Contract, What constitutes, Termination. Agency. In an action of contract against a Massachusetts corporation for an alleged breach of an oral agreement to employ the plaintiff for one year at a fixed rate of compensation, it appeared that the alleged oral agreement was made between the plaintiff and an agent acting for the defendant, that the plaintiff entered the defendant's employ under this agreement and rendered services for a little more than four months, when he was discharged by the defendant, and that there was a balance due him when he was discharged. It also appeared that, a few days after he entered the defendant's employ, he executed an agreement in writing purporting to be made between him and another corporation of the same name as that of the defendant, organized under the law of the State of New York, which was signed by the same agent of the defendant purporting to act as treasurer of such New York corporation. This instrument in writing provided for the employment of the plaintiff by the New York corporation during the year covered by his oral contract with the defendant. No such New York corporation was in existence, and both the plaintiff and the defendant's agent understood that the New York corporation had not been organized, and that the new agreement was not to become binding until that corporation had been organized completely and had taken a transfer of the defendant's business, and it did not appear and was not contended that these things ever had been done. The defendant in substance asked the judge to rule that the oral agreement between the plaintiff and the defendant was terminated by the new agreement in writing made between the plaintiff and another party, and that the plaintiff's services thereafter must be taken to have been rendered under such agreement in writing, and therefore that the plaintiff could not recover. The judge refused to make this ruling, and ruled that the alleged contract in writing was void as purporting to be made by a corporation not in existence, and the jury returned a verdict for the plaintiff. On exceptions alleged by the defendant, it was held, that the judge's refusal of the ruling requested by the defendant was right, and that the defendant could not have been harmed by the judge's ruling that the agreement in writing was void, because, even if the defendant's agent could have been bound by it personally on the ground that he had held himself out as the agent of a non-existing principal, the instrument could not affect the relations between the plaintiff and the defendant.
SHELDON, J.
The defendant, a corporation organized under the laws of this Commonwealth, acting through one Quinby, its authorized agent, agreed orally to employ the plaintiff for a period of one year from August 30, 1904, at a fixed rate of compensation. The plaintiff entered the defendant's employment under this agreement, and rendered services to it as agreed until January 7, 1905, when he was discharged. The defendant had paid him for services in full up to November 12, 1904, and in part after that time, but there was a balance due to him when he was discharged. These facts were either not in dispute at the trial, or appear to have been found by the jury. Upon these facts, the plaintiff was prima facie entitled to recover; and no question comes before us upon these exceptions as to the plaintiff's claim made in the account annexed to his third count for liquidated damages for the defendant's breach of agreement. Nor was any contention made by the defendant that the agreement set up by the plaintiff was made before August 30, 1904, and so was not to be performed within one year, and could not be enforced under the provisions of R.L.c. 74, § 1, cl. 5, which was not repealed by St. 1908, c. 237. But the judge ruled that the plaintiff could not recover under his count on the written contract hereafter mentioned, being the second count of his declaration.
It appears that the plaintiff, after his oral agreement with the defendant and a few days after he had entered into the defendant's employ, executed a written agreement purporting to be made with another corporation of the same name as the defendant, but which it was recited in the agreement was "incorporated under the laws of the State of New York," and which purported to be executed by Quinby as the treasurer of that corporation. In this contract the New York corporation agreed to employ the plaintiff and he agreed to give to it his services for the same time, with provisions for his compensation and other terms substantially but not exactly the same as had been stipulated for in the plaintiff's oral agreement with the defendant. This new written agreement accordingly covered the same subject matter, the plaintiff's employment and his compensation, as had been covered by his previous agreement with the defendant. The defendant contends that the previous oral agreement was ended by the new written agreement made with another party; that the plaintiff's services thereafter must be taken to have been rendered under the new agreement to the New York corporation; and so that he can sustain no claim for compensation or damages against the defendant. This contention the defendant presented to the judge in various requests for rulings, which were refused, and it seeks now to maintain the contention before us.
But the new agreement, made by the plaintiff with a third party, was res inter alios acta as to the defendant. It would not affect the relations between these parties unless it was shown to have been intended to do so (Corey v. Woodin, 195 Mass. 464, 470; Edgar v. Breck Sons Corp. 172 Mass. 581, 583), or unless it was shown to have been acted upon between the parties to the new agreement so that the plaintiff's services since its making must be found to have been rendered to the New York corporation. But neither of these circumstances was shown or was asserted at the argument before us to have existed. The rights of the parties to this action were fixed by their oral agreement (Picard v. Beers, 195 Mass. 419), and must continue until that agreement either had expired by its own terms or had been terminated by the parties to it or by operation of law.
It cannot be said as matter of law that the plaintiff's oral agreement with the defendant was merged into his subsequent written agreement with the New York corporation within the meaning of the decisions relied upon by the defendant. Even as between the parties to that agreement it would have been competent to show by oral evidence that it had been executed and delivered upon the oral condition that it should take effect only after the New York corporation had completed its organization and had taken over the defendant's business. Elastic Tip Co. v. Graham, 185 Mass. 597. Hill v. Hall, 191 Mass. 253, 265. Stevens v. Stevens, 150 Mass. 557. Wilson v. Powers, 131 Mass. 539, 540. And see Fleming v. Morrison, 187 Mass. 120. A fortiori this must be so when the question arises between third parties.
It is not material here whether the new agreement could or could not have been enforced by the plaintiff against Quinby personally, on the ground that he had held himself out as the agent of a non-existent principal. Anthony v. Butler, 13 Peters, 423, 433. Kelner v. Baxter, L.R. 2 C.P. 174. In this case both the plaintiff and Quinby understood, as was the fact, that the New York corporation had not been organized, and that the new agreement was not to become binding until that corporation had become completely organized, had taken a transfer of the defendant's business, and had itself begun the transaction of business. But it did not appear and has not been contended that these things ever were done. The plaintiff never had entered the service of the New York corporation. Under these circumstances the defendant was not harmed by the ruling of the judge that the new agreement was void; it was at least inefficacious as to the relations between the plaintiff and the defendant. There never had been any intention of diverting the services of the plaintiff away from the defendant to the New York corporation except upon the happening of future events, one of which would have required the defendant's consent, and none of which have been found or shown to have happened.
What we have said disposes of all the contentions that were made at the argument. The rulings which were refused ought not to have been given; and the defendant has no right of exception to those which were made.
Exceptions overruled.