Minnesota Amusement Company v. Larkin

• Decision Date: 31 January 1962
• Docket Number: No. 16681.,16681.
• Citation: 299 F.2d 142
• Parties: MINNESOTA AMUSEMENT COMPANY, a corporation, Appellant, v. John Fred LARKIN, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

299 F.2d 142 (1962)

MINNESOTA AMUSEMENT COMPANY, a corporation, Appellant, v. John Fred LARKIN, Appellee.

No. 16681.

United States Court of Appeals Eighth Circuit.

January 31, 1962.

Mandt Torrison, St. Paul, Minn., for appellant. Bundlie & Kelley, St. Paul, Minn., and H. L. Fuller, Woods, Fuller, Shultz & Smith, Sioux Falls, S. D., were with him on the brief.

Holton Davenport, Sioux Falls, S. D., for appellee. Davenport, Evans, Hurwitz & Smith, Sioux Falls, S. D., were with him on the brief.

Before VOGEL, VAN OOSTERHOUT and BLACKMUN, Circuit Judges.

VOGEL, Circuit Judge.

Appeal here is taken from a judgment awarded in favor of John Fred Larkin, plaintiff-appellee, a resident of South Dakota, against defendant-appellant, Minnesota Amusement Company, a Delaware corporation, having its principal place of business and licensed to do business in Minnesota. Judgment was ordered by the District Judge for the Southern Division of the District of South Dakota, sitting without a jury. Diversity of citizenship and amount involved satisfy requisites for federal jurisdiction.

Plaintiff sought to recover damages for an anticipated loss for the period of his life expectancy because of an alleged breach of an agreement which plaintiff claims was entered into with the defendant.

The record indicates that the plaintiff, continuing a career of theater management commencing in the early 1900's, first came into the employ of the defendant in 1932, the year defendant was organized, at which time his work was in connection with defendant's theaters in St. Cloud, Minnesota. In 1941 he was transferred to Sioux Falls, South Dakota. In 1946 he was promoted to the position of district manager for the defendant's theaters in South Dakota, a position he held until 1949, at which time he was retired pursuant to a written agreement which is the core of the present controversy. The letter, subsequently accepted by plaintiff and comprising this agreement, was sent by the then president of the defendant, Harry B. French, to the plaintiff and read as follows:

"Minnesota Amusement Company "Administration Office Minneapolis 3 "17 North 6th Street Minnesota "June 6, 1949 "Mr. Fred Larkin "State Theater "Sioux Falls, S. D.

"Dear Fred:

"This will confirm our conversation of a week ago last Friday to the effect that starting as of July 3, 1949, you will be retired as a fulltime employee of ours.

"In view of your long years of service to us, you will be retained on our payroll and we shall pay you the sum of seventy-five dollars ($75) a week.

"Inasmuch as you are on the payroll as a full-time employee, we expect that you will render to us as requested from time to time your services as consultant and adviser in connection with theatre operation. Such service, however, shall be rendered by you only from such place as may from time to time be selected by you. Being on the payroll, Fred, entitles you to our group life insurance and hospital benefits. When you are in Minneapolis, naturally we want you to make the office your headquarters and discuss any matter that you think should be taken up as pertains to the operation and welfare of our theatres.

"I am sending this letter in duplicate. Please sign one copy indicating your understanding of the above and return it to me. The other copy is for your own personal file. There are no other copies.

"Kindest regards. "Very truly yours "HARRY B. FRENCH "HBF:JT

"The contents of the above letter are in accordance with my understanding.

. . . . . .

"J. FRED LARKIN"

Plaintiff signed the original of the foregoing, returned it to French and retained his copy.

In accordance with the agreement, plaintiff was paid $75 per week regularly thereafter until shortly after October 31, 1956, when he received from the defendant a letter advising of the termination of the agreement. Such letter, dated October 31, 1956, insofar as it may be pertinent to the plaintiff, was as follows "Mr. Fred Larkin "1624 So. Fifth Ave "Sioux Falls, S. D.

"Dear * * * Fred:

"I have been advised by our New York office¹ that, effective January 1, 1957, your agreement with the Company re salary will be put on a two-year termination basis from that date.

"I wanted you to have this information as quickly as possible so that you can make your plans for the future accordingly.

"Insurance-wise I am certain that we will be able to work out a plan to continue your company insurance after that date. It may be necessary to convert it, but I will do everything within my power to continue it on the same basis as at present, with you paying the total premiums on a company rather than a conversion basis.

"This is not the kind of information I enjoy sending to you, but it is necessary under the circumstances.

"Kindest regards. "Sincerely yours "CHAS. WINCHELL"

Payments to plaintiff continued until the first week of January, 1959, at which time they ceased. He has not been paid since that time.

