May v. Schuyler

[Dissenting.] —On July 9, 1870, the defendants wrote a letter to the plaintiff in Paris whereby they employed the plaintiff to sell for them in France certain arms and military goods, and agreed to pay to him as compensation for his services in selling the same, or any part thereof, the difference between certain prices therein stated and the price which should be obtained on the sale thereof. They also offered to sell to the plaintiff at the same price any of the said goods.

An important feature in the answer, directly bearing upon the main question in issue between the parties, is the allegation relied upon by the defendants, as a defense to the plaintiff’s claim, that the firm of B. *110Remington & Sons were interested with them in certain of the arms, and that, in reliance upon an alleged agreement made by their agent Reynolds with the plaintiff, in changing prices, which it was asserted was made by the letters of September 27, 1870, they had settled with E. Remington & Sons, paying them over $20,000 more than if they had settled by the prices of July 9, 1870 ; that they would not have paid said sum to the Remingtons if they had believed that the plaintiff had any just claim against them other than as stated in the letters of September 27, 1870; and they therefore insisted upon the $20,000 by way of counter-claim. This issue in the pleadings, and the abandonment of this counter-claim, will be referred to presently.

The letter of July 9, 1870, was written in anticipation of war between France and Prussia. On July 4, 1870, the proceedings in the corps legislatif everywhere produced the belief that war was inevitable. The .French legislature declared war on the 15th, and on the following 19th of July, the French Minister left Berlin. The defendants, between July 15-and 19, began to write letters to different people in Europe on the subject of selling arms, and among others wrote the letter in question. It is appar-' ent from the whole record that the future negotiations were subsequent to the declaration of war, and there is no intimation that the business arrangement between the parties had become invalid by the fact of war. If the letter, therefore, was accepted and acted upon, the question of war has nothing to do with the validity of the contract between the parties, provided its performance was not rendered impossible by any act of law. This is not claimed.

On the said July 29, the plaintiff’s firm replied to the letter of July 9, to the effect that he could do nothing without samples, and even with samples he hardly *111knew what could be done, as the war department had written that it was fully supplied. As the defendants had written in the proposal of July 9, “You can telegraph us if you think necessary,” the plaintiff on August 23, then next, telegraphed to the defendants inquiring ‘ ‘ How many arms they- could ship with 400 cartridges each,” and that he, the plaintiff, could probably contract all having that number.” This message refers in terms to the letter of “ July 9,” as .plaintiff’s ground of action. On the following day the defendants’ answer by telegraph, “ Can furnish about all the arms per our letter of July 9,” and it informs the plaintiff, Our Mr. Reynolds left with full set of samples by steamer Brest last Sunday-—meet him.” The plaintiff wrote on August 26 to the defendants, repeating his telegram of the 23rd, and the defendants, on the following September 7, acknowledged the receipt of plaintiff’ s letter of August 26, and in it confirms in detail the prices contained in the first letter of July 9, 1870. They write, “We still can furnish 1500 Remington rim fire carbines, cal. 52, $15.50, metallic cartridges for ditto $21.50,” etc., etc. This letter of September 7, 1870, was written only seven days before the sale was made ; and the sale was made before the letter could reach Paris.

Prom the above correspondence it is plain that the defendants’ offer in their letter of July 9 was accepted by the plaintiff, and upon the terms proposed. Up to this point the negotiation was conducted solely between the plaintiff and the defendants, and there is no conflict of evidence. The terms proposed were not only accepted by the plaintiff, but clearly ratified by the defendants’ acceding to his requests in forwarding samples, without which sales could not be made, and without change in the prices for the goods to be sold.

A contract then existed between the parties by which the defendants became bound in law to pay to *112the plaintiff for all such goods named in their offer of July 9, 1870, as he should sell to the French government or any one else, for his services on such sale the difference between the prices in such offer stated for the goods and those which he should obtain upon their sale.

Were any material changes made in the terms of this contract by the plaintiff, either with the defendants or their agent, Reynolds %

It is claimed that when Reynolds went to Paris he had certain instructions as the defendants’ agent in the sale of the goods, and that, prior to September 15, 1870, the date of the French sale, he and the plaintiff had agreed upon an advance in the prices contained in the 'letter of July 9, correspondingly reducing the plaintiff’s compensation. On the part of the plaintiff it is claimed that the agent had no authority from his principals to change the prices, that the defendants had not given such instructions to their agent, or claimed to have made any change, until after the sale had been completed.

