Hanson v. Central Show Printing Co.

• Decision Date: 20 October 1964
• Docket Number: No. 51381,51381
• Parties: Harry G. HANSON, Appellant, v. CENTRAL SHOW PRINTING CO., Inc., Appellee.
• Court: Iowa Supreme Court

Page 654

130 N.W.2d 654

256 Iowa 1221

Harry G. HANSON, Appellant, v. CENTRAL SHOW PRINTING CO., Inc., Appellee.

No. 51381.

Supreme Court of Iowa.

Oct. 20, 1964.

Brown, Dresser, Kinsey & Jolas, Mason City, for appellant.

Pappas & Senneff, Mason City, for appellee.

THOMPSON, Justice.

We state the material facts which were before the court as made by the plaintiff's evidence; and for the purpose of our consideration of the propriety of the ruling of the trial court in granting the defendant's motion for a peremptory verdict and entering judgment thereon, we take them as true. The governing rule at this point is well established.

The case as made by the plaintiff's evidence is that he was a skilled pressman, and had been in the employ of the defendant corporation at Mason City for many years prior to 1959. In the autumn of that year he had an opportunity to obtain a steady job with the Stoyles Printing Company, also of Mason City. He knew that the defendant's business was often slack in the winter, and contacted G. C. Venz, the president of defendant, to learn whether he would have steady work with it. This resulted, after some negotiations, in an arrangement expressed in a letter from Venz to the plaintiff, which is set out:

'Oct. 21, 1959

Mr. Harry Hanson,

Starting today Oct. 21, I will guarantee you 40 hours work per week thru out the entire year each year until you retire of your own choosing.

/s/ G. C. Venz, Pres.'

The plaintiff thereupon elected to remain in the employ of the defendant, and did so until October 21, 1961, when he was discharged, without cause. His hourly rate of pay was $2.77 1/2. He asks 'damages in the past and in the future at the rate of $2.77 1/2 per hour for 40 hours per week throughout the entire year for each year and until he retires, all according to the terms of the employment contract', and for costs. At the close of his evidence the trial court granted the defendant's motion for a directed verdict, and from the judgment entered thereon the plaintiff appeals.

I. The question before us is essentially a simple one, and has been before the courts of the various jurisdictions many times. The rule which has been generally followed is thus set forth in 35 A.L.R. 1432: '* * * in the absence of additional express or implied stipulation as to the duration of the employment or of a good consideration additional to the services contracted to be rendered, a contract for permanent employment, for life employment, for as long as the employee chooses, or for other terms purporting permanent employment, is no more than an indefinite general hiring terminable at the will of either party.' This rule fits the situation before us, where the employment was to be 'until you retire of your own choosing.'

Many courts have applied and followed this rule. In 1961 Judge Henry Graven of the United States District Court Northern District of Iowa, discussed it at length in Bixby v. Wilson & Company, 196 F.Supp. 889. He concluded that while he was bound to follow the Iowa law on the question, it had not been exactly passed upon by the Iowa courts, but that there were strong indications the rule stated above would be followed. In that case the plaintiffs had been employed by the defendant during a strike at its Cedar Rapids plant. They were informed that their employment would be permanent. In reliance upon this promise some gave up other jobs; some gave up farm leases; and some moved to Cedar Rapids. But the trial court held that these things were insufficient consideration to support the claimed contract for permanent employment, and rendered judgment for the defendant.

The defendant urges here lack of mutuality; that is, it contends the plaintiff was not bound to any specific or enforceable term of employment. This is true; but lack of mutuality is not always proof of want of consideration. We have said: 'If the lack of mutuality amounts to a lack of consideration, then the contract is invalid. But mere lack of mutuality in and of itself does not render a contract invald. * * * Though consideration is essential to the validity of a contract, it is not essential that such consideration consist of a mutual promise.' Standard Oil Co. v. Veland, 207 Iowa 1340, 1343, 224 N.W. 467, 469. We quoted this with approval in Des Moines Blue Ribbon Distributors, Inc. v. Drewrys Ltd., U.S.A., Iowa., 129 N.W.2d 731, 736.

