Joseph v. Krull Wholesale Drug Co.

• Decision Date: 19 December 1956
• Docket Number: Civ. A. No. 15362.
• Citation: 147 F. Supp. 250
• Parties: Charles E. JOSEPH v. KRULL WHOLESALE DRUG CO.
• Court: U.S. District Court — Eastern District of Pennsylvania

147 F. Supp. 250

Charles E. JOSEPH v. KRULL WHOLESALE DRUG CO.

Civ. A. No. 15362.

United States District Court E. D. Pennsylvania.

December 19, 1956.

COPYRIGHT MATERIAL OMITTED

H. P. Abramson, Maurice Abrams, Philadelphia, Pa., for plaintiff.

Thomson F. Edwards (of Pepper, Bodine, Frick, Scheetz & Hamilton), Philadelphia, Pa., for defendant.

VAN DUSEN, District Judge.

This case is before the court on plaintiff's post-trial motions after a jury rendered a special verdict in defendant's favor in this contract action. Considering the testimony in the light most favorable to the jury's verdict, the facts will be summarized below.

Following preliminary meetings with the officers of the defendant company,¹ the plaintiff, Charles E. Joseph, on Wednesday, October 17, 1951, at the Warwick Hotel in Philadelphia met with Paul D. Helfrich, President, and Harry C. Andersen, Vice-President and Secretary, of the defendant company. At this time, the latter officers presented to the plaintiff an offer of employment as sales manager for the defendant, Krull Wholesale Drug Company, on the basis of paying him $833.33 a month.² The agreement was to be terminable at will by either party.³ At the meeting, the plaintiff suggested that the company make him a vice-president in charge of sales, as it would carry prestige in the trade, and also said he would like to discuss the entire thing with his wife and family and would call either Mr. Helfrich or Mr. Andersen to let them know whether he would accept the proposition offered to him.

On Friday, October 19, plaintiff called Mr. Andersen, who was at his home in Drexel Hill, Pa., from Pelham, New York, and accepted the offer. On Monday, October 22, 1951, a meeting of the Board of Directors was called, at which Mr. Paul Helfrich, Mr. Andersen and Mr. Wilton Helfrich were present.⁴ As a result of this meeting, a resolution was adopted by the Board which elected the plaintiff vice-president in charge of sales of the company, effective October 29, 1951, to continue at the discretion of the Board of Directors.⁵

Mr. Joseph began work for the defendant on October 29, 1951, and worked in such position until Monday, April 21, 1952, when, pursuant to a resolution of the Board of Directors of the defendant company,⁶ Mr. Paul Helfrich notified the plaintiff of his discharge.⁷

Plaintiff brought suit alleging a fixed term of employment to December 31, 1952, by means of a verbal contract, and demanded judgment for the loss of wages involved. Following a jury verdict on special questions,⁸ establishing that the contract was entered into as described above and was to be continued at the discretion of the board, plaintiff moved to set aside the verdict and judgment entered thereon and for a new trial.

To determine applicable law in a federal court, where jurisdiction is based, as here, on diversity of citizenship, the substantive rights of the parties are determined according to the forum's local law. Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188. See, also, Klaxon Co. v. Stenton Electric Mfg. Co., 1941, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477.⁹ Therefore, we look to the law of Pennsylvania to determine the place of contracting.

When acceptance is made over the telephone, as here, the place of contracting is where the acceptor speaks. Rothenberg v. H. Rothstein & Sons, 3 Cir., 1950, 181 F.2d 345, 346; Restatement of Conflicts of Laws, § 326, comment C. Thus, here the place of contracting was New York.¹⁰

In Pennsylvania the validity of a contract, so far as it may be affected by the statute of frauds, is governed by the law of the place of contracting and we must, therefore, look to the New York Statute of Frauds to determine the validity of this contract. Continental Collieries v. Shober, 3 Cir., 1942, 130 F.2d 631, 633; Renault v. L. N. Renault & Sons, D.C.E.D.Pa.1950, 90 F.Supp. 630; and Bernstein v. Lipper Manufacturing Co., 1932, 307 Pa. 36, 43, 160 A. 770.¹¹

In the Bernstein case, supra, the court emphasized the value of this rule when performance takes place in more than one state.¹² Here, likewise, there was performance of the contract in jurisdictions other than Pennsylvania¹³ and so there is present the additional reason for finding the governing law to be that of the place of contracting.

The New York Statute of Frauds, in Section 31 of the Personal Property Law, McKinney's Consol.Laws, c. 41, states:

"§ 31. Agreements required to be in writing

"Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking;

"1. By its terms is not to be performed within one year from the making thereof or the performance of which is not to be completed before the end of a lifetime; * * *."

