Ferryboatmen's Union v. Northwestern Pac. R.

DENMAN, Circuit Judge. This is an appeal from a decree rendered in a proceeding in equity for an accounting and a recovery of overtime wages claimed by the appellants to be due members of the crews of appellees’ ferryboats, under an award in an arbitration held under the act of Congress known as the Railway Labor Act (45 U.S.C.A. § 151 et seq.). The award was contested by appellees in the District Court below in proceedings other than this suit prescribed by the act. Judgment finally establishing the award was rendered. Suit was brought within the statutory period for commencement of a suit on a judgment. The answers make no claim of laches or under the statute of limitation. Though the recovery and accounting prayed for involved many crew members’ claims for many months of employment, the appeal may be disposed of by the determination of two questions of law: The first is, whether in considering the accounting prayed for the'District Court properly interpreted the terms of the award with reference to overtime payments; and the second, whether under the undisputed facts the seamen’s indorsements on the checks given them by the appellees constituted an accord and satisfaction of their claims. Appellees operate passenger and automobile ferryboats between one or another pairs of‘ cities on the crowded thoroughfares of the port of San Francisco. Prior to the award, the crews subject to its terms had been employed on these ferryboats for 12-hour watches with 24 hours between! each watch; that is to say, two 12-hour watches in each three, successive days. The award determined that the men should not be required to serve such excessive time in an employment in such a crowded harbor with its . many months of foggy weather. It limited the watches to 8 hours in any one day, and increased their monthly pay $10 per month in each of the classes of crew members parties to the award. The appellees paid their crews certain sums of money for wages which they claimed were for the amount due under the award. There was no dispute between the men and the companies that at least this amount was due them. The crew members indorsed and cashed the checks in forms long used by the appellees, under statements, later considered, to the effect that the indorsements were an acknowledgment of receipt in full of payment of the amounts stated on the checks to be for additional compensation under the award. The crews later were advised that they were entitled to a greater sum under the [775] award than the amounts paid them, and brought this suit. The pertinent portions of the award are as follows: “Hours of Service. “Rule 6. “Assigned crews will work on the basis of eight (8) hours or less on watch each day for six (6) consecutive days.” “Overtime. “Rule 8. “The monthly salary now paid the employees covered by this agreement shall cover the present recognized straight time assignment. All service hourage in excess of the present recognized straight time assignment shall be paid for in addition to the monthly salary at the prorate rate.” The first disputed question is whether overtime shall be paid crew members working 12 hours in a day in addition to the monthly salary referred to in rule 8. The appellees claim that the phrase “All service hourage in excess of the present recognized straight time assignment” does not mean in excess of an assignment of 8 hours per day provided in rule 6, but that it means in excess of 48 hours per week of total time. “Mr. Sharp. [For seamen.] As a part of this formula, will you state whether the formula contemplated that before a 12- and 24-hour man should be entitled to any overtime he should give 48 hours’ service in a week. “Mr. Hancock. [For ferry owners.] That is correct.” Appellee’s position is that the shipowner could assign a watch to a seaman of 2 hours on Monday; 14 hours on Tuesday; 4 hours on Wednesday; 16 hours on Thursday; 2 hours on Friday; and 10 hours on Saturday, and still owe him no overtime. Under the principle so invoked, what the ferryboat owners did was to require the men to serve on watches of 12 hours each, with 24 hours intervening between each watch, thus aggregating in 6 days 48 hours; that is to say, the owners required the men to render exactly the same services as they had rendered prior to the arbitration award and claim that the award for an 8-hour day as against the prior 12-hour day gave them no overtime. Appellees took their chance that they could set aside the arbitration in continuing the 12-hour watches until its affirmance. It is apparent that under a decision by us accepting the principle of interpretation now invoked by the appellees the 12-hour watch could be restored without the deterrent of the overtime. We do not so'construe the terms of the award. The phrase of rule 8 as established by the award, “present recognized straight time assignment,” clearly means the time assignéd per day, as stated in rule 6, as follows: “Rule 6. “Assigned crews will work on the basis of eight (8) hours or less on watch each day for six (6) consecutive days.” The whole meaning and purpose of the award would be frustrated if the 8-hour assignment per day of straight time were interpreted to mean any 48 hours per 6 days, distributed at the convenience of the employer. This erroneous