Sickelco v. Union Pac. R. Co., 9375.

• Decision Date: 05 June 1940
• Docket Number: No. 9375.,9375.
• Citation: 111 F.2d 746
• Parties: SICKELCO v. UNION PAC. R. CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

111 F.2d 746 (1940)

SICKELCO v. UNION PAC. R. CO. et al.

No. 9375.

Circuit Court of Appeals, Ninth Circuit.

May 3, 1940.

Rehearing Denied June 5, 1940.

Porter C. Blackburn, of Los Angeles, Cal., for appellant.

E. E. Bennett, Edward C. Renwick, and Malcolm Davis, all of Los Angeles, Cal., for appellees.

Before WILBUR, DENMAN, and STEPHENS, Circuit Judges.

STEPHENS, Circuit Judge.

Appeal from a judgment rendered after a directed verdict in favor of defendants. Jurisdiction of the federal courts is based on diversity of citizenship. The jurisdictional sum of money is involved. For convenience we will refer to the appellant and appellees as plaintiff and defendants respectively.

For many years plaintiff was employed by the defendant Los Angeles & Salt Lake Railroad Company, and later by the defendant Union Pacific Railroad Company, in the capacity of "mechanical supervisor". The defendant Los Angeles & Salt Lake Railroad Company leased its properties to the defendant Union Pacific Railroad Company, and the Union Pacific Railroad Company agreed to "liquidate the current and deferred assets and liabilities of" the Los Angeles & Salt Lake Railroad Company, and "defend or settle all claims, demands and suits growing out of the operations and business of the" Los Angeles & Salt Lake Railroad Company "prior to the effective date" thereof. Plaintiff seeks to recover from the defendant companies full salary for periods from March 30, 1932 to June 21, 1932 and from August 26, 1932 to February 26, 1936, totaling over three years, during which he was laid off on account of illness and injuries. Five causes of action were pleaded, but during the course of the trial, counsel for plaintiff conceded that no evidence had been presented from which the court could properly submit the second and fifth causes of action to the jury. We therefore confine our discussion to the first, third and fourth causes of action.

In his first cause of action plaintiff based his claimed right to recover the salary for the periods above mentioned on an alleged custom or usage of the defendant companies to pay their employees their full salary during periods of incapacity. Plaintiff cites cases in support of this cause of action which hold that parties who contract on a subject matter concerning which known usages prevail, by implication incorporate them into their agreement if nothing is said to the contrary. It is plaintiff's contention that he introduced evidence fairly tending to prove a custom or usage, and that the question of whether or not there was such a custom should have been presented to the jury.

Plaintiff's third cause of action sets up an alleged contract to make such payment of compensation during disability to members of Mechanical Supervisors' Association, of which plaintiff was a member. In support of this cause of action plaintiff introduced in evidence a written agreement between his employers and the Mechanical Supervisors' Association, dated May 1, 1926. There is no mention in this agreement as to payment for services except for the following:

"Article IV — Basis of Payment:

"(a) All foremen will be paid a monthly salary for all services rendered. Present classifications and salaries being so designed will remain in effect until or unless changed in accordance with the provisions of this agreement."

Plaintiff's theory in connection with this cause of action is not clear. He at one time argues that the above quoted provision is ambiguous and therefore should be interpreted against the author of the agreement. It is shown by the evidence that the agreement was prepared by attorneys for the plaintiff's employers. He next argues that the agreement should be given the practical application given to it by the defendants themselves, and in support of this argument evidence was introduced which plaintiff claims shows that the company was in the habit of paying its foremen for time off while sick. He next argues that there had been a long existing oral understanding between the parties which was expressly adopted into the written agreement by the above quoted provision; and then the argument is presented that even though there might not have been an express incorporation of the oral understanding into the written agreement, still it would be proper for the plaintiff to prove the oral agreement, since there would be no conflict between the terms of the oral agreement and the written agreement, notwithstanding the fact that it might be closely related to the subject matter of the written instrument.

Plaintiff's fourth cause of action is based upon quantum meruit. His contention here can best be understood from a quotation from his opening brief: "The plaintiff does not contend that he actually performed his duties for the time he is claiming salary. * * * he is nevertheless entitled to recovery under the quantum meruit rule for the period of time that plaintiff was kept on the suspension list and contrary to his wish and under circumstances which he believed to be entirely unnecessary and uncalled for."

He points to evidence in the record to the effect that he was regarded by the defendants as an "employee" during the periods of time in question, the company allowing him to retain his seniority on its rolls, and issuing him transportation passes to which only an "employee" was eligible.

Defendants denied the existence of any custom or usage as alleged by plaintiff, the existence of the contract referred to in plaintiff's third cause of action, and that plaintiff had rendered any services during the periods in question. As affirmative defenses to each cause of action defendants set up the statute of limitations and accord and satisfaction.

We shall discuss the three causes of action separately.

With reference to the usage and custom which plaintiff sought to prove in support of his first cause of action, we quote from plaintiff's opening brief: "It is appellant's contention that it appears affirmatively from the evidence in the case at bar that there was a uniform practice or custom existing between the defendants and their foremen whereby foremen were entitled to their pay for time off occasioned by sickness or injury arising in the course of employment."

At the outset it should be noted that the evidence upon which plaintiff relies is all directed to proving that the defendants were in the habit of compensating their employees for time off on account of disability. No attempt was made to show that it was the custom of railroads in general, nor that there was any custom whatsoever except as between the parties in question. We express no opinion as to whether or not this sort of custom or usage, if proved, would fall within the rule that parties who contract on a subject matter concerning which known usages prevail by implication incorporate them into their agreements, if nothing is said to the contrary. It is our opinion and we hold that the plaintiff failed to prove a custom or usage, even as between the defendants and their employees.

We think the general doctrine is well put in 17 Corpus Juris, 451, Customs and Usages, Sec. 10, "* * * a usage or custom of trade must be certain and uniform in order to be binding. It is not sufficient that it is merely as certain as the nature of the business to which it applies will permit. Further, a loose and variable practice will not be allowed to control the rights of the parties, nor will an alleged usage which leaves some material element to the discretion of the individual."

And in the same volume of Corpus Juris, 453, Customs and Usages, Sec. 11, "A custom must be compulsory, and not left to each one's option to obey it. Likewise, a usage, in order to be regarded as entering into a contract, must be clearly distinguished from mere acts of courtesy or accommodation."

This action was instituted originally in the California Superior Court; the contract set up by the plaintiff is alleged to have been entered into in California. We therefore look to the California law to determine what sort of custom or usage will control the rights of the parties. We find that the California courts recognize the requirements as to certainty and uniformity to establish a custom or usage. See Security Commercial & Savings Bank v. Southern Trust & Commerce Bank, 74 Cal. App. 734, 241 P. 945 hearing denied Sup. Ct..

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