Chapin v. Cambria Iron Co.

• Decision Date: 09 November 1891
• Docket Number: 213
• Citation: 145 Pa. 478,22 A. 1041
• Parties: P.E CHAPIN v. CAMBRIA IRON CO
• Court: Pennsylvania Supreme Court

22 A. 1041

145 Pa. 478

P.E CHAPIN v. CAMBRIA IRON CO

No. 213

Supreme Court of Pennsylvania

November 9, 1891

Argued October 12, 1891

APPEAL BY DEFENDANT FROM THE COURT OF COMMON PLEAS OF CAMBRIA COUNTY.

No. 213 October Term 1890, Sup. Ct.; court below, No. 58 September Term 1888, C.P.

On June 22, 1888, service was made of a summons in an action of assumpsit brought by Philip E. Chapin against the Cambria Iron Company. On September 1, 1888, the plaintiff filed a statement of claim, averring in substance:

That on or about January 1, 1881, the plaintiff made a verbal contract with Daniel J. Morrell, who was then in the employment of and acting for the Cambria Iron Company as general manager, and was also chairman of the Gautier Steel Company, Limited, then being conducted as an independent organization, but really controlled and managed by the Cambria Iron Co., to become the superintendent of said steel company at an annual salary of ten thousand dollars, the plaintiff being then informed by said Morrell that negotiations were pending and would be consummated for the purchase of said steel company, and its conversion into a department of said iron company of which plaintiff should be general superintendent; that, pursuant to said agreement, the plaintiff left a situation of large profit at Cleveland, O came to Johnstown, Cambria county, Pa., on March 1, 1881 assumed the position of general superintendent of said steel company, and thereafter discharged its duties; that on July 1, 1881, the works of said steel company were united to and became a part of the Cambria Iron Co., under the title of the Gautier Steel Department of the Cambria Iron Co., and the plaintiff, without any new or further or other contract, but under the direction of the general manager of said iron company, continued as general superintendent of said department until December 31, 1883, his total salary for said term of service amounting to $28,333.34; that, on or about December 1, 1883, the plaintiff was solicited by defendant to accept the position of general manager of defendant's works at Johnstown, the defendant agreeing to pay the plaintiff an annual salary of twelve thousand dollars in said position; that the plaintiff accepted said position and discharged its duties from January 1, 1884, until December 31, 1887, the total salary earned by him therein being $48,000; that the defendant did not pay in full the salary earned by the plaintiff in either of the said positions balances being left due to him for each year of his service upon which he claimed interest. Then followed a statement of the plaintiff's account against the defendant, exhibiting a claom for $6,901.77 balance against the defendant, exhibiting a claim for $6,901.77 balance due on September 1, 1888, on account of salary as superintendent of the steel department, and a balance of $7,367.42, due September 1, 1888, on account of services as general manager of the defendant company.

The defendant pleaded non-assumpsit and payment with leave.

At the trial, on June 10, 1890, the plaintiff and his wife both testified to the making of the contract set out in the statement of claim respecting the superintendency of the Gautier Steel Co., stating that Mr. Morrell, who was plaintiff's father-in-law, came to Cleveland, and after explaining arrangements on foot for making that company a department of the Cambria Iron Co., offered the plaintiff a salary of ten thousand dollars if he would take the superintendency, which offer the plaintiff, after coming to Johnstown and looking over the situation, accepted on February 7th. Plaintiff testified, also, that on the same day, Mr. Morrell wrote a letter to E. Y. Townsend, the president of the Cambria Iron Co., informing him of such acceptance, though the letter did not mention the subject of salary; that the plaintiff saw and read the letter before it was sent, and Mr. Townsend afterwards admitted the receipt of the letter.

Under the by-laws of the Gautier Steel Co., Limited, which were in evidence, the power to appoint and discharge superintendents and fix their salaries, was vested in the board of managers. The by-laws of the Cambria Iron Co., adopted in 1878, authorized the general manager to appoint, fix the salaries of, and discharge certain specified superintendents of departments, "and such other agents and clerks as may be necessary."

