its contract with the shipping board the company will divide as a bonus one-half million dollars among those of its general department foremen who continue in its employment until the completion of that contract." The complaint alleged further that in reliance on this promise the appellant remained continuously in the respondent's employment until October 15, 1920, when the contract referred to had been completed; that the appellant would not have continued in such employment except in reliance upon the promise, and that he has not been paid the bonus.

As stated by the appellant, the question here is: "Where an employer promises a bonus or a share of the profits to an employee employed for an indefinite term, to be paid if he works continuously for a given period, is the employer bound by his promise when the employee accepts the offer by performance?" The complaint servant-serving states an enforcefor bonus-right able contract, and the answer to the

Master and

to enforce.

question is, "Yes."

The offer and its acceptance by compliance with its terms created a unilateral contract, which is binding upon the offerer. The principle of mutuality of obligation, as generally applied in the law of contracts, has no place in the consideration of unilateral contracts. Such contracts are not based on mutual promises or obligations. "If the "If the promisor has received a consideration, his promise is binding and may be aptly termed an obligation; but as there is no promise on the part of the promisee, there can be no mutual obligations. Accordingly, where one makes a promise conditioned upon the doing of an act by another, and the latter does the act, the contract is not void for want of mutuality, and the promisor is liable though the promisee did not at the time of the promise engage to do the act; for upon the performance of the condition by the promisee, the contract becomes clothed with a val

id consideration, which relates back and renders the promise obligatory." 6 R. C. L. 687.

See also 23 R. C. L. p. 1115.

The promise here was therefore no "nudum pactum" on that theory, nor is it one on the theory that the promise was one for additional pay to be given one already under contract to do the very work for which the additional pay was promised. The argument that the appellant cannot recover the bonus for the reason that he was paid his regular salary while in the respondent's employ overlooks the very idea conveyed by the word "bonus," which is "an allowance in addition to what is stipulated."

Standard Standard Dict. The complaint shows that the appellant was free to quit his work at any time, and therefore was under no obligation to do the thing which the respondent was seeking to accomplish by its offer. The compliance with the terms of the officer created a contract supplementary to the contract of employment. By this supplementary contract the respondent agreed to reward the appellant for remaining in its employ and refraining "from accepting employment elsewhere until this company shall complete the ships." As was said in Zwolanek v. Baker Mfg. Co. 150 Wis. 517, 44 L.R.A. (N.S.) 1214, 137 N. W. 769, Ann. Cas. 1914A, 793: "We regard this by-law as being simply the offer of a reward to employees for constant and continuous service. The defendant made an offer of extra or additional compensation to any employee who performed a certain number of hours' service within a given period, provided net profits were earned, and provided the employee did not quit or was not discharged before a stated time. There is no dispute. upon the point that this offer was communicated to the plaintiff when he made his original contract of employment; and the evidence tends to show that when the contract was modified in modified in December, 1908, the plaintiff advised the defendant that

the raise made in wages was satisfactory, provided he would be permitted to share in the profits, and that he was informed that he could participate therein. . . A binding and enforceable contract to pay a reward rests, on one side, upon a valid offer, and, on the other side, upon an acceptance of such offer, including its terms and conditions, by a performance of the services requested in the offer before the offer lapses or is revoked. Until acceptance by performance of the services, it is merely a proposition; but when accepted by performance it becomes a binding contract, subject to the laws governing contracts generally. Performance constitutes acceptance of the offer, and after performance it cannot be revoked, so as to deprive a person who has acted on the faith thereof of compensation. . . . It is not necessary that the person performing the service for which a reward is offered generally should give notice to the offerer that he accepts the offer; for in such case the party making the offer impliedly dispenses with actual notice, and the doing of the act completes the contract. Acting upon an offer and complying with its terms and conditions constitute an acceptance.

The fact that the plaintiff had a written contract does not chance the situation. That contract ran for one year, subject to renewal, but might be terminated by either party on three months' notice. The plaintiff was not obligated by this contract to remain in defendant's employ until the reward was earned, unless he saw fit to do so. The reward related to an independent subject, not covered by the contract, and one that did not affect its terms in any way."

