Fujimoto v. Rio Grande Pickle Company

• Decision Date: 11 July 1969
• Docket Number: No. 26553.,26553.
• Citation: 414 F.2d 648
• Parties: George FUJIMOTO et al., Plaintiffs-Appellees, v. RIO GRANDE PICKLE COMPANY, Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

414 F.2d 648 (1969)

George FUJIMOTO et al., Plaintiffs-Appellees, v. RIO GRANDE PICKLE COMPANY, Inc., Defendant-Appellant.

No. 26553.

United States Court of Appeals Fifth Circuit.

July 11, 1969.

COPYRIGHT MATERIAL OMITTED

Benjamin S. Hardy, Thomas G. Sharpe, Jr., Brownsville, Tex., Eugene H. Tepley, Denver, Colo., for appellant.

Asa V. Bland, Atlas, Schwarz, Gurwitz & Bland, McAllen, Tex., for appellees.

Before GOLDBERG and MORGAN, Circuit Judges, and LIEB, District Judge.

GOLDBERG, Circuit Judge:

This appeal involves claims by George Fujimoto and Jose Bravo against the Rio Grande Pickle Company upon written contracts of employment. The questions before us are of contract formation and construction.

Rio Grande Pickle Company, a Colorado corporation engaged in the business of raising and selling cucumbers for the pickling industry, hired Fujimoto in the Spring of 1965 and Bravo in the following Fall. Both of these employees were given important jobs. Fujimoto was employed as the supervisor of the planting and growing operations, while Bravo functioned as the labor recruiter.

In order to encourage them to work with zeal and not to leave the company's employ, Rio Grande offered contracts with profit sharing bonus provisions to both Fujimoto and Bravo. Prior to the offer of the written contracts, the company had responded to the offerees' demands for more compensation by orally agreeing to pay them a salary plus a bonus of ten per cent of the company's annual profits. Bravo told the president of Rio Grande that he wanted the agreement in writing, and the president replied "I will prepare one and send you a contract in writing." The contractual documents sent to Fujimoto and Bravo did not specify how the offers could be accepted or how the acceptances should be communicated to the company. Under these circumstances Fujimoto and Bravo signed their respective contracts but did not return them to the company. Believing that they had accepted the company's offers and that they were working under the proffered bonus contracts, the two employees remained in the employ of Rio Grande until November 30, 1966.

The written contracts called for the employees to devote their best efforts to Rio Grande and promised in return that the company would pay each offeree a bonus amounting to ten per cent of the company's net profits for each fiscal year. Each employee was to agree to return half of his bonus to the company as an investment in company stock.

Partly as a consequence of projected changes in the nature of the corporation's business, Fujimoto and Bravo quit their jobs with Rio Grande on November 30, 1966. Shortly thereafter the company ceased doing business in Texas. Fujimoto and Bravo then brought this suit, claiming that they had accepted the offered contracts and that they had not received the ten per cent bonuses due them. They alleged that they were each entitled to ten per cent of the company's net profits for the fiscal year ending September 30, 1966, and ten per cent of the profits of the subsequent two months, October and November, 1966.

In answer to special interrogatories the jury found that Fujimoto and Bravo each had entered into a written contract in October, 1965. It was then determined that Fujimoto and Bravo should each recover the sum of $8,964.25 as damages for the company's breach of contract.

On appeal Rio Grande argues that there is insufficient evidence in the record to support the jury's finding that Fujimoto and Bravo had accepted the offered bonus contracts. The company further argues that even if the contracts had been accepted, the district court's judgment still should be reversed because the court erred in charging the jury as to how to compute the net profits of the corporation.

We have concluded that employment contracts were accepted and that they subsisted throughout the fiscal year ending September 30, 1966, and for two months into the following fiscal year. However, we have also concluded that the district court erred in instructing the jury on how to compute Rio Grande's net profits for the truncated period of October and November, 1966. The judgment of the district court is, therefore, affirmed in part and reversed and remanded in part.

I.

Rio Grande argues that there were no contracts because Fujimoto and Bravo did not accept the written bonus offers by signing and returning the written instruments to the company. Each contract was signed by the respective employee, but neither was returned. Thus the first issue is whether the offers, which by their terms did not specify the means by which they could be accepted, could be accepted by a mode other than the return of the signed instruments.