To rebut the plaintiff's allegations as to the making of an express contract in regard to the amount of his salary on February 7th, the defendant made the following offer of a letter from Mr. Morrell (who had died before the action was brought), to Dr. C. S. Wurts, who was one of the managers of the Gautier Steel Co. and vice-president of the Cambria Iron Company:

Defendant offers letter of Daniel J. Morrell, dated May 4, 1881, to Dr. C. S. Wurts, as part of the res gestae of the employment, and in relation to the salary of Mr. Chapin; to be followed by proof that no letter was received by the Cambria Iron Co., or by Mr. Townsend informing him or the company of Mr. Chapin's acceptance of Mr. Morrell's offer, as testified to by Mr. Chapin.

The letter was as follows:

"JOHNSTOWN, Pa., May 4, 1881.

"DR. C. S. WURTS.

My dear Sir: Yours of yesterday is at hand, and I note the action of the board of managers of the Gautier Company, Limited, in accepting the resignation of Mr. Charles Douglass and confirming the appointment of Mr. Chapin as superintendent. I have made no arrangement with Mr. C. as to salary, and shall wish to have that question considered when I am next in the city, unless we can sooner have a meeting of the board here, . . . .

Yours truly,

"D. J. MORRELL."

Objected to, as incompetent to affect the plaintiff, and irrelevant; that it is no part of the res gestae of the employment of Mr. Chapin, as it is written more than two months after he entered the employ of the Gautier Steel Co., Limited, that having occurred on the first of March and the contract alleged by him having been consummated on the seventh of February, three months previous to this letter; that this is a letter between other parties, both of whom were in the Cambria Iron Co., and it is not shown, or offered to be shown, that the contents of it were ever communicated to the plaintiff.

By the court: The objection to the admission of the letter offered in evidence is sustained, the letter is excluded; exception.

Further facts were made to appear as follows:

On March 1, 1881, the Cambria Iron Co., which was the largest stockholder of the Gautier Steel Co., completed the purchase of the interests of the other stockholders therein, and became the sole owner. From that date until July 1, 1881, the business of the steel company continued to be conducted under its reorganization as a limited partnership, but on the latter date, its accounts having been closed up, it was formally made a department of the iron company.

The plaintiff came to Johnstown on March 1, 1881. For the succeeding two months he was occupied principally in familiarizing himself with the business and with his duties, as superintendent; Charles Douglass, who had for some time been the superintendent of the steel company, still continued to act as such until May 1st, when the plaintiff took regular charge of the business. No entry was made upon the books of the steel company with reference to the plaintiff's salary until June 30th, when an account was opened in which he was credited with $2,333.33 as salary. This sum was equal to the amount of four months' salary at the rate of seven thousand dollars per year. Plaintiff testified that this credit was entered by direction of Mr. Morrell, defendant's general manager, who informed him, at the time of giving such direction, that the remainder of his salary, three thousand dollars per annum, would be paid by the Philadelphia office of the iron company. In this account the plaintiff was debited with various sums received by him, and the account was balanced, showing the sum of $99.41 due him. This balance was then carried over to the books of the Cambria Iron Co., opened for the Gautier Steel department. The plaintiff was thereafter regularly credited therein with $583.33 monthly, and the sums so credited were paid to him at the Johnstown office.

The plaintiff testified that in 1882 he spoke to Mr. Morrell in regard to the payment of the three thousand dollars per annum, and the latter promised to arrange for its payment during a visit he was about to make to the company's general office at Philadelphia, but on his return said that he had forgotten it; that in the spring of 1883, Mr. Morrell's health having failed, and his mind having become a wreck, the plaintiff called the matter of salary to the attention of E. Y. Townsend, president of the company, who thereupon said that he knew of the salary contract made with Mr. Morrell, and the three thousand dollars would be paid; and that subsequently the plaintiff received from the Philadelphia office one thousand dollars on account of it. Mr. Townsend, testifying for the defendant, denied having had the conversation referred to, and denied that the one thousand dollars, received by the plaintiff from the Philadelphia office, was paid on account of salary, stating that it was advanced to and debited against him as a loan, and the debit was afterwards charged to the expense account for some reason that the witness could not remember. On cross-examination, the witness testified further:

"Q. Was it not a common practice for you to pay your superintendents at Johnstown a certain proportion of the salary through the Johnstown office, and another through the Philadelphia office? A. Not merely superintendents; it was done in this way, and has always been done: A...