NHA, Inc. v. Jones, 17431

• Decision Date: 12 October 1973
• Docket Number: No. 17431,17431
• Citation: 500 S.W.2d 940
• Parties: NHA, INC., Appellant, v. Paskel A. JONES et al., Appellees.
• Court: Texas Court of Appeals

Page 940

500 S.W.2d 940

NHA, INC., Appellant, v. Paskel A. JONES et al., Appellees.

No. 17431.

Court of Civil Appeals of Texas Fort Worth.

Oct. 12, 1973.

Rehearing Denied Nov. 16, 1973.

Akin, Gump, Strauss, Hauer & Feld, and Michael Lowenberg, Dallas, for appellant.

Law Offices of George Busch, Inc., and Laurance L. Priddy, Fort Worth, for seventeen (17) appellees.

Prager & Vogel, and Andrew L. Vogel, Fort Worth, for appellees, Paskel A. Jones and Johnnie L. Strange.

Charles L. Foster, Jr., Everman, for appellee, David Severin.

OPINION

BREWSTER, Justice.

This case involves twenty separate and distinct lawsuits that were tried together.

The suits were brought by twenty former employees against their former employer, NHA, Inc., for damages for the alleged breach by the employer of employment contracts that the employer had separately entered into with each of the employees. Shortly prior to the time these contracts were entered into NHA, Inc. had been awarded a contract by the United States Army in which NHA, Inc. agreed to maintain and repair the Army's helicopters that were engaged in military operations in Southeast Asia. The work of NHA, Inc. for the Army under this contract was to begin January 1, 1971, and was to continue for a six month period. The plaintiffs were employed by NHA, Inc. to perform work that it was to do under this Army contract.

Each of the plaintiffs arrived in Vietnam in either December, 1970, or early January, 1971, and the employment of each of them was brought to an end between four and six weeks after their arrival in Vietnam.

The employees contended that each had a contract for a year's employment. Most contended that they each terminated employment in less than a year because of material breaches of the employment contracts by NHA, Inc. Several of the employees were fired by NHA, Inc.

The trial was non-jury and it resulted in judgments for each of the plaintiffs. The total of the judgments obtained by the twenty plaintiffs against NHA, Inc. was around $142,824.31 and this appeal is by NHA, Inc. from that decree.

Nineteen of the employees are actually intervenors in this case, but since they are in fact plaintiffs, we will call them plaintiffs throughout this opinion.

The trial court held that each of the plaintiffs, as one element of damage for breach of the contracts, was entitled to recover the difference between the pay that each plaintiff would have earned during the year covered by his employment contract had he worked for the entire year, and the amount of money that he actually did earn during that contract period through the exercise of reasonable diligence.

In other words, the trial court allowed each of the plaintiffs to recover as damages future wages that had not yet been earned at the time their employments were terminated. This item of damage constituted the major part of the recovery that was awarded to each plaintiff.

Each of the plaintiffs signed a written employment contract with NHA, Inc. on a printed form that was furnished by NHA, Inc. The provisions of the twenty contracts were identical except for the dates they were entered into, the job classification, and the provisions as to the wage scale to be paid the employees.

Each of the employment contracts contained the following provision:

'1. Term of Agreement

'The term of this agreement shall be for the period of one (1) year beginning with the date of Employee's departure from the Continental United States (CONUS--original forty-eight states and the District of Columbia), or the date of Employee's signature on this contract, whichever date is latter; or such lesser periods as shall be determined by NHA, Inc.'

In NHA, Inc.'s Point of Error No. 1 and the argument under it, it contends that the trial court erroneously held it to be liable to each of the plaintiffs for damages based on lost or future wages, because that element of damage was not recoverable under the facts of this case for the reason that the contracts involved were for indefinite terms and were therefore terminable at the will of either party. NHA, Inc. contends that where the employment contract is for an indefinite term and is terminable at the will of either party that a recovery for loss of future wages can not be had.

We sustain NHA, Inc.'s first point of error.

Referring to employment contracts the Supreme Court held in its opinion in East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99 (1888), at page 102 the following: '. . . when the term of service is left to the discretion of either party, or the term left indefinite, or determinable by either party, that either may put an end to it at will, and so without cause. . . . When such a state of agreement exists, it i no breach of contract to refuse to receive further services, . . ..'

