Tiedman v. American Pigment Corporation

• Decision Date: 03 March 1958
• Docket Number: No. 7451.,7451.
• Parties: Allen W. TIEDMAN and Victor Mercaldi (Victor Mercaldi having died during the pendency of this action and Anthony Mercaldi having qualified as Administrator of the Estate of Victor Mercaldi, deceased), Appellants, v. AMERICAN PIGMENT CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

253 F.2d 803 (1958)

Allen W. TIEDMAN and Victor Mercaldi (Victor Mercaldi having died during the pendency of this action and Anthony Mercaldi having qualified as Administrator of the Estate of Victor Mercaldi, deceased), Appellants, v. AMERICAN PIGMENT CORPORATION, Appellee.

No. 7451.

United States Court of Appeals Fourth Circuit.

Argued October 10, 1957.

Decided March 3, 1958.

John M. Goldsmith, Radford, Va. (Robert S. Irons; Goldsmith & Irons, Radford, Va., and William J. Graham, on brief), for appellants. Howard C. Gilmer, Jr., Pulaski, Va. (Alex M. Harman, Jr., Pulaski, Va., on brief), for appellee.

Before PARKER, Chief Judge, and SOBELOFF and HAYNSWORTH, Circuit Judges.

SOBELOFF, Circuit Judge.

After an extensive trial the District Judge, sitting without a jury, dismissed the claim of the plaintiff, Allen W. Tiedman, against the American Pigment Corporation, on a contract of employment.

Tiedman's co-plaintiff, Mercaldi, had no participation in the events here reviewed, and joined in the suit as assignee of an interest in Tiedman's claim. The plaintiffs have appealed.

The contentions raised on the appeal are that the Court erred in its decision upon the merits and in denying certain of the plaintiffs' requests for the inspection of documents and premises in defendant's possession.

In 1941, and for some years earlier, the defendant had been engaged at Pulaski, Virginia, in manufacturing natural iron pigments from raw materials which it mined nearby. It had also been buying synthetic iron oxides, known as ferrites, from Northern Pigment Company, of Toronto, Canada, particularly two shades designated by Northern as Nos. 300 and 307. As the patents on processes for manufacturing synthetic iron oxides had expired in 1938, they were rapidly replacing natural materials which had theretofore been imported from abroad to tint mined pigments used in paint making. American Pigment's chemist had, before entering military service, succeeded in producing in its laboratory only small quantities of synthetic iron oxides. The company had not produced them commercially and had no facilities for their large scale production. It was desirous, however, of entering that branch of the industry.

In the fall of 1941, American Pigment Corporation learned that Tiedman, plant manager of the Northern Pigment Company, was available for employment. After negotiations, American and Tiedman entered into a contract dated January 10, 1942, for his employment for a period of ten years, renewable for additional periods up to forty years. The defendant agreed to set up facilities in accordance with Tiedman's advice and assistance, and the latter promised to serve the former "with all of the knowledge and skill at his command in the manufacture of synthetic oxides." He further agreed "to reveal the secrets and methods in toto known to him or that may become known to him in the manufacture or process of synthetic iron oxides during the term of his employment." Specifically he agreed that he could and would manufacture synthetic iron oxides of a quality equal or superior to "Northern pigments Nos. 300 and 307."

In addition to an agreed salary, Tiedman was promised a "royalty" of two dollars per ton on all synthetic iron oxides manufactured. The royalty was to be paid, irrespective of the duration of the employment, to Tiedman and his heirs, etc., during his lifetime and for a period of fifty years after his death.

Commercial production of synthetic iron oxides began at Pulaski in August, 1942, but according to the defendant, the product did not measure up to the standards of the trade or of competing products, particularly Northern's Nos. 300 and 307, as promised in the contract. Tiedman, however, testifying as a witness, insisted that such failures as occurred were due either to the strain of wartime conditions or to breaches of the defendant's contractual duty to supply him proper facilities and labor; that while there had been some differences between him and his employers, they had made no major complaints against him; and that the company abruptly fired him on November 19, 1945.