contention of the appellees was the basis of the companies’ computation under which it paid the men the checks in question. It was accepted by the ' lower court as a proper basis of computation, and the court’s decision resting on this' erroneous interpretation of the agreement is in error. With respect to the contention concerning the indorsement of the seamen payees of the checks as a “receipt of payment in full,” the checks being given for services rendered entirely in the state of California and the seamen’s indorsements being made there, and the checks cashed there, they must be construed under the laws of the state of California. The Supreme Court of that state, in Sierra & San Francisco Power Co. v. Universal Electric & Gas Co., 197 Cal. 376, 388, 241 P. 76, 81, states the law in that regard to be: “The discharge of claims by way of accord and satisfaction is dependent upon contract express or implied; and it follows that the essentials necessary to valid contracts generally must be present in a contract of accord and satisfaction. Therefore, there must be (1) a proper subject-matter; (2) competent parties-; (3) a consent or meeting of the minds of the parties; and (4) a consideration.” The indorsements of the seamen on the owners’ checks lack the third and fourth criteria of the above statement of the California law. There was no consideration and no meeting of minds. [776] The amount stated on the face of the check was the amount which the company admitted was due. There was no dispute between the sailor and the company that this amount at least was due. Yet it is the payment of this amount 'both agree was due the sailor that must constitute the consideration for the claimed accord and satisfaction. There was here no detriment to the promisees, the shipowners, in paying what they admitted was due the seamen, and the essential consideration is hence plainly lacking. Whether or not there was a dispute as to further compensation does not make the undisputed amount paid a consideration for the release of the disputed addition. During many years of employment of the seamen they had placed their signatures under similar provisions on the back of their pay checks. The testimony is uncontradicted that in every such case, where the seamen made claim for additional compensation, the claim had been taken under consideration by the companies, and any amount found underpaid was paid despite the indorsement. When we consider the intimate status of the seaman to his ship and the employing owner, it is apparent that, in view of this long-established practice of the parties to this status, the seamen’s minds did not meet the minds of the shipowners when they signed under the usual statement on the back of the checks. We find no merit in the contention of these shipowners in this .attempt to defeat the claims of their seamen. The accounting is a matter for the trial court, and should be conducted on an interpretation of the award which will give to the members of the crews overtime for any day’s services for the hours in excess of any 8 hours in that day. Since the hourly overtime is the same as hourly straight time, it is only necessary to compute the straight-time hourly wage. In computing overtime, the formula is that of rule 9 of the agreement controlling wages existing at the time of the arbitration as modified by the establishing of 8-hour watches. It reads as follows: , “Fixing Overtime Rate. “Rule 9. ' “To compute the hourly overtime rate divide 12 times the monthly salary by the present recognized straight time annual assignment. “Note: Under above the hourly overtime rates, for employes working different assignments, will be arrived at in the following manner: “(a) On 8 and 16 watches, divide 12 times the monthly salary by 2504. “(b) On 12 and 24 watches, divide 12 times the monthly salary by 2920. “(c) On 12 and 24 watches, with one watch off per month, divide 12 times the monthly salary by 2776.” Since the award abolished 12-hour watches and established 8-hour watches only, the computation of the overtime over 8 hours is that of formula (a). The divisor 2504 represents the 6-day week applied to an annual employment. Six-sevenths of 365 equals 312% working days, in round figures 313, times 8 hours equals 2504. Appellees on this appeal for the first time raise the question of laches. It was not pleaded below. No showing of loss of evidence or witnesses or any embarrassment to appellees has been made. On the contrary, the evidence is from the corporations’ records of payments explained by the corporate employers then in charge of the wage payments. Hence this is a proper case to apply the analogy of the statute of limitation, within the time of which the suit was filed. Furthermore, without pleading laches, these seamen have been put to the expense of attorneys’ and witness’ fees and costs of a trial below occupying 174 pages of the record, and similar attorneys’ fees and cost on the appeal. In a court of equity such conduct estops this late assertion of laches. With regard to interest on any amount of underpayment for working the men 12 hours a day, the companies have had the use of the money and the men have not. They are entitled to interest. The District Court is ordered to proceed with the trial of the cause under the principles above determined. Reversed.