STEVENS v. G. L. RUGO & SONS, Inc., 209 F.2d 135

WOODBURY, Circuit Judge. The plaintiff, who sets himself out as a “citizen of England and national of the Kingdom of Great Britain,” brought suit in the court below against the defendant, a corporation organized under the laws of the Commonwealth of Massachusetts, to recover damages for breach of a contract of employment.

Trial before a jury began in the District Court on October 15, 1952, and on the same day at the close of the plaintiff’s evidence the defendant moved for a directed verdict on the ground of “lack of evidence produced by plaintiff.” The court reserved action on the motion and the defendant thereupon proceeded to put in its evidence. On the following day at the close of all the evidence, the defendant did not move for a directed verdict and the case was submitted to the jury which returned a verdict for the plaintiff in the sum of $10,500.

The defendant made no motion to set the verdict against it aside or for a new trial, but nevertheless on November 3, 1952, the court ordered hearing on the motion which the defendant had made for a directed verdict on the evidence introduced by the plaintiff.

The court took the motion under advisement and on January 5, 1953, it entered the judgment from which the plaintiff has taken this appeal wherein the court in accordance with its memorandum opinion ordered judgment for the defendant dismissing the plaintiff’s complaint, and in addition ordered “that in the event the foregoing judgment is reversed the verdict is set aside and new trial had.” It is evident from the District Court’s memorandum opinion that the basis for its order dismissing the plaintiff’s complaint, and directing judgment for the defendant on its motion for a directed verdict based on the plaintiff’s evidence, was the plaintiff’s own testimony as to his understanding of the meaning of the contract involved, to which we shall presently refer.

It is equally evident from the opinion that the trial court entertained misgivings, in view of some of the language in Johnson v. New York N. H. & H. Ry.

Co., 1952, 344 U.S. 48, 73 S.Ct. 125, as to its power to enter a judgment for the defendant on the latter’s motion therefor at the close of the plaintiff’s evidence, as to which it had reserved decision, and that, because of its doubts, the court entered its alternative order for a new trial so that in the event its action ordering a judgment for the defendant should be held on appeal to be beyond its powers, it could, in advance of a second trial, reach the same result by granting a .motion by the defendant for a

summary judgment based on the testimony introduced at the trial. Thus the first and foremost question on this appeal is whether under the law of the Commonwealth of Massachusetts, which conced-edly and obviously applies, there is evidence enough to warrant submitting the plaintiff’s case to a jury. The plaintiff is a chartered quantity surveyor and estimator, and a member of the Institute of Chartered Surveyors in London.

He was trained in England, and up to 1949 he had pursued his occupation of estimating the quantities and costs of materials required for the erection of buildings and other structures, at first in England, and later for about four years in the British West Indies.

Early in 1949 he answered an advertisement for an “A-l Estimator” inserted in a trade publication by the defendant, and in response thereto received a letter from the defendant’s president stating that the place of the employment offered was Boston, Massachusetts, and that “the position is permanent.” Further correspondence followed, and early in September the plaintiff gave up his position in the West Indies as chief estimator for a firm of English architects, and came to the United States with his family.

He and the defendant’s president met in Boston for an interview at the latter’s office, following which the plaintiff went to England, settled his affairs there, and late in March, 1950, returned to the United States with his family on permanent immigration visas. On the 6th of April he went to work for the defendant at a salary of $150.00 a week. His employment, however, was short lived, for on May 26, the defendant’s president complained to the plaintiff with respect to the quantity and quality of his work and his attitude toward it, and discharged him as of the first of June.

The contract of employment involved in this litigation was not reduced to writing. Its terms, therefore, must be drawn from the correspondence which passed between the plaintiff and the defendant’s president and their testimony as to what they said to one another.

The defendant’s president testified in substance that he told the plaintiff that the position offered was “permanent,” as he had said in his letter to the plaintiff quoted from earlier in this opinion, in the sense that the defendant’s business prospects were bright and there was good reason to believe that it would need the services of a skilled estimator for an indefinite time.

Furthermore, he said he told the plaintiff and the plaintiff fully agreed, that at the outset of the employment there would be a trial period of three months in order not only to determine whether the plaintiff was qualified to do the work and fitted harmoniously into the defendant’s organization, but also to determine whether the plaintiff found his employment by the defendant congenial.

There is no reference in the correspondence to an initial trial period, and the plaintiff testified categorically that nothing whatever was said about such a period in any conversation with the defendant’s president, but that he came to the United States with his family on the understanding that he was to have permanent employment with the defendant from the beginning. The District Court recognized that on the evidence outlined above the jury could reasonably find that the defendant offered and the plaintiff accepted “permanent” employment as defined in Car-nig v.

Carr, 1897, 167 Mass. 544, 46 N.E. 117, 35 L.R.A. 512, from the start of their relationship. Nevertheless it entered judgment for the defendant because of the plaintiff’s testimony as to his understanding of the meaning of the word “permanent.” Stevens said, in response to questions by the court: “As I understood it, when Mr.

