Nussenbaum v. Chambers & Chambers, Inc.

• Decision Date: 24 February 1948
• Citation: 322 Mass. 419,77 N.E.2d 780
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: NUSSENBAUM v. CHAMBERS & CHAMBERS, Inc.

322 Mass. 419

77 N.E.2d 780

NUSSENBAUM

v.CHAMBERS & CHAMBERS, Inc.

Supreme Judicial Court of Massachusetts, Suffolk.

Feb. 24, 1948.

Exceptions from Superior Court, Suffolk County; Baker, Judge.

Action by Murray Nussenbaum against Chambers & Chambers, Inc., for services rendered defendant as manager of a fur department maintained by defendant in a department store. Verdict for plaintiff, and defendant brings exceptions.

Exceptions overruled.

Before QUA, C. J., and LUMMUS, RONAN, SPALDING, and WILLIAMS, JJ.

J. H. F. Calver and J. J. O'Neill, both of Boston, for plaintiff.

J. N. Worcester, F. E. Allison & E. H. Bennett, Jr., all of Boston, for defendant.

QUA, Chief Justice.

The plaintiff seeks to recover for services rendered to the defendant as manager of a fur department maintained by the defendant in a department store in Boston. After a verdict for the plaintiff for $10,100, the defendant excepts to the denial of its motions for a directed verdict in its favor, to the exclusion of certain evidence, and to the denial of its motion for a new trial.

The defendant first employed the plaintiff for the year beginning on or about April 1, 1943. New contracts of employment were entered into for each of the two succeeding years. This action is to recover a balance alleged to be due for the third year, ending on or about April 1, 1946.

On the testimony of the plaintiff, the jury could find that for the first year (except a period at the beginning) the plaintiff was to receive a salary of $150 a week plus a bonus of $5,000 at the end of the year, against which he could draw at any time during the year; that for the second year his compensation was to be the same; but that for the third year he was to receive $200 a week, the same bonus of $5,000, and in addition either twenty per cent of the profits or $10,000, whichever should be larger. If the jury believed the plaintiff, they could find that a balance as large as the amount of the verdict remained unpaid on the contract.

The ground on which the defendant contends that a verdict should have been directed in its favor is that the increase in the plaintiff's salary (including as salary the $10,000 or share of the profits) agreed upon in the spring of 1945 had not been approved by competent Federal authority under the Wage Stabilization Act of October 2, 1942, 56 U.S.Sts. at Large, 765, §§ 1, 2, 5(a), 10, and 11, 50 U.S.C.A.Appendix, §§ 961, 962, 965(a), 970, 971, and regulations made in pursuance of that act.¹ This defence poses a number of questions which we do not pause to decide, such as: (a) Whether the public policy disclosed by the Wage Stabilization Act was so fundamental that the judge was bound to take cognizance of its violation, although the defence was not pleaded (see Whittingslow v. Thomas, 237 Mass. 103, 129 N.E. 386;Nowell v. Equitable Trust Co., 249 Mass. 585, 595, 596, 144 N.E. 749;Morello v. Levakis, 293 Mass. 450, 451, 452, 200 N.E. 271;Barsky v. Hansen, 311 Mass. 14, 15, 40 N.E.2d 12;Gleason v. Mann, 312 Mass. 420, 422, 45 N.E.2d 280); (b) whether the judge was bound to take judicial notice of the Federal regulations without formal proof see ( West v. New York, New Haven & Hartford Railroad, 233 Mass. 162, 166, 123 N.E. 621;Finlay v. Eastern Racing Association, Inc. 308 Mass. 20, 26, 27, 30 N.E.2d 859;Glover v. Mitchell, 319 Mass. 1, 3, 4, 64 N.E.2d 648;Knapp v. Graham, 320 Mass. 50, 57, 67 N.E.2d 841;Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1²); (c) whether there was any evidence by which the plaintiff was bound that approval had not in fact been obtain; and (d) whether there was any obligation on the defendant's part to endeavor to secure approval. If we assume, without decision, that all these questions should be answered in favor of the defendant, we are of opinion, nevertheless, for reasons now to be stated, that the illegality contention did not require the direction of a verdict for the defendant in this case.

In general, illegality in a contract is a defence only because it is against public policy that the court should be called upon to enforce contracts that the parties have been expressly or impliedly forbidden by law to make or to perform. Courts do not go out of their way to discover some illegal element in a contract or to impose hardship upon the parties beyond that which is necessary to uphold the policy of the law. Council v. Cohen, 303 Mass. 348, 352, 21 N.E.2d 967. Williston on Contracts (Rev. ed.) § 1629A. We do not believe that the policy of the Wage Stabilization act rendered illegal and mere act of entering into an agreement for an increase in salary or wages which might be approved by the proper Federal authority before the time agreed upon for actual payment. It would seem that in the orderly course of events negotiation and agreement would commonly precede approval. A rule based upon a contrary expectation would be needlessly harsh in its effect upon many wage earners and salaried persons who had no intent to violate the law. We have no doubt that such a rule would be contrary to the actual practice under the act in a great number of instances. The policy of the law would be fully sustained if approval were obtained before payments were made.

The language of the Wage Stabilization Act lends itself readily to this interpretation. The prohibitions of the act were specifically directed against paying or receiving wages or salaries and not against the making of executory agreements. Section 5. See also § 4, 50 U.S.C.A.Appendix, § 964. The penalties of section 11 related to these prohibitions. Executive Order No. 9250, October 3, 1942, 50 U.S.C.A.Appendix, § 901 note, 7 Fed.Reg.7871, dated the day after the enactment of the statute and designed to give effect to it, followed similar lines. This order provided in Title II, § 1, ‘No increases in wage rates * * * and no decreases in wage rates, shall be authorized unless notice of such increases or decreases' shall have been filed with and approved by the war labor board. Section 5 of the same title, 7 Fed.Reg.7873, provided, ‘No increases in salaries now in excess of $5,000 per year * * * shall be granted until * * *.’ Section 3 of Title III, 7 Fed.Reg.7873, read in part, ‘No provision with respect to wages * * * which is inconsistent with the policy herein enunciated * * * shall be enforced¹ except * * *.’ In the regulations of the economic stabilization director, § 4001.10, 10 Fed.Reg.11962, it was provided that ‘In the case of a salary rate * * * no increase shall be made by the employer except as provided in regulations, rulings, or orders promulgated under the authority of these regulations,’ and that ‘Except as herein provided, any increase * * * shall be considered in contravention of the Act * * * from the date of the payment³ if such increase is made prior to the approval of the Board or the Commissioner * * *.’

[8] No doubt an agreement to perform an illegal act is commonly an illegal agreement, but the difficulty in applying that doctrine here is that we do not think that any agreement to perform an illegal act is shown as matter of law. The burden of proof was upon the defendant. Savoy Finance Co. v. De Biase, 281 Mass. 425, 433, 183 N.E. 742;Chamberlain v. Employers' Liability Assurance Corp. Ltd. 289 Mass. 412, 419, 194 N.E. 310. There was evidence that both parties knew of the Wage Stabilization Act. There was evidence that the increase in the plaintiff's weekly salary for the third year from $150 to $200 a week was not to begin until approval had been obtained. There was nothing that compelled the jury to find that the parties intended that the increased bonus should be paid at the end of the year regardless of approval. Such intent to violate the law is not to be presumed....