The parties in the instant case entered into a stipulation of facts and waived a jury trial. *Page 478 No testimony therefore was taken. The facts that are pertinent on appeal are as follows. On July 28, 1943, plaintiff was employed by defendant as an instructor in its technical training school at the rate of $263 per month, payable semimonthly. Such employment was not stated to be for any definite period of time. Plaintiff performed his duties as instructor until September 1, 1943, when he was transferred with no change in salary to the service department where he remained until October 30, 1943, when he was informed that his services would no longer be needed. He was discharged and paid to October 30, 1943, the date of his discharge. He demanded his salary for the balance of the monthly period ending November 28, 1943. Upon defendant's refusal, suit was brought and the judge rendered a judgment in favor of plaintiff for $251.25 and costs.
Defendant on appeal claims that there is nothing to take the case out of the rule it contends for, i.e., that a person employed for an indefinite period may be discharged at will at any time, and the mere naming of a salary or wages by the month is only indicative of the pay the employee is to receive and does not indicate any definite period of employment. The trial judge held that the hiring of an employee by the month without any other testimony as to the term of hiring created a presumption that the person was hired by the month, and when there is no testimony to overcome this presumption, the plaintiff is entitled to recover the salary for the balance of the month. Because of the importance of the question, we allowed an appeal.
Defendant, as appellant, has presented most thorough and scholarly briefs. In its main brief it has strictly adhered to Court Rule No. 68, § 5 (1945), by printing in alphabetical order an indexed list of the cases with appropriate citations of reports. *Page 479 This covers 11 pages. Plaintiff also has filed excellent briefs with a large number of citations. We only mention this to show that the courts of the various States disagree on the question though plaintiff concedes that possibly the weight of authority upholds defendant's contention, but insists that in many cases cited by defendant there are other facts and circumstances that were taken into consideration.
The conflict in the decisions prompted the two States of California and Georgia to enact statutes covering the subject. Labor Code of California 1937, § 3001,* is as follows:
"A servant is presumed to have been hired for such length of time as the parties adopt for the estimation of wages. A hiring at a yearly rate is presumed to be for one year; a hiring at a daily rate, for one day; a hiring by piece work, for no specified time."
The Georgia Code of 1933, § 66-101,8224 is as follows:
"That wages are payable at a stipulated period raises the presumption that the hiring is for such period; but if anything in the contract shall show that the hiring was for a longer term, the mere reservation of wages for a lesser time will not control. An indefinite hiring may be terminated at will by either party."
Obviously we look to the decisions of our State, where the question has often been presented in some form. Defendant insists that the case of O'Connor v. Hayes Body Corp., 258 Mich. 280, is decisive. In the course of the opinion, it was said:
"The contract of employment, being for no definite period, was a hiring at will and could have been *Page 480 terminated at any time, by either party without notice. It was not terminated as a matter of law by the closing of the factory and the subsequent employment of plaintiff as a day watchman, if the parties agreed to the continuation of compensation as claimed by plaintiff."
It will, however, be noted upon reading the briefs and records in this case that plaintiff nowhere contended that he had more than a contract for an indefinite period. The case did not raise the point involved in the instant one. The decisive question was whether changing the rates in pay and type of work terminated the original hiring that provides for a specific amount per month. Plaintiff recovered and the judgment was affirmed by this court.
On the other hand, plaintiff relies upon a number of other cases, but we again find that the question has not yet been squarely ruled upon under facts similar to those here presented. One of the main cases which has been frequently quoted is that ofLoew v. Hayes Manufacturing Co., 218 Mich. 595, where previous negotiations wound up in a letter in which an employer wrote to the employee that it would pay him $6,000 the first year, $6,600 the second year and $7,200 the third year, but the letter began with the statement:
"All statements or agreements contained in this letter are contingent on strikes, accidents, fires or any other causes beyond our control."
It seemed very unlikely to make this condition if the contract were only one at will. Appellant herein claims that other circumstances leading up to the writing of the letter dispel any ambiguity in the letter and show that the intention of the parties was to bind them for a term of three years. The court quoted from the case of Maynard v. Royal Worcester CorsetCo., 200 Mass. 1 (85 N.E. 877), which *Page 481 favors the claims of plaintiff in the instant case. Massachusetts is one of the minority States which favors plaintiff's claims. Appellant has analyzed the case of Maynard v. Royal WorcesterCorset Co., supra, and calls attention to the following words which it regards as significant:
"The length of the term of service reasonably inferable as the understanding of the parties, from their words, course of dealing and other acts, was a fact to be determined upon all the evidence."
