Patton v. Babson Statistical Org., Inc.

• Decision Date: 19 May 1927
• Citation: 259 Mass. 424,156 N.E. 534
• Parties: PATTON v. BABSON STATISTICAL ORGANIZATION, Inc.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

259 Mass. 424

156 N.E. 534

PATTON

v.BABSON STATISTICAL ORGANIZATION, Inc.

Supreme Judicial Court of Massachusetts, Middlesex.

May 19, 1927.

Report from superior Court, Middlesex County; J. D. McLaughlin, Judge.

Action by Edna S. Patton against the Babson Statistical Organization, Inc. On report pursuant to stipulation. Judgment for plaintiff pursuant to stipulation for part only of recovery sought.Elder, Whitman, Weyburn & Crocker, of Boston, for plaintiff.

Ropes, Gray, Boyden & Perkins, of Boston (F. D. Putnam and E. R. Dewing, both of Boston, of counsel), for defendant.

CROSBY, J.

This case was heard before a judge of the superior court with a jury and at the close of the testimony, by agreement of counsel, the judge directed a verdict for the plaintiff on two items for $626 with interest from the date of the verdict, upon the following written stipulation of counsel:

‘This case is to be reported on the agreement that if there was evidence on which the jury could find for the plaintiff on item 1 then judgment is to be entered for the plaintiff in the amount of item 1 with interest from the date of the verdict; and if there was evidence on which the jury could find for the plaintiff on item 2 then judgment is to be entered for the plaintiff in the amount of item 2 with interest from the date of the verdict. Otherwise, judgment for the defendant.’

In 1919 the plaintiff entered the employment of the defendant as a dental hygienist at a salary of $20 a week. About a year and a half later it was increased to $21 a week. Shortly after she went to work she was given a booklet issued by the defendant entitled, ‘Log of the Crew,’ which contained a statement of a profit-sharing or deferred salary plan. The material portions are set forth in the report, including the following:

‘ Babson's Salaries for 1923.-This plan applies only to the Babson Statistical Organization, and not to the Babson Institute, or the Babson Park. * * * The employees who have been with the Babson Statistical Organization two full calendar years, in addition to their fixed salaries, may receive one or more additional payments which shall be charged to the salary account. * * * If any question arises as to the interpretation or application of any feature of the plan, the decision of the president shall be final.’

The plaintiff testified that she read and understood these provisions and did not object to them. She remained in the defendant's employ until October 11, 1923, when she was discharged by its president. During the time she was so employed she received her weekly salary. This action is brought to recover the deferred salary to which she claims to be entitled during the years 1922 and 1923.

The contract between the parties was valid and could not be avoided by the plaintiff's discharge; as she had not been employed for a definite time, she could lawfully be discharged at any time. Scott v. J. F. Duthie & Co., 125 Wash. 470, 216 P. 853, 28 A. L. R. 328;Roberts v. Mays Mills, 184 N. C. 406, 114 S. E. 530, 28 A. L. R. 338. See notes 28 A. L. R. 328, 331, and cases cited. It could have been found that she continued in the defendant's employ relying on the promise to be paid the deferred salary; that the promise was founded upon a valid consideration; and that it was not a mere gratuity, but a part of the contract of service. Zampatella v. Thomson-Crooker Shoe Co., 249 Mass. 37, 39, 144 N. E. 82.

[4] The plaintiff testified that, after her discharge, she had an interview with Mr. Babson, the defendant's president, who then told her she was not entitled to any deferred salary and that he ‘was going to pay his money as he saw fit.’ It is the contention of the defendant that the clause in the plan which reads, ‘If any question arises as to the interpretation or application of any feature of the plan, the decision of the president shall be final,’ is a bar to recovery. If it be assumed that this clause constitutes the president a quasi arbitrator within the rule applied in Palmer v. Clark, 106 Mass. 373,Robbins v. Clark, 129 Mass. 145, and Norcross v. Wyman, 187 Mass. 25, 72 N. E. 347, the question remains whether the plaintiff is bound by his decision that she was not entitled to the deferred salary.

[5] It is a general rule that an agreement purporting to oust the courts entirely of their jurisdiction is void. Rowe v. Williams, 97 Mass. 163;Pearl V. Harris, 121 Mass. 390;White v. Middlesex Railroad, 135 Mass. 216;Lewis v. Brotherhood Accident Co., 194 Mass. 1, 79 N. E. 802,17 L. R. A. (N. S.) 714;Bauer v. International Waste Co., 201 Mass. 197, 203, 87 N. E. 637. See, also, London Tramways Co., Limited, v. Bailey, 3 Q. B. D. 217; Hope v. International Financial Society, 4 Ch. D. 327.

The agreement in the present case is not like a building contract in which the decision of an architect or engineer respecting the quantity or quality of the work done is a condition precedent to the plaintiff's maintaining an action for the price. Palmer v. Clark, supra; White v. Middlesex Railroad, supra.

If the phrase of the plan can be considered as an agreement for arbitration, it cannot be presumed that the parties intended to make such an arbitration a condition precedent to a right of the plaintiff to bring an action for the deferred salary. The defendant's...