Mr. Reynolds left New York for Paris August 20, 1870, and the first interview with the plaintiff was had September 2 following. Reynolds took with him samples of goods from the defendants which the plaintiff had called for. These samples were marked for the plaintiff, and the bills of lading stated the goods to be for him. The defendants’ letter, introducing him to the plaintiff, August 19, 1870, makes no mention of prices. “ It trusts that the plaintiff will give him his hearty co-operation, that the plaintiff would find him well posted as to the quantity and quality of arms, and he would represent the firm in .obtaining arms and cartridges.” These arms and cartridges were to “be obtained from the defendants in New York, the quantity and quality of which was known to Reynolds.

I am unable to find from the correspondence any *113evidence that the defendants at any time before the sale pommunicated to the plaintiff or the agent, Reynolds, that they had changed the prices of the goods. The sale was made on September 14, 1870, and communicated to the defendants by a telegraphic dispatch the same day, in cipher, devised by the plaintiff, and agreed upon between the parties beforehand; and the prices named therein are the prices of the letter of July 9, 1870. On September 7, the defendants wrote, “Before this reaches you Mr. Reynolds will inform you what we can furnish,” and in this letter the prices named for the goods are the prices contained in the letter of July 9.

As the case stands it does not rest upon the conflicting testimony of Reynolds and the plaintiff relating to the conversation between them about the change of prices. There seems to be on that point a positive contradiction as to what was said. The referee having the parties before him in the light of the correspondence in the case gave unqualified credit to the plaintiff, and I a,m of the opinion the evidence fully justifies his judgment. l'Tor can I see the significance claimed by the defendants’ counsel to the one point on which Reynolds and the plaintiff appear to have agreed. The statement by both is in substance that at the time they were to show the samples to the commission of armament Mr. Reynolds exhibited to the plaintiff a statement of prices, and the latter said, “he should not accept anything of the kind, that he worked by the prices of July 9, and Mr. Reynolds said, you will have to fight, that letter with Messrs. Schuyler, Hartley & Graham.” This is in accord with the plaintiff’s case. The point is that the defendants did not change the terms of the contract until after it was executed, when they had not the right to do so. Reynolds, as agent merely, could neither by any act of his own, or by any declaration he might make, prove either his agency of *114the defendants or the extent of his powers. The declarations or representations of Reynolds as agent, not expressly authorized by his principals, could not •bind the plaintiff unless within the scope of his agency (N. Y. Life Ins. & Trust Co. v. Bede, 3 Seld. 364).

But this is not the whole case. The defendants have furnished affirmative testimony showing, I think, conclusively that they acted upon the terms of the July letter, and did not authorize their agent, Mr. Reynolds, to raise their prices until after the sale was effected. The record shows that the defendant Schuyler was examined before the trial upon the allegation in the answer relating to the defendants’ counter-claim of $20,000, which it alleged had been paid to the Remingtons on a settlement of their respective interests in the goods. It appears from Mr. Schuyler’s testimony that the settlement was based upon the prices of the letter of July 9, 1870, and not on the prices of the letters of September 27,1870. On the examination the books were not produced, but on the trial they were produced, and from them it appears that the plaintiff is stated to have been the purchaser of the goods, and on the bill entered in the book the letter of July 9 is referred to as containing the prices at which they were sold. This evidence is confirmed by the testimony of both the agent, Reynolds, and the defendant, Hartley. It is but fair to say that the; both claim that the settlement with the Remingtons was a forced settlement, and in some way should not be deemed as binding.

But the copy of the book produced on the examination of Mr. Schuyler before the trial, did not contain the name of “May, July 9, 1870,” over the bill as settled by the defendants with the Remingtons, which appeared on the bill produced on the trial. The defendants must be concluded by their books containing the sales made by the plaintiff, at the time and the *115prices therein named. This counter-claim set up in the answer was abandoned on the appeal by the defendants’ counsel.

On December 12, 1870, the samples which the plaintiff had written for, reached Paris, and on the following day he, co-operating with Eeynolds, as requested by the defendants, offered the goods by' sample to the commission „of armament, and in the course of the negotiation, it was agreed that four-fifths of the price which was to be paid should be paid in New York on shipment, and one-fifth thereof should be paid in Prance, on arrival of the goods, and that the plaintiff should táke his compensation out of the payment made in Prance. If this be deemed to be a variance of the contract, the answer'is that the terms were assented to by the defendants. The plaintiff’s telegram of August 23, 1870, informed the defendants that French sales would be made in Paris, and the telegram informed the defendants when the sale was made how the payments were to be made. Plainly the defendants were called upon either to decline such a change or to say to the plaintiff that they would not accept it as performance of the contract. They did neither, but received the four-fifths of the proceeds in New York, and afterwards received one-fifth, which belonged to the "plaintiff. This was a ratification. The subsequent adoption was equivalent to a prior authority.