So the lack of mutuality in itself is not fatal to plaintiff's case, if there is other consideration. He contends that he gave up the opportunity to take other employment; that this was a detrinment to him, and so furnished consideration for the agreement. But it has been repeatedly held that this is not sufficient in contracts for permanent employment, or, as the plaintiff contends here, until he should 'retire of your own choosing.' In Edwards v. Kentucky Utilities Co., 286 Ky., 341, 150 S.W.2d 916, 919, 135 A.L.R. 642, where the plaintiff had left another job at defendant's request on the assurance of a permanent job, the Kentucky Court of Appeals said: 'But be this as it may, no consideration was paid to the appellee for the contract of employment sued on; and we are not disposed to broaden the present rule in this state by which such contracts are construed as contracts terminable at the will of either party * * *.' So, in Chesapeake & Potomac Tel. Co. v. Murray, 198 Md. 526, 84 A.2d 870, 873, it was held: 'However, the mere giving up of a job, business or profession by one who decides to accept a contract for alleged life employment is but an incident necessary on his part to place himself in a position to accept and perform the contract, and is not consideration for a contract of life employment.'

The same question was before the Michigan Supreme Court in Adolph v. Cookware Co. of America, 283 Mich. 561, 278 N.W. 687, 689, where it was said: 'Plaintiff's proofs, taken as true, showed a contract for permanent employment. Such a contract is for an indefinite period, and, unless for a consideration other than promise of services, the employment was terminable at the will of either party. Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315, and cases there cited.

'The action of plaintiff in giving up the practice of his profession was but an incident necessary on his part to place himself in a position to accept and perform he contract and not a price or consideration paid to defendant for the contract of employment.' Cited is also Lord v. Goldberg, 81 Cal. 596, 22 P. 1126, 15 Am.St.Rep. 82.

The question was extensively considered in Skagerberg v. Blandin Paper Co., 197 Minn. 291, 266 N.W. 872. The plaintiff's case showed that he was a consulting engineer, specializing in the field of heating, ventilating, an air conditioning. While he was employed by the defendant, he received an offer from Purdue University for emploment at a yearly salary, which would leave him free for three months to continue his practice; and while performing his duties at the university he would be permitted to carry on his private work so far as time permitted. He communicated this offer to the defendant, which promised, if he would refuse the Purdue offer and would purchase the home of defendant's power superintendent it would give him permanent employment. A demurrer was sustained in the trial court and judgment affirmed by the Minnesota Supreme Court. That court said: 'The words 'permanent employment' have a well-established meaning in the law. The general rule is well stated in 18 R.C.L. p. 509, § 20: 'In case the parties to a contract of service expressly agree that the employment shall be 'permanent' the law implies, not that the engagement shall be continuous or for any definite period, but that the term being indefinite the hiring is merely at will.' Loc. cit. 197 Minn. 292, 266 N.W. 873, 874.

With reference to plaintiff's contention that consideration passed from him to the defendant, the court said: 'The effort of plaintiff to show an additional consideration passing from him to defendant was abortive, since it shows that the merely abandoned other activities and interests to enter into the service of defendant--a thing almost every desirable servant does upon entering a new service, but which, of course, cannot be regarded as constituting any additional consideration to the master.' To the same effect is Arentz v. Morse Dry Dock & Repair Co., 249 N.Y. 439, 164 N.E. 342, 344, 62 A.L.R. 231.

Our own cases, while not entirely clear on the point, seem to uphold the authorities from other jurisdictions. Thus in Lewis v. Minnesota Mutual Life Insurance Company, 240 Iowa 1249, 37 N.W.2d 316, we stated and followed the general rule that in the absence of a consideration in addition to the services to be rendered, contracts for permanent employment...