Lubriko Co. v. Wyman

• Decision Date: 12 June 1923
• Docket Number: 2875.
• Citation: 290 F. 12
• Parties: LUBRIKO CO. v. WYMAN.
• Court: U.S. Court of Appeals — Third Circuit

290 F. 12

LUBRIKO CO. v. WYMAN.

No. 2875.

United States Court of Appeals, Third Circuit.

June 12, 1923

Charles J. Hepburn and Herbert G. Stockwell, both of Philadelphia Pa., for plaintiff in error.

Franklin Spencer Edmonds and Leon J. Obermayer, both of Philadelphia Pa., for defendant in error.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

WOOLLEY Circuit Judge.

The Lubriko Company, the defendant, is a corporation engaged in the manufacture and sale of automobile lubricants. Webster W Wyman, the plaintiff, had been its sales agent for several years, holding valuable exclusive sales agency contracts in thirty-three states. By virtue of these contracts he had obtained profitable personal contracts with distributors for the purchase, through him, of Lubriko products for varying terms, some running for as long as ten years. On these contracts the company paid him during the year 1918 more than $13,000 in commissions. Having demonstrated that he was an excellent salesman, J. C. Pierson, the president of the company, pursuaded Wyman to submit to a cancellation of his exclusive sales agency contracts, surrender his trade paraphernalia, and transfer to the company his personal contracts with distributors, and in return the company would as later it did, enter into a contract with him as its sales manager for a term of ten years from October 1, 1918, paying for his services, in lieu of salary, one cent per pound on all sales of Lubriko products in any part of the world, exclusive of Canada.

Wyman entered upon his duties on the day named in the contract. Immediately difficulties arose. These were due to a variety of circumstances and developed into a highly unpleasant situation. In the first place the little corporation was without a head. Pierson, the president and owner of nearly all its stock, spent his summers in Canada and his winters in Florida, visiting the office only occasionally. Miss Anna May Collins was vice president and James Frazer was secretary and treasurer. They ran the business and had their own ideas as to how it should be done. Wyman, having under his contract 'the usual authority vested in a sales manager,' had decidedly different ideas and tried to enforce them. Petty jealousies on the part of Miss Collins and Frazer, and Wyman's exaggerated notion of his newly acquired importance, added nothing to the peace of the organization. On the first day of his new employment, Miss Collins informed Wyman that they had decided not to elect him a director and thereby bring him into 'the family,' as had been promised. This started the trouble. Wyman's manners were not the best and his language was violent and abusive when addressing Miss Collins and Frazer and when talking to others about them. On the other hand, while the manners and language of these officials are not impugned, their conduct toward Wyman was, at least, irritating. Wyman talked freely to other employees about them, using language and displaying a feeling which tended to the breaking down rather than to the upbuilding of the sales organization of the company. On the other hand Wyman's efforts in his sales department were checked and at times thwarted by Miss Collins and Frazer, thus tending to limit the effectiveness of the work which it is conceded he was amply able to do. As he had surrendered valuable sales agency contracts in exchange for an income dependent upon the volume of sales, and as he thus had a substantial personal interest in the company's output, Wyman was irritated by opposition and his profanity increased with his irritation. Miss Collins and Frazer seemed to regard Wyman's activities as an effort on his part to undermine their official authority. Wyman viewed the conduct of Miss Collins and Frazer as an effort on their part to cripple the sales department. While some of the things Wyman said and did might easily be construed as insubordination, the evidence on the other hand seems to indicate that he, though ugly about it, obeyed the orders of his superiors and was always 'loyal to the product.' Nor does it appear that he was abusive or disloyal to the president. Whatever his short comings, Wyman's employer was acquainted with them. Having been with the company for several years, they did not meet as strangers when they entered into the contract. Many acts done and things said by Wyman which are now relied upon in justification of what ultimately happened were overlooked, or, it may be, were held in suspense for future action according as Miss Collins might revive them from memoranda of his doings and sayings which she carefully made and filed away. These notes were taken from her desk, presumably by a stenographer who was sympathetic with Wyman. Coming to Wyman's knowledge, they added fuel to the fire. So, early in April, 1919, Miss Collins wired Pierson in Florida to come to Philadelphia and take some action. Wyman, who was on the road selling goods, was ordered home. When the two men met in the office of the company, Pierson asked Wyman for the contracts with distributors which he had caused to be transferred from himself under the old arrangement to the company under the new arrangement. Wyman handed them to Pierson and then Pierson discharged him.

Wyman brought this suit on the contract for commissions. Before trial the company paid him to the date of his discharge and counsel stipulated that the case should go to the jury solely as to the amount due him from the date of his discharge to about the date the suit was brought. On this stipulation the sole question tried to the jury was whether the discharge was justified. The jury rendered a verdict for the plaintiff and the case is here on the defendant's writ of error.

We are quite aware that we have stated the case by giving the permissible inferences from the testimony rather than by giving the testimony itself. We have done this for the reason that a recital of this long and unpleasing story would not illumine the questions we have to decide, and for the purpose of showing that the testimony was susceptible of different inferences, and that, accordingly, the learned trial judge properly submitted it to the jury. From the testimony the jury could divide Wyman's conduct into two classes,-- that which was offensive to his superiors and that which constituted offenses against his employer, and, in deciding how far they went toward a justification for his discharge, the jury could measure the amount of provocation that figured in the situation and the extent to which condonation, if any, played a part. Contrary to the very earnest insistence of counsel for the plaintiff in error we are of the opinion that these issues were, in varying degrees, controverted, and that there was sufficient evidence for the jury, if properly instructed on the law, to find a verdict either way.

The law applicable to the facts developed by the testimony is briefly this: Wyman became simply the agent or servant of the Lubriko Company. Thereby that corporation, as employer or master relinquished nothing of its right to formulate its business policy and direct its business affairs. That Wyman, the servant, owed his master the duty of faithful service was implied, if not expressed, in the contract of employment. Carpenter Steel Co. v. Norcross, 204 F. 537, 123 C.C.A. 63, Ann. Cas. 1916A, 1035. A breach of this duty amounted to a breach of contract which, if such occurred, was a justifiable ground for his discharge. And this is so whether his conduct was known by the master at the time of the discharge or was discovered later. Farmer v. Trust Co., 246 F. 671, 158 C.C.A. 627, L.R.A. 1918C, 1027; 2 Williston on Contracts, Sec. 839; 18 R.C.L. 517. Faithful service is of course a condition precedent to the right of wages. Therefore conduct of a servant involving insolent and disrespectful language, or disobedience of orders of a superior, 2 Williston on Contracts, Sec. 1020; Darst v. Alkali Works (C.C.) 81 F. 284; O'Neil v. Schneller, 63 Pa.Super.Ct. 196; or tending to prejudice or injure his master's...