Summary
In Mabley Carew Co. v. Borden, 129 Ohio St. 375 [ 195 N.E. 697, 100 A.L.R. 511], the employer offered a death benefit to his employees who were such at time of death.
Summary of this case from Chinn v. China Nat. Aviation Corp.Opinion
No. 24890
Decided May 1, 1935.
Employer and employee — Contract in favor of third party — Payment of sum equal to employee's wages year preceding death — Provision that certificate voluntary and gratuitous, not defense against beneficiary — Acceptance of certificate constitutes executed contract, vesting right in beneficiary, when.
1. A certificate in which a particular employee was named, was executed by the employer and delivered to the employee named therein during the period of employment, which certificate contained the following recital of fact: "In appreciation of the duration and faithful character of your services heretofore rendered as an employe of this company, there will be paid in the event of your death, if still an employe of this company, to the party or parties designated by you on the back of this certificate a sum equal to the wages you have received from this company for the year next preceding the day of your death, but in no event to exceed Two Thousand Dollars." The certificate, having been accepted by the employee, who remained in the employ of the company until her death, and prior thereto designated her sister a beneficiary on the back of such certificate, creates a contract in favor of a third party, with sufficient consideration to support it as such.
2. The fact that such certificate contains a further provision, as follows: "The issue and delivery of this certificate is understood to be purely voluntary and gratuitous on the part of this company, and is accepted with the express understanding that it carries no obligation whatsoever or assurance or promise of future employment and may be withdrawn or discontinued at any time by this company," creates no defense as against the beneficiary.
3. The acceptance of the certificate by the employee, the designation of a beneficiary on the back thereof, together with the fact that the employee remained in the employment of the company until death, constituted an executed contract and vested in the beneficiary a right to the amount provided for therein.
CERTIFIED by the Court of Appeals of Hamilton county.
Ida C. Borden brought an action in the Court of Common Pleas of Hamilton county against the Mabley Carew Company, alleging in her petition that Anna Work, her sister, now deceased, was and had been for some years an employee of such company and that it promised and agreed in writing to pay to such person as was designated by Anna Work on the back of a certificate issued to her a sum equal to the wages received by her from the company for the year next preceding the date of her death. The plaintiff in error further alleges that she is the person designated on the back of the certificate; that Anna Work continued in the employ of the company until the date of her death; that her wages for the year preceding were $780, and she prays judgment for this amount with interest from the date of the death of Anna Work.
The Mabley Carew Company in effect denies these allegations and states affirmatively that if the certificate was issued as claimed, it was issued voluntarily and gratuitously and without consideration, and was issued to Anna Work and accepted by her with the express understanding that it carried no legal obligation.
A reply was filed, denying the affirmative allegations of this answer. The case came on for trial in the Court of Common Pleas and at the conclusion of the plaintiff's evidence the trial court sustained a motion directing a verdict for the Mabley Carew Company.
Motion for new trial was overruled, judgment was entered and error was prosecuted to the Court of Appeals of Hamilton county, which court reversed, set aside and held for naught the judgment of the Court of Common Pleas. The Court of Appeals, finding that its decision was in conflict with the decision in the case of Black v. W. S. Tyler Co., 12 Ohio App. 27, certified the case to this court for review and final determination.
The following is a copy of the certificate upon which the action was predicated:
"No. 378. "THE MABLEY CAREW CO."To Mrs. Anna Work.
"In appreciation of the duration and faithful character of your services heretofore rendered as an employee of this Company, there will be paid in the event of your death, if still an employe of this Company, (except under those circumstances which would give rise to an obligation on the State of Ohio under any Workmen's Compensation Act to reimburse your Estate for your death,) to the party or parties designated by you on the back of this certificate a sum equal to the wages you have received from this Company for the year next preceding the day of your death, but in no event to exceed the sum of Two Thousand Dollars.
"The issue and delivery of this certificate is understood to be purely voluntary and gratuitous on the part of this Company and is accepted with the express understanding that it carries no legal obligation whatsoever or assurance or promise of future employment, and may be withdrawn or discontinued at any time by this Company.