The plaintiff must be presumed to have been selected by the defendants as their agent for his skill, discretion, and the confidence consequently reposed in him by his principals. He had been their clerk and partner in New York, and their correspondent in Paris, where he resided. He was familiar with the French language, and had access and intercourse with prominent public and military men in France. Mr. Eeynolds was not versed in the French language, and *116could not speak it, but was familiar with the quality and quantity of goods which the defendants had, or could procure in Hew York, for sale.

The plaintiff was not in a position to delegate his authority to Reynolds, or anybody else, without express power conferred by his principals. His relation to them involved personal trust and confidence, and largely called for discretion and judgment.

It is not claimed that the goods sold, as stated in the fourth cause of action, are mentioned in the letter of July 9, 1870. The claim is for a commission of five per cent, on the sale of the goods. The defense here is that the sale of these arms was not the result of any act of the plaintiff, but that they were sold by the defendants to the French consul in Hew York. The referee has found for the plaintiff upon the ground that he, as broker, was authorized to sell the goods to the French government; that he had made such offer and it was distinctly commxinicated to the defendants, and that they adopted the offer to sell. It is true he did not himself procure any agreement to be made. He had procured and exhibited the samples, without which the French commission of armament would not have known anything of the arms. He brought the buyer and the seller together, gave notice of the price, and put the government in the way of treating with the defendants. I think the case is brought within the rule well settled, and the finding of the learned referee should be sustained.

The second cause of action was found for the defendants. The referee was of the opinion that the defendants had authorized the plaintiff to sell only for cash in Hew York, and that the plaintiff contracted to sell these goods, the whole amount to be paid in France. He came to the conclusion that the defendants did not ratify in this case what he found to be a departure from their instructions. Besides, from an examination *117of all the testimony, I am of the opinion that there is a conflict whether the plaintiff or the defendants themselves effected the sale, and the decision of the referee on this branch of the case should stand.

The case is unusually voluminous, and a great many exceptions were taken during the progress of the trial, to the referee’s rulings in receiving and rejecting testimony. It is not necessary to examine the evidence and exceptions in detail. Much of the evidence was irrelevant, and I haye been unable to discover any valid exception. Nearly one hundred propositions of fact, and about one quarter of the number in law, were submitted for settlement. These chiefly consisted of requests to find evidence and not facts, and the referee had mostly decided by his report, those which the party had the right to require him to pass upon. I am of the opinion that there is ample evidence in the case, independent of the objections and exceptions taken,, to support the judgment, and the findings and conclusions upon which it rests.

The judgment entered on the report of the referee must be affirmed.

—By letter, dated July 9, 1870, the defendants, constituting the firm of Schuyler, Hartley & Graham, of the city of New York, employed the plaintiff, a commission merchant, in Paris, France, to sell for them in France certain arms and military goods, and in consideration that he should do so, the defendants in said letter, as is claimed by plaintiff, agreed to pay him as compensation for his services in ' selling the same or any part thereof, the difference between certain prices therein stated for such arms and military goods, and the price which should be obtained upon the sale thereof, and they also offered to sell to the plaintiff at the same prices any of the said goods. All sales were to be paid for in the city of New York.

*101On July 19, 1870, war was declared between France and Prussia, and on July 29, 1870, the firm of which plaintiff was a member, replied to defendants’ letter of July 9, which had been written to plaintiff individually, to the effect that they could do nothing without samples, and that even with samples they hardly knew what could be done, as the war department had written that it was fully supplied.

On August 19, 1870, the defendants determined to send their confidential clerk, Mr. Reynolds, to France, with full power to act for them within certain instructions, which will presently be noticed, as their agent in the sale of goods, and on August 20, Reynolds sailed, taking with him some samples. Others were subsequently sent subject to his order. His instructions were to obtain prices, payable in New York, which were considerably higher than those which had been named to the plaintiff. In all other respects he seems to have been intrusted with full discretionary powers. He also bore a letter to plaintiff’s firm in which the defendants introduced him as the representative of their firm, and in which they requested plaintiff’s firm to co-operate with him.

