Stinson v. Edgemoor Iron Works, Civil Action No. 343.

• Decision Date: 26 June 1944
• Docket Number: Civil Action No. 343.
• Parties: STINSON v. EDGEMOOR IRON WORKS, Inc.
• Court: U.S. District Court — District of Delaware

55 F. Supp. 861

STINSON v. EDGEMOOR IRON WORKS, Inc.

Civil Action No. 343.

District Court, D. Delaware.

June 26, 1944.

Cornelius C. O'Brien, of Philadelphia, Pa., and Aaron Finger (of Richards, Layton & Finger), of Wilmington, Del., for plaintiff.

Clair J. Killoran and John VanBrunt, both of Wilmington, Del., for defendant.

LEAHY, District Judge.

Defendant has now moved for summary judgment after its motion to dismiss failed. See 53 F.Supp. 864. The facts concerning the contract in suit are found in the former opinion. Upon stipulation, plaintiff's testimony was taken by deposition which, supported by an affidavit of defendant's president, is the base for defendant's motion for summary judgment.

The contract of employment is in writing and in the form of an interoffice communication.¹ Plaintiff's deposition, together with the affidavit of defendant's president, B. D. Beamish, establishes that no dispute exists as to the contract terms. This is clear by the following excerpts:

"By Mr. Killoran defendant's attorney:

"Q. Now then, the next page is Exhibit E. Your complaint — by that, I mean the statement in this bill — filed by your counsel, states that you were employed for a year on March 12, at $8200 per year? A. That is right.

* * * * *

"Q. And was this employment which was entered into March 12, 1943, initiated by you or by the company? A. By the company.

* * * * *

"Q. Your new arrangement entered into with Edge Moor Iron Works, Inc. on March 12, which was retroactive till February 21, 1943 — was that a verbal contract or a written contract? A. I think it was a written contract. Here it is here.

"Q. A written contract; and when you say `written contract' you refer to Exhibit E? A. That is right.

* * * * *

"Q. Mr. Stinson, so that I understand you, do I understand you to say that the letter of March 12, which we have identified as Exhibit E represents your contract between Edge Moor Iron Works, Inc. and yourself relative to a hiring at $8200 per year for one year? A. That is right.

* * * * * *

"Q. And that there was no verbal agreement, undertaking or other representation on behalf of the company what would modify that in any way?

* * * * *

"Mr. O'Brien: That is objected to.

"Mr. Killoran: Before or at the time? I will withdraw that question. It is an awkward question anyway.

"Q. Does the letter accurately represent the understanding had between you and the company relative to your new employment arrangement?

"Mr. O'Brien: That is objectionable, but I am not going to press any objection to it, because that contract speaks for itself, and any understandings entered into by him verbally would be considered to be merged in the writing. And may I say for the record and for your benefit, that we do not claim any writing other than this writing; we depend for our rights upon a certain memorandum entitled `Salary Adjustment', dated March 12, 1943, a copy of which is attached to the complaint as Exhibit E, and which we contend speaks for itself.

"By Mr. Killoran:

"Q. And that is your understanding, Mr. Stinson, as your counsel has expressed it for you? A. That is right.

"Mr. Killoran: No further questions.

"Mr. O'Brien: In other words, we do not contend, Mr. Stinson, that there were any verbal statements made inducing the execution of this paper, other than contained in the paper itself: in other words, that the writing speaks for itself." (Emphasis supplied)

No issue of fact is raised because concededly the interoffice document is a true representation of the agreement between the parties. Defendant contends that this court, under the doctrine of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, as extended by subsequent Supreme Court cases, is bound to follow the Delaware Superior Court case of Greer v. Arlington Mills Co., 1 Pennewill, Del., 581, 43 A. 609, which it claims is authority for holding that the interoffice memorandum constitutes a hiring at will and not a hiring for a period of one year. Since Greer v. Arlington Mills Co., supra, is decisive² that the interoffice memorandum constitutes a hiring at will, plaintiff's contention will now be discussed.

