Jay F. Swanson v. Stan Levy

This case involves an action by appellant to recover monies paid in discharging appellee’s debt upon appellee’s default in the repayment thereof. Appellant and appellant’s brother employed appellee to establish a chain of restaurants. Appellant’s brother in a personal letter dated April 16, 1969 confirmed appellee’s employment. Appellee was principally employed by a corporation called “Johnny’s American Inn, Inc.” and also known as “Here’s Johnny’s.” In December 1969 appellant guaranteed a personal loan installment note for appellee. The parties arranged to repay the note from payroll deductions from appellee’s salary. Appellant, acting for “Johnny’s American Inn, Inc.,” advised appellee by letter of January 28, 1970 that in the absence of a definite plan for corporate financing, appellee’s salary was to be “furloughed.” By the express terms of this letter, the “furlough” was not an act of termination of employment but rather a temporary measure of economy. The letter requested appellee to continue to seek corporate financing from investors, and appellee did so. Appellant’s attorney advised appellee by letter of April 15, 1970 that appellee was no longer authorized to…