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Balstad v. Solem Machine Co.

AUGUST 19, 1960.




Appeal from the Circuit Court of Winnebago county; the Hon. ARTHUR V. ESSINGTON, Judge, presiding. Judgment affirmed.


This was an action for damages for breach of an alleged oral contract of employment. The cause was tried to verdict in the Circuit Court of Winnebago County. A verdict of $2,837.75 was returned by the jury for the plaintiff.

Defendant appeals from the judgment on the verdict and contends that the alleged oral contract is unenforceable under the provisions of Section 1 of the Statute of Frauds (Ill. Rev. Stat. 1955, Chap. 59, Par. 1). It also contends that the verdict is against the manifest weight of the evidence and that the evidence shows a mutual mistake and no contract. Finally, the defendant contends that the court erred in excluding evidence offered by the defendant.

The uncontradicted facts show that plaintiff was employed by the defendant at its plant in Lockport, New York, as an engineer, for a period of thirty-one and one-half months. He was hired by the president of the defendant corporation after two interviews in the fall of 1955. Only the plaintiff and defendant's president participated in the negotiations culminating in the employment of the plaintiff in these interviews, and only these two testified as to the terms of the oral agreement.

Plaintiff claimed that he was to be paid $11,000.00 per year, payable monthly. Defendant contended that the salary was some lesser amount as reflected by the payroll records. It was also contended by the plaintiff that he was entitled to vacation pay for vacations he had been requested not to take and contended that the defendant had agreed to pay for a six weeks trip to Norway to visit his mother. Defendant denied these contentions.

Various exhibits were introduced by both parties. None of the exhibits, however, are definite as to the relations between the parties and to quote extensively from them would only serve to unduly extend this opinion without corresponding benefit. Suffice it to say that these exhibits together with the testimony of the parties presented controverted factual issues.

The effect of the verdict of the jury has been to enforce an oral contract and so, we must first determine if this contract was unenforceable as the defendant claims. The pertinent portion of the statute involved (Ill. Rev. Stat. 1955, Chap. 59, Par. 1), provides as follows:

"That no action shall be brought, whereby to charge any executor or administrator upon any special promise to answer any debt or damages out of his own estate, or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person, or to charge any person upon any agreement made upon consideration of marriage, or upon any agreement that is not to be performed within the space of one year from the making thereof, unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized."

While the plain language of the statute would appear to preclude a recovery in this case, we believe that the settled law of Illinois has properly distinguished this particular type of transaction from the contract prohibited by the statute. It is true that performance under the contract has extended over a period well in excess of a year. Also, it must be concluded that it was the intention of the parties that the contract should extend for a period of more than one year. However, this was a personal contract which might or might not have been performed according to the intention of the parties. We believe that the courts have interpreted this statute to provide that the contract is unenforceable only if it is impossible of performance in one year.

Under the facts in this case, this contract could have been performed at any time. By the act of the defendant in discharging the plaintiff without notice, he has indisputably shown that the contract was terminable at the will of either party. This construction was the construction placed upon the contract by the plaintiff also, since he has not sought to recover for the balance of the year 1958. When both parties to an oral agreement by their actions interpret the contract as one terminable at will, it certainly is beyond the power of a court to place a different interpretation on the agreement.

It is true that the contract, by the contention of both parties, called for an annual salary. This was to be paid by the month, however, which is perfectly consistent with our finding that the contract was to run from month to month.

This contract could have been concluded by many conditions, all occurring within one year. The death or resignation of the plaintiff, or abandonment or bankruptcy of the defendant would have effectively terminated the contract. This being so, the contract could be performed in one year and so was not within the statute.

There is a dearth of recent cases on this question, from which, one might conclude that this point has been generally recognized and settled. Cases supporting the position followed by this ...

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