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BETTERMAN v. AMERICAN STORES COMPANY (03/28/51)

March 28, 1951

BETTERMAN
v.
AMERICAN STORES COMPANY, APPELLANT



Appeal, No. 223, March T., 1950, from judgment of Court of Common Pleas of Cambria County, Dec. T., 1947, No. 386, in case of Gustave Betterman v. American Stores Company. Judgment affirmed; reargument refused April 17, 1951.

COUNSEL

George M. Spence, with him Joseph Gilfillan, Robert H. Shertz, Spence, Custer, Saylor & Wolfe, Gilfillan, Gilpin & Brehman and Shertz, Barnes & Shertz, for appellant.

Frank A. Sinon, with him Philip N. Shettig, Shettig & Swope, and Rhoads & Sinon, for appellee.

Before Drew, C.j., Stearne, Jones, Bell, Ladner and Chidsey, JJ.

Author: Bell

[ 367 Pa. Page 195]

OPINION BY MR. JUSTICE BELL

Plaintiff, a contract carrier by motor vehicle, brought an action of assumpsit against defendant for the cost of operation plus a reasonable profit guaranteed him under a written contract dated August 30, 1937, and recovered a verdict of $16,050.13. Defendant appealed from (the judgment on the verdict which was entered following) the lower court's refusal to enter a judgment n.o.v. or to grant a new trial. What is the proper construction of the contract; was the contract legal; was plaintiff's evidence sufficient to establish his case? -- These are the most important questions involved in this appeal. From 1200 pages of testimony we shall briefly summarize the important facts.

Plaintiff was employed by defendant as a truck driver commencing in 1933. In 1936 defendant persuaded plaintiff and other truck drivers of defendant to purchase their own trucks and become contract carriers, orally promising plaintiff (and others) that if they did so they would be given steady work and would make a profit and that their earnings would be considerably increased over those they received as ordinary truck drivers. On August 30, 1937, plaintiff and defendant entered into the aforesaid written contract which was prepared by counsel for defendant and was subsequently filed by counsel for defendant with the Public Utility Commission of Pennsylvania. A similar contract was prepared by defendant and executed by it and 31 other truck drivers of defendant at approximately the same time. The contract was for a period of one year, renewable automatically for a further term of one year and so on from year to year unless 15 days'

[ 367 Pa. Page 196]

    written notice was given by either party of his or its intention to terminate the same. The agreement provided that the plaintiff (carrier) would furnish a truck suitable to defendant; that he would be subject to call at any time ; that he would personally drive the truck (in the absence of sickness, etc.); that his truck would be available for loading and transporting defendant's merchandise at such times and places as defendant should designate; that the transportation was to be within the State of Pennsylvania and the contract was to be subject to the laws, rules and regulations of the proper regulatory bodies. There then followed this very important provision with respect to compensation: "9. The parties mutually agree that the compensation for such service outlined above shall not be fixed*fn1 but shall vary with the tonnage, mileage, loading and unloading time, number of stops, road and weather conditions. The parties hereto shall from time to time make such adjustments of the compensation as shall be mutually agreed upon by the parties. Company hereby guarantees to Carrier compensation at least equal to the full cost of operation of the typical or average operator of the same class as Carrier for similar service, plus a reasonable profit. The minimum of such charges to be paid shall be subject to review, fixing and asscertainment by any regulatory body having jurisdiction thereof."

It will be instantly noted that the compensation was not fixed but, because of the indefinite and uncertain services to be rendered by the carrier, the compensation was to vary with a number of varying factors and a cost-plus profit was guaranteed. The importance of this cost-plus clause in the construction of the contract and the question of compensation will hereinafter more fully appear.

[ 367 Pa. Page 197]

Based upon the aforesaid contract, plaintiff, through defendant's counsel, filed an application with the Pennsylvania Public Utility Commission for a contract carrier's permit, which the Commission granted on November 16, 1937. On September 30, 1940, defendant, on behalf of plaintiff, filed with the Pennsylvania Public Utility Commission a schedule of minimum rates effective November 16, 1937. This schedule contained the rates based on weight and mileage on a zone basis for two types of commodities. One of the obvious purposes was to provide plaintiff with some regular compensation for his work as it was performed.

The court below, in a detailed, comprehensive and very able opinion, held -- and we agree -- that under said contract of 1937 plaintiff was entitled to "the full cost of operation... plus a reasonable profit."

The conduct of both plaintiff and defendant clearly indicates that the parties believed and intended the contract of 1937 to be binding. Not only did the plaintiff so testify, but (a) in 1943 defendant brought an action against plaintiff upon the aforesaid contract of 1937 in which it averred that said contract was still in full force and effect ; and (b) on February 1, 1944, defendant and plaintiff entered into a supplemental written agreement amending (in immaterial matters) "the present contract entered into between the parties hereto dated the 30th day of August 1937 " and reaffirming and ratifying said contract of August 30, 1937. How then is it possible for defendant to now maintain that the parties intended to abrogate the contract of 1937 and supersede it by the rates filed with the Pennsylvania Public Utility Commission?

Defendant nevertheless contends that the minimum, maximum and only compensation legally payable to plaintiff is that which is in accord with the schedule of rates or ...


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