Court Opinion

ID: 9751494
Source: CourtListenerOpinion
Date Created: 2023-08-28 16:31:13.787075+00
Date Added: 2024-06-11T07:26:48.887475
License: Public Domain

Hammond, J.,
filed the following dissenting opinion.
In Heckler v. Balto. & Ohio R. Co., 167 Md. 226, 173 A. 2d 12, 14, this Court, in refusing effect to an alleged lifetime contract because its terms were not sufficiently definite, said this: “Holding as we do that the declaration alleges that the settlement was made by the corporation itself, we have not found it necessary to discuss the question whether a contract of employment made in settlement of a damage suit for personal injuries incurred in the service of a corporation, by an agent with apparent authority to settle the claim, is an exception to the general rule as to the necessity for express authority to make a contract for life employment. This question is ably discussed in F. S. Royster Guano Co. v. Hall (C. C. A. 4th) 68 F. 2d 533. There a number of cases are cited which recognize such an exception.”
*282In C. & P. Telephone Co. of Baltimore City v. Murray, 198 Md. 526, 84 A. 2d 870, this Court held that in the absence of a consideration in addition to the promise to work, a lifetime contract could not be made by a company employee or officer without the proof of definite authority to make such a contract under a by-law or resolution of the board of directors. The Court found in the Murray case that there was no independent consideration. However, the Court went on to say: “If the employee has purchased permanent or life employment for a valuable consideration additional to the services which he has contracted to render, a discharge without good cause may constitute a breach of contract.” The Court continued: “Many Courts in this country have held that a contract by which a corporation, in consideration of the release of a claim against it for damages, agrees to give the claimant permanent employment, is valid and enforceable, and is equivalent to life employment or employment for such length of time as the employer has work which the employee is able and willing to perform in a satisfactory manner ... it has been held that where an injured employee is induced to sign a release of his claim for damages on condition that he be given permanent employment, and the contract is clear and definite, the employer is estopped to deny the authority of the officer who made the promise, on the equitable principle that an employer should not retain the advantage or benefit arising from the promise and at the same time' deny the authority of the officer who made it.” The Court found that a settlement of a claim was an independent and additional consideration.
Having clearly pointed out the road to be travelled by a legal vehicle factually equipped to use it, the Court, in the instant case, when confronted with such a vehicle, refuses it access to the road previously clearly marked and shunts it off onto, what seems to me, an archaic, unrealistic and illogical path, totally unsuited to it, and which unjustly penalizes the appellee in the prosecution of his bona fide claim.
*283All of the Courts which apply what I conceive to be the correct rule, namely, that settlement of a personal injury claim by a corporation may, in the ordinary course of business, include a contract of life employment, recognize the so-called general rule applied in the Murray case under the facts the Court there found. They deny the applicability of the general rule to cases where the facts are like those in the case before us and explain why a different rule should there be applied. Some of the cases rely on the theory of apparent authority, some on the theory that a corporation which has received the benefits of a contract is properly and equitably estopped to deny the authority of the officer who made it. I think that the facts in this appeal justify invoking both theories. McNabb, as District Superintendent in Baltimore, was the company, as far as Ray was concerned. Ray was certainly justified, when he made the contract with McNabb, in thinking that he was making it with the company. The board of directors meant nothing to him and he would not be bound by by-laws or board resolutions in the absence of actual knowledge of them. Restatement, Agency, 167 b. McNabb, as District Superintendent, undoubtedly could make settlements of personal injuries which involved, in dollars and cents, far more money than would be represented by the settlement which was made with Ray. The facts which I think justify finding estoppel are referred to hereafter.
