The opinion of the court was delivered by: WORTENDYKE
Plaintiff Lind had a verdict molded by the Court upon special findings made by the jury, pursuant to Federal Rule of Civil Procedure 49, 28 U.S.C. Motion for direction of verdict for defendant was denied. Motion is now made for judgment notwithstanding the verdict or, in the alternative, for a new trial. F.R.C.P. 50. Both motions must be considered. Montgomery Ward & Co. v. Duncan, 1940, 311 U.S. 243, 61 S. Ct. 189, 85 L. Ed. 147. The amount of the verdict as molded includes damages upon two separate causes of action. Based on the jury's findings as to the first count, Lind, a former employee of the defendant corporation, was awarded $ 36,953.10 as an 'override' commission of 1% on aggregate of gross sales of defendant's merchandise by salesmen allocated to plaintiff's supervision in the New York metropolitan territory, from April 19, 1951 to February 15, 1952, with interest. The jury also awarded Lind $ 353, without interest, as reimbursement for expenses of moving his household goods from New Jersey to New York at the termination of his status as New Jersey State Manager on January 31, 1957.
Motion for Judgment N.O.V.
Upon this motion defendant contends that there is no evidence in the case which supports a conclusion that defendant agreed to pay plaintiff the stated commission upon the basis and during the period claimed. More particularly, defendant argues that as a matter of law the alleged integrated contract sued upon was not binding upon defendant because of lack of apparent authority in Kaufman and Herrfeldt to make or ratify it, and that the agreement, if it was made, was too indefinite and lacking in essential terms to be enforceable. Defendant also urges that waiver of the incentive features of the agreement relied upon, and a release of all claims of plaintiff thereunder are conclusively established by the evidence.
Briefly, Lind's proofs were as follows: He commenced employment with defendant as a salesman in the year 1941. From 1942 to 1950, he worked on a commission basis. On August 31, 1950 he became an assistant sales manager for the New York metropolitan area on a salary basis of $ 125 per week, raised to $ 150 on October 1, 1950, plus certain allowances. On April 19, 1951 Lind was appointed District Manager for the metropolitan area and was assigned approximately one-third of all of the defendant's salesmen in the area. This arrangement had its inception with the issue by Metropolitan Sales Manager Kaufman to each of his three assistants of an inter-office memorandum. This memo advised of the new title and briefly set forth the duties and responsibilities of the new position. The pertinent portion of the memo relied on by Lind was as follows:
'An incentive plan is being worked out so that you will not only be responsible for increased sales in your district, but will benefit substantially in a monetary way.
'Very truly yours, 'S) H. B. Kaufman 'Metropolitan Sales Manager.'
The other two District Managers under Kaufman received similar memoranda. Lind accepted the title and responsibilities of District Manager, but continued to receive only his salary remuneration of $ 150 per week until it was increased to $ 175 in January, 1952. On February 1, 1952 he was transferred from this position to become State Manager of defendant's business in New Jersey.
Lind admits that no contract arose between him and the defendant upon the language of the interoffice memorandum of April 19. He does claim, however, that shortly thereafter, in a discussion with Kaufman about the incentive plan adverted to in the memorandum, the latter informed him that 'They are working something out for you.' Kaufman reiterated this some two weeks later. Finally, Lind testified, in June 1951 Kaufman told him that he was to receive a 1% 'override' commission on the gross sales of all the salesmen working under him. Kaufman later reassured Lind, upon his further inquiry, that he should not worry but would receive his 'override.' Lind's testimony was corroborated as to at least one of these meetings with Kaufman. In June 1951 a secretary in Kaufman's office heard Kaufman tell Lind that he would receive the 'override.' Until Lind became New Jersey State Manager he claims to have made several inquiries of Kaufman (denied by Kaufman) respecting the commission, but was unable to secure any more definite response than the suggestion that he refrain from worrying and the assurance that he would receive the commission. Lind argues that Kaufman was held out by the defendant corporation as apparently clothed with authority to bind the corporation to the payment of the 'override' commission. He bases this on the fact that Kaufman advised him as to his weekly salary and all salary increases after he became Kaufman's assistant, and of his appointment as District Manager. Lind further testified that in 1950 one Herrfeldt, a vice-president of the defendant, had asked Lind to become Kaufman's assistant. Lind agreed, and Herrfeldt told him that Kaufman would fix his salary in that capacity. Herrfeldt was, at the time, in charge of all sales for the corporation, and plaintiff says that in such capacity Herrfeldt was authorized to hire and fire and to fix salaries of all personnel under his jurisdiction. After this conversation with Herrfeldt, Kaufman did in fact notify Lind of his salary status and of the October 1, 1950 increase. Lind admits that Kaufman did not inform him who had determined that he should receive the 'override' commission. While working as District Manager, Lind made no further inquiry of Herrfeldt as to the commission. However, after his transfer from Kaufman's area, in the Fall of 1952 he was advised by Herrfeldt, in response to his further inquiry, not to worry, and was assured that he would ultimately receive the commission.
