Court Opinion

ID: 9446885
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:20:37.164268+00
Date Added: 2024-06-11T17:30:49.050456
License: Public Domain

HAND, Circuit Judge
(concurring in part and dissenting in part).
My brothers have stated the facts so fully that I shall not add anything except *374enough to make plain my reasoning. In the action against the corporation — Lee v. Jenkins Brothers (incorporated in New Jersey) — I need discuss only two questions: First, whether plaintiff’s testimony, which constituted all the evidence in the record, was so inherently improbable that it would have been necessary to set aside a verdict in his favor; and second, whether, assuming that Yardley did make the contract on behalf of the corporation, he had authority to do so. The result in the action against Yardley personally — Lee v. Yardley — assuming that Yardley did make the personal contract as alleged, depends on whether it was valid under the Statute of Frauds. I shall first consider whether the plaintiff’s testimony was inherently too unreliable to support a verdict that Yardley ever made the contract.
It seems to me that, great as may be my personal doubts as to the truth of the plaintiff’s testimony, it was not so patently incredible that a jury should not have been allowed to accept it. The corporation was about to take over the plant of the Crane company with which Lee, who was then thirty years old, had been connected for the preceding thirteen years. He had become the “business manager” which was the “highest job in the plant outside the production superintendent” ; and the corporation certainly wished to continue the business. The Crane company at the time, 1920, had a pension system under which employees who were discharged after the age of 60, or who voluntarily retired after 65, were entitled to a pension reckoned on two percent of their salary for each year they had worked, but limited to $1500 each year. The plaintiff’s salary was $4,000 and in six years he would have reached the maximum, even though he was granted no increase meanwhile. The corporation installed a similar system shortly after the time when Lee swore that Yardley had made the personal promise to him; and the variant which Yardley’s promise to him introduced in both pension plans was that, whereas under them he got no pension whatever, if he voluntarily retired before 65 or was discharged before 60, under the separate contract he was to receive a pension beginning at 60, although he had not served the corporation until the specified date. It cannot therefore be disputed that the alleged contract did give him an extremely important advantage over the other employees by putting it within his power to leave the business at any time with an assurance that he would enjoy a pension when he reached sixty. At the time of the trial, not only was Yardley dead, but so were the two other persons who he said had been present at the interview, Mr. and Mrs. Bar-rington. Furthermore, he never raised the question again, so far as appears, during the 25 years that he continued to serve. On the other hand it is impossible to appraise what may have been the importance to the corporation of his adherence to the business, or what added1 inducement beyond the old pension plan it might have been thought wise to offer him, if it was necessary to secure him. At worst, the difference to the corporation would be that it accepted the risk that he might not stay with the business for the full period: after six years the amount of the pension would be the same whether he did or not. Little impressive as is his testimony, in the end the question is as to its credibility, and that is-one of the standard issues that a jury must decide. Indeed, Judge Lumbard did not suggest that there was no issue of fact for the jury.
However, I cannot agree that Yardley, as president of the corporation, had authority to make a contract that was to' last for the life of the promisee. I have-not indeed found any decision in Connecticut that decides that question; but. in New York, New Jersey, Maryland, Iowa, Wyoming and West Virginia the law is settled1 and in Texas the same *375limitation was even imposed on the president’s authority to make a contract for three years.2 There is a fairly well established exception to this doctrine when the promise is part of the settlement of a claim for personal injuries,3 and one case so decided when the promisee, though injured, had apparently made no claim.4 The distinction is a little hard to justify rationally, except for the strength of the motive that personal injury adds; however, even assuming as I do that it exists, the case at bar is not within the exception. Since the Connecticut courts have indicated no disposition to the contrary, I assume that they would follow so generally accepted a doctrine. There being no relevant corporate by-law, I would say that the accepted doctrine is the law of Connecticut. If the law of New Jersey should be thought to measure the president’s powers — which I do not suggest — the same result follows, a fortiori. For this reason I think that the complaint in the action against the corporation was rightly dismissed.
Coming next to the action of Lee v. Yardley and assuming that a contract was made, the first question is whether Yardley’s promise was void under the Statute of Frauds as a promise to be answerable to “a debt, default or miscarriage of another.” It is well settled law — although again I have found no Connecticut decisions — that this clause of the Statute presupposes some valid obligation running from a third party to the promisee; and does not include situations in which the parties to the contract mean to provide for the failure of the third party to enter into any legal obligation at all. Duca v. Lord, 1954, 331 Mass. 51, 117 N.E.2d 145; Delaware Feed Stores v. First Auburn Trust Co., 1956, 151 Me. 372, 120 A.2d 223; Walker v. Norton, 1857, 29 Yt. 226; Ledlow v. Becton, 1860, 36 Ala. 596; Mease v. Wagner, 1821, 1 McCord (S.C.) 395; Restatement of Contracts § 180, Comment (b), Illustrations 3 and 4; 2 Willis-ton on Contracts § 454. The distinction between the promisee’s failing to secure an obligation from the third person, and the third person’s failing to perform an obligation has little to commend it as a new question, but I accept it as a valid gloss upon the clause. Although Lee steadfastly clung to the statement that Yardley had “guaranteed” the corporation’s payment of the pension, that makes no difference, if the corporation was not liable; for in that event there was no “debt, default or miscarriage” to which Yardley’s promise was secondary. Clearly Yardley did not mean to confine his promise to the possibility that the corporation, having entered into a valid contract, might fail to pay the pension.
Finally, it is true that the Connecticut Statute of Frauds, as usual, requires a contract to be in writing, if it cannot be performed within one year, and that according to Lee’s testimony, his pension *376did not fall due until he had reached the age of 60. Nevertheless, he remained in the employ of the corporation for 25 years after the contract was made, when the corporation discharged him for some reason not disclosed. Connecticut courts in accord with the general interpretation of this provision of the statute have steadily ruled that, when the promisee of such a contract has performed in full, he may enforce the promise, although it was, and has remained, oral. Harmonie Club Inc. v. Smirnow, 106 Conn. 247, 137 A. 769; Blakeslee v. Board of Water Commissioners, 1937, 121 Conn. 163, 186, 183 A. 887; Burkle v. Superflow Manufacturing Co., 137 Conn. 488, 78 A.2d 698; Strang v. Witkowski, 138 Conn. 94, 82 A.2d 624. Therefore, the question arises whether Lee did not fully perform his contract by working for the corporation until 1945 when he was discharged. It is quite true that this exception is an entirely judicial invention, avowedly imposed in the interest of fair dealing; or, as it is sometimes put, in order to prevent the statute from being an instrument for the perpetration of fraud instead of for its prevention. Be that as it may, it has become as much a part of it as anything in it, and it seems to me undesirable to import into it refinements of nebulous outline. There still remains the question whether Lee fully performed, since he was discharged before he had served until he was 60, but if the exception is to realize its purpose, surely the promisor must not be allowed to escape by preventing the promisee from completing his performance.
In what I have said I do not mean to pass upon the question whether the plaintiff could alternatively recover for Yard-ley’s breach of an implied warranty that he was authorized to make the contract for the corporation.
I think that the judgment dismissing the complaint in Lee v. Jenkins should be affirmed, but that the judgment in Lee v. Yardley should be reversed, and the action remanded for further proceedings not inconsistent with the foregoing opinion.

