Title Ins. Co. v. Howell

• Decision Date: 16 June 1932
• Court: Virginia Supreme Court
• Parties: THE TITLE INSURANCE COMPANY OF RICHMOND, INCORPORATED, v. CLARA A. HOWELL, EXECUTRIX.

Page 713

158 Va. 713

THE TITLE INSURANCE COMPANY OF RICHMOND, INCORPORATED, v. CLARA A. HOWELL, EXECUTRIX.

Supreme Court of Virginia, Wytheville.

June 16, 1932.

Present, Campbell, C.J., and Holt, Hudgins, Gregory and Browning, JJ.

1. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Term of Office — Contract for Hire from Month to Month — General Contract of Hiring — Case at Bar. — The instant case was an action by a former employee of a corporation against the corporation for salary. The compensation of plaintiff was set forth in a resolution of the executive committee confirmed at a meeting of the board of directors. The resolution stated that plaintiff was to be paid, not $708.34 a month, but at the rate of $708.34 per month. Therefore, this was not a contract for hire from month to month but merely a general contract of hiring, to be paid for on a stated basis, with nothing said about notice of the termination of the contract.

Held: That the general contract of hiring was terminable at the will of the corporation.

2. PAROL EVIDENCE — Varying Written Contract. — The general rule that parol evidence is not competent to vary the legal effect of a written contract is settled law, not challenged.

3. MASTER AND SERVANT — General Hiring — Terminable at Will. — A general hiring is terminable at the will of the parties. A contract of employment for an indefinite term may, in the United States, be terminated at the will of either party.

4. PAROL EVIDENCE — What One of the Parties Thought. — Parol evidence is never competent to show merely what one of the parties to a contract thought.

5. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Term of Office — Power of President — Case at Bar. — The instant case was an action by a former employee of a corporation against the corporation for salary. The compensation of plaintiff was set forth in a resolution of the executive committee confirmed at a meeting of the board of directors. The president of the corporation informed plaintiff that he had no authority to make the contract with him and that whatever was done would have to be done with the approval of the board of directors. A president who has no power to make a contract has no power to change it.

Held: That no agreement between the president and the plaintiff would alter or change the corporation's contract of hiring of plaintiff contained in a resolution of the executive committee confirmed by the board of directors.

6. USAGES AND CUSTOMS — Custom Varying or Altering Terms of Contract. — Extraneous evidence of a custom which alters or varies the terms of a contract of hiring is, upon familiar principles, inadmissable.

7. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Term of Employment — Set-off — Compensation for Services or Loan. — The instant case was an action by a former employee of a corporation against the corporation for salary. The corporation set up a counterclaim for $1,000.00, which the employee received from it in addition to his salary. Plaintiff contended that this was compensation for special services, while the corporation claimed that it was merely a loan or advance. The jury found for plaintiff. There was a conflict in the testimony as to what occurred at a meeting of the executive committee as to plaintiff's compensation. Plaintiff testified that one member of the committee said, while the committee was still in session, that they were willing to employ his services, and that another member said that he was willing to compensate plaintiff for the services. The former president of the corporation testified that he understood that plaintiff would be allowed a reasonable expense for his services.

Held: That this testimony was sufficient to sustain a verdict for plaintiff, notwithstanding there was nothing in the record of the meeting of the executive committee to support it.

8. CORPORATIONS — Payment — Voluntary Payment by President. — Voluntary payments made under no mistake by a corporation and authorized by its president must stand, and the new president of the corporation is as much bound by them as his predecessor would have been.

9. CORPORATIONS — Statement of President in Presence of Executive Committee — Committee Bound by Statement Not Contradicted — Case at Bar. — The instant case was an action by a former employee for compensation. Plaintiff relied on an agreement between plaintiff and the executive committee of the corporation that he should be compensated for certain services. It was contended that there was no competent evidence to show such an agreement. Plaintiff testified that the president of the corporation, when the executive committee was in session, told him in its presence that the committee was willing to employ him to perform these services. Promise to pay for the work done followed as a matter of course. It was claimed that the president had no power to make such a promise. The committee, however, was bound by the statement of the president, made in its presence without contradiction, just as it would have been bound by the uncontradicted statement by any other member made in like circumstances.

