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FARMER v. ARABIAN AMOCO

July 28, 1959

Howard FARMER, Plaintiff,
v.
ARABIAN AMERICAN OIL COMPANY (a Delaware corporation), Defendant



The opinion of the court was delivered by: PALMIERI

Defendant moves for judgment in accordance with its motion during the trial for a directed verdict. Fed.R.Civ.P. 50(b), 28 U.S.C.A. Unhappily, after almost two weeks of testimony and many hours of deliberation, the members of the jury were unable to agree and they were discharged.

The plaintiff a physician, seeks damages for his alleged wrongful discharge from defendant's employment. His suit is based upon an alleged oral contract of employment pursuant to which plaintiff was to have been employed as an ophthalmologist in defendant's hospital and public health installation in the Kingdom of Saudi Arabia 'for the duration of defendant's operation of its oil wells in the Kingdom of Saudi Arabia.' *fn1"

The defendant, in its amended answer, denied the alleged oral contract and alleged that the plaintiff was hired pursuant to a written agreement. This was in the form of a letter of the defendant offering the plaintiff employment, and countersigned by plaintiff so as to indicate his acceptance. *fn2" Further, the defendant alleged two affirmative defenses: first, that the alleged oral agreement of employment was void because it was not in writing, *fn3" and second, that the plaintiff's employment was terminated for good cause.

 The matter of good cause was much bruited at the trial and was the rock on which the jury deliberations foundered. It was the subject of the first of the framed issues submitted to the jury. The members of the jury were unable to reach agreement as to whether good cause existed for the plaintiff's discharge. *fn4"

 Upon plaintiff's direct examination at the trial, defendant objected to testimony concerning the alleged oral contract of employment and was granted a continuing objection to such testimony on the basis of (a) the parol evidence rule; (b) the Statute of Frauds; and (c) plaintiff's failure to prove the authority of Dr. Allen, the defendant's representative who allegedly made the oral contract in the course of a long distance telephone conversation with plaintiff. Defendant was also permitted to reserve its right to strike this testimony for the reasons stated. At the close of plaintiff's case defendant was permitted to reserve its motions until all the evidence had been received, when it renewed its objection and moved that the testimony be stricken. Decision was reserved. The defendant also then moved for judgment on grounds (b) (Statute of Frauds) and (c) (lack of authority) as above indicated, and on the further ground that the plaintiff testified that it was his understanding that he was employed for a period of at least five years, and that such an agreement would be void under the Statute of Frauds. After the discharge of the jury, the defendant moved for judgment pursuant to Fed.R.Civ.P. 50(b) on all the above grounds and on the further ground that the evidence established beyond any question its justification for discharging the plaintiff.

 I shall not refer again to the question of justifiable discharge. It was a vigorously contested factual issue, appropriately within the province of the jury to decide. As to the motion for judgment on the ground that the contract, as plaintiff understood it, *fn5" was void under the Statute of Frauds, that ground will not sustain the motion, for plaintiff's 'understanding' of his obligation under the contract does not establish that the parties' minds met on that subject. E. g., Lee v. Jenkins Brothers 2 Cir., 1959, 268 F.2d 357, at 362.

 The New York *fn6" Parol Evidence Rule

 The letter of May 26, 1955, set forth in footnote 2, supra, evidence only a hiring at will. Watson v. Gugion, 1912, 204 N.Y. 535, 98 N.E. 18, 39 L.R.A.,N.S., 1090; Martin v. New York Life Ins. Co., 1895, 148 N.Y. 117, 42 N.E. 416. If plaintiff's testimony that he was orallypromised employment for so long as defendant was operating its oil wells in Saudi Arabia was inadmissible, there has been a failure of proof and defendant is entitled to judgment on the ground that the evidence established only a hiring at will under which it was free to discharge plaintiff at any time, with or without cause.

 The testimony of the plaintiff was that the oral contract was made in the course of a telephone conversation which took place on April 13, 1955, between Dr. T. E. Allen, a member of the defendant's medical staff, and himself. One of Dr. Allen's duties was to interview candidates for positions on the medical staff of defendant's hospital in Saudi Arabia and it was in this connection that he met plaintiff in February 1955. The testimony upon which plaintiff relies is as follows:

 'I told him that I did not want to go over there for a very short time, a few months or anything like that, and I would not be interested in going for less than a period of five years and he says, 'Well, we cannot measure this in years due to the circumstances of being expropriated or something of that kind, but you will have that job so long as we operate oil wells, and -- in Arabia.' And I said, 'Very well. With that assurance I will accept the position.' And he said, 'You are hired." (Transcript, p. 57.)

 In substance, there is a writing setting forth an agreement, and a prior alleged oral agreement, both relating to plaintiff's employment by defendant. Since the writing and the alleged oral contract are tied together in time and by their subject matter, the plaintiff cannot avoid or add to the writing by proof of an oral understanding. Probably the most cogent expression of the applicable law was made in the case of St. Regis Paper Co. v. Hubbs & Hastings Paper Co., 1923, 235 N.Y. 30, 138 N.E. 495. The Court there quoted with approval the following statement from a leading authority on evidence (St. Regis Paper Co. v. Hubbs & Hastings Paper Co., supra, 235 N.Y. at page 35, 138 N.E. at page 496):

 "When a legal act is reduced into a single memorial, all other utterances of the parties on the topic are legally immaterial for the purpose of determining what are the terms of their act.' Wigmore on Evidence § 2425.'

 The Court then went on to say (235 N.Y. at page 36, 138 N.E. at pages 496-497):

 '* * * Evidence of a parol brokerage agreement was therefore incompetent to show that the formal writings were not the final ...


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