Professor Corbin has summarized the law on this issue as follows:

"In the first place, there is no question that the offeror can require notice of acceptance in any form that he pleases. He can require that it shall be in any language and transmitted in any manner. He may require notice to be given by a nod of the head, by flags, by wig-wag, by a smoke signal on a high hill. He may require that it be by letter, telegraph or radio, and that there shall be no contract unless and until he is himself made conscious of it.

"Secondly, the offeror can specify a mode of making an acceptance of his offer, without making that method exclusive of all others. If the mode that he specifies is one that may not bring home to him the knowledge that his offer has been accepted, then such knowledge by him is not a requisite. The offeror can specify a mode of acceptance without any knowledge of the law of contract and without thinking in terms of offer and acceptance at all. This will be considered below.

"Thirdly, if the offeror specifies no mode of acceptance, the law requires no more than that the mode adopted shall be in accord with the usage and custom of men in similar cases. If proof of such usage and custom is wanting or is uncertain, the court must consider probable convenience and results and then help by its decision to establish a custom for the future and a rule of law." Corbin on Contracts § 67, p. 109 Student Ed. 1952.

See also Allied Steel & Conveyors, Inc. v. Ford Motor Company, 6 Cir. 1960, 277 F.2d 907, 910-911.

This case falls within the third of Professor Corbin's rules. Neither written offer specified a particular mode of acceptance, and there is no evidence that Rio Grande ever manifested any intent that the offers could be accepted only by the return of the signed instruments. Moreover, there is substantial and convincing evidence to the contrary. The record is replete with evidence that the company conditioned the bonus offers primarily upon the offerees remaining in the company's employment and that the employees understood that they did not have to return the signed contracts in order to have contracts under which they would each get a ten per cent bonus.

Since we have found that the return of the signed documents was not the exclusive means by which the offerees could convey their acceptances, we must now determine whether Fujimoto and Bravo in fact adequately communicated such acceptances to the company. Where, as here, the offer and surrounding circumstances are silent as to permissible modes of acceptance, the law requires only that there be some clear and unmistakable expression of the offeree's intention to accept. In the words of Professor Corbin:

"Whenever the case is such as to require a notice of acceptance, it is not enough for the offeree to express mental assent, or even to do some overt act that is not known to the offeror and is not one that constitutes a customary method of giving notice. If the overt act is one that clearly expresses an intention to accept the specific offer and is in fact known by the offeror, there is an effective acceptance. This is because the offeror has actual knowledge." Emphasis added. Corbin on Contracts, supra, § 67 at p. 111.

As Professor Corbin indicates, the mode of expressing assent is inconsequential so long as it effectively makes known to the offeror that his offer has been accepted. One usually thinks of acceptance in terms of oral or written incantations, but in many situations acts or symbols may be equally effective communicative media. See Restatement of Contracts § 21. In the words of Chief Judge Brown in Aetna Casualty & Surety Co. v. Berry, 5 Cir. 1965, 350 F.2d 49, 54:

"That the communication from the Berry Companies to Aetna was not in words express goes only to the weight and clarity of the message, but it does not mean that no contract came into existence. Of necessity, the law has long recognized the efficacy of non-verbal communications. From the formation of contracts by an offeree\'s silence, nod, hand signal "v" or "x" on an order blank to the doctrine of admission by silence, the law has legally realized that to offer guidance and comment meaningfully on the full range of human conduct, cognizance must be taken of communications other than by words. Symbols for words often suffice. Lawyers and Judges live by them, as the citation to this very case may sometime demonstrate."

See also McCarty v. Langdeau, Tex.Civ. App.1960, 337 S.W.2d 407, 412 (writ ref'd n. r. e.).

In the case at bar there is substantial evidence to support the jury's finding that the company knew that the offerees had agreed to the terms of the proffered bonus contracts. Of particular importance is the fact that Fujimoto and Bravo, who had threatened to quit unless their remuneration was substantially increased, continued to work for the company for fourteen months after receiving the offers. Moreover, during this fourteen-month period they did not again express dissatisfaction with their compensation. There is also evidence that Fujimoto and Bravo discussed the bonus contracts with the company president in such circumstances and in such a manner that their assent and acceptance should have been unmistakable to him. In view of ...