Reynolds arrived in Paris on September 1, and on the following day he called on the plaintiff and handed him his letter of introduction. During the voyage of Reynolds some communications had passed between plaintiff and defendants, which, however, in the view hereinafter taken, are not of sufficient importance to be referred to with particularity.

On September 2, 1870, the day after the first interview with Reynolds, plaintiff wrote to the defendants that up to that time he had not accomplished any sales, that all was rocking in Paris, but that the financial bottom was all right, though the then government was about ended.

On September 4, there was a revolution in Paris, *102which resulted, among other things, in the establishment, on September 8 or 9, of a commission of armament with authority to deal with private parties for the purchase of arms.

On September 12, defendants’ samples reached Paris, and on the following day May and Reynolds went together to the commission of armament to offer defendants’ goods. On their way there May proposed some changes in the prices of, some of the goods, and as these changes did not encroach upon the limits of Reynolds’ instructions, the latter assented that they might be made.

In the course of the negotiation which then ensued, the commissioners of armament expressed their willingness to take a large portion of the goods offered, but declined to pay until arrival; and as Reynolds was not authorized to sell, except for cash on shipment, the negotiation was suspended.

On the same evening May ascertained that four-fifths of the price which the commissioners of armament were willing to pay, would cover defendants’ interest in the sale, and thereupon he suggested to Reynolds, by way of getting over the difficulty, to propose to the commission that four-fifths be paid in Hew York on shipment, and the balance in France, on. arrival of the goods. May also agreed that in such case he would take his compensation out of the payment to be made in France. Reynolds agreed to the suggéstion. These terms were accordingly offered to, and finally accepted by the commission.

This transaction, together with further efforts made by May subsequently, during the siege of Paris, led to certain sales for "which the defendants received the whole of the proceeds. For the sales stated in the first, third, and fourth causes of action set up in the complaint, the referee found that the plaintiff is entitled to compensation.

*103Up to this point there is no conflict of evidence, and plaintiff s right to compensation is not seriously questioned. But as to the amount of compensation to which he is entitled upon the sales stated in the first and third cause of action, there is a decided conflict.

Reynolds testified that at his first interview with May he showed May the memorandum of prices below which he was not authorized to sell; that May compared these prices with those of the July letter, and found that they were higher, but that he made no objection to the increase, and no claim to the July prices, and that if he had, he (Reynolds) would not have employed him.

Reynolds further testified that on several other occasions, between the first interview with May and their joint visit to the commission of armament, he distinctly informed May that under all circumstances the goods would have to net in Yew York the increased prices contained on his (Reynolds’) memorandum, and that May was satisfied with it.

And he also testified that, after a commission of five per cent, on his memorandum prices had been agreed upon, May, on the way to the commission of armament, proposed to ask in gold such of the memorandum prices as were in the currency of the United States, and that the difference should be allowed to him in addition to the five per cent., to which Reynolds assented.

May, on the other hand, says that at the first interview with Reynolds, as well as afterwards, he claimed the benefit of the July prices, and that he never agreed to take any different rate of compensation.

If the case rested here, and the proof showed that in the face of this claim made by May, Reynolds, without objection, accepted May’s services, the assent of Reynolds to May’s claim might be inferred, and if he had authority to bind defendants by such assent, *104and thereupon the case presented simply a conflict of testimony, the fact as found by the referee could not be disturbed.

But the case does not rest here; nor does it present simply a conflict of testimony. The plaintiff, by his own testimony, showed that Reynolds never assented, but that, in reply to plaintiff’s claim, he always said that the plaintiff had to fight this out with Schuyler, Hartley & Grraham. On giving his version of the conversation had with Reynolds, immediately before their joint visit to the commission of armament, the plaintiff testified as follows:

Q. Did Mr. Reynolds then, or subsequently,—and if later state exactly at what stage of the proceedings —say anything to you, or did anything take place with reference to an effort on his part to increase the prices of the letter of July 9, 1870 ?

A. I have a list of prices in the handwriting of Mr. Reynolds, found among his papers, when I returned to Paris in the Spring of 1871, which, I think, he made that very day—the 13th of September.

Q. State what took place between Mr. Reynolds and yourself, with reference to those prices, and when it was, with reference to the commencement of your negotiations ?