Though the cases are not crystal clear in their holdings, it seems apparent that in a situation such as this the New York courts would apply this statute and render the contract void. See Silverman v. Indevco, Inc., Sup.1951, 106 N.Y.S.2d 669, affirmed 1951, 279 App.Div. 573, 107 N.Y.S.2d 542;¹⁴ Lindeman v. Textron, Inc., 2 Cir., 1956, 229 F.2d 273, 276;¹⁵ and Canister Co. v. National Can Corp., D.C.D.Del.1945, 63 F.Supp. 361, appeal dismissed 3 Cir., 1947, 163 F.2d 683.¹⁶ See, also, Rubin v. Irving Trust Co., Sup.1951, 107 N.Y.S. 2d 847, 852, affirmed 1953, 305 N.Y. 288, 113 N.E.2d 424.¹⁷ The latest discussion by the New York courts of this rule in Rubin v. Irving Trust Co., 1953, 305 N.Y. 288, 113 N.E.2d 424, relied upon by plaintiff, is quite different from this case.¹⁸ From a reading of the New York cases and the Lindeman case, supra, it appears to the court that the Second Circuit has led the way by holding sub-division 10¹⁹ of the Statute of Frauds to be substantive,²⁰ and it is most likely that the New York Court of Appeals would similarly rule on the first sub-division. Plaintiff's motion for a new trial on these grounds is, therefore, denied.

Even if an appellate court were to determine that the above reasoning was incorrect and that the New York Statute of Frauds is a procedural rule, plaintiff is not entitled to a new trial for the following reasons:

1. The jury's answer to special question 2²¹ found the contract to be one that is terminable at will.

2. The admission into evidence of the minutes and resolutions of the meetings of the Board of Directors of defendant corporation on October 22, 1951, and April 18, 1952, was not error on the facts of this case as they appear on the record.²²

The rules of evidence provide that regular business entries shall be admissible as evidence of the event.²³ 28 U.S.C.A. § 1732;²⁴ 28 P.S. §§ 91a-91d.²⁵ See, also, Freedman v. The Mutual Life Insurance Co. of N. Y., 1941, 342 Pa. 404, 21 A.2d 81, 135 A.L.R. 1249.

As to these documents, there can be no question but that the records were made in the regular course of the defendant's business at or near the time of the event. The sources of information, method and time of preparation were such as to justify their admission.²⁶ Thus, it appears that these documents are admissible in evidence. Overfield v. Pennroad Corp., D.C.E.D.Pa.1941, 42 F.Supp. 586, 628, supplemented D.C.E.D.Pa.1943, 48 F. Supp. 1008, affirmed 3 Cir., 1944, 146 F.2d 889.

These records are not conclusive as to the occurrences as testified to by defendant's witnesses and the weight of this evidence was open to attack by competent testimony contradicting them.²⁷ The documents are evidence of the terms of the agreement and counsel had ample opportunity to examine and cross-examine all of the witnesses on the resolutions and minutes and on all of the oral testimony concerning the agreement. Plaintiff also had ample opportunity to argue to the jury on the weight of this evidence. The court, therefore, charged the jury that these documents were inconclusive, but specifically instructed them "to consider it along with the other evidence in arriving at your decision." (N. T. 146).

From a consideration of all of the testimony and all of the exhibits, the jury concluded that the contract of employment provided that the plaintiff could be discharged at any time in the discretion of the Board of Directors.²⁸ Thus, in making its decision, the jury had before it all offered relevant evidence and its finding may not be disturbed.

3. Testimony that the defendant corporation made contracts since its incorporation in April 1934 with all of "about seven men" who have ever served as officers of the company, on a certain basis,²⁹ is admissible as tending to prove a practice of the defendant company not to make written contracts or contracts for definite periods of time with its various officers. Baldridge v. Matthews, 1954, 378 Pa. 566, 569, 570, 106 A.2d 809, 811.³⁰ See, also, 1 Wigmore on Evidence (3rd Ed.) § 92 et seq., where it is stated that:

"Whether or not sufficient regularity exists must depend largely on the circumstances of each case."

Here the testimony that the defendant had not employed any of the seven officers of the corporation since its incorporation for a stated term establishes such a sufficient regularity.³¹

The court, in considering the admissibility of this testimony, clearly referred to it as evidence of practice and never alluded to it as conclusive or binding evidence. Also, it should be noted that plaintiff's attorney did not raise this objection at the end of the court's charge, although ample opportunity was allowed him when the court requested suggested additions to the charge before the jury was sent out to deliberate.

4. There is no error in the court's having admitted into evidence the testimony of W. R. Helfrich³² that the testimony of his father, P. D. Helfrich, a preceding defense witness, concerning a meeting between plaintiff and the two Helfrichs in the Benjamin Franklin Hotel some day in the month of March 1952, was...