Roberts v. Mays Mills, 184 N. C. 406, post, 338, 114 S. E. 530, contains the following: "It appears in this case that the contract for employment was by the week, and hence either party could terminate. it at the end of any week. The offer of a bonus and its acceptance by

entering upon the work was a supplementary contract for a reward in consideration of the employee remaining in the service for the specified time. It did not change the terms of the contract of employment by the week, but by this agreement the employee, if he failed to remain the specified time, forfeited all claims to the bonus, and, on the other hand, if the employer discharged the employee without good and sufficient cause, he was liable to the employee for the bonus lost thereby. Inasmuch as the employee knew that the employment could be terminated at the end of any week, he is entitled, upon such violation of the supplementary contract for continuous service, upon a quantum meruit for the length of time he served at the rate of 10 per cent on the wages earned up to that date according to the employer's offer. The employee is not entitled to recover damages for the wages for the unexpired time, for the contract of employment was terminable at the end of any week, nor can he recover the bonus for the unexpired time. . . . The system of offering bonuses for continuous employment has been adopted by many employers, in their own interest, as well as being a step towards a better understanding between employers and employees. The enforcement of such contract can work no harm to employers, for they can discontinue the practice by failing at any time to renew such offers."

See also Orton & S. Co. v. Miltonberger, 74 Ind. App. 462, 129 N. E. 47; Bentley v. Ross, 250 Ill. 182, 95 N. E. 182; Kinder v. Cushman Motor Co. 89 Neb. 619, 131 N. W. 921; Henderson Land & Lumber Co. v. Barber, 17 Ala. App. 337, 85 So. 35; Kerbaugh v. Gray, 129 C. C. A. 326, 212 Fed. 716, where the court said: "The objection mainly relied upon at the trial and here was that this promise of a bonus, if made, was nudum pactum because the plaintiff, being bound to do his best for his salary, gave nothing in the way of consideration to support

the promise of a bonus. This would be true if the plaintiff were legally bound to continue in the employment of the defendant to the end of the season. But he was not and could have quit work at any time. . . . Therefore the jury had a right to find that he continued in the employment after this promise of a bonus, relying upon it."

Some of these cases arose where the promise of a bonus was made at the time that the employee entered the promisor's employ, but their reasoning and applicability to the present case are not thereby lessened, for where the employee to whom the promise is made is at liberty to cease his work at will, he is under no duty to do that which the promise seeks to secure, and, in reason, is in the same situation as is one just entering upon such employment. Henderson Land & Lumber Co. v. Barber, 17 Ala. App. 337, 85 So. 35; Zwolanek v. Baker Mfg. Co. supra. What the respondent sought was the continuous services of the appellant, and these were not secured to it by any contract existing at the time the offer was made, any more than they would have been had the appellant not already been at work. The respondent is in error when it claims "he gave respondent nothing for which he was not otherwise fully compensated." The appellant gave what the respondent offered to pay handsomely for, i. e., uninterrupted service until the work on hand was completed. As opposed to the conclusion we have reached, there is cited the case of Russell v. H. W. Johns-Manville Co. 53 Cal. App. 572, 200 Pac. 668, a short opinion by the intermediate appellate court of California. The case on its facts can be distinguished from the case at bar, however. The court there makes use of language which is in direct conflict

with our view of the law, and we prefer to meet the case head-on. The decision is not carefully prepared, as is witnessed by the fact that the authorities, some of which we have noted above, are not referred to, and the result reached is alleged to be based upon two Georgia cases, Davis v. Morgan, 117 Ga. 504, 61 L.R.A. 148, 97 Am. St. Rep. 171, 43 S. E. 732, and Duncan v. Cone, 16 Ga. App. 253, 85 S. E. 203, the latter being an opinion consisting of only the two words, "Judgment affirmed." Nor does the former sustain the California court, as the following quotation from it demonstrates: "Both proved a promise to give more than was due, and to pay extra for what one was already legally bound to perform. The employer therefore received no consideration for his promise to give the additional money at the end of the year. . . He got no more services than he had already contracted to receive, and, according to an almost unbroken line of decisions, the agreement to give more than was due was a nudum pactum and void as having no consideration to support the promise."

The California case was one involving an employee under no obligation to continue in his employment, and yet the California decision says: "We do not discover any real distinction between the facts of this case and those of the case of Davis v. Morgan."

The distinction between a promise of a gift to one for doing what he is obliged to do and the promise of a bonus to one for doing what he is not obliged to do seems to us real.

The judgment is reversed, with instructions to overrule the demur

rer.

Main, Ch. J., and Bridges, Holcomb, and Mitchell, JJ., concur.

Of possible interest in connection

with the present annotation, because of the principles involved, is the annotation in 25 A.L.R. 1450, on promise of additional compensation for completing building or construction contract.

