Case Name: Petty v. Missouri & Arkansas Railway Company
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1943-02-01
Citations: 205 Ark. 990
Docket Number: 4-6944
Parties: Petty v. Missouri & Arkansas Railway Company.
Judges: The 'Chief Justice thinks the contract of appellant was not in writing and is barred by the three-year statute of limitations. He therefore concurs in the result.
Reporter: Arkansas Reports
Volume: 205
Pages: 990–1004

Head Matter:
Petty v. Missouri & Arkansas Railway Company.
4-6944
4-6944
167 S. W. 2d 895
Opinion delivered February 1, 1943.
Donald 8. Marts, W. J, Dungan, IP. R. Donham, and 8am M. Wassell, for appellant.
G. E. Tingling, V. D. Willis, and W. 8. Walker, for appellee.

Opinion:
McHaney, J.
On July 16, 1941, appellant filed the following complaint, omitting formal parts, against appellee in the Woodruff circuit court: "That from June 25, 1925, to December 3, 1935, the plaintiff was in the employ of the defendant as locomotive engineer; that on December 3, 1935, while plaintiff was on a list of active locomotive engineers employed by defendant, he was pulled from service and discharged by defendant with out just or reasonable cause; that, at the time of his said discharge, plaintiff was working under an employment agreement made and entered into by and between defendant and its employees on August 8, 1935, and effective August 1, 1935; said agreement being entitled 'Missouri & Arkansas Railway Company Schedule of Rules, rates of pay and working conditions to engineers, firemen and hostlers'; that § § (d) and (e), respectively, of art. 32 of. said agreement are as follows, to-wit:
' (d) Enginemen shall not be discharged, suspended or demerits placed against their records until they have had a fair and impartial hearing before an officer of the company. At such hearing they may be represented by an employee of their own choice or by the regularly constituted committee of their organization. The representative of the man involved in the hearing shall have the right to introduce witnesses and interrogate any witness giving testimony at the investigation. If found not guilty, he shall be returned to the service and paid for time lost.
'(e) Enginemen shall have the right to appeal from any decision which involves discipline.'
"That, since his summary discharge as aforesaid, plaintiff has never been given the hearing provided for in § (d) of art. 32 of said employment agreement; that he has repeatedly and consistently demanded such hearing, and that defendant has at all times, failed, refused and neglected to give him- such hearing; that, upon a fair and impartial hearing, it will be developed that no cause existed at the time of plaintiff's discharge, or prior thereto, to justify such discharge; that plaintiff has, at all times during his employment with defendant, and at all times since his said discharge, been ready, able and willing to continue in said employment; that, at the time of said discharge, plaintiff was earning on an average of $225 per month as engineer for defendant, and that, by reason of such wrongful discharge without just cause and without having been accorded the hearing as provided in said agreement, defendant has breached said contract of employment, and that, in consequence of said breach, plaintiff has suffered damages, as time lost, in the sum of fifteen thousand seventy-five dollars ($15,075); that suit was filed by the plaintiff herein against the defendant herein in the Boone county circuit court on the 3rd day of December, 1940, was the identical suit herein; that summons was issued on the filing of said complaint and immediately served on the defendant; that said suit remained continuously pending in said court until the'.............................. day of July, 1941, when a voluntary non-suit was taken by the plaintiff; and that this suit is, therefore, filed within the period pennitted by the laws of the state of Arkansas.
"Wherefore, plaintiff prays judgment against the defendant for reinstatement; for damages, as time lost resulting from defendant's breach of said contract of employment, in the sum of fifteen thousand seventy-five dollars ($15,075); for his costs, herein expended, and all other proper relief. ' '
Appellee demurred to this complaint on two grounds, (1) that it does not state facts sufficient to constitute a cause of action; and (2) that it shows on its face that, if a cause of action is stated, it is barred by limitations. The court sustained the demurrer. Appellant declined to plead further and his complaint was dismissed. This appeal is from that order.
A number of arguments are made by appellant for a reversal of this judgment and a similar number by appellee for its affirmance. Pro and con it is argued by the parties, (1) that this is a suit in tort for damages and that the three-year statute of limitations, § 9134, Pope's Dig., applies; (2) that since appellant alleged no written contract of employment with appellee, but only a written contract of employment for the whole class of engine employees, the contract is oral and the three-year statute, § 8928, applies; (3) that the contract between appellee and its employees set out in the complaint was in writing and that the five-year statute, § 8933, applies; and (4) that the contract or the particular provision thereof set out in the complaint as § (d) and (e)' of art. 32 thereof, is unilateral, lacking in mutuality of obliga lion, 'and is unenforcible. These are interesting legal questions, but we pretermit a discussion of all of them except the last.
