Court Opinion

ID: 9856243
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:42:32.109638+00
Date Added: 2024-06-11T09:34:05.591056
License: Public Domain

Felton, Chief Judge,
concurring specially in the ruling in Division 2 of the opinion.
The contract involved in this case is as follows: “Georgia, Fulton County—This agreement, made as this first day of December, 1960 by and between Zac-Lac Paint & Lacquer Co., a corporation of the State of Georgia, and E. Fred McIntyre, Jr.— Witnesseth—Said Zac-Lac Paint & Lacquer Co., hereinafter referred to as the corporation, does employ E. Fred McIntyre, Jr. as administrative assistant to the president, for the period of one year, from and after the first day of December, 1960, and at the expiration of this contract, it may be renewed under conditions and circumstances as may be mutually agreed between both parties.
*817“1. The corporation, in consideration of the promises, undertakings and agreements of E. Fred McIntyre, Jr., herein contained and as compensation to him for all services rendered and to be rendered hereunder, agrees to pay E. Fred McIntyre, Jr. an annual salary of twelve thousand ($12,000.00) dollars, payable in equal semi-monthly installments of five hundred ($500.00) dollars each, less spcial security and withholding tax, as provided by law. This contract shall remain in force except for the failure to perform satisfactorily the duties outlined herein.
“2. E. Fred McIntyre, Jr., is to act as administrative assistant to the president performing all duties that would be assigned to him by the president and is accountable to the president of the corporation.
“3. In consideration of the compensation to be paid to him by the corporation, said E. Fred McIntyre, Jr., agrees to devote all of his time, attention and energies to the performance of the duties required of him by virtue of said employment and further agrees that during the continuance of his employment by the corporation, he will not engage in any other business or venture, whether or not such business is competitive or for profit, unless same is specifically approved in advance by the president of the corporation.
“4. A- bonus will be paid to E. Fred McIntyre, Jr., by the corporation, based on a percentage of net profits, amount to be determined, after annual audit is completed. Said bonus will be based on the operations of the corporation for the year 1961. No bonus will be paid on the operations of the corporation for the year 1960.
“5. The amount of the net profits (after taxes) of the corporation, if any, upon which the bonus mentioned in the preceding paragraph is based, shall be determined through a proper audit of the books of the corporation by an independent certified public accountant, and the amount so found and determined by such accountant, shall be final and binding upon each of the parties.
“6. No part or portion of the bonus, if any, to be paid to E. Fred McIntyre, Jr., hereunder,1 shall be due and payable to him until the completion of the audit of the books of the eorpo*818ration, by said accountant, following the closing of said books on December thirty-first, which is the ending of the corporation’s fiscal year.
“7. In the event of the termination of this contract, whether by death of E. Fred McIntyre, Jr., or by mutual agreement, or otherwise, said E. Fred McIntyre, Jr., shall be entitled to receive the proportionate amount of his stipulated salary then due, computed on a monthly basis.
“8. It is also agreed that the provisions made herein, including bonus arrangement, are voluntary and no suit or action shall be brought against Zac-Lac Paint & Lacquer Co. to recover same, and, in the event E. Fred McIntyre, Jr., severs his connections with the corporation before the close of any fiscal year, that he will not be entitled to receive any sums provided for herein. In witness whereof: Zac-Lac Paint & Lacquer Co. has caused this instrument to be signed by its president and E. Fred McIntyre, Jr., has hereunto set his hand and seal as of the day, the month and the year first above written, /s/ M. E. Zachos, President; E. Fred McIntyre, Jr., Administrative Assistant.”
There are inconsistencies, conflicts and ambiguities in the above contract which require consideration by this court in arriving at the meaning and legal effect of the provisions of the contract. While at first blush it might seem that paragraph 8 forecloses all right to sue for any amount, under the contract other considerations override such a view and demand a contrary conclusion: 1st There is no binding obligation in the contract for a payment of any definite bonus because no percentage of the net profits is agreed on. This leaves a question of the payment of a bonus and the amount, entirely to the corporation and in the event of the payment of a bonus it would be voluntary payment, without obligation, on the part of the .corporation. The same would be true if there were a promise to pay a certain percentage of bonus and it was agreed that such a promise was voluntary and not a consideration. 2nd. The last sentence in paragraph numbered “1” in the contract contradicts paragraph 8. If a contract is in force, an action may be maintained on it. Srd. The principle of ejusdem generis applies to paragraph 7. The words “or otherwise” should be *819construed to mean the same thing as the specific instances of the causes of the termination of the contract, to wit: causes brought about other than by the misconduct of either party. Under this construction, paragraph 7 is contrary to paragraph 8 if paragraph 8 is construed as on first blush it might be, because a provision that the employee shall be entitled to receive a proportionate amount of his stipulated salary due upon termination is inconsistent with a covenant not to sue. 4th. In paragraph 8 the statement that the provisions in the contract are voluntary is not true as to all of them. The mutual obligations of the parties, for a consideration, are not voluntary but are ordinarily legally binding. The provision for a bonus payment is voluntary under the terms of this contract, and it is my opinion that the contract intended to provide solely that no action could be brought by the employee upon the contract for a proportionate part of a yearly bonus in the event he himself severed connections with the corporation before the close of any fiscal year without any fault on the part of the corporation. I think paragraph 8 should be so construed because without the word “and” appearing after the words “to recover same” the paragraph would undoubtedly mean what has just been stated next above. Moreover, if the first part of paragraph 8 is an immediate release of the corporation for all future indebtedness the addition of the last part of the paragraph was completely superfluous. In view of the ambiguity and contradictions of the contract, I am of the opinion that the parties intended the meaning to be as if said “and” had been omitted. I do not think that the rule as to covenants not to sue applies in this case because of the mutual obligations of the parties agreed to be performed after the execution of the contract and this fact distinguishes this case from some or all of the cases cited on this question. I do not think that it can be said that the employee intended to make any future gift to the corporation. lie certainly could not be said to have so intended where the contract provided that he would be entitled to receive salary then due upon termination without fault of either party.
In view of the contradictions and ambiguities in this contract and Code § 20-704 (6), I think it is perfectly proper for this *820court to give the contract the only reasonable, rational and fair construction of which it is susceptible.
In cases of unambiguous contracts resort must be had to reformation. Courts of law have been construing ambiguous contracts from time immemorial and numerous rules have been developed for their construction. The courts have properly recognized the fallibility of lawyers and laymen in the writing of contracts and seek to lend a helping hand in the solution of the problems of ambiguities and conflicts in contracts and go a long way towards giving a contract a construction which is reasonable and fair and not one which is ridiculous and absurd. 12 Am. Jur., Contracts, 749, § 228, 751, § 229, 772, § 241; Drake v. Wayne, 52 Ga. App. 654 (184 SE 339).