Definition of the term "bonus," as used in this class of contracts, is not easy, although that term is one which has come to be frequently used, and conveys a certain popular meaning. The term as used in employment contracts conveys an idea of something which is gratuitous, or which it may be claimed is gratuitous, over and above the prescribed wage which the employer agrees to pay. It is this element which distinguishes the class of cases under discussion from other cases where obviously there was no lack of consideration or mutuality, even though the wage was not definitely fixed, as in those instances where the employee works on commission. It may be stated generally that the present annotation does not purport to include cases where the agreement was to give the employee, as a part of his salary, a commission or percentage of the business transacted by him or a percentage of the profits of the business, without any other stipulation as to the length of service which he must render to entitle him thereto. Cases are also excluded where the promise was of a gift to the employee at some future time, but the nature of the employment or of the gratuity was such as to distinguish the promise. from what is ordinarily regarded as a promise of a bonus. The annotation includes cases generally in which the extra compensation expressly designated a bonus, and, apart from these cases, only those cases have been as a rule included in which it seemed that the extra compensation was in the nature of a bonus to the employee, as that term is used in popular phraseology relating to agreements between master and servant.

is

While there is a conflict of opinion as to the validity of an agreement to pay an additional sum for per

formance of that which the promisee is already under obligation to perform, so as to give the latter the right to enforce such promise after performance, the cases which have involved the right of an employee to a bonus promised by the employer are not strictly of that class, unless the employee was already obligated to serve the term or to render the particular service for which the bonus was promised. It appears, accordingly, that if one enters into a contract of employment under an agreement that he shall be paid a certain salary by the week, or some other stated period, and, in addition, a bonus, in case he serves for à specified length of time, there is no reason for refusing to enforce the promise to pay the bonus, in case the employee serves the stipulated time, on the ground that it was a promise of a mere gratuity. This is true if the contract contemplates a continuance of the employment for a definite term, and the promise of the bonus is made at the time the contract is entered into. And if no time is fixed for the duration of the contract of employment, but the employee enters upon or continues in the service under an offer of a bonus if he remains therein for a certain time, his service, in case he remains the required time, constitutes an acceptance of the offer of the employer to pay the bonus, and after that acceptance the offer cannot be withdrawn, but may be enforced by the employee. Supporting the validity and enforceability of bonus contracts on the grounds above indicated, are the following cases: United States. Kerbaugh v. Gray (1914) 129 C. C. A. 326, 212 Fed. 716.

Henderson Land &

Canada. Smith v. White Owl Drug Co. (1922) Manitoba, [1922] 3 West. Week. Rep. 501, 70 D. L. R. 550. See also Sims v. Harris (1901) 1 Ont. L. Rep. 455.

In Kerbaugh v. Gray (Fed.) supra, where a superintendent of construction work sought to recover a bonus from his employer, the court said: "The objection mainly relied upon at the trial and here was that this promise of a bonus, if made, was nudum pactum because the plaintiff, being bound to do his best for his salary, gave nothing in the way of consideration to support the promise of a bonus. This would be true if the plaintiff were legally bound to continue in the employment of the defendant to the end of the season. But he was not, and could have quit work at any time. There

fore the jury had a right to find that he continued in the employment after this promise of a bonus, relying upon it."

And where the employer posted a notice that beginning on a certain day he would give a bonus of 5 per cent to every man in his employ, except men doing piecework, who served "four months' straight time," it was held in Henderson Land & Lumber Co. v. Barber (Ala.) supra, that a foreman who knew nothing of this offer until after he had made an agreement to work for a certain sum per month beginning on the same day

as the time specified in the bonus notice, but who after reading the notice remained in the service and worked continuously during the four months' period, was entitled to the bonus offered, and that the employer could not claim lack of mutuality as a defense in an action by the employee to recover the same. It was said: "There is no mutuality in a unilateral contract, until the party claiming under it has complied with the terms of the proposition. When, however, one makes a promise conditioned upon the doing of an act by another, and the latter does the act, the contract is not void for want of mutuality, and the promisor is liable; for upon performance of the conditions by the promisee the contract becomes clothed with a valid consideration which relates back and renders the promise obligatory. It is an

elementary principle that, where one. publishes an offer, and before it is withdrawn another acts upon it, the one making the offer is bound to perform the promise; in other words, the act becomes binding when the act is performed. Under the

terms of the offer published by defendant, it applied to 'every man in our employ (except men doing piecework).' piecework). Plaintiff was certainly in the employ of defendant at the time the offer was made, and performed service in that capacity for the term stipulated. We can see no reason why, if his testimony is to be believed, which we must do on appeal, he is not within the terms of the offer."

So, the proposition that a contract by which an employer is to pay the employee a certain amount as wages in any event, and an additional amount if he remains in the employment until the end of the contract, is not unenforceable as to the extra compensation on the ground that it is nudum pactum, is supported by Haag v. Rogers (1911) 9 Ga. App. 650, 72 S. E. 46.

And in Phillips & Co. v. Hudson (1911) 9 Ga. App. 779, 72 S. E. 178, it was held that a promise by an employer to pay as a bonus to the