Stewart v. Blackwtood Electric Steel Corp.

• Decision Date: 03 November 1925
• Docket Number: (No. 5412.)
• Citation: 100 W.Va. 331
• Parties: FrEd B. Stewart v. Blackwtood Electric Steel Corporation.
• Court: West Virginia Supreme Court

100 W.Va. 331

FrEd B. Stewart

v.Blackwtood Electric Steel Corporation.

(No. 5412.)

Supreme Court of Appeals of West Virginia.

Submitted October 27, 1925.

Decided November 3, 1925.

1. Contracts Evidence Trial Court Has Duty to Construe Written Contract, if it be Susceptible of Construction; Court Shoidd Instruct Jury as to Their Findings Under Contract; if Evidence is Conflicting on Material Point Necessary to Interpret Contract, Question of Intent of Parties is One for Jury; if Contract of Employment is ambiguous, Construction by Parties and Acts Under it May be Considered.

It is the duty of the trial court in a suit based on a written contract to construe the contract, if it be susceptible of construction, and instruct the jury as to their finding under the contract so construed. But if the contract, being one of employment, is ambiguous as to the time over which it shall extend and be operative, the situation of the parties, the surrounding circumstances at the time of the contract, the practical construction given to it by the parties, their acts under it, may be considered in determining the true length of time intended. If the evidence be conflicting on a material point necessary to interpretation, the question of the intent of the parties becomes a jury question under proper instructions, (p. 338.)

(Contracts, 13 C. J. § 517; Evidence, 22 C J. § 1581; Trial, 38 Cyc. p. 1524.)

2. Trial Instruction That Written Contract for Employment, Silent as to Term of Employment Beyond One Year, Except That After Year Fixed Wage Shall be Paid per Month, Constitutes Contract for Two Years, Held Error.

Where such a contract as is mentioned in the first point, is silent as to the term of employment beyond one year, except that after the one year a fixed wage shall be paid per month, it is error for the court to tell the jury that the writing constitutes a contract of employment for a period of two years, (p. 338.)

(Trial, 38 Cyc. p. 1523.)

3. Frauds, Statute of Master and Servant Contract May be Formed by Correspondence; Letter Offering Contract of Employment Held Sufficient to Satisfy Statute.

A contract of employment may be formed by correspondence, and where the letter of proposal from the employer, afterwards accepted by the employee, shows on its face that the employment shall extend for more than a year, the letter of proposal is a sufficient memorandum in writing to relieve the contract from the bar of the statute of frauds, (p. 339.)

(Frauds, Statute of, 27 C. J. § 308; Master and Servant, 39 C. J. § 10.)

4. Corporations' Whether President and General Manager of Corporation Has Power to Make Contract of Employment for More Than Year Held to Depend on By-Laws, Character of Business, and Practical Operation Thereof.

Whether a president and general manager of a corporation has power to make a contract of employment for more than a year for the benefit of the corporation, depends upon the by-laws defining his powers and duties, the character of the business placed under his management, and his practical operation thereof with the assent of the directors. All such facts and circumstances may be considered in arriving at the extent of his power given under the by-laws; and whether the contract is unusual or extraordinary. (p. 339.)

(Corporations, 14a C. J. § 2280.)

5. Same On Conflicting Evidence as to Whether Corporation's Directors Have Ratified Contract of Employment by President, Question of Ratification is One for Jury,

Where there is a sharp conflict in the evidence as to whether the directors of a corporation have ratified and confirmed a contract of employment made by its president and general manager, claimed to be ultra vires by the corporation, the question of ratification is one of fact for the jury, (p. 341.)

(Corporations, 14a C. J. § 2559.)

(Note: Parenthetical references by Editors, C. J. Cyc. Not part of syllabi.)

Error to Circuit Court, Wood County.

Action by Fred B. Stewart against the Blackwood Electric Steel Corporation. Judgment for plaintiff, and defendant brings error.

Judgment reversed; verdict set aside; new trial.

F. C. Fisher, and Marshall & Forrer, for plaintiff in error. Wm. Beard, for defendant in error.

Lively, President:

Claiming a contract of employment as superintendent of defendant's pattern shop, carpenter shop and inspection department in its steel plant, plaintiff obtained a verdict of $4,-172.50 for breach thereof in an action of assumpsit. On his motion $735.00 was remitted and judgment was entered for $3,437.50, and defendant prosecutes this writ of error to that judgment.

