Norfolk-Portsmouth Newspapers, Inc. v. Stott

• Decision Date: 08 September 1967
• Docket Number: NORFOLK-PORTSMOUTH,RFOLK-PORTSMOUTH
• Citation: 156 S.E.2d 610,208 Va. 228
• Court: Virginia Supreme Court
• Parties: NEWSPAPERS, INCORPORATED v. Mary H. STOTT.

Page 610

156 S.E.2d 610

208 Va. 228

NORFOLK-PORTSMOUTH NEWSPAPERS, INCORPORATED v. Mary H. STOTT.

Supreme Court of Appeals of Virginia.

Sept. 8, 1967.

Shepard W. McKenney, Norfolk (Kaufman, Oberndorfer & Spainhour, Norfolk, on brief), for plaintiff in error.

William C. Worthington, Norfolk (Thomas L. Woodward, Suffolk, on brief), for defendant in error.

Before EGGLESTON, C.J., and SPARTLEY, BUCHANAN, SNEAD, I'ANSON, CARRICO and GORDON, JJ.

BUCHANAN, Justice.

The question for decision in this case is whether Mary H. Stott, plaintiff, was entitled to benefit from a series of labor contracts executed between Norfolk-Portsmouth Newspapers, Incorporated, defendant, and the Hampton Roads Newspaper Guild during her term of employment by defendant.

Plaintiff, in a motion for judgment filed December 10, 1958, alleged that she was employed September 1, 1949, by defendant as a news reporter for the Suffolk area at defendant's Suffolk office 'for newspapers owned, published and controlled by defendant, namely, The Virginian-Pilot and Norfolk Landmark, and the Norfolk Ledger-Dispatch, which employment continued until May 1st, 1957'; that she was covered by the contract made between defendant and the Guild, ¹ which contract was unknown to her and concealed from her by defendant, and that she was entitled to wages at a rate higher than was actually paid her.

Defendant's response admitted plaintiff's employment, but denied that she was employed as a news reporter, and denied the other allegations of the motion for judgment.

The evidence was heard by the trial court, sitting without a jury, and on March 28, 1966, the court entered judgment for plaintiff in the sum of $4,987.50, with legal interest on various portions of this amount from various dates during her term of employment. To this judgment the defendant was granted a writ of error.

Defendant and its corporate predecessor, Norfolk Newspapers, Incorporated, published the Virginian-Pilot and Norfolk Landmark (later the Virginian-Pilot) and the Norfolk Ledger-Dispatch (later the Ledger-Star).

On December 10, 1953, an agreement was executed between defendant's predecessor, as publisher, and the Hampton Roads Newspaper Guild, Local 219, American Newspaper Guild, C.I.O., the Guild contracting 'for itself and on behalf of all of the employees of the Publisher in the Editorial Department of the Norfolk Virginian-Pilot,' with exceptions not here material. The opening paragraph of the contract also provided: 'The word 'employee' or any reference to them, whenever used in this agreement, shall be construed to include only employees of the Publisher covered by the contract.'

Article II provided:

'1. Job classifications and experience rating of employees on the payroll as of the signing of this agreement have been agreed upon by the Publisher and the Guild.

'2. * * * (This section provided for classifying and rating employees hired after the effective date of the agreement, and stipulated that if the publisher and the Guild could not agree within thirty days of the hiring, the matter should be submitted to arbitration as provided in the contract.) '* * *

'5. Effective as of 30 days prior to this agreement, the weekly salaries of employees engaged directly in the preparation of news and editorial matter, features, art or photographs shall be not less than the following * * *.'

Detailed minimum wage scales for several categories of employees, including general reporters, limited assignment reporters, women's page reporters and society page reporters were then set forth.

