Hines v. Ward Baking Co.

155 F.2d 257, 1946 U.S. App. LEXIS 2957
CourtCourt of Appeals for the Seventh Circuit
DecidedMay 3, 1946
DocketNo. 8812
StatusPublished
Cited by14 cases

This text of 155 F.2d 257 (Hines v. Ward Baking Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hines v. Ward Baking Co., 155 F.2d 257, 1946 U.S. App. LEXIS 2957 (7th Cir. 1946).

Opinion

LINDLEY, District Judge.

Plaintiff appeals from a judgment entered on the pleadings in his suit to recover additional employment compensation from defendant. He urges that the court erred in, (1) holding as a matter of law that an executed modified employment contract requires no consideration; (2) striking from his pleadings an averment of conversations between him and defendant’s vice president, alleged to have been the basis of inducement to plaintiff to sign the modified ^agreement, and, (3), failing to hold that his original contract was, by his continuation in defendant’s employment without execution of a new one, automatically extended for a period of five years. He prays, in the alternative, in this court for the first time that, if the entire amount demanded, some $54,000, may not be allowed him, he recover either $14,830 or $11,330. Defendant insists that the court’s rulings were proper and that the judgment should be affirmed.

The undisputed facts, as culled from the pleadings upon which judgment was entered, follow. Plaintiff became an executive employee of defendant under a contract beginning August- 1, 1931, terminating at the end of five years, at an annual salary of $35,000, payable in equal monthly installments on the last day of each month. On May 1, 1933, plaintiff wrote defendant that it was “agreeable” to him to accept [259]*259a temporary 10% reduction in his salary, effective May 8, 1933, and, on May 20, 1933, that he understood that the reduction referred to in his letter of May 1 should apply for the balance of his contract period, provided, however, that he be free to submit to the board of directors for its consideration at any time a partial or complete restoration of his salary to the rate specified in tile contract “for the then unexpired balance of its term.” From that date until July 31, 1936, plaintiff continued in defendant’s employment, receiving, accepting and retaining compensation at the reduced figure in equal monthly installments without protest. The original five-year term having expired on July 31, 1936, plaintiff continued in defendant’s employment for an additional year at the same reduced rate without further negotiation or arrangement of any character. On July 1, 1937, defendant wrote plaintiff that, although his contract had expired July 31, 1936, and had not been renewed and he had continued in the company’s employment at the rate of compensation provided in the modified contract, his employment would terminate on July 31, 1937. On July 31, 1937, plaintiff acknowledged receipt of this letter; and on the same day defendant wrote plaintiff further that, although his employment had been terminated as of that day, the company desired him to do some special work for it in its labor relations for the compensation of $100 per day and expenses, this arrangement to continue until such time as the company should determine to end it. On the same day plaintiff replied that the proposition as set forth in this letter was “agreeable to him” and he thereafter continued in defendant’s employment for some four years on this basis.

The District Court found that the letters of May 20, 1933, constituted a modified contract of employment under which plaintiff agreed to accept a lesser compensation for future services than that provided in his original contract; overruled plaintiff’s contention that the modification was not effective for the reason that it lacked consideration and held that no consideration is necessary to support a modified agreement to accept a smaller sum for work to be done in the future than that originally specified, if thereafter it is fully executed. This holding we approve. Ordinarily an agreement modifying a former agreement by promising to accept a lesser sum in lieu of a liquidated, matured contracted amount is without consideration and void. The law of Illinois, in accord with the general authority, recognizes an exception that, where the modified contract is to be and actually is thereafter fully performed as to sums maturing after such new agreement, no consideration need be shown. Illinois holds that if the parties proceed to execute fully the modified agreement, so that nothing remains to be done by either party and it is no longer executory, the contract as executed will not be disturbed; that, so long as the modified agreement remains executory, the party waiving the greater amount and accepting the lesser has a right to repudiate the agreement and claim the full amount specified in his original contract; that while the modified agreement remains executory, one may rightfully demand full payment of the specified payments, but that, having the right to waive performance of the original agreement and carry the modified contract into effect, if he does so and fully performs and accepts the benefit of the new agreement, he cannot thereafter repudiate it and sue for the larger sum. Snow v. Griesheimer, 220 Ill. 106, 77 N.E. 110; Doyle v. Dunne, 144 Ill.App. 14; Levy v. Greenberg, 261 Ill.App. 541. Cases from other jurisdictions supporting this are Romaine v. Beacon Lithographic Co., 13 Misc. 122, 34 N.Y.S. 124; State v. American Surety Co., 137 Or. 394, 300 P. 511, 2 P.2d 1116; Julian v. Gold, 214 Cal. 74, 3 P.2d 1009, 1010; Nordfors v. Knight et ux., 90 Utah 114, 60 P.2d 1115; Price v. Price, 24 Cal.App.2d 462, 75 P.2d 655; Bishop on Contracts, 2d Ed. 37; Idaho Gold Dredging Corp. v. Boise Payette Lumber Co., 62 Idaho 683, 115 P.2d 401; 17 C.J.S., Contracts, § 376, p. 862.

Plaintiff places emphasis upon Fichter v. Milk Wagon Drivers’ Union, 382 Ill. 91, 46 N.E.2d 921, but we think .the facts of that case render its pronouncements in[260]*260applicable to the present record. There plaintiff, a member of a union, paid his dues until he sustained a permanent injury-in 1928. The by-laws of the union then provided for accident and illness benefits at the rate of $20 a week throughout the continuation of the disability, with an additional $2 per week for wife and for each child under 16 years of age. The union paid Fichter at the rate of $26 weekly until December, 1935, when it amended the bylaws and advised him that it would thereafter pay him $20 per week for 92 weeks and after that nothing further. He accepted the $20 per week for 92 weeks and then sued for the payments accruing thereafter under the original by-laws. The court held that Fichter’s right to payments vested at the time of his injury and that he could not be deprived of that right by a later ex parte amendment to the by-laws. Obviously the facts are not parallel to those at bar and the resulting distinction in law is equally manifest.

Plaintiff’s complaint of the action of the court in striking from his reply averments of oral conversations with an executive of the company preliminary to the execution of the modified agreement runs directly in the face of hornbook law forbidding modification of written agreements by proof of preliminary parol negotiations or inducements.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bird v. White
D. Utah, 2019
Super Starr International, LLC v. Fresh Tex Produce, LLC
531 S.W.3d 829 (Court of Appeals of Texas, 2017)
Davison v. Board of Trustees
478 N.E.2d 3 (Appellate Court of Illinois, 1985)
Rocker v. Murphy
322 N.E.2d 541 (Appellate Court of Illinois, 1975)
Angel v. Murray
322 A.2d 630 (Supreme Court of Rhode Island, 1974)
Swanson v. United-Greenfield Corporation
239 F. Supp. 299 (D. Connecticut, 1965)
Charles v. Judge & Dolph, Ltd.
111 F. Supp. 794 (N.D. Illinois, 1953)
Day v. Norman
42 So. 2d 273 (Supreme Court of Florida, 1949)
Wm. J. Lemp Brewing Co. v. Ems Brewing Co.
164 F.2d 290 (Seventh Circuit, 1947)

Cite This Page — Counsel Stack

Bluebook (online)
155 F.2d 257, 1946 U.S. App. LEXIS 2957, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hines-v-ward-baking-co-ca7-1946.