. Heaman v. E. N. Rowell Co., 1933, 261 N.Y. 229, 185 N.E. 83; Carney v. N. Y. Life Ins. Co., 1900, 162 N.Y. 453, 57 N.E. 78, 49 L.R.A. 471; Greaves v. American Institute for Scientific Research, 1921, 114 Misc. 413, 187 N.Y.S. *375420; Savarese v. Pyrene Mfg. Co., 1952, 9 N. J. 595, 89 A.2d 237; Pullman Co. v. Ray, 1953, 201 Md. 268, 94 A.2d 266; Chesapeake & Potomac Telephone Co. of Baltimore City v. Murray, 1951, 198 Md. 526, 84 A.2d 870; Lewis v. Minnesota Mut. Life Ins. Co., 1949, 240 Iowa 1249, 37 N.W.2d 316; Horvath v. Sheridan-Wyoming Coal Co., 1942, 58 Wyo. 211, 131 P.2d 315; Beall v. Morgantown & Kingwood R. Co., 1935, 116 W.Va. 515, 182 S.E. 295; See also General Paint Corp. v. Kramer, 10 Cir., 1932, 57 F.2d 698. But see Baltimore & O. R. Co. v. Foar, 7 Cir., 1936, 84 F.2d 67, where a life contract by an agent without express authority was held enforceable, apparently on the ground that there had been a ratification.

. Leak v. Halaby Galleries Inc., Tex.Civ.App.1932, 49 S.W.2d 858. But. see Model Clothing House v. Hirsch, 1908, 42 Ind.App. 270, 85 N.E. 719.

. E. g., F. S. Royster Guano Co. v. Hall, 4 Cir., 1934, 68 F.2d 533. But see Savarese v. Pyrene Mfg. Co., 1952, 9 N.J. 595, 89 A.2d 237; Horvath v. Sheridan-Wyoming Coal Co., 1942, 58 Wyo. 211, 131 P.2d 315; Pullman Co. v. Ray, 1953, 201 Md. 268, 94 A.2d 266; Beall v. Morgantown & Kingwood R. Co., 1935, 116 W.Va. 515, 182 S.E. 295.

. Eggers v. Armour & Co. of Delaware, 8 Cir., 1942, 129 F.2d 729.