Attached to the agreement was a list of names, classifications, ratings, base salaries and anniversary dates, entitled: 'AGREED SCHEDULE OF JOB CLASSIFICATIONS AND EXPERIENCE RATINGS OF EMPLOYEES ON PAYROLL AS OF THE SIGNING OF AGREEMENT, DECEMBER 10, 1953.' The schedule contained the names of and the data concerning sixty-two employees. Plaintiff's name was not included.

Two other contracts, dated March 24, 1955, and February 21, 1957, were also introduced as exhibits. The 1955 exhibit contract did not have a schedule attached, but it was clearly indicated that one was attached. Article II, section 3 thereof, for example, specifically refers to 'the attached inititial classification list.' The 1957 agreement contained a schedule listing seventy-two names of employees then on the payroll and gave their classifications and ratings. Again plaintiff's name was not included.

Plaintiff does not claim that she was listed as an employee of the defendant in any of these three contracts of 1953, 1955, 1957, although she was regularly employed by the defendant from September, 1949, until May, 1957, the period in which all of them were executed.

Plaintiff's claim is that she was a third-party beneficiary of these contracts and entitled to be paid on the same basis as those who were named in the schedules, rather than on the basis of her own separate contract with the defendant. She seeks to bring herself within § 55--22 of the Code, ² which provides that if a covenant or promise is made for the benefit of a person 'with whom it is not made,' i.e., who is not specifically a party to it, such person may maintain an action on it as if it had been made with him only.

In Graybar Electric Company v. Doley, 4 Cir., 273 F.2d 284, this statute was relied on as giving Graybar a right of action against defendants, stockholders of Eastern Broadcasting Corporation, who had executed a written agreement to advance money to Eastern for necessary financing. In denying Graybar's claim the court said:

'It is clear from the wording of the statute that it limits the right of a third person to sue upon a contract to which he is not a party to a case where it can be shown that the contract was made for his benefit. We think Graybar does not meet this test. It will be noted that a third person may now sue on a contract to which he is not a party though he is not named therein and he is not solely benefited thereby; but only if the contract was made for his benefit. * * *' 273 F.2d at 289.

Consonant with this holding is the statement in Burton v. Chesapeake Box, etc., Corp., 190 Va. 755, 767, 57 S.E.2d 904, 909, 18 A.L.R.2d 1044, that this section 'has no application unless the party sought to be held liable has assumed an obligation for the benefit of a third party. The statute does not purport to create a contract when no contract exists.'

In 17A C.J.S. Contracts § 519(4) c, pp. 966--967, it is said:

'A clear intent to benefit the third person must appear to enable him to sue on the contract; incidental beneficiaries cannot maintain an action thereon.

'Fact that the parties to a contract must have clearly and definitely intended it to be for the benefit of the third person to enable him to sue thereon is one of the most commonly expressed limitations on the rule. * * *' See 17 Am.Jur.2d, Contracts, § 304, p. 727; 4 M.J., Contracts, § 81, 1966 Cum.Supp., p. 89.

The contract here relied on does not indicate an intent to benefit the plaintiff. An intent to the contrary is rather clearly demonstrated.

The statute does not interfere with the freedom of contract. It does not require the inclusion of persons not intended to be included. Montague Mfg. Co. v. Homes Corp., 142 Va. 301, 309, 128 S.E. 447, 449.

The immediate contracting parties to the agreement here involved were at pains to set out those intended to be benefited. The contract, as stated, was on behalf of all of the employees of the publisher 'in the Editorial Department of the Norfolk Virginian-Pilot,' with the exception of the editor and others specified; but 'employee' included only 'employees of the Publisher covered by the contract'; and it was expressly stated (Article II) that the classifications and ratings of the employees on the payroll at the signing of the agreement 'have been agreed on' by the contracting parties. Plaintiff was then an employee on the payroll but was not among those listed as agreed on according to the attached schedules.

Article II also provided for the classification and expe rience ratings of new employees and the 1957 contract listed the names, classifications and ratings of those then on the payroll, seventy-two in all. Plaintiff was still then on the payroll but her name was not among those listed as having been...