Rugo wrote to me and told me the job was a permanent one and also when he told me in my interview with him that the job also was a permanent one, as I understood it there was plenty of work to be done and as far as one could see there was no reason to assume that this work would not cease — that this work would cease, and providing I was satisfactory to Mr.

Rugo, and providing we got on with each other, and providing I did the job, and providing there was work to do, I could assume that the job really had a long term possibility. “I understood the word “permanent” to mean, your Honor, the job had plenty of future in it, I could dig myself in in the job and know very well that providing I was satisfactory to Mr. Rugo, and providing naturally — well, if you like, Mr.

Ru-go was satisfactory to me, and providing I liked working in the office, providing I did my job, I could remain there on an established basis and not as — on the other hand, as opposed to a temporary basis where one goes in for a particular job or goes in for two or three months, and then he is told he has to find another job, or that job will be finishing in a certain time.” The District Court said that it was clearly apparent from these statements that Stevens understood that the position offered him was permanent, but that his employment in it “was at will until each party knew the relationship was satisfactory.” Wherefore the court concluded that since the plaintiff was discharged before mutual satisfaction had been established, the plaintiff could not recover as a matter of law.

We feel constrained to disagree for we think the court misconstrued the plaintiff’s testimony quoted above. As we have already pointed out the plaintiff testified definitely that no trial period was agreed upon, or even mentioned, but that he was employed permanently from the outset. Thus when he defined what he meant by “permanent” we do not think he could have intended to frame his definition in such a way as to include an initial period of trial to determine mutual satisfaction.

Instead we think he intended to define “permanent” not as meaning forever or for life, but as meaning only for as long as there was work to do and each party was satisfied with the relationship. And this, in essence, is the usual definition of the word in contracts such as the one under consideration. The word “permanent” is not infrequently used in contracts of employment, but not in its absolute sense of everlasting or enduring forever without change, or even as enduring for life.

It is used in a relative sense to distinguish transient or temporary employment for some fixed, and usually limited time, as for a period of days, weeks, months or even perhaps years, or until the completion of a given piece of work or the happening of some event. Its meaning is elastic, depending upon the context in which and the background against which it is used, but its meaning is not for that reason so indefinite that a promise of permanent employment cannot be enforced.

As used in a contract of employment it “may fairly be held to mean that the employee is to serve so long as he remains able to do his work properly, and the employer continues to be engaged in the business to which the hiring related.” 1 Williston, Contracts § 39 (Rev. Ed.1936). This is the sense in which the word was interpreted in Carnig v.

Carr, supra, wherein the court said in 167 Mass. at page 547, 46 N.E. at page 118: “To ascertain what the parties intended by ‘permanent employment,’ it is necessary to consider the circumstances surrounding the making of the contract, its subject, the situation and relation of the parties, and the sense in which, taking these things into account, the words would be commonly understood; for it fairly may be assumed that the parties used and understood them in that sense. Schuylkill Navigation Co. v. Moore, 2 Whart. [Pa., 477,] 491.

Looking at the matter in that way, we think that the words would be commonly understood as meaning that so long as the defendant was engaged in enameling, and had work which the plaintiff could do, and desired to do, and so long as the plaintiff was able to do his work satisfactorily, the defendant would employ him, and that in that sense, the employment would be permanent; that is, the plaintiff would be under no necessity of looking for work elsewhere, but could rely on the arrangement thus made.

So construed, the contract would be capable of enforcement, and there would be no want of mutuality because the plaintiff might not have bound himself to continue in the defendant’s employment.” This, in practical effect, is the same

interpretation put upon the word “permanent” by the plaintiff. Hence, if the jury should find, as no doubt it did, that the plaintiff had the status of a “permanent” employee from the beginning of his employment the question arises as to the justification for his discharge. There is no doubt that the defendant continued to have work for the plaintiff to do and that the plaintiff was satisfied with his job. Nor is there any doubt that the defendant’s president was dissatisfied with the plaintiff’s work and discharged him.

The plaintiff’s employment, although “permanent” from the outset, being conditioned upon the defendant’s satisfaction with the plaintiff’s work, the question arises whether the plaintiff introduced sufficient evidence at the trial to sustain his burden of showing performance of the condition. Fried v. Singer, 1922, 242 Mass. 527, 532, 136 N.E. 609.

And the answer to this question turns upon the meaning to be given to the word “satisfaction.” It might be questioned as an abstract proposition whether a promise to render a performance satisfactory to the other party to a contract was not illusory in character because conditioned on the caprice or whim of the party to be satisfied.