The applicability of the Delaware Superior Court case of Greer v. Arlington Mills Co. Concededly since Erie R. Co. v. Tompkins a federal district court must follow the law of the state in which it sits in matters of substance where jurisdiction is founded upon diversity of citizenship. Plaintiff here contends, however, that a federal district court is not bound to follow the law established by a lower or inferior court such as the Superior Court of the State of Delaware when it sits as a nisi prius court. The parties agree that the only case in Delaware bearing on the case at bar is Greer v. Arlington Mills Co., supra, and that the Supreme Court of Delaware has never passed upon a similar contract of employment. Following Erie R. Co. v. Tompkins, supra, the Supreme Court has held that a federal district court is bound by decisions of state courts which are not the highest courts of the states. Fidelity Union Trust Co. v. Field, 311 U.S. 169, 61 S.Ct. 176, 85 L.Ed. 109 (from 3 cir.); Six Cos. of Cal. v. Joint Highway Dist. No. 13, 311 U.S. 180, 61 S.Ct. 186, 85 L.Ed. 114 (from 9 cir.); West v. American Telephone & Telegraph Co., 311 U.S. 223, 61 S.Ct. 179, 85 L.Ed. 139, 132 A.L.R. 956 (from 6 cir.); Stoner v. New York Life Ins. Co., 311 U.S. 464, 61 S.Ct. 336, 85 L.Ed. 284 (from 8 cir.). In the Field case, supra, the federal district court sitting in New Jersey was concerned with the applicability of two state precedents from the Court of Chancery. The Circuit Court of Appeals held that the district court was not bound by these decisions. The Supreme Court reversed and said 311 U.S. 169, 61 S.Ct. 178, 85 L.Ed. 109: "We think that this ruling was erroneous. The highest state court is the final authority on state law (Beals v. Hale, 4 How 37, 54, 11 L. Ed. 865; Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188, 114 A.L.R. 1487), but it is still the duty of the federal courts, where the state law supplies the rule of decision, to ascertain and apply that law even though it has not been expounded by the highest court of the State. See Ruhlin v. New York Life Ins. Co., 304 U.S. 202, 209, 58 S.Ct. 860, 862, 82 L.Ed. 1290. An intermediate state court in declaring and applying the state law is acting as an organ of the State and its determination, in the absence of more convincing evidence of what the state law is, should be followed by a federal court in deciding a state question. We have declared that principle in West v. American Telephone and Telegraph Co., 311 U.S. 223, 61 S.Ct. 179, 85 L.Ed. 139, 132 A.L.R. 956, decided this day. It is true that in that case an intermediate appellate court of the State had determined the immediate question as between the same parties in a prior suit, and the highest state court had refused to review the lower court's decision, but we set forth the broader principle as applicable to the decision of an intermediate court, in the absence of a decision by the highest court, whether the question is one of statute or common law." It becomes unnecessary to consider whether the Superior Court³ of the State of Delaware is comparable to the New Jersey court involved in the Field case, supra. This court is bound by Greer v. Arlington Mills Co., supra, in any event, because an analysis made "from all the available data" (West v. American Tel. & Tel. Co., 311 U.S. 223, 237, 61 S.Ct. 179, 183, 85 L.Ed. 139, 132 A.L.R. 956) indicates that the law of Delaware is what was expounded by the court in Greer v. Arlington Mills Co., supra, in its charge to the jury in that case. The law on the question as to whether a particular form of expression in a written agreement creates a hiring for a period of time or a hiring at will is in conflict. Cf. 11 A.L.R. 471 and 100 A.L.R. 836. But there is no available data which indicates that the Supreme Court of Delaware would not follow the rule of Greer v. Arlington Mills Co., supra. In fact, the inference is strong that the Supreme Court would follow that rule and that that case represents the law of the State of Delaware, for in the absence of "other persuasive data" there is every reason to believe that the Supreme Court of Delaware would follow a long-standing decision of the Superior Court,⁴ especially where such decision is not at war with the overwhelming weight of authority and where, as in Delaware, the Superior Court judges also sit as Supreme Court judges. Cf. Stentor Electric Mfg. Co. v. Klaxon Co., 3 Cir., 125 F.2d 820.

Defendant's motion for summary judgment granted.

1 The following is a copy (Exhibit E) of the contract "Interoffice "Edge Moor Iron Works "To: Mr. J. A. Stinson "Re: Salary Adjustment "From: B.D.B "Date: March 12, 1943

"As discussed with you, I recently applied to the Stabilization Board to permit your salary to go on a fixed basis at the rate established by your approximate last year's earnings. At that time, our profits for 1942 had not been established, particularly as the physical inventory on December 31st was much less than...