The court in the Maynard Case seemed to recognize that there were other facts in the case in addition to the mere renewal of employment for a period of an additional year at a salary of $5,000 a year, payable weekly.
Possibly the strongest case in Michigan is Southwell v.Parker Plow Co., 234 Mich. 292, which, however, relies uponLoew v. Hayes Manufacturing Co., supra, and cites a number of cases in this State which it is claimed have a tendency to sustain the Massachusetts rule that has been followed by the highest courts of a minority of States and for which rule plaintiff contends.
The trial court after reviewing many of the Michigan cases concluded that the various decisions leave the question of time of termination of a contract of employment, where only the amount of salary at a certain rate by the month is mentioned, in a state of uncertainty. We turn to 2 Restatement of the Law of Agency, § 442, comment "b," which states as follows:
"The fact that a servant or other agent is employed under a contract which merely specifies a salary proportionate to units of time which are commonly used for the purposes of accounting or payment, such as a month or a year, does not, of itself, indicate that the parties have agreed that the employment *Page 482 is to continue for the stated unit of time. Such a specification merely indicates the rate at which the salary is earned or is to be paid, and either party is privileged to terminate the relationship at any time unless further facts exist. However, the fact that payment is to be made in accordance with a time unit is evidence, in connection with other relevant facts, indicating that the agreement is for such unit. Thus, an agreement for the period of time mentioned as that for payment, or as the basis for payment, is indicated if one party pays consideration aside from his promise to employ or to serve; or if the agency is an important one and of a kind such that a temporary appointment would not be likely to be made; or if, as the principal has notice, the employee has made an important change in his general relations in order to accept the position, such as the removal of himself and his things to a new place; or if he has given up a position of some value in order to enter the employment. In the absence of other facts, a custom in the business of which the parties should know, or a usage by the principal as to periods of employment of which the agent should know, is controlling."
The Michigan annotations to the Restatement of the Law of Agency omitted reference to the decision in O'Connor v. HayesBody Corp., supra, which defendant claims is decisive of the law of this State.
Notwithstanding this conflict of authorities and the contention of the parties as to whether the court has stated the rule for this State under similar facts, we find on one phase of the question the courts do agree. This court of its own volition asked for briefs on the further question whether, inasmuch as under the statement of facts plaintiff was originally hired as an instructor in defendant's technical training school at the rate of $263 per month, did not the nature of his employment indicate that he was to be hired by the month? It is generally known that *Page 483 regular teachers are hired by the year or month or for a definite term. Plaintiff was not hired as a day laborer but as an instructor. It is true that later his duties were changed but it is not claimed, and the stipulation of facts does not show, that there was any change in the salary or term of employment. Defendant in its supplemental brief attempts to belittle the importance of plaintiff's original position, and to do this, goes outside the record. The case was decided upon the stipulation of facts and the parties are bound thereby, and may not go beyond them. Tirrill v. Miller, 206 Iowa, 426 (218 N.W. 303). The rule as laid down in the section of the Restatement of the Law of Agency quoted, states:
"Thus, an agreement for the period of time mentioned as that for payment, or as the basis for payment, is indicated if * * * the agency is an important one and of a kind such that a temporary appointment would not be likely to be made."
In Chamberlain v. Detroit Stove Works, 103 Mich. 124, we stated that the term of employment depended, among other things, upon the "nature of the services performed." We believe that the fact that plaintiff was hired as an instructor at a certain sum per month is all important because the nature of the services performed by an instructor is such that it is not a hiring at will, but by the month, as may be implied by the fact that he was hired for a definite amount per month. With the added fact considered, we believe that plaintiff is entitled to recovery.
Judgment affirmed, with costs to plaintiff.
STARR, C.J., and BUSHNELL, and REID, JJ., concurred with BUTZEL, J.
* This provision was first enacted in California in 1872. — REPORTER.
8224 This provision appears in the Georgia Code of 1895, § 2614. — REPORTER.