Larson v. Jeffrey-Nichols Motor Co.

181 N.E. 213, 279 Mass. 362, 1932 Mass. LEXIS 922
CourtMassachusetts Supreme Judicial Court
DecidedMay 24, 1932
StatusPublished
Cited by39 cases

This text of 181 N.E. 213 (Larson v. Jeffrey-Nichols Motor Co.) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Larson v. Jeffrey-Nichols Motor Co., 181 N.E. 213, 279 Mass. 362, 1932 Mass. LEXIS 922 (Mass. 1932).

Opinion

Crosby, J.

This is an action of contract, in two counts, to recover for the alleged breach of an agreement to employ the plaintiff as manager of the used car department of the defendant. The case was tried before a judge of the Superior Court, without a jury, upon the second count, the first count being waived by the plaintiff. The judge made certain findings of fact, and found for the defendant. The sole question is whether this finding was warranted on the facts and the proper inferences which could be drawn therefrom. The evidence is not reported. The plaintiff excepted to the finding, and to the judge’s refusal to find and rule as he requested.

The following and other facts were found by the judge: On February 1, 1927, the Jeffrey-Nichols Company and the defendant Jeffrey-Nichols Motor Company were corporations organized under the laws of and doing business in this Commonwealth. The stockholders in both corporations were identical except that the defendant was a stockholder in the Jeffrey-Nichols Company. Charles E. Jeffrey, Jr., was president of the Jeffrey-Nichols Company, and the president and treasurer of the defendant. The by-laws of the Jeffrey-Nichols Company provided that the president should appoint its employees, while the by-laws of the defendant vested this power solely in the directors. On February 1, 1927, one Little was in the employ of the Jeffrey-Nichols Company as retail sales manager, and on April 14, 1927, became general manager of that company. Under specific instructions from Jeffrey and with full knowledge on his part of the terms of hiring, Little engaged the plaintiff as manager of the used car department at a salary of $4,500 a year, plus a bonus of $2.50 on all sales of both new and second hand cars, the employment to commence February 2, 1927. The terms were set forth in the following memorandum, “Ben” being the plaintiff and “Bill” the said Little: “Ben Saw Mr. Jeffrey today. O. K. on salary 4500. & bonus new & used cars 2.50. Better resign at Henshaws at once. Call me. Bill.” The plain[365]*365tiff entered upon his duties and received $88 weekly from the Jeffrey-Nichols Company until July 31, 1927. On or about that date, the defendant took over all the assets and assumed all the liabilities of the Jeffrey-Nichols Company. Little thenceforth was in the service of the defendant as general manager. Without any new understanding the plaintiff worked for the defendant in the same capacity as he had worked for the Jeffrey-Nichols Company, and received the same weekly payments until September 29, 1928, when he was discharged without cause by Little acting under specific instructions from Jeffrey. The plaintiff made no claim upon either company for the bonus until shortly after February 2, 1928, when he brought the matter to the attention of Little who asked him to delay making any such claim for the present in view of the unsatisfactory financial condition of the defendant. The subject was not mentioned again until about the time of the plaintiff’s discharge, when he made demand for the bonus on Jeffrey and was refused. During the time he worked for the Jeffrey-Nichols Company four hundred ninety-eight cars were sold. From the time the plaintiff worked for the defendant until February 2, 1929, when his second year’s contract would have expired, ten hundred eighty-six cars were sold.

The plaintiff’s contract with the Jeffrey-Nichols Company was valid. It was a contract for one year. Maynard v. Royal Worcester Corset Co. 200 Mass. 1. It was not a contract within the statute of frauds, G. L. c. 259, § 1, Fifth, because it was capable of full performance within one year, although it might extend beyond that period. Rowland v. Hackel, 243 Mass. 160, and cases cited at page 162. Moreover the memorandum given by Little under authority from Jeffrey was sufficient under the statute. Jacobson v. Perman, 238 Mass. 445, 448. It is well settled that a third party cannot in this Commonwealth recover on a contract made merely for his benefit. Griffin v. Cunningham, 183 Mass. 505, 509. If the plaintiff can prevail in this action it is on the theory that his original contract with the Jeffrey-Nichols Company became the contract of the defendant by [366]*366way of novation. To recover on that ground it must be proved not only, as here, that there was an existing valid original obligation, but that there was an agreement of all parties to the new contract, the extinguishment of the old contract, and a valid new contract. Wright v. Hanna, 210 Penn. St. 349. Jones v. Commonwealth Casualty Co. 255 Penn. St. 566. Cox v. Baltimore & Ohio Southwestern Railroad, 180 Ind. 495. Hayward v. Burke, 151 Ill. 121. See also cases collected in 46 C. J. at pages 579-580.

Although we do not find any case directly in point, two cases decided by this court involve questions somewhat analogous. In Aldridge v. Fore River Ship Building Co. 201 Mass. 131, the plaintiff made a written contract with the Fore River Ship and Engine Company by the terms of which he was to work for it during a term of five years from January 1, 1902, at a stated weekly wage in cash, and the additional compensation at the end of each year of service of $1,000 par value of the common stock of the corporation. The plaintiff continued in this employment until September 8, 1904, when the company became insolvent and its assets and business were purchased at a foreclosure sale by the defendant corporation, which was organized as a part of a reorganization plan. The business was continued without interruption and the same man was president of both corporations. On the same day the defendant sent to the plaintiff and posted in its shops a bulletin notifying employees that the property had. been purchased by it, and stating employees are invited to continue in their present positions.” In December of the same year the plaintiff was discharged without fault on his part, and brought an action for breach of contract against the defendant, contending that the bulletin, which was accepted by him by continuing to perform the same work he had performed for the original company at the same weekly pay, made the defendant liable according to the terms of his written contract with the Fore River Ship and Engine Company. This court held, however, that the terms of the bulletin and its acceptance by the plaintiff did not import the old contract into the relation estab[367]*367lished between the plaintiff and the defendant. It was said at page 134: "The defendant agreed to continue the ‘positions’ of old employees, which can mean only the general character of work, but it said nothing about compensation or length of service or how service might be ended. These and other terms of employment were left open to be fixed by further agreement .... The plaintiff had a right, notwithstanding the continuance of his work for the defendant, to assert his claim in the bankruptcy court against the Fore River Ship and Engine Company or in a court of equity if a receiver was appointed. The bulletin is not ambiguous in terms and is complete. Its words ‘present positions’ do not refer to pre-existing contracts, nor incorporate their terms by implication.”

If it be assumed that Little, as the general manager of the defendant, had ostensible authority to make a contract of employment in behalf of the defendant, and that a contract with the plaintiff, in the same terms as the old contract with the Jeffrey-Nichols Company, if made by Little would have been binding on the defendant, see Knight v. Whitmore Manuf.

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Bluebook (online)
181 N.E. 213, 279 Mass. 362, 1932 Mass. LEXIS 922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/larson-v-jeffrey-nichols-motor-co-mass-1932.