General Paint Corporation v. Kramer

• Decision Date: 22 April 1932
• Docket Number: No. 529.,529.
• Citation: 57 F.2d 698
• Parties: GENERAL PAINT CORPORATION et al. v. KRAMER.
• Court: U.S. Court of Appeals — Tenth Circuit

57 F.2d 698 (1932)

GENERAL PAINT CORPORATION et al. v. KRAMER.

No. 529.

Circuit Court of Appeals, Tenth Circuit.

March 24, 1932.

Rehearing Denied April 22, 1932.

A. A. Davidson, of Tulsa, Okl. (Preston C. West and West, Gibson, Sherman, Davidson & Hull, all of Tulsa, Okl., and Orrick, Palmer & Dahlquist, of San Francisco, Cal., on the brief), for appellants.

John H. Cantrell and A. J. Biddison, both of Tulsa, Okl. (Harry Campbell and Valjean Biddison, both of Tulsa, Okl., on the brief), for appellee.

Before LEWIS, COTTERAL, and McDERMOTT, Circuit Judges.

McDERMOTT, Circuit Judge.

The defendants appeal from a judgment for $56,625 rendered upon the verdict of a jury. The plaintiff declared upon a breach of an oral contract of employment for his lifetime. The defendants denied the oral contract; denied the authority of the agent with whom the plaintiff claimed he dealt, to make such a contract; and objected to the introduction of any proof of such oral agreement, for that it altered the terms of a written contract of employment and contravened an applicable Oklahoma statute. Hill, Hubbell & Co. merged with the General Paint Corporation in October, 1928, retaining, however, its corporate existence; for the purposes of this case, the two corporations may be treated as one. The proof most favorable to plaintiff disclosed the following state of facts:

The defendant corporations were engaged in the paint business, with broad corporate powers, including the power to acquire patent rights. D. W. Boylan was an executive officer of both companies, with power of managerial supervision over Oklahoma business. Plaintiff was continuously employed by the defendants from 1927 until his discharge in February, 1930. During 1928 the plaintiff invented certain valuable improvements for a wrapping machine used by the defendants in their business. Plaintiff was the legal and equitable owner of all rights to his inventions, save perhaps shop rights of his employers, not here questioned. In April, 1929, a written contract of employment was entered into between plaintiff and Hill, Hubbell & Co., and in May, 1929, a written contract of employment was entered into between plaintiff and the General Paint Corporation, on its own behalf and that of its subsidiaries. These contracts are substantially the same; the latter and controlling one is set out in the margin.¹

This contract does not cover the patent rights here involved, for plaintiff's rights to them attached before the contract was made. Over seasonable and vigorous objection, plaintiff testified to a conversation alleged to have been had between him and Mr. Boylan, in June, 1929, which was during the existence of this written contract of employment, as follows:

"A. I came out to the office, out on the Sand Springs road, and saw Mr. Boylan, told him I would like for him to ride out with me to the Oklahoma Natural Gas yards where I was then setting up a wrapping machine for the Oklahoma Natural people. He rode out there with me and commended me very highly on the lay-out I was progressing on, and he said he kind of thought as soon as I got through he would have me make that change in the entire plant; that is, at Milwaukee and other places. After we talked awhile we got in the car and came back, and I asked him when he was going to have me go back to Milwaukee and the other plant, and he told me not to worry about that; that I would be taken care of, not to let that bother me at all, not to worry about it, that I would always be taken care of, and he said they were having, we were having, they were having some papers fixed up for the inventions and ideas that I had pertaining to the wrapping machine and that they would send them to me some of these days pretty soon, they would be coming along, for me to sign them and return them, mail them back, and have them taken care of; that I shouldn't worry, that I would always have a job the rest of my life at my present salary. * * *

"Q. After you got back to the plant did you have any further conversation with Mr. Boylan with reference to the transfer of the rights to these inventions? A. He said not to worry at all about it; take care of that situation when it is mailed to you, and you will always get your $400.00 a month.

"Q. Did you make any inquiry at that time as to what work there would be for you to do? A. He told me not to worry, there would be lots to do, would be plenty to do; they would call on me whenever they needed me."