A leading case which supports the appellee is F. S. Royster Guano Co. v. Hall, (C. C. A. 4th) 68 F. 2d 533, 535 (referred to in the Heckler case). There the plaintiff lost his right arm, received in settlement $700.00 and was put back to work at the same rate of wages he had been receiving. The company official who dealt with him was one Baynard, the Superintendent of the Charlotte plant, and the contract, as found by the Court, was for the payment of the sum of $700.00 and a lifetime job for top wages for common labor. The Circuit Court of Appeals for the Fourth Circuit, speaking through Judge Parker, pointed out that the plaintiff surrendered, *284for the small sum of $700.00, his claim of damages for the loss of an arm, and said: “The case is radically different, therefore, from one where nothing is given or surrendered in consideration of the promise of permanent employment. . . . The fair meaning of the promise was that defendant would furnish plaintiff employment so long as he might live at the highest rate of wages which it paid for common labor, with the implied provisos that he perform the work assigned him satisfactorily and that defendant continue in business.” The Court pointed out that ordinarily, the general manager of a business does not have authority to enter into contracts for life employment, but quotes Judge McDermott in General Paint Corp. v. Kramer, (C. C. A. 10th) 57 F. 2d 698, 703, as follows: “We recognize that there are instances when such contracts are and should be upheld, as, for example, where, as an incident to a settlement for personal injuries, it is agreed to employ the injured one in some capacity not involving managerial responsibility.” Judge Parker went on to testify to the wisdom of the rule as follows: “The wisdom of this exception to the general rule is manifest. Such contracts providing employment to laborers who have been injured in the service of the employer do not interfere in any substantial way with the employer’s control over his business. They are reasonable, in that they enable the employer to obtain release from claims for damages which may prove expensive to him, while providing a livelihood to employees who have been injured in his service and who , because of such injury, may have difficulty in finding employment elsewhere. ... It is to be noted that in the case at bar, the defendant, while denying the validity of the contract upon which the jury has found that the release was obtained, has pleaded that release, as well as the statute of limitations, in bar of plaintiff’s right to recover for his injury. If these pleas should be sustained, and at the same time validly be denied to the contract of which defendant has thus *285had the benefit, the injured employee would be without remedy.”
Judge Parker, for the Court, found that it would be hard to imagine anyone whose authority to make it would be “more readily assumed than a superintendent in general charge of the plant where the injury was sustained”, and said again, “but there is more here showing the authority of the superintendent with respect to this settlement than merely the general authority which usually pertains to that position. Someone made a settlement with plaintiff for his injuries and obtained a release. Plaintiff testified that it was the superintendent who did this; and, as stated above, the verdict of the jury must be interpreted as a finding that this was the fact. The defendant cannot accept the fruits of a settlement and then assert that the agent who made it had no authority to settle. We do not mean to say that acceptance and reliance upon a release is, in the absence of knowledge, a ratification of the settlement as made; but it is a recognition of some authority to settle in the one who has obtained it, and the question which remains is as to the extent of that authority. The question here, then, is narrowed to this: Whether, under the circumstances disclosed, the superintendent in charge of the local business of the defendant, whose authority to settle a claim for personal injuries has been recognized, was clothed with apparent authority to bind the employer by a contract of permanent employment as one of the terms of the settlement. We think that this question must be answered in the affirmative. For cases in which a similar result has been reached see........” (Citing cases).
As the Court found, to paraphrase Judge Parker, McNabb made a settlement with the plaintiff which included a job for life, in consideration of forbearance to sue, and the statute of limitations is now a complete protection to the company. I do not think that the appellant which has accepted the fruits of this settlement for twenty-five years can now assert that the agent *286who made it had no authority to settle. It is impossible for me to believe that a reasonable man would not inevitably find from the facts proven that the company either knew or must be presumed to have known of the settlement. Ray’s injuries were extremely serious. He suffered the loss of his right leg, a skull fracture, fractures of his left leg and right arm, and other injuries over practically his entire body. No money was paid in settlement of these very serious injuries; no suit was ever filed seeking any. This alone would put the company on notice. All the Pullman Company paid was the hospital expenses, amounting to some $1,040.00, and weekly sums while Ray was unable to work, of about $10.00 per week, or some $440.00. In addition, they purchased him an artificial leg, and thereafter, from time to time, three other artificial legs. All of this was done for an employee of no particular skill or value to the company who had worked for it only seven months before the injury. Yet, the District Superintendent in Baltimore promised this new employee a lifetime job. He worked as a diagram messenger for over twenty years. The duties of a diagram messenger are to meet the various trains and to take to, and receive from, the Pullman conductor the schedules of seat and berth occupancy. The Pullman Company officers, travelling over the system, inevitably over the years must have seen Willie Ray working as a diagram messenger, and the unusual spectacle of seeing a one-legged man in this capacity, which requires considerable walking, can scarcely have escaped their attention. The checks for the hospital expenses and the artificial legs must have come from, or to the attention of, the central accounting office and have been of such an unusual character as to promote inquiry for their necessity and propriety. There is uncontradicted testimony that on at least two occasions, McNabb told experienced employees of The Pullman Company that they had given Willie Ray a lifetime job and were lucky to have been able to effect settlement on that basis, and that it had saved the Company a great *287deal of money. Such matter-of-fact comments to fellow workers indicate that McNabb had made the contract and that it was a matter of common knowledge in the Pullman Company, or at least, they furnish evidence from which the jury could have so found. Another significant fact is that when the work of diagram messenger was changed, Ray was given a job as stock keeper but retained on the payroll for four years as a diagram messenger. This unusual procedure must have also excited inquiry as to Ray's status, if any were needed by that time.