With regard to Kaufman's meaning when he stated 'They are working it (the commission) out', Lind conceded he understood 'they' to refer to Kaufman's superiors, including the company's president, Arthur Schulte, and his brother, John, a vice-president. Arthur Schulte's successor as president of the company on February 1, 1955, Stanley Brown, was never asked by Lind for payment of any commission. However, he did advise Lind, according to Lind's testimony, in the course of discussions of a possible sale of the New Jersey distribution business of the corporation to Lind, that if such sale were effected no charge would be made for goodwill because of the large amount of commissions owed to him. Brown denied this.
Defendant's evidence was as follows: It is uncontroverted that when Lind was assigned the title of District Manager by the memorandum of April 19, he did not receive any salary increase. No reference was made to any commission rights in any of the succeeding payroll increase authorizations. There is no evidence to contradict the testimony of Arthur Schulte that all payroll increases had to be approved by him before being made. Arthur Schulte, president of the defendant corporation from 1950 to 1954, testified that Herrfeldt had no authority to employ personnel or fix salaries or compensation of any kind independently of the approval or rejection by Schulte of such action, and that Kaufman was likewise so limited.
Plaintiff lays great stress upon the language of the memo of April 19 to the effect that an incentive plan was in process of being worked out from which the plaintiff would benefit substantially in a monetary way. However, on january 28, 1952, Lind's annual salary was increased $ 1,300. It was noted on this payroll authorization, approved by Schulte, that this increase was for merit. For aught that may appear in the evidence to the contrary, plaintiff accepted this increase without comment respecting his failure to receive the claimed 1% commission. The acceptance of this salary increase, of course, was just six months after Lind, by his own testimony, had been told by Kaufman that he was to receive the commission.
The defendant also had certain fringe benefits in effect during Lind's employment as District Manager. An 'Extended Plan for Incentive Compensation' adopted by the stockholders in April 1949 provided for certain incentive compensation based on the consolidated net profit of the company for the preceding calendar years. Also a pension trust had been in effect since April 1947. In addition to these so-called fringe benefits, defendant's New York Metropolitan Sales Manager encouraged sales competition among his subordinates for which he would recommend that cash prizes be awarded.
Kaufman testified that he issued the interoffice memorandum of April 19 to each of his three assistants. Although he denied having any conversations with Lind relative to his compensation following April 19, 1951, Kaufman conceded that he planned to recommend to Eastern Sales Manager Reiner, for submission to Herrfeldt, that Kaufman's three assistants be included in 'our incentive pension plan -- bonus plan.' Kaufman's recommendations were approved, and these were accordingly included 'in the Company incentive plan.' He explained that the reference in the memo of April 19th to an incentive plan and to the substantial monetary benefit was the incentive bonus plan which he had in mind, and that 'if an assistant did an especially good job, I (Kaufman) would recommend, through Mr. Reiner and Mr. Herrfeldt, that he would get an extra bonus or a larger bonus than maybe the other two men.'
The integrated contract relied on by Lind herein was made and was to be performed in the State of New York. As this Court has jurisdiction by reason of diversity of citizenship of the parties, this Court must look to the conflicts law of New Jersey, Klaxon Co. v. Stentor Electric Mfg. Co., 1941, 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477, which dictates that the contract is governed by the law of New York, Specialties Development Corp. v. C-O-Two Fire Equipment Co., 3 Cir., 1953, 207 F.2d 753. Judicial Notice of the law of New York is taken by this Court, Gallup v. Caldwell, ...