Magnolia Petroleum Co. v. Butler, 13174.

Decision Date06 September 1935
Docket NumberNo. 13174.,13174.
Citation86 S.W.2d 258
PartiesMAGNOLIA PETROLEUM CO. v. BUTLER.
CourtTexas Court of Appeals

Appeal from District Court, Parker County; J. E. Carter, Judge.

Action by D. H. Butler against the Magnolia Petroleum Company. From the judgment, the defendant appeals.

Reversed and rendered.

W. H. Francis, A. S. Hardwicke, and Russell Surles, all of Dallas, and Shropshire & Bankhead, of Weatherford, for appellant.

Preston Martin, of Weatherford, and Clark & Clark, of Fort Worth, for appellee.

BROWN, Justice.

D. H. Butler, appellee, had been an employee of appellant, Magnolia Petroleum Company, for many years, but less than twenty, and was retired from service on June 1, 1930, and before he became sixty-five years of age.

While appellee was in appellant's employ, it created at its own expense, without the aid of financial support from any of its employees, a plan for the benefit of its faithful employees who might be retired from service. The plan was adopted in 1918, and is as follows:

"(a) Regular Retirement: All men who have reached the age of sixty-five years and women fifty-five years and who have been twenty years or longer in the service shall be retired on a regular allowance, unless, in individual cases, at the request of the employee, some later date be fixed by the Board of Trustees for such retirement; in which event, such employee, who has at the time of retirement been in the service of the company twenty years or longer, shall be retired on a regular allowance.

"(b) Retirement at Request of Employee or at Discretion of Board: Any man who has reached the age of fifty-five years, or any woman fifty years, who has been thirty years or longer in the service, or any man who has reached the age of sixty years, who has been twenty years or longer in the service, may be retired on a regular allowance, either at his or her request, with the approval of the Board, or, without the request of the employee, at the discretion of the Board.

"(c) Retirement at Discretion of Board: Any employee who has been ten years or longer in the service and who by physical examination is shown to be permanently, totally incapacitated for service, or whose retirement on account of advancing years is, in the judgment of the Board, advisable, may, at the discretion of the Board, be retired and granted a regular or a special allowance. Section 2. Amount of Payments.

"(a) The payments for regular allowances which the Board may authorize under this plan shall be, as follows:

"For each year of active service an allowance of two per cent of the average annual pay during the ten years next preceding retirement; but no regular allowance shall be less than $300.00 per annum or more than seventy-five per cent of such average annual pay. Illustration:

"If the retired employee, reaching the age of sixty-five years, has been in the employ of the company twenty-five years and his average annual salary during the last ten years of his employment has been $1,200.00, or $100.00 per month, his annual allowance or annuity would be twenty-five times two per cent of his average salary— that is, fifty per cent of $1,200.00 equaling $600.00 per year, or $50.00 per month.

"(b) The amount and duration of each special allowance shall be determined by the Board.

"Section 12. The annuities and benefits granted employees in accordance with this plan have no relation whatever to the determination of the amount of wages or salaries to be paid by this company, but are granted as a voluntary reward for and in appreciation of faithful and efficient service, and as an incentive to further service, applicable to all employees, including officials, on equal terms. This plan shall not be construed, however, as giving any employee the right to be retained in the service of the company, or any right or claim to an annuity or allowance after discharge from the service of the company unless the right to such annuity or benefit accrued prior to such discharge.

"The company reserves the right at any time, at its discretion, to withdraw or modify this plan either as to annuities or benefits."

In 1926, appellant changed its status from that of a voluntary joint stock association, operating under a declaration of trust, to that of a private corporation, and adopted the following plan for its retired employees:

"Annuities—Section 1. Eligibility. All employees of this company are eligible for retirement on annuities under the following conditions:

"(a) Regular Retirement: All men who have reached the age of sixty-five years and women fifty-five and who have been twenty years or longer in the continuous active service of this company shall be retired on a regular allowance unless in individual cases some later date be fixed by the Board of Directors for such retirement.

"Optional or Discretionary Retirement: Any man who has reached the age of fifty-five years, or any woman who has reached the age of fifty years, who has thirty years or longer in the continuous active service of the company, or any man who has reached the age of sixty years who has been twenty years or longer in the continuous active service of the company, may be retired on a regular allowance, either at his or her request, with the approval of the Board of Directors, or without the request of the employee, at the discretion of the Board of Directors.

"Section 2. Payments. (a) Amount of Payments. The amount of payments for all such regular allowance which the Board authorizes shall be as follows:

"For each year of continuous active service an allowance of two per cent of the average annual pay during the five years next preceding retirement; but no regular allowance shall be in excess of seventy-five per cent of such annual pay, except that for the first year from the date of retirement the annuitant shall receive an amount equivalent to the full salary in effect at the time of retirement.

"(b) Method of Payments: Annuities are to be paid monthly by check to the order of the annuitant and mailed to his or her address.

