George A. Fuller Co. v. Brown

Decision Date19 October 1926
Docket NumberNo. 2466.,2466.
Citation15 F.2d 672
CourtU.S. Court of Appeals — Fourth Circuit



George Rountree, of Wilmington, N. C. (Rountree & Carr, of Wilmington, N. C., on the brief), for plaintiff in error.

Robert Ruark, of Raleigh, N. C. (Ruark & Campbell, of Wilmington, N. C., and Ruark & Fletcher, of Raleigh, N. C., on the brief), for defendant in error.

Before WADDILL and PARKER, Circuit Judges, and COCHRAN, District Judge.

PARKER, Circuit Judge (after stating the facts as above)

Defendant's motion for judgment, at the conclusion of the evidence, was properly denied. Where a jury trial is waived pursuant to section 649 of the Revised Statutes (Comp. St. § 1587), such motion corresponds to a motion for a directed verdict in a trial before a jury; and the exception to the refusal of the motion presents only the question as to whether there was any substantial evidence before the court to sustain the allegations of the complaint. Societe Nouvelle d'Armement v. Barnaby (C. C. A. 9th) 246 F. 68, 158 C. C. A. 294. In passing upon such motion, as in passing upon a motion by defendant for a directed verdict, we must view the evidence in the light most favorable to plaintiff, and must draw therefrom all conclusions and inferences which can legitimately be drawn in plaintiff's favor.

The evidence establishes a promise by the defendant to pay to plaintiff as a "bonus" a share of the profits on each of the ships which it was engaged in building, conditioned upon plaintiff's remaining in the employment of defendant and rendering satisfactory services until the completion of all of the ships, and, as to the ships not completed at the time of the promise, that the profits realized upon them should justify the payment. It establishes that this promise of bonus was not of something vague and indefinite, but that a definite sum was paid plaintiff upon the completion of each of the first six ships, with the statement that this was approximately 50 per cent. of the bonus on that ship, and that the remaining 50 per cent. would be paid upon the completion of the twelve ships contemplated; that the bonus would be increased if the profits earned on succeeding ships should exceed the profits on the first; and that a similar amount would be distributed on succeeding ships if the profits earned should warrant same. It establishes that plaintiff relied upon the promises of defendant, and continued in its employment, rendering satisfactory service until the shipyard was closed, and that, because of the promises made him, he declined employment elsewhere at an increased salary And it establishes that the condition as to the making of profits was unquestionably fulfilled as to the second, third, fourth, fifth, and sixth ships, which were constructed at even greater profit than the first. In other words, the evidence shows a conditional offer on the part of plaintiff, acceptance on the part of defendant, a consideration, and a compliance with the conditions of the offer.

Defendant's position that there was no binding contract and consequently no liability on its part, rests upon three propositions: (1) That there was no definite promise to pay a bonus, but merely an indefinite statement of intention to give a gratuity, the carrying out of which was to depend upon the discretion of its own officers; (2) that, in any event, the bonus was not to be paid, except as authorized by the officers of defendant, and that they had not authorized the payment of same; and (3) that it was a condition of the payment of the bonus that the twelve ships should be completed, and that this condition had not been complied with. We shall consider these in order.

As to the first proposition, we think that the statement made to plaintiff, and embodied in the paper attached to his receipt, was more than a mere expression of intention of giving a gratuity When considered in connection with the surrounding circumstances, it was a definite promise that plaintiff should share in the profits realized from each of the ships. Defendant had a profitable contract with the government, but, on account of disorganized labor conditions, the realization of profit from the contract depended upon its ability to hold its organization together and to proceed with the work. It therefore made this offer to share profits, not only to plaintiff, but to various other persons who occupied positions in its organization, paying only half of the bonus to which they were entitled upon the completion of each of the ships, and holding back the other half, which it promised to pay upon the completion of the twelve which it represented that it intended to build. It is true that the paper attached to plaintiff's receipt contained the words, "This bonus is paid to you as a reward for the services you have rendered in the construction of the ship named, but it is understood that it is not a part of the compensation provided in your employment arrangements."

But, conceding to this language its full effect, it does not mean that the amount paid, or promised plaintiff, was a gift without consideration, but, as expressly stated, was a "bonus," which "is not a gift or gratuity, but a sum paid for services, or upon a consideration in addition to or in excess of that which would ordinarily be given." Kenicott v. Wayne County, 16 Wall. 452, 471, 21 L. Ed. 319; Noel, Collector, v. Parrott, 15 F.(2d) 669 (C. C. A. 4th) decided June 8, 1926; Payne v. U. S., 50 App. D. C. 219, 269 F. 872; Roberts v. Mays Mills, 184 N. C. 406, 114 S. E. 532, 28 A. L. R. 338; Zuolanek v. Mfg. Co., 150 Wis. 517, 137 N. W. 769, 44 L. R. A. (N. S.) 1214, Ann. Cas. 1914A, 793.

The law applicable to such cases was well stated by the late Chief Justice Clark, of the Supreme Court of North Carolina, in the case of Roberts v. Mays Mills, supra, as follows:

"It has become a very general policy with large employers of labor to offer a bonus or additional compensation to employees who shall render continuous and efficient service for a specified period of time. This is not a gratuity or gift, but is an offer on the part of the employer, with whom the offer originates in order to procure efficient and faithful service and continuous employment, and when the employee enters upon the service upon that inducement it becomes a supplementary contract of which he cannot be deprived without sufficient cause."

In the case of H. S. Kerbaugh, Inc., v. Gray (C. C. A. 2d) 212 F. 716, 129 C. C. A. 326, having under consideration the validity of an agreement to pay a bonus to certain employees, in addition to the salary paid them, Judge Ward, speaking for the court, said:

"The objection mainly relied upon at the trial and here was that this promise of a bonus, if made, was nudum pactum because the plaintiff, being bound to do his best for his salary, gave nothing in the way of consideration to support the promise of a bonus. This would be true if the plaintiff were legally bound to continue in the employment of the defendant to the end of the season. But he was not, and could have quit work at any time. Martin v. New York Life Ins. Co., 148 N. Y. 117, 42 N. E. 416. Therefore the jury had a right to find that he continued in the employment after this promise of a bonus, relying upon it."

It is said, however, that there was no promise to pay the "bonus," but a mere expression of hope or expectation on the part of defendant, mere "words of prophecy, encouragement, or bounty, holding out a hope, but not amounting to a covenant." But we do not so interpret them. When the first $300 was paid to plaintiff, he was told:

"This amount is approximately fifty per cent. of the total amount to be paid you. The remaining fifty per cent. will be paid upon the completion of the twelve vessels now under construction." (Italics ours.)

And this same definite statement was either expressly or impliedly made each time a bonus was paid plaintiff on the five succeeding ships, and each time the receipt of plaintiff for the bonus money paid him was attached to a paper containing the same statement. It is clear that this was not mere "prophecy" or "holding out a hope," but a definite promise. The conditions following the promise we shall discuss later on, but, so far as this language is concerned, there can be no doubt that it is a promise. Nor do we think that the language as to the bonus to be paid on the succeeding ships is mere language of hope or prophecy. It is true that the statement is that the defendant "expects" to distribute a share of the profits on each of the succeeding hulls, but this is followed by a qualifying statement which not only adds a condition, but gives definiteness, viz. "Under the same...

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