It appears to be settled that this pronouncement is the law in Texas. See May v. Lee, 28 S.W.2d 202 (Glaveston Civ.App., 1930, no writ hist.) and Ingram Freezers v. Atchison, T. & S.F. Ry. Co., 464 S.W.2d 915 (Dallas Civ.App., 1971, ref., n.r.e.) (in which opinion many other cases so holding are cited). An employment contract providing for an indefinite term of service is not invalid for that reason, but can be terminated at will by either party. See Brekken v. Reader's Digest Special Products, Inc., 353 F.2d 505 (7th Cir., 1965) and the Ingram Freezers case, supra.

It is also settled that where an employment contract contains provisions such as the ones above quoted that there is no conflict between the provision that the term of the agreement shall be for one year and the provision that NHA, Inc. may determine that its term shall be for a lesser period than one year. The courts hold that the latter provision merely limits the former provision. See Texas Cotton Co-Operative Ass'n v. Anderson, 67 S.W.2d 406 (Eastland Civ.App., 1933, no writ hist.); and F. W. Woolworth Co. v. Petersen, 78 F.2d 47 (10th Cir., 1935).

The clause in question is not ambiguous. It simply provides in substance that the term of the agreement shall be for a period of one year from a designated date or such lesser periods as shall be determined by NHA, Inc. The meaning of such language is clear.

The trial court erred in permitting plaintiffs to offer extrinsic evidence tending to prove that the various plaintiffs and the defendant intended the terms of the contracts of employment to be something other than that which is so clearly provided for in the contracts involved. Such evidence tended to vary and contradict the written provisions of the contract stating the term of the agreements and was therefore admitted into evidence in violation of the parol evidence rule.

The effect of the language used in each of these employment contracts in the clause fixing the term of the agreement is to render each of such employment contracts for an indefinite term and therefore terminable at the will of either party for any reason that such party saw fit.

The settled law is that where an employee sues his employer for damages for the breach by the employer of an employment contract that is for an indefinite term of service, as are each of the contracts involved here, the loss of wages that would have been earned in the indefinite future is not a recoverable item of damages . This is so because such a contract can be legally terminated at will by either party.

We therefore hold that the trial court erred in awarding to each of the plaintiffs a recovery for the loss of wages that had not yet accrued at the time his contract was terminated.

The contention made by defendant in its second point of error and the argument and authorities under it is that the court erred in admitting parol evidence of prior and contemporaneous oral agreements that modified and added to the written employment contracts, and in making findings of fact and conclusions of law, based on such evidence, to the effect that each of the employment contracts were partly written and partly oral. Defendant assigns as error each such fact finding and each conclusion of law ruling that parol evidence was admissible and that each of the contracts was partly oral.

For each plaintiff the trial court made findings that the oral parts of each of the employment contracts were substantially as follows:

'In addition to the written provisions of the contracts between (employee's name) and NHA, Inc., NHA, Inc. also contracted orally with (employee) as follows:

'a) To furnish him with quarters equivalent to those of a GS9, a Senior Non-Commissioned Officer, a Warrant Officer, or a Commissioned Officer.

'b) To have available for him in Vietnam food of reasonable quality and quantity.

'c) To pay him at the following intervals: Every two weeks, beginning December 16, 1970.

'd) To pay all his travel expenses to and from Vietnam.

'e) To start his pay from the time he left his home in the Continental United States to go to Vietnam.

'f) To provide insurance for the protection of his family in addition to Government required workmen's compensation insurance under the Defense Base Workers Act.'

The parol evidence complained of was offered to establish these claimed oral parts of the various employment contracts.

The parol or extrinsic evidence rule is stated as follows: 'As a general rule, in the absence of fraud, accident, or mistake, extrinsic evidence is inadmissible to vary, add to, or contradict the terms of a valid written instrument that on its face is complete and unambiguous.' 23 Tex.Jur.2d 500, Evidence, Sec. 342, and cases there cited. Parol evidence is not admissible to vary or contradict either the express or the implied terms of a written contract. Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30 (1958).

This parol evidence rule is not a rule of evidence, but is a rule of substantive law. Hubacek v. Ennis State Bank, supra.

'Consequently, evidence admitted in violation of the rule is incompetent and without probative force, even though...