The case in some of these aspects may be said to be analogous to that of Fisher v. John L. Roper Lumber Co., 183 N. C. 485, 111 S. E. 857, 859, 35 A. L. R. 1417 (cited by Judge Delaplaine for the Court in the Murray case). There the Court determined that the jury could properly find that the contract “was by way of compromise and adjustment of a bona fide claim on the part of plaintiff against the company. Such an adjustment will afford sufficient consideration for the agreement, whether the claim was well grounded or not.” The contract was made by the defendant’s foreman in charge of the mill in which the employee was injured and was to the effect that the company would employ the worker in such work as he could do about the mill in his crippled condition at a living wage for the balance of his life sufficient for himself and the support of his family. The Court pointed out that there was evidence “tending to show that the company paid for the operation amputating plaintiff’s arm, and that the owner of the plant and the general superintendent both personally knew of the injury and the amputation, and that plaintiff was taken back into their employment at the same wages, notwithstanding the loss of his arm, and they knew, or should have known, the condition of his return and the agreement concerning his employment, assuredly they had every opportunity to know, and there were facts sufficient to excite inquiry as to the terms of his further employment. ... It ap*288peared that this man, havinjg only one arm, was on the employer’s payroll at the price of a full hand for twelve years, and if the management didn’t know of' the terms of plaintiff’s employment their negligence in this respect should be imputed to them for knowledge.”
This Court has made plain its views on the acceptance of the benefits of a contract made by one who ordinarily would not have authority to make it, where the corporation knew or is presumed to have known, of what occurred. In Edelhoff v. Horner-Miller Mfg. Co., 86 Md. 595, 39 A. 314, a chattel mortgage of corporate property was not shown to have been executed upon the express authority of the directors. The money obtained was used to pay the debts incurred by the corporation. The Court said: “Now while it may be true, as a general rule, that ministerial officers of a corporation without authority expressly conferred or to be implied from previous conduct, cannot pledge the property of the corporation, yet when a mortgage of its chattels has been made by such officers for the purpose of securing funds to pay its debts and continue its business, and it receives the full benefit of the transaction, without objection being made, it will be presumed to have authorized or ratified the acts of its officers.” In Webb v. Duvall, 177 Md. 592, 11 A. 2d 446, the chattel mortgage was executed in the name of the corporation by the purchasing agent. The chairman of a creditors committee, designated to manage and operate the company’s plant, purchased a printing press to be used in the business and paid for it with his own money. To secure himself, he prepared a chattel mortgage and had it signed by the company’s purchasing agent. There were subsequent meetings of the officers and directors but at none of them was the mortgage mentioned and there was no corporate action giving authority to the purchasing agent, or anyone else, to execute the mortgage. It was conceded that the printing presses were used in the plant until the receivers were appointed. The Court decided that the mortgage was binding on the corpora*289tion, saying: “From the foregoing authorities, as applied to the facts in the instant case, it is our conclusion that there was that degree of constructive knowledge and implied ratification on the part of the corporation with reference to the purchase of the presses and equipment, and the execution of the chattel mortgage involved herein, to support the appellant’s contention that his claim was a valid subsisting lien. . . .” (Emphasis supplied).