"Part 4, General Rules—Section 2:

"The annuities and benefits herein provided for are voluntary grants by the company and this plan shall not be construed as giving any employee the right to be retained in the service of the company, or any right or claim to an annuity or death benefits to his beneficiaries after discharge from the service of the company.

"The company reserves the right at any time at its discretion to withdraw or modify this plan, either as to annuities or death benefits. The above plan is to go into effect as of July 1, 1926."

Butler was retired as an employee in 1930, and on May 22, 1930, at a meeting of the board of directors of appellant, the following resolution was passed:

"Whereas, David H. Butler, age sixty-four, an employee of the sales department of Magnolia Petroleum Company for approximately seventeen years, is in ill health and physically not able to continue in the employment of the company.

"Now, therefore, be it resolved, that the said David H. Butler is hereby specially retired from the service of the company with a gratuity to be paid him of $861.35, or $71.78 per month, payable monthly, for a period of one year from June 1, 1930; such monthly payments to terminate at any time the said David H. Butler shall die, if his death occurs prior to one year after June 1, 1930."

Appellant paid appellee, under the foregoing conditions, $71.78 per month for one year from June 1, 1930, issuing to appellee its check semimonthly for the sum of $35.89, which checks appellee accepted and cashed, without complaint, or protest. At the end of the stipulated year, the payments were discontinued, and appellee brought suit in the district court of Parker county, alleging his long service as an employee of appellant; the establishment by appellant of a pension system for its faithful employees; that such system was held out as an inducement to its employees to remain in its employ; that he relied upon the promises and inducements provided for in the system, and refrained from taking other employment, where he could have increased his earnings; that in 1930, while appellee was in the regular employ of appellant, "said defendant recommended, advised and suggested that this plaintiff retire from the services on the pension, as aforesaid, and so stated and represented to him that it intended to place the agency at Sweetwater (where appellee was agent in charge) on a commission basis and that if he would retire, it would pay to him a pension during the balance of his lifetime on a basis of 2% per year for the length of time he had served said defendant, or 35% of his average salary, which per cent would entitle this plaintiff to a pension of $71.00 per month. That relying upon said promises and representations of said defendant, the same being material inducements to him, this plaintiff agreed to retire with the expressed agreement and contract on the part of the said defendant that in consideration therefor it would pay to him said pension in the sum of $71.00 per month during the balance of his lifetime."

Appellee alleged his voluntary retirement on June 1, 1930, under the circumstances alleged; and that in keeping with such agreement, the appellant began paying him a pension of $71 per month, and continued such payments until June 1, 1931, when appellant ceased making such payments and breached its contract. He sued for $1,704 alleged to be past due; for $71 per month over a period of 11.1 years (his life expectancy) in the sum of $9,457.20, or in the alternative for a lump sum, less a discount of 6 per cent. per annum.

As an alternative plea, appellee alleged that appellant was guilty of fraud in inducing him to retire, under the facts and circumstances shown; that he would have continued in the service but for such fraudulent promises; and prayed for $29,232, the amount...

To continue reading

Request your trial
16 cases
  • Craig v. Bemis Co., Inc., 74-2241
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • August 13, 1975
    ...e. g., Menke v. Thompson, 8 Cir. 1944, 140 F.2d 786; Umshler v. Umshler, 1947, 332 Ill.App. 494, 76 N.E.2d 231; Magnolia Petroleum Co. v. Butler, Tex.Civ.App.1935, 86 S.W.2d 258, writ dism'd, it is now generally true that both employers and employees regard pension benefits as a type of def......
  • Hurd v. Illinois Bell Telephone Company
    • United States
    • U.S. District Court — Northern District of Illinois
    • September 27, 1955
    ...Tex.Civ.App.1951, 241 S.W.2d 306; Webster v. Southwestern Bell Telephone Co., Tex.Civ.App.1941, 153 S.W.2d 498; Magnolia Petroleum Co. v. Butler, Tex. Civ.App.1935, 86 S.W.2d 258; Dowling v. Texas & N. O. R. Co., Tex.Civ.App. 1935, 80 S.W.2d 456; Spiner v. Western Union Telegraph Co., Tex.C......
  • Ball v. Victor Adding Machine Company, 15883.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • September 12, 1956
    ...review of the Employer's actions under plans making decisions conclusive (no such provision exists in this case), Magnolia Petroleum Co. v. Butler, Tex.Civ.App., 86 S.W.2d 258, error dismissed; Webster v. Southwestern Bell Telephone Co., Tex.Civ.App., 153 S.W.2d 498, error refused; Aston v.......
  • Siegel v. First Pennsylvania Banking and Trust Co.
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • December 21, 1961
    ...or that the denial of benefits had not been arbitrary. See Menke v. Thompson, 8 Cir., 1944, 140 F.2d 786; Magnolia Petroleum Co. v. Butler, Tex.Civ.App., 1935, 86 S.W. 2d 258; In re Missouri Pac. R. Co., D.C. E.D.Mo., 1943, 49 F.Supp. 405; Kravitz v. Twentieth Century-Fox Film Corp., 1957, ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT