Wright v. Weaver Bros. (56 F. Supp. 595, 1944)

COLEMAN, District Judge.

This is a suit for relief by a declaratory judgment pursuant to Section 274d of the Judicial Code, 28 U.S.C.A. § 400, under the provisions of the Army Reserve and Retired Personnel Service Law of 1940, 50 U.S.C.A.Appendix, § 403. The proceeding is now before the Court on motion of defendant to dismiss the complaint on the ground that it fails to state a claim against the defendant upon which relief can be granted. The motion is based upon two principal grounds, (1) that the action is prematurely brought and no declaratory judgment can be given at the present time; and (2) that Section 403 of the Army Reserve and Retired Personnel Service Law of 1940 does not afford plaintiff the relief for which he contends because of a supplemental agreement which he made with defendant.

The material facts as set forth in the bill of complaint, and which we must treat as true for the purposes of the present motion, are as follows: On February 18, 1937, the defendant, Weaver Bros., Inc., a Maryland real estate corporation, with offices in Baltimore, by formal written agreement with plaintiff, Carroll Wright, a resident of Baltimore, employed the plaintiff to be its general manager and in active charge of its real estate and mortgage loan business at an annual salary of $3600 “payable in convenient installments” and also agreed that plaintiff should receive an annual allowance, payable in the same manner, of $600, towards the maintenance and upkeep of an automobile to be used by him in, furtherance of his duties in connection with defendant’s business. In addition to this salary and allowance, it was agreed that the defendant should also pay the plaintiff, for his services, certain specified percentages of the defendant’s annual net income from the operation of its business, to be computed in the manner set forth in the agreement.

The period of plaintiff’s employment was specified in the agreement “to continue, with the exceptions hereinafter specified, until the expiration of a period of six (6) months after delivery by either party hereto to the other of a written notice of termination.” The exceptions referred to relate to events that have not occurred, i. e., (1) discontinuance of defendant’s business, and (2) plaintiff’s death.

. Plaintiff entered upon his duties with the defendant which he performed to defendant’s satisfaction until on or about December 14, 1940, when plaintiff, being a member of a reserve component of the United States Army, was duly ordered and assigned to active duty and has since continued on such duty. On the aforementioned date, plaintiff and defendant, because of the former’s entrance into the military service, made a supplemental written agreement which consisted, except for the customary preambles, etc., merely of the two following paragraphs:

“So long as said agreement of February 18th, 1937, remains in full force and effect and the party ot the second part remains on active duty in the .United States Army, the party of the first part will pay to the party of the second part, in lieu of the salary and automobile allowance provided for him in said agreement, the sum of Fifty Dollars ($50.00) each month, payable on or about the first day of each month beginning January 1st, 1941..

“IN ALL. RESPECTS, except as hereinbefore expressly stated, the said agreement of February 18th, 1937, is hereby ratified and confirmed.” (The first three words appear in capital, letters, as here written.)

Prior to the making of this supplementary agreement, that is, effective August 27, 1940, Congress enacted the so-called Army Reserve and Retired Personnel Service Law of 1940, 50 U.S.C.A.Appendix, §§ 401-405. Briefly stated, the purpose of this law, operating in conjunction with other war-time legislation to which more specific reference is hereinafter made, is to grant, through a moratorium or stay, the protection of the civil rights of those serving in our Armed Forces during the period of such service, and more particularly to provide for reasonable assurance of' employment after the expiration of same — a significant factor in the maintenance of the morale of our Armed Forces so necessary to the success of their war efforts and the consequent security of our citizens as a whole.

Among the provisions of this war-time legislation, and the only provisions with which we here need to be directly concerned, are the following:

“(a) Any member of any reserve component of the land or naval forces who is on active duty or who may be assigned to active duty and who, in the judgment of those in authority over him, satisfactorily completes such active duty, and any person so ordered into the active military service of the United States who, in the judgment of those in authority over him, satisfactorily completes the period of service required under thi.s joint resolution, shall be entitled to a certificate to that effect upon the completion of such active duty or such period of service, which shall include a record of any special proficiency or merit attained. In addition, each such person who is assigned to such active duty or ordered into such active military service shall be given a physical examination at the beginning of such active duty or service; and upon the completion of the period of such active duty or service, each such person shall be given another physical examination and, upon the written request of the-person concerned, shall be given a statement of medical record by the War Department: Provided, That such statement shall not contain any - reference to mental or other conditions which in the judgment of the Secretary of War or the Secretary of the Navy would prove injurious to the physical or mental health of the person to whom it pertains.