Defendant was establishing and organizing its plant for the purpose of manufacturing high grade electric furnace steel castings near the City of Parkersburg in the early part of 1923, and plaintiff was engaged, in a lucrative employment in Fort Wayne, Ind. Through its president and acting general manager, Alexander Blackwood, negotiations by mail were opened with plaintiff for the purpose of securing his services as an employee, which negotiations resulted in the alleged contract the breach of which is the basis of this action. Plaintiff entered the service of defendant about July 1, 1923, and was discharged about April 21, 1924. His claim is that his contract extended for two years and that he was to have been paid wages of $250. per month for the first three months, $275.00 per month for the next three months, $300.00 per month for the next six months; and for the remaining 12 months, the sum of $350.00 per month; and that without good cause and for no fault on his part he was summarily discharged. The declaration contained the common counts, and a special count setting out the contract and its breach. A bill of particulars stating an account between the parties under the alleged contract was asked for and filed. Defendant plead the general issue.

The issues raised were whether plaintiff had established a written contract of employment for a two-year service and his wages thereunder, so as to remove the bar of the statute of frauds; and whether Blackwood, defendant's president, who made the alleged contract on defendant's behalf, had authority to bind it by a contract for a term of years. A motion to set aside the verdict as contrary to the law and evidence, because of evidence admitted and evidence refused, instructions given and refused, and excessiveness of the verdict, was made and overruled.

The points of error are: (1) that the evidence fails to establish a contract for a term of years, so as to relieve it from the statute of frauds; (2) that the evidence fails to show authority in Blackwood, either as president or general manager to make a contract of employment for a term of years; and (3) excessiveness of the verdict.

Did the evidence establish a contract for two years?

Plaintiff claimed that such contract was clearly established by correspondence between himself and Alexander Blackwood acting as president and general manager of defendant company. A part of the correspondence was put in evidence. The first letter was to Stewart from defendant Company, dated March 5, 1923, purporting to answer a letter from Stewart to Blackwood, dated March 1st (which was not produced, but its absence accounted for to the satisfaction of the trial court). In the letter of March 5th Blackwood says he had in mind to hold stock (of the Company), say 20 shares, for about two years so that Stewart could have an opportunity of purchasing same at his leisure; and offered to employ Stewart at $175.00 per month until the plant was in operation and producing when there would be an increase to $200.00 per month, the service to begin about April 1. On March 12th, Stewart answered and declined the offer. On March 14th, Blackwood replied asking what salary would Stewart accept to take charge of pattern shop, carpenter shop and inspection departments, the service to begin April 15th or May 1st. On March 17th, Stewart answered, proposing to enter the employment at $350.00 a month to start with and more as the business in- creased, and to stay in the service at that wage indefinitely. And as to the purchase of stock, he would pay for part of it when he came, '' and would like at least a two year contract.'' On March 28th, Blackwood acknowledged Stewart's letter of March 17th, saying he would like to meet the offer in full but was unable to clo so; and made a counter offer as follows: the wrage to be $200.00 to continue for three months after beginning of the operation; then to be $250.00 for three months further, and then $275.00 per month, and after operation for one year the wage to be $300.00 per month. The letter said, '' We are executing a contract covering a period of years, just as you want it, and will also reserve sufficient stock to make it interesting and also to make you a prominent stockholder." Blackwood (who had been relieved as president and general manager) produced the correspondence and was examined as plaintiff's witness. He was then permitted to say that he had received a reply to his letter of March 26th (the reply being dated March 29th), but was not permitted to say what the contents were because the reply of March 29th was not produced. He said he had turned it over to the Company on March 5, 1924. No notice had been served on defendant to produce that reply letter; and the court refused to permit the evidence of its contents to go to the jury, because it was not a lost document. Counsel for defendant upon being called on for the reply letter of March 29th, stated that they did not have it, had not looked for it, not having been noticed to bring it to the trial, and had spent three days in looking for a letter of April 5th which they had been called on to produce at the trial, and had been unable to find it. The next letter offered was from Blackwood, as president and general manager, to Stewart, dated April 2nd; it was rejected because it showed on its face it was in reply to the letter of March 29...