In beginning the discussion of this point (4), as above stated, learned counsel for appellant, in their brief, state: "In filing this appeal, appellant realizes that the holding in the case of St. Louis, I. M. & S. R. Co. v. Matthews, 64 Ark. 398, 42 S. W. 902, 39 L. R. A. 467, is against him. In order for appellant to obtain a reversal in the case at bar the majority opinion in the Matthews case, supra, should be overruled. While there are several essential differences between the facts in that case and the one at bar, (Matthews having had a hearing) the legal question of mutuality of obligation in a contract is the same."
In that case, Matthews was an engineer and was working under a contract with the company, art. 1 of which provided: "No engineer shall be discharged or suspended without just and sufficient cause, and, in case an engineer believes his discharge or suspension to have been unjust, he shall make a written statement of the facts in the premises, and. submit it to his master mechanic, and at the same time designate any other engineer who may be in the employ of the company at the time on the same division; and the master mechanic, together with the engineer last referred to, shall, in conjunction with the superintendent, investigate the case in question without unnecessary delay, and give prompt decision, and, in case the aforesaid discharge or suspension is decided to have been unjust, he shall be reinstated and paid half time for all the time he has lost on such account." He was discharged and sought reinstatement under said article 1. This was denied him, without cause as he alleged. He sued for damages and recovered judgment for $500. In an opinion by Mr. Justice Battle, the judgment was reversed. The court said: "Appellee, for a stipulated consideration, agreed to serve appellant in the capacity of an engineer. There was no contract as to the time he should continue, to serve. Appellant agreed to pay him according to certain rates for his services, not to discharge him without just cause, to promote him according to certain grades of service, and, when it saw fit to reduce the number of its engineers, to discharge them in the order of their juniority in service, first discharging the youngest, and then the next, and so continuing until the number should be sufficiently reduced. There might have been in these promises an implied understanding on the part of the appellant to retain appellee in its service so long as he should serve it acceptably as an engineer, unless he should he sooner discharged in the manner indicated. But we fail to discover any evidence of an agreement on the part of appellee to serve any specified time. Hence there was no contract that he would serve, and that the appellant would employ him, for any stated time — the agreement of both being necessary to fix the time of service — and, consequently, no' violation of a contract by the discharge of appellee before the expiration of any particular time.'' '
We see nothing in this holding that runs counter to any well established rule of the law of contracts. On the contrary it appears to us to be in harmony with the rule of mutuality of obligation. The fact that it was decided 45 years ago and by a divided court, Chief Justice Bunn dissenting, is not sufficient to justify overruling it. Decisions of other courts are cited to support the decision made, and our investigation discloses that there are a number of decisions of courts of last resort since' that time and up until quite recently that are in accord with it. One of such cases is L. & N. R. Co. v. Bryant, 263 Ky. 578, 92 S. W. 2d 749, decided March 27, 1936. That case reviews a number, if not all, the former cases of the Court of Appeals of Kentucky holding to the same effect as our Matthews case, some of them being: Hudson v. Cincinnati N. O. & T. P. R. Co., 152 Ky. 711, 154 S. W. 47, 45 L. R. A., N. S., 184, Ann. Cas. 1915B, 98; N. & W. R. Co. v. Harris, 260 Ky. 132, 84 S. W. 2d 69; Clay v. L. & N. R. Co., 254 Ky. 271, 71 S. W. 2d 617; Western Union Tel. Co. v. Ramsey, 261 Ky. 657, 88 S. W. 2d 675, 103 A. L. R. 541. In that Bryant case the court said: "It is difficult to perceive any logical reason why that principle should not he applied as between employer and employee in contracts for service of the nature and kind here involved the same as in any other contract. If employees desire its elimination from their contracts of employment, it could easily he done by providing for definite periods of service conditioned upon ability and disposition to perform them, with optional rights in the employees to renew the contract in the absence of legal reasons against it, with corresponding obligation of the employer to abide by the option so given. ' '
There are. decisions to the contrary, notably McGlohn v. Gulf & S. I. R. Co., 179 Miss. 396, 174 So. 250, decided May 17, 1937, and Rentschler v. Mo. Pac. R. Co., 126 Nebr. 493, 95 A. L. R. 1, 253 N. W. 694, decided March 23, 1934, where it was correctly remarked that ".the decisions of our courts are in hopeless conflict," and this was not a unanimous opinion. Commenting upon that decision in the Bryant case, the Kentucky court said: "We are not unmindful that a contrary position seems to have been taken by the Nebraska Supreme Court in the case of Rentschler v. Missouri Pacific Railroad Co., (citation as above); but that opinion was not a unanimous one and the reasons advanced therein for ignoring the well-settled principle of contract rights, supra, are not altogether satisfactory, although the opinion cites some from other jurisdictions in apparent support thereof, as does the annotation following that opinion in the last publication, commencing on page 10 of the 95 A. L. R. volume. The Nebraska Supreme Court in that case criticizes our opinions as well as those of other courts taking the same view. None of the courts adopting the principles of the (Hudson v. C. N. O. & T. P. Ry. Co., 152 Ky. 711, 154 S. W. 47) and following cases from this court were, nor were we in any of those opinions, able to find any logical reason why such contracts should be made an exception to and governed by'an entirely different rule from the universal one applicable to all other classes of contracts, and especially so when the open clause therein could be guarded against, in some such manner as is above indicated. ' '
An extensive annotation to the Rentschler (Neb.) case may be found in 95 A. L. R. 10, and those desiring to pursue the matter further are referred thereto.