A. He said, “We are going to show these samples now, and here are the prices, from which I will allow your concern a commission of five per cent., and all or any advance that you may obtain over those prices shall be for yourself.”

Q. Did he at that time show you a statement, or list of prices ?

A. He did ; and I said that I should not accept anything of that kind, that I worked by the letter of July 9, and he made use of the expression, “You will have to fight that letter with Messrs. Schuyler, Hartley ■& Grraham; these are the prices that I name.”

*105Other similar admissions are in evidence.

Upon plaintiff’s own showing, therefore, it is difficult to perceive how the report of the referee can be sustained as to the first and third causes of action alleged in the complaint.

Assuming plaintiff’s construction of the letter of July 9 to be the correct one, the proposition therein contained and plaintiff’s acceptance thereof, constituted a special contract, and unless plaintiff actually effected a sale or offered to buy according to the terms of it, he can maintain no action upon it against the defendants. And no time being specified therein, the defendants, it seems to me, were at liberty to vary their terms or to revoke and terminate the contract at any time before any such sale was actually effected or offer made. Whatever authority was conferred, was one not coupled with an interest in the goods themselves. It therefore remained revocable. The interest contemplated by the rule making an agency coupled with an interest irrevocable, must be one in the subject over which the power is to be exercised, and the power of revocation always includes the power to modify.

That Reynolds, even if he did not revoke, did essentially modify the contract originally entered into between the parties, at least so far as the same could be done against plaintiff’s protest, and that for that purpose he possessed all the power and authority which the defendants themselves could have exercised if personally present, is not controverted, and there being no pretense on the part of the plaintiff that he subsequently came to an agreement with the defendants themselves concerning the point in dispute, it clearly appears from his own showing, that in point of fact there was a failure to agree upon a new rate of compensation. As to the extent of Reynolds’ authority I will add, that in his brief the learned counsel *106for the plaintiff expressly concedes that there was no limitation of it in defendants’ letter accrediting him to the plaintiff.

The real question involved in the present appeal, therefore, is, whether the defendants immediately preceding the joint visit of the plaintiff and Reynolds to the commission of armament, remained at liberty to take back their original proposition and to insist upon an increase of prices. If they had the legal right to make this change, the referee erred in giving to plaintiff the benefit of the July prices, though, as between the plaintiff and Reynolds, he may have been justified in disbelieving Reynolds. And whether they were free to do so, depends upon the further question whether up to that time plaintiff had effected a sale or offered to buy according to the terms of the letter of July 9.

It is quite clear that he had done neither.

Leaving out of view tfie change that occurred by revolution in the French government, as a fact rather weakening than strengthening plaintiff’s case, the most that can be said of plaintiff’s efforts up to the time now under consideration is, that by them he had put himself into communication with a party desirous of purchasing in a certain contingency. But that was not enough. That the French government might eventually desire to buy some of the goods, was a matter clearly contemplated by the defendants before they wrote the letter of July 9. The existence and address of this possible purchaser was matter equally well known to both parties. To earn the benefit of the special contract upon which plaintiff relies, it was incumbent upon him to complete a bargain according to the terms of it.

Thus, in McGavock v. Woodlief (20 How. U. S. 221), it was held : “As the terms of sale were explicit, the proposal to fulfill should have been equally so. *107Nothing should have been left to conjecture or speculation. There should have been as much certainty on one side of the contract as upon the other. Certainty in the offer to fulfill is as important to the vendor as certainty in the terms of the sale to the vendee, and equally necessary before the vendqr can be put in fault.

“The broker must complete the sale; that is, he must find a purchaser in a situation and ready and willing to complete the purchase on the terms agreed on, before he is entitled to his commissions.

“ Then he will be entitled -to them, though the vendor refuse to go on and perfect the sale.”

In short, when the right to compensation depends upon a special contract, plaintiff must perform the undertaking assumed by him, and no matter what the terms and conditions may be, upon which the right to compensation depends, they must be performed as a condition precedent to a right of action for the recovery of the specific compensation (Fraser v. Wyckoff, 63 N. Y. 445; Jacobs v. Kolff, 2 Hilt. 133; Gregory v. Mack, 3 Hill, 380).

It is only in cases where the broker is employed generally to find a purchaser, that it is sufficient to entitle him to compensation, that a sale is effected through his agency as its procuring cause. In such a case, his agency may consist, simply, in bringing the parties together, and leaving them to make their own bargain. Yet, if a sale actually results in consequence thereof, he is entitled to recