contrary to public policy in the absence of a resolution of the Board of Directors authorizing the same, and that the same would be voidable under the law of the State of Illinois, and void under the law of the State of Wisconsin, (4) that said amended complaint is insufficient because it alleges the contract was one which neither the plaintiff nor the defendant, had they entered into the same, would have expected to be performed within one year, and said contract is therefore void or voidable because it violates the Statute of Frauds, (5) that subdivisions a, b, c and d of Paragraph 5 of Count III of the amended complaint are insufficient for the reason that they contain the conclusions of the pleader only rather than the allegations of fact upon which the plaintiff relies, and that by reason thereof the said Paragraph 5 should be stricken, that Paragraph 5-d of Count III of the amended complaint is insufficient because said allegations are by conclusion rather than by statement of facts upon which plaintiff relies; (6) the plaintiff alleges that the Walter Booth Shoe Company agreed orally to employ the plaintiff but said contract if consumated by the Walter Booth Shoe Company, was not binding upon this defendant and is void or voidable because it violates the Statute of Frauds; (7) that the alleged agreement that plaintiff was orally employed by Walter Booth Shoe Company and that this defendant ratified said oral agreement, is void or voidable and not binding on this defendant because it violates the Statute of Frauds.

The defendant moves also to strike Count IV of the amended complaint for the reason that the letter as above quoted does not contain a false, malicious or wrongful statement, does not contain a malicious, wrongful or unjust inference, and does not constitute an action for the interference with the rights of plaintiff in his employment; that there are no allegations that the defendant, Mid-States Shoe Company willfully and intentionally interfered with the plaintiff's business rights by writing said letter; that all allegations of said amended complaint wherein the plaintiff charges that said letter, Exhibit A, contains scandalous statements are conclusions and should be stricken by the amended complaint as there is nothing in the language of Exhibit A which can be construed as scandalous or malicious; that Count IV asking for exemplary or punitive damages should be stricken as there is no right under the law for the plaintiff's recovery for exemplary or punitive damages; that plaintiff's amended complaint alleges that the letter, Exhibit A, was written on or about September 27, 1957, at which time the plaintiff was in the employ of the defendant and did not have employment with any other concern, and that by reason thereof the letter, Exhibit A, did not prevent the plaintiff from obtaining other employment and did not interfere with any business relationship which said plaintiff had at the time said letter was written, and finally that Count IV does not state a cause of action upon which relief may be granted.

As to Count III of the amended complaint, it is readily apparent that the contract alleged was an oral employment contract for life. The defendant, by its motion, questions the validity of this type of contract for two reasons, (1) the contract is unenforceable because it violates the Statute of Frauds, and (2) the contract was not authorized by a resolution of the Board of Directors of the Walter Booth Shoe Company, the predecessor of the defendant.

This contract was allegedly executed in Wisconsin and both parties agree that Wisconsin law governs its validity.

The plaintiff relies on the case of Nelsen v. Farmers Mutual Auto Insurance Company, 4 Wis.2d 36, 90 N.W.2d 123 in support of his contention that the contract is not within the Statute of Frauds.

The Wisconsin Statute of Frauds provides as follows:

    "241.02 In the following case every agreement shall
  be void unless such agreement or some note or
  memorandum thereof, expressing the consideration, be
  in writing and subscribed by the party charged
  therewith:
    "(1) Every agreement that by its terms is not to be
  performed within one year ...

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