Our attention is called to the Railway Labor Act, enacted by Congress in 1926, as amended in 1934 and 1936. TJSCA, Title 45, chapter 8, as being persuasive of the trend of the times and that the rule of this and other courts, as announced in the Matthews case, should be overruled. We cannot agree. This act created the National Railway Adjustment Board, with four divisions, composed of an equal number of representatives of employers and employees, to adjust and "settle all disputes, whether arising out of the application of such agreements (agreements concerning rates of pay, rules and working conditions) or otherwise. . . ." Subd. 1. While this act does not prescribe an exclusive remedy and appellant was not obliged to present his claim to division No. 1 of said board, Moore v. Ill. Central R. Co., 312 U. S. 631, 61 Sup. Ct. Rep. 754, 85 L. Ed. 1089, yet that procedure was open to him. Instead of presenting his claim to that tribunal, he elected to bring liis action in this state, where the decision of this court in the Matthews ease prevented his recovery. The contract under which he sues was made in 1935 and is conclusively presumed to have been made with reference to the laws of this state in force at the time it was made. As said in Robards v. Brown, 40 Ark. 423, "The laws which are in force at the time when, and the place where, a contract is made and to be performed enter into and form a part of it. This is only another way of saying that parties are conclusively presumed to contract with reference to existing law. ' ' Adams v. Spillyards, 187 Ark. 641, 61 S. W. 2d 686, 86 A. L. R. 1493. While the contracts involved in these cases were mortgages or deeds of trust, the obligations of which created by prior acts had been impaired by acts of the General Assembly the same rule applies to an act which impairs the obligation of a contract based on existing rights' determined by this court. It was so held in Adams v. Spillyards, supra.
Nor does our adherence to the rule announced in the Matthews case tend, in any way, to militate against the asserted trend of modern decisions to adjudicate and determine substantial rights as between laborers and their union organizations on the one hand and employers on the other. In Mastell v. Salo, 140 Ark. 408, 215 S. W. 583, Mastell, a coal mine operator, had contracted with the United Mine Workers of America, of which Salo was a member, to employ only union miners and to settle controversies according to a contract known as Interstate Joint Agreement. The pit committee discoveréd that Salo was entitled to certain pay for work already done for which he brought suit. One of the questions was that Salo did not raise the question of the amount claimed and that the pit committee had no right to do so. This court held against the contention by saying "that the pit committee assumed to act for appellee as one of its members, and he adopted and ratified their action." No question of mutuality was raised, and could not well have been, even though the contract was the same in respect to discharge as the one here involved, since the suit was to recover money actually earned while working under the contract. See, also, Moody v. Model Window Glass Co., 145 Ark. 197, 224 S. W. 436, and Model Window Glass Co. v. Moody, 150 Ark. 142, 233 S. W. 1092.
If appellant is a member of any labor organization, or if any such organization negotiated the agreement here involved with appellee, the complaint failed to allege it, and no mention is made therein of the Bailway Labor Act, nor was it relied upon in the lower court.
It follows from what we have said that the judgment is correct and must be affirmed.
The 'Chief Justice thinks the contract of appellant was not in writing and is barred by the three-year statute of limitations. He therefore concurs in the result.