In Usher v. New York Cent. & H. R. R. Co., 76 App. Div. 422, 78 N. Y. Supp. 508, 509, affirmed, 179 N. Y. 544, 71 N. E. 1141, the contract was for the employment of the plaintiff at a monthly compensation of $35 per month for life. The contract was entered into between the plaintiff and the superintendent of the Hudson River Division. The plaintiff had been injured while in the defendant’s employ and had lost his leg, and the life contract was in part settlement of his claim. The Court said: “The main contention on the part of the appellant is that the contract, if made, was not binding upon the company, for the reason that the division superintendent had no power to make it in the absence of expressed authority, and that the contract was in itself unreasonable. . . . The transaction between Watson and the plaintiff was in effect but a single agreement by which the latter released his claim, and the former agreed to hire bim for life in consideration of such release. To permit the defense now under consideration would relieve the defendant from all liability on a contract which the plaintiff fully performed when he relinquished his claim. A corporation, when sued, cannot set up ultra vires as a defense to an action for breach of contract, or even for specific performance, when it has had the full benefit of the contract, and the other party has duly performed it; nor will such a plea avail, whether interposed for or against a corporation, when it will not advance justice, but will accomplish a legal wrong.” See also The Pennsylvania Company v. Dolan, 6 Ind. App. 109, 32 N. E. 802; and Starr v. Superheater Co., (C. C. A. 7th) 102 F. 2d 170-176, where the Court referred to the Usher *290and Dolan cases just cited, and said: “These holdings are based upon the equity rule that an employer cannot retain the advantage or benefit arising from the promise and at the same time deny the authority of the agent who made it. Application of this rule would scarcely be denied in any jurisdiction because it is based upon sound elements of estoppel.” This case was referred to by Judge Delaplaine in the Murray case, and the language just quoted was adopted by this Court.
The Court, in the opinion in the present case, says that there are no facts, to support a theory of estoppel. I feel that the facts which have been cited, as to the payment of Ray’s hospital expenses and the cost of his artificial legs, his reemployment, and the running of the statute of limitations, the consequent bar to his claim, and the knowledge of the Company, actual or necessarily implied, are ample evidence of estoppel to bring the case within the rule of the cases cited. For cases where what I conceive to be the proper rule to be applied here, has either been applied or definitely recognized, see: Eggers v. Armour & Co. of Del., (C. C. A. 8th) 129 F. 2d 729; Toni v. Kingan & Co., 214 Ind. 611, 15 N. E. 2d 80; Cox v. The Baltimore & Ohio Southwestern Railroad Co., 180 Ind. 495, 103 N. E. 337, 50 L. R. A., N. S., 453; Hobbs v. Electric Light Co., 75 Mich. 550, 42 N. W. 965; Stevens v. Southern Railway Company, 187 N. C. 528, 122 S. E. 295; Standard Oil Co. v. Nickerson, 103 Fla. 701, 138 S. 55; Okla. Portland Cement Co. v. Pollock, 181 Okla. 266, 73 Pac. 2d 427; Louisville & N. R. R. Co. v. Cox, 145 Ky. 667, 141 S. W. 389; Jackson v. Ill. Cent. R. Co., 76 Miss. 607, 24 S. 874; Brighton v. Lake Shore & M. S. Ry. Co., 103 Mich. 420, 61 N. W. 550; American Car & Foundry Company v. Smock, 48 Ind. App. 359, 91 N. E. 749, 93 N. E. 78; Illinois Central Railroad Company v. Fairchild, 48 Ind. App. 300, 91 N. E. 836; Stanton v. Erie R. Co., 131 N. Y. App. Div. 879, 116 N. Y. Supp. 375; and Sax v. Detroit G. H. & M. Ry. Co., 125 Mich. 252, 84 N. W. 314.
*291If my view of the cases prevailed, it would be necessary to decide two other points which were argued: 1, that the promise of employment was also conditional upon there being work available which the appellee was competent to perform, and 2, that the contract for employment was modified to that extent by the collective bargaining agreement to which Ray was necessarily a party.
I think that there is abundant evidence from which the jury could find that there was work which the company could give Ray and which he was qualified to perform, which in no way would have come in conflict with the conditions of the bargaining agreement. Ray had seniority in Baltimore, he had worked as a stock keeper for four years and there was available, or could have been made available, the job of assistant stock keeper. I have no doubt that if Ray was qualified to perform the work he did perform for twenty-five years, the last four as stock keeper, he was qualified to perform work the company had available, or could have made available, to him without infringing, in any way, on the obligations it assumed under the collective bargaining agreement. I think the Court’s instructions on this point to the jury were sound, and evidently the jury, from its verdict, agreed with this point of view. I would affirm the judgment..