"The Mabley Carew Co. "Adolph C. Weiss, Secy. "Cincinnati, Ohio, Dec. 24, 1919."
"ENDORSEMENT."The Mabley Carew Co. Date, ............
"Gentlemen: — It is my desire that you make all benefits payable under this Certificate to the following and in the proportions here indicated:
Relation to"Name Beneficiary Address Proportion
"Mrs. Ida Borden Sister
"Signature........................."
Messrs. LeBlond, Morrissey, Terry Gilday and Mr. J. Paul McQueen, for plaintiff in error.
Mr. Julius R. Samuels, for defendant in error.
It is contended by the Mabley Carew Company that there is no proof of the designation of Ida C. Borden as beneficiary under the certificate in question.
The name appears on the back of the certificate and, while it is typewritten, it is certainly a sufficient designation, taken in connection with the fact that Anna Work had it in her possession until her death.
There is just one question in this case, and that is the consideration for the issuance of this certificate. It is true that Anna Work could not maintain an action on this certificate in her lifetime, as no right of action existed in her favor; but that fact did not prevent it from being enforceable, after her death, in the hands of Ida C. Borden.
This certificate was not a pure gratuity on the part of the Mabley Carew Company, as there was a provision in the certificate to the effect that the payment would not be made in the event of death unless Anna Work was still an employee of the company. This was an inducement to Anna Work to continue in the employ of the company. That is not the only consideration, as it is expressed at the outset that the company appreciates the duration and faithful character of the services of the employee theretofore rendered. The employee, by virtue of the issuance of the certificate, had a right to expect that the person nominated by her would in the event of her death receive the amount designated by the certificate. This was certainly an incentive to remain in the service of the company.
It is not a tenable proposition that, because Anna Work had no enforceable right during her life, her beneficiary could take no more than she had. We think the learned Court of Appeals was right in holding that Anna Work, by continuing in the service of the company until her death, created a binding obligation upon the company to pay to her designated beneficiary the sum mentioned in the certificate.
It is stated in the certificate: "The issue and delivery of this certificate is understood to be purely voluntary and gratuitous on the part of this Company". That was a part of the contract so far as Anna Work was concerned. She had no right that she could possibly assert, as she had to die before the right would ripen in anyone.
The case of Zwolanek v. Baker Mfg. Co., 150 Wis. 517, 137 N.W. 769, 44 L.R.A. (N.S.), 1214, Ann. Cas., 1914A, 793, pronounces the law relative to certificates of this character in its true light as we see it. The court there said, at page 521 of the opinion:
"While the practice initiated by the defendant is beneficial to its employees, it is not difficult to see wherein it is also beneficial to the employer. It tends to induce employees to remain continuously in the employ of the same master and to render efficient services so as to minimize the possibility of discharge. It also tends to relieve the employer of the annoyance of hiring and breaking in new men to take the place of those who might otherwise voluntarily quit, and to insure a full working force at times when jobs are plentiful and labor is scarce."
True, Anna Work by reason of this certificate was under no obligation to continue in the service of the Mabley Carew Company if she did not see fit so to do; neither was the company, by reason of the certificate, obligated to give her continuous or definite employment. But neither of these facts in any wise affected the right of the beneficiary, so far as Anna Work was concerned after this contract was executed.
We find no case exactly on all fours with the one before us; but we do find a number of cases that support the finding made by the Court of Appeals herein. The subject is well digested and thoroughly discussed in an annotation in 28 A. L. R., beginning at page 331. It is a well known proposition of law that a contract should be given that construction that will uphold it and preserve to the parties thereto their rights if the same can be done without doing violence to language. We find no trouble in upholding this contract.
The judgment of the Court of Appeals is hereby affirmed.
Judgment affirmed.
WEYGANDT, C.J., WILLIAMS, JONES, MATTHIAS, DAY and ZIMMERMAN, JJ., concur.