Emphatically, he testified that he had disclosed fully and in good faith all secrets and methods known to him regarding the manufacture of synthetic iron oxides, as required by the contract, and that if the employers were unable to practice the art, it was not because he withheld anything, but because deficient training limited their ability fully to utilize the disclosures made to them. He asserted, however, that the company had actually been successful as a result of the "know how" skills, and methods he communicated to its employees; that American had suffered no losses; that all of its product was absorbed by the market or used by the defendant. The response of the defendant was that much that was disposed of in wartime was inferior to the standard promised by Tiedman and could not possibly have satisfied normal requirements.

The testimony presents irreconcilable conflicts, which need not be further elaborated. It raises essentially issues of credibility, and the case illustrates the reason for the rule (No. 52, F.R.C.P., 28 U.S.C.A.) requiring appellate courts to give due regard to the trial court's opportunity, which is denied them, to see and hear the witnesses, and to accept findings of fact unless convinced that they are clearly erroneous.

The Judge's findings determined the facts substantially as contended by the defendant. He found that the plant was erected in accordance with Tiedman's directions as to layout, selection and installation of machinery and equipment, and that Tiedman made no complaint then as to the plant or its equipment.

The Judge's opinion points out that Tiedman failed to install equipment that had been furnished at his instance, and that he permitted it to lie idle during the entire period of his employment.

The District Judge concluded that according to the weight of the credible evidence, Tiedman did not as a rule during the three years of his employment succeed in producing a product of the required standards of quality to meet the competition of the market. There was also an explicit finding that Tiedman did not perform his obligation to impart his knowledge or skill and to disclose his methods to anyone connected with the defendant. On the contrary, the Court was convinced that Tiedman studiously avoided passing on information to those employees who did possess sufficient training to utilize it in the production of the required product independently of Tiedman; that he hoarded his secret knowledge, persistently rejecting the company's suggestions for the employment of a trained assistant to whom he could impart his methods and secrets. There was evidence that Tiedman boasted of driving away the company's general manager for "nosing in my business."

The circumstances under which Tiedman's employment ended were minutely inquired into in the District Court. They are enlightening on the questions of credibility in other aspects of the testimony, and obviously were given consideration by the Judge.

Over a considerable period the defendant had been seeking a method of producing synthetic sienna. By the summer of 1945, with Tiedman's assistance, it believed that it had achieved a patentable process. A contract was prepared for assignment by Tiedman to the company of any patent that might be granted, upon payment of certain cash considerations. Tiedman declined to execute the contract without first seeking advice from Mr. Constable, his father-in-law, an attorney in Toronto. For this declared purpose, Tiedman left Pulaski October 4, 1945.

It appears from testimony offered by the defendant that as Tiedman was expected to return in about a week, an appointment was arranged for him for October 15, to meet a Mr. Garrett, a mechanical engineer who had recently been discharged from military service and was under consideration for employment as an assistant to Tiedman. Asked on cross examination why he did not return for this interview, Tiedman replied he had no such appointment "that he knew of."

About the 15th of October, Mr. Tiedman, instead of returning to Pulaski, wired from White Plains, New York, to his secretary at the plant, without disclosing where he could be reached, requesting her to deposit his semi-monthly salary in his bank account.

There was no further communication from Tiedman, but on November 13, 1945, his father-in-law as his attorney, wrote the defendant's attorney advising that Tiedman had consulted him "about four weeks ago" concerning their contract and that "as I did not hear from him I left the matter in abeyance." Mr. Constable's letter also announced to the defendant, "It now appears that Mr. Tiedman remained over in New York to look after certain interests and in the belief that he was entitled to a reasonable vacation." Mr. Constable suggested that the defendant forward to Mr. Tiedman his salary for one month by way of vacation "on his undertaking to return at once to the company for further instructions." He added that he did not know Mr. Tiedman's address in New York but that a communication would reach him if sent in care of Miss Constable, a daughter of the writer and a sister of Mrs. Tiedman, at a given address in White Plains, New York.

Defendant's attorneys promptly informed Mr. Constable that their client was unwilling to make the requested advance, and on November 19, wrote Mr. Constable, recounting the circumstances of plaintiff's departure on October 4, and his failure to return. They also recited the defendant's version of its disagreements with Tiedman and his alleged failures in his duty under the contract, and gave notice of termination of the contract of employment. The company addressed a letter to Tiedman at his Pulaski apartment, instructing him not to visit the ferrite plant until he had conferred with its Executive Vice-President.

Tiedman did return to Pulaski later...