On August 21, 1929, attorneys for defendants sent to plaintiff, for his signature and return, applications for patents to the improvements in question and assignments thereof to defendants. Plaintiff signed as requested, and returned the papers on August 26. No mention of any agreement for life employment is mentioned in the correspondence. The assignments recite a consideration of "One Dollar ($1.00) and other good and valuable considerations received by the said assignor from said assignee aforesaid, the receipt of which is hereby acknowledged." The defendants have continued to use a part of plaintiff's inventions, and have retained the assignments to all of them.

There was no interruption in the employment, plaintiff drawing his salary each month, and reporting for such work as he might do, until January, 1930, when he was advised that the directors "had decided to let me go and that they didn't just want to turn me loose but wanted to give me $75.00 a month." Plaintiff refused to accept this, asserted that he had a different arrangement, and in March, 1930, filed this action. One of the counts was on quantum meruit for the value of the patent rights assigned, but this was dismissed before submission to the jury.

The defendants' evidence controverted the oral agreement testified to by plaintiff, but the verdict of the jury has settled that. Mr. Boylan testified as to his authority as follows: "I have no authority from either corporation to hire men for life. I have no authority from either corporation to hire men for any length of time. I have never at any time employed men for a definite period. I have never at any time employed men during their lifetime."

We are of the opinion that it was error to admit proof of the oral agreement. The effect of this conversation was to alter the written contract in one important particular, a change in the term of the employment from one at will to one for life. The parties remain the same, the salary the same, and there is no suggestion of any other change. The contract itself provides that no modification thereof shall be valid, unless in writing indorsed thereon. Moreover, the state of Oklahoma, where this contract was made and to be performed at least in part, and whose courts are asked to enforce it, has declared its public policy by a statute which reads: "A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise." C. O. S. 1921, § 5081.

The power to enact such a statute cannot be questioned. It is the same power which enables a state to enact statutes of frauds and perjuries. The Oklahoma courts have repeatedly sustained and applied the statute. Early v. King, 38 Okl. 206, 135 P. 286; Maisen v. Cartwright, 43 Okl. 737, 144 P. 375; Walker v. Johnson, 102 Okl. 9, 227 P. 113; Walker Drilling Co. v. Carlew, 109 Okl. 7, 234 P. 598; Newman v. Roach, 111 Okl. 269, 239 P. 640.

On the face of it, the evidence as to the oral agreement is in the teeth of this statute. The oral agreement altered one of the terms of the written contract of employment; the agreement was not in writing, and, of course, was not executed, as it could not be as long as plaintiff lived, for another Oklahoma statute prescribes that "an executed contract is one, the object of which is fully performed. All others are executory." C. O. S. 1921, § 5064. The plaintiff, however, argues, plausibly and forcibly, several reasons why the testimony was admissible. We turn to them.

1. It is urged that the writing is not a contract at all; that, since either party might terminate the employment at any time, without notice or liability, neither party was bound for a moment of the future; that, at best, it is no more than a document which measures the rights of the parties as long as work was performed under it. In support of this contention, we are referred to the long line of decisions which deal with the so-called "will, wish or want" agreements, and which hold that an agreement of one to buy as much as he wills, wishes, or wants is not sufficient consideration to support the counter promise of the other to sell. Santaella & Co. v. Lange Co. (C. C. A. 8) 155 F. 719; Cold Blast Transp. Co. v. Kansas City Bolt & Nut Co. (C. C. A. 8) 114 F. 77, 57 L. R. A. 696; Curtiss Candy Co. v. Silberman (C. C. A. 6) 45 F.(2d) 451. We are in entire accord with the doctrine laid down by these cases, and, if the plaintiff were here suing because the defendants, after making the written contract, refused him any employment, we should hold that there was no contract for which a recovery could be had for breach of an agreement for future services. But we do not think the cases are in point. The question is not what liability exists on account of a breach of the written agreement; the question is, Is the writing a contract? If it is not a contract, one may well ask, what is it? True, it is terminable at will; but, under plaintiff's own theory, he worked under it from June until August. Having so worked, the writing contains enforceable agreements of both parties; agreements of defendants to pay $400 a month, and to pay the expense of securing patents on inventions of plaintiff during the period; agreements of plaintiff to disclose in writing discoveries made by him during that period to the defendants and not to disclose them to others. Here are mutual enforceable promises, and that makes a contract.

The plaintiff treats the writing as a "contract to emplo...