But such promises are not uncommon in contracts, and contracts containing them have generally been upheld by the courts by construing the promise as at least requiring a performance satisfactory to the other party in the exercise of an honest judgment. 3 Williston, Contracts § 675A (Rev.Ed.1936). This is the law in Massachusetts even as to contracts of personal service wherein matters of personal taste, fancy or sensibility are concerned, as in a contract to employ an actor. Fried v. Singer, supra, 242 Mass. 531, 136 N.E. 609 and cases cited. But a less strict

interpretation was long ago given to a promise to perform industrial service in a shop to the employer’s “entire satisfaction,” for in Sloan v. Hayden, 1872, 110 Mass. 141, it was said that in such a setting the parties must have intended performance to the employer’s “reasonable satisfaction” since the stricter

interpretation would allow the employer unreasonably to deprive the employee of the fruits of his contract when he had fully performed his part of it in good faith. See also Rooney v. Weeks, 1935, 290 Mass. 18,194 N.E. 666, which seems to teach that unless the express words of the contract, or its subject matter, show clearly that the parties intended by “satisfaction” to mean the subjective satisfaction of the particular employer, the court will construe the word to mean the employer’s satisfaction as a reasonable man.

There is no evidence in the present record that the parties in the course of their negotiations leading up to the contract used the word satisfaction in its subjective sense. The defendant’s president testified that the word was used, but it does not appear that he used it with reference to his personal taste, whim or caprice. And since the plaintiff was employed in a highly technical capacity, one in which matters of taste, fancy and sensibility were in no way concerned, it follows that the rule of Sloan v. Hayden, supra, applies. Our search, therefore, is not limited to evidence of bad faith on the defendant’s

part in discharging the plaintiff, but is broadened to a search for evidence from which the jury might properly find that a reasonable man in the defendant’s position would have been satisfied with the plaintiff’s performance. We have not far to look for such evidence. There was evidence, it is true, that the plaintiff made one rather large error in a computation of quantity which he made for the defendant, and that perhaps he made a few other smaller errors.

But there was evidence that his errors were no more than might be expected in the performance of the kind of technical work he was employed to do and that his errors were caught and corrected when his work was cheeked for accuracy which was the usual practice because errors such as his were not infrequently made.

There was also evidence that the plaintiff took time out in the afternoon for tea, that on occasions he pleaded a prior engagement when asked to work overtime at night, that after working overtime he came in late the next morning, and that he registered his objection to doing routine computations himself on the ground that such work could be done as well and at less expense by a junior employee. On the other hand, there is no evidence that he obstinately or contumaciously persisted in his ways when asked to change them.

On the contrary, it appears that when taken to task by his superiors he readily and willingly consented to conform to the defendant’s office routine and practice. Naturally enough the plaintiff encountered some difficulty in his work at first because of his lack of familiarity with local unit prices for concrete, masonry and the like, and with making computations in United States money. But difficulties of this nature must have been anticipated by the defendant when the plaintiff was hired, and it appears that the plaintiff was rapidly familiarizing himself with his new environment.

Certainly the jury might have found on the foregoing facts that the defendant had reasonable grounds for dissatisfaction with the plaintiff’s performance. But we think it is clear that the jury might also find the contrary, as it apparently did when it returned a verdict for the plaintiff. It follows that the defendant’s motion for a directed verdict should not have been granted and this renders it unnecessary for us to decide whether the court had the power to grant it under the Federal Rules of Civil Procedure.

In its memorandum opinion, the trial court stated that its reason for reserving decision on the motion for a directed verdict, and allowing the case to go to the jury, was that, in case it should later be held that the motion was improperly granted, the plaintiff would not again be forced to cross the Atlantic to testify. We are not able to reconcile this statement with the alternative order for a new trial if the judgment on the directed verdict was erroneous, unless the trial court thought the “new trial” could be decided on a motion by the defendant for

summary judgment. This latter procedure is not now available in view of our holding that the evidence presented a jury question. It may now be too late to order a new trial and it may be that in view of our opinion there is no occasion for one. Nevertheless, we think that the trial court’s hands should not be tied in that respect. Accordingly, we will exercise our broad powers under Title 28 U.S.C. Sec. 2106, and vacate the entire judgment below, without specifically directing the entry of a judgment for the plaintiff on the verdict.

The judgment of the District Court is vacated and set aside and the case is remanded to that court for further consistent proceedings. . Clearly the matter in controversy exceeds the sum or value of $3,000 exclusive of interest and costs. Federal jurisdiction under Title 28 TJ.S.O. § 1332 (2) is, therefore, beyond question. . The question of lack of consideration was neither raised nor discussed at the trial.

But it would seem that the plaintiff in declining to renew his contract of employment in tho West Indies gave as much consideration for the defendant’s promise of permanent employment as the plaintiff gave in Kirkley v. F. H. Roberts Co., 1929, 268 Mass. 246, 252, 167 N.E. 289, 290, wherein citing Carnig v.

Carr the court said that a contract of employment for as long as tho employee “shall faithfully and diligently perform the duties of his employment” was not too indefinite to be enforced, and that whatever the law might be elsewhere, the fact that the employee does not promise to remain with the employer for any definite time “does not invalidate tho contract, nor, of itself, make it terminable at the will of the company,” . The court’s charge was not made a part of the record. Apparently it was not objected to by the appellant.

We assume, therefore, that the case was submitted to the jury in accordance with the law of Massachusetts as outlined herein.