Upon defendant's refusal to continue the payments subsequent to January 1, 1959, the plaintiff commenced this action claiming that there was a breach of the agreement, which agreement plaintiff contends was for life.

It was defendant's contention that the agreement was not for the life of the plaintiff, that it was terminable at will, and that it had fully paid plaintiff all sums due him under any and all contracts of employment or otherwise.

The basic issue is, of course, whether the contract between the parties was one for retirement on the basis of $75 a week payable as long as the plaintiff lived or whether it was, as claimed by the defendant, simply an agreement for limited employment, terminable at the will of the defendant and providing for $75 per week until so terminated. A careful examination of the letter and its acceptance does not indicate whether it is an agreement terminable at will or whether it is one binding the defendant to pay for the balance of plaintiff's life. The contract as written is indefinite. It leaves doubt. The trial court, sitting without a jury, determined, first, that the contract here between the parties was ambiguous, and, second, that other evidence could be received from which the intent of the parties in entering into the agreement might properly be ascertained. We think the trial judge was eminently correct in so doing. In United States v. Northern Pac. Ry. Co., 8 Cir., 1951, 188 F.2d 277, 280, this court said:

"* * * The question as to whether an ambiguity exists in a contract is to be determined by the court as a matter of law. 17 C.J.S. Contracts § 617; Whiting Stoker Company v. Chicago Stoker Company, 7 Cir., 171 F.2d 248; Golden Gate Bridge & Highway District of California v. United States, 9 Cir., 125 F.2d 872."

In Floyd v. Ring Construction Corp., 8 Cir., 1948, 165 F.2d 125, 129, certiorari denied 334 U.S. 838, 68 S.Ct. 1496, 92 L.Ed. 1763, we said:

"The law is `that the terms of a contract, if it be ambiguous, are matters of fact to be determined in the same manner as other facts; by the jury, if it be a jury case, or by the court, if the jury be waived; while the construction of the contract and its legal effect are questions of law for the court.\' Pike Rapids Power Co. v. Minneapolis, St. P. & S. S. M. R. Co., 8 Cir., 99 F.2d 902, 916; National Surety Corporation of New York v. Ellison, 8 Cir., 88 F.2d 399, 402; State v. Fellows, 98 Minn. 179, 187, 107 N.W. 542, 108 N.W. 825; Bell Lumber Co. v. Seaman, 136 Minn. 106, 161 N.W. 383, 384; Lucas v. Ganley Bros., 166 Minn. 7, 206 N.W. 934, 936.

"It is the law, also, as the court observed in this case (D.C., 66 F. Supp. 436, at page 438), that where ambiguity exists in a contract the construction the parties in their dealings and by their conduct have placed upon the terms will furnish the court with persuasive evidence of their meaning. 17 C.J.S. Contracts, § 325; City of South St. Paul v. Northern States Power Co., 189 Minn. 26, 248 N.W. 288, 291." (Emphasis supplied.)

It is our duty here on appeal to review such evidence as the court received in explanation of the ambiguity appearing in the contract between the parties. In consideration of such evidence, we must take that view thereof which tends to support the findings and conclusions of the trial court, in the same manner as we would consider such evidence as tending to support the verdict of a jury had a jury been sitting in this case and had it found in favor of the plaintiff. We must accept all inferences which reasonably tend to support the conclusions of the trial court. City of West Plains v. Loomis, 8 Cir., 1960, 279 F.2d 564, 567-568; United States v. Skolness, 8 Cir., 1960, 279 F.2d 350, 352-353.

Testimony was received as to the history of events giving rise to the final written agreement between the parties, namely, defendant's letter of June 6, 1949, and plaintiff's written acceptance thereof. Such testimony indicated that in 1943 plaintiff told Mr. John Friedl, then president and general manager of the defendant, who at the time of trial was deceased,²

"* * * I was in very poor health and that I wanted to resign. I said `I could obtain other employment which would pay me far more than I was getting and it wouldn\'t be so hard on my health, that the job in Sioux Falls was getting too rough for me to handle.\'"

And:

"A. I sat down and Mr. Friedl said `I don\'t question at all, Fred, that you could obtain employment paying you more than we are paying you. However,\' he says, `we are in a very, very serious emergency and we certainly don\'t want you to resign. We want you to go through this emergency and go as far as you can go. If it becomes necessary to retire you, you will be retired at the same pay that you are receiving now, and it will be paid to you each and every week as long as you live. You know from the way we are taking care of Mr. Hayes that we take care of our employees, and remember, if you stick with us you\'ll have nothing to worry about, your security is

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