10. CORPORATIONS — Contracts — Contract Made by President with Acquiescence of Board of Directors. — Contracts which a corporation may make and which are made by its president with the knowledge and acquiescence of its board of directors are binding, even though the president, as an original proposition, might not have been clothed with necessary power.

11. AGENCY — One Permitting Another to Hold Himself out as Agent. — One who permits another to hold himself out as agent and appears to acquiesce in that assumption of authority is bound thereby.

12. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Power of Executive Committee to Employ Officer — Statement of Member of Executive Committee Not Contradicted by Other Members — Case at Bar. — In the instant case the executive committee of a corporation had full authority to employ plaintiff to secure options for it on the shares of stock in another corporation. Having such authority, the executive committee was bound by the statement of one of its members, made to plaintiff in the presence of the executive committee and without protest, to the effect that the committee was willing to employ plaintiff for this purpose.

Error to a judgment of the Law and Equity Court of the City of Richmond, in a proceeding by motion for a judgment for money. Judgment for plaintiff. Defendant assigns error.

The opinion states the case.

R. E. Cabell and J. Gordon Bohannan, for the plaintiff in error.

Page & Leary, for the defendant in error.

HOLT, J., delivered the opinion of the court.

This is a fifteen day motion brought by Mr. Arden Howell, now dead, to recover of the Title Insurance Company of Richmond, the sum of $1,062.51, claimed to be due under a contract of employment. He has recovered a judgment for the full amount.

Designating the parties as they stood in the trial court the plaintiff, a lawyer in Richmond of standing and experience was an expert title examiner. The defendant believed that his services would be valuable to it and set about to secure them. Mr. E. D. Schumacher, who was then its president and chief executive officer, opened negotiations for the purpose. They terminated in the contract sued on. Howell was made vice-president, placed in charge of the Title Insurance Department, began work on July 1, 1930, and continued there until September 15, 1930, when he was discharged by letter from Mr. Wilson, of date August 30th, and received early in September, notifying him that his services would not be needed after the 15th. Mr. Wilson, who was the successor of Mr. Schumacher, took office as president some time in August.

Compensation to the plaintiff was a major consideration and he had suggested a salary of $8,500.00 a year. That suggestion was unacceptable but satisfactory terms were finally agreed upon, are in writing and appear in this resolution adopted at a meeting of the executive committee, held on May 12 or 13, 1930:

"On motion duly made and seconded, the executive committee accepted the recommendation of the president and recommended that the board of directors authorize the employment of Mr. Arden Howell and his election to the office of vice-president and counsel to devote his efforts in the interest of the company and to suggest such improvements and methods of upkeep as will make the abstract plant more efficient and economical in operation. The salary of Mr. Howell to be at the rate of $708.34 per month, payable on the 1st and 15th of each month, Mr. Howell assuming his duties on July 1, 1930, and his salary and office becoming effective from that date."

When this was shown to Mr. Howell, he protested and said: "My proposition was $8,500.00 per year." Mr. Schumacher answered: "Well, it is the custom of the company to employ officers by the month," and that "it was the custom of their company when employing the officers to employ them on the basis of one month, but that they were entitled to one month's notice in the event their services were not longer needed."

Afterwards both Howell and Schumacher initialed a copy of this resolution. It was confirmed at a meeting of the board of directors held on the 15th, and under it he went to work.

It is well to bear in mind plaintiff's exact claim, for the temptation to digress and to grow didactic is at times exceedingly strong.

His counsel, in their brief, say: "It was the claim and contention of the plaintiff that he was employed by the defendant at a monthly salary of $708.34, payable on the 1st and 15th days of each month, upon the express understanding and agreement that he should be given thirty days' notice in the event of the termination of his employment."

And again: "Its president and chief executive officer, who represented the defendant in all of its negotiations and dealings with the plaintiff leading up to and culminating in his employment,...