“(b) In the case of any such person who, in order to perform such active duty of such service, has left or leaves a position, other than a temporary position, in the employ of any employer and who (1) receives such certificate, (2) is still qualified to perform the duties of such position, and (3) makes application for reemployment within folly days after lie is relieved from such active duty or service—

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“(B) if such position was in the employ right to terminate the contract on the theory that the supplemental agreement of December 14, 1940, must be interpreted as. impliedly intended to apply to the entire-period that the plaintiff might be in the armed forces, since plaintiff’s consent to-the reduction made in his compensation by this supplemental agreement was the consideration on the one hand, and the promise-to pay the reduced amount while the plaintiff was in the armed forces was the consideration on the other, because we cannot ignore- — -which such a theory does — the express language contained in this supplemental agreement which is that “IN ALL. RESPECTS, except as hereinbefore expressly stated, the said agreement of February 18, 1937, is hereby ratified and confirmed.” If the plaintiff had intended that the cancellation clause of the original' agreement should have no application to the new agreement he could have insisted upon a clause to this effect. That he did not do so may have been the result of oversight, but presumably was more likely due to the fact that the effect of the recently enacted Army Reserve and Retired Personnel Service Law of 1940, for which he now, as we think, erroneously contends, had not occurred to him. There is no ambiguity in the words employed in the supplemental! agreement. Nor is there any claim by plaintiff that it was not drawn precisely as both, parties intended.

As for the argument that since the-original agreement was made prior to the passage of the Army Reserve and Retired Personnel Service La\y of 1940, the Act when later passed nullified the cancellation clause in the original agreement, because-the two are inconsistent, and that therefore the supplemental agreement purported to do, and could in fact do, no more than reaffirm such force and effect as was attributable to that clause in the original agreement after the Act was passed, we believe such argument is completely overcome by the fact that it would be entirely contrary to sound statutory interpretation to construe the Act as intending, merely by implication, to nullify an express agreement which, as here, a person in the armed forces has made with his employer, freely and without any compulsion or misrepresentation, at the time he enters upon his military duties.

Provisions identical with those with which we are here concerned, are also in the Selective Training and Service Act of 1940, 50 U.S.C.A.Appendix, § 308; and the Civilian Reemployment of Members of the Merchant Marine Act, 50 U.S.C.A.Appeudix, § 1472. Also it is of significance that the Soldiers’ and Sailors’ Civil Relief Act of 1940, 50 U.S.C.A.Appendix, §§ 510-590, in dealing with the effect of that Act upon the rights, remedies, etc., of its beneficiaries, by virtue of written agreements entered into after commencement of military service, contains the following (50 U.S.C.A.Appendix, § 517) :

“Nothing contained in this Act shall prevent — •

"(a) the modification, termination, or cancellation of any contract, lease, or bailment or any obligation secured by mortgage, trust deed, lien, or other security in the nature of a mortgage, * * * pursuant to a written agreement of the parties thereto (including the person in military service concerned, or the person [draftee] to whom section 106 is applicable, whether or not such person is a party to the obligation), or their assignees, executed during or after the period of military service of the person concerned or during the period specified in section 106.” (Italics inserted.)

It will thus be seen that the Soldiers’ and Sailors’ Civil Relief Act of 1940 expressly removed from the operation of that Act, contractual relationships had with one in the armed forces, such as here involved. We recognize the fact that the basic purpose of the Soldiers’ and Sailors’ Civil Relief Act of 1940 was merely to suspend enforcement of certain civil liabilities of persons serving in the military and naval establishments and the Coast Guard; that the Army Reserve and Retired Personnel Service Law of 1940 does not contain a provision such as the one just quoted, and that, by fixing the right to reemployment after completion of service, it deals with substantive rather than procedural rights. However, under the Army Reserve and Retired Personnel Service Law of 1940, 50 U.S.C.A.Appendix, § 404, the benefits of the Soldiers’ and Sailors’ Civil Relief Act of 1918, 50 U.S.C.A.Appendix, §§ 101-165, were expressly extended to the beneficiaries under the first mentioned Act, effective until October 17, 1940, when the provision granting this extension was superseded by the Soldiers’ and Sailors’ Civil Relief Act of 1940. See 50 U.S.C.A.Appendix, § 585. Thus it would appear to be an entirely reasonable conclusion, from the evolution of these closely inter-related pieces of legislation, that although the Army Reserve and Retired Personnel Service Law of 1940 does not contain any express provision such as does the Soldiers’ and Sailors’ Civil Relief Act of 1940, with respect to the modification, termination or cancellation of any written contract, executed during or after the period of military service of-the person concerned, nevertheless, since the last named Act superseded from the date of its enactment, namely, October 17, 1940; its earlier counterpart, namely, the Soldiers’ and Sailors’ Civil Relief Act of 1918, and since the benefits of this 1918 Act were, as we have seen, expressly extended to the beneficiaries of the Army Reserve and Retired Personnel Service Law of 1940, it is reasonable to conclude that Congress, in passing this last named Act, did not intend to make the status of beneficiaries thereunder, with respect to written agreements entered into by them during or after their period of military service, any different from what had impliedly been the status of corresponding beneficiaries under the Soldiers’ and Sailors’ Civil Relief Act of 1918, and had expressly been the status of corresponding beneficiaries under the Soldiers’ and Sailors’ Civil Relief Act of 1940.

It is to be noted that the Army Reserve and Retired Personnel Service Law of 1940 was enacted August 27, 1940, and the Soldiers’ and Sailors’ Civil Relief Act just a few weeks later, namely, on October 17, 1940. But the Section of the later Act, Sec. 107, 50 U.S.C.A.Appendix, § 517, which, as we have seen, relates to the modification, termination or cancellation of written contracts executed during or after the period of military service of the person concerned, was added by amendment of October 6, 1942, and the Report of the House Committee on Military Affairs respecting the various amendments of October 6, 1942, contains the following significant statement (House Report No. 2198, 77th Congress, Second Session, 50 Appendix) : “Section 107 clarifies the right of a person in military service to make certain arrangements with respect to his contracts and obligations, but requires that such arrangement must be in writing.”

The right of re-employment upon which the present plaintiff is insisting, by virtue of the statute, is, it must be remembered, in derogation of the common law, and therefore must be strictly construed and not extended by implication or by liberal interpretation. In short, the integrity of contracts, the basic principle that their mutuality, and that therefore the rights of both or all contracting parties, must be zealously guarded, are things not lightly to be cast aside under our Constitutional form of Government, in time of War any more than in time of Peace.

Unquestionably, those in the armed forces of our country should be relieved, as fully as possible, from harassment and injury with respect to their civil affairs during their terms of service, thus enabling them to more completely and successfully devote all of their energies to the war needs of the Nation. Such is an essential párt of their just reward for their service and sacrifice. Such is the commendable object underlying the Act upon which the present plaintiff relies. But neither this statute, nor any related war time legislation, gives evidence of any intent to take away from the soldier or sailor his capacity to act, if he so desires, as a free agent, as he might have done before entering the service. Indeed it would be stultifying to him to do so. It would be tantamount to a declaration that once in the armed forces, our citizens become, in effect, incompetent to contract or to be held to any other normal non-military responsibilities, and what is worse, it would encourage dishonest practices which.have no place in our law. It would say to the civilian, “You deal at your peril with all those. in the Armed Forces.”

For the foregoing reasons, the defendant’s motion to dismiss the bill of complaint must be granted. It therefore becomes unnecessary to consider the question of the validity of the provisions of the Act here in review, as would be the case were the Court required to find that their effect is that for which the plaintiff has contended, or had the plaintiff not entered into the supplementary agreement of December 14, 1940. Likewise, it becomes unnecessary to consider any of the other questions raised by the-motion to dismiss. We rest our decision squarely'upon the finding that the Act neither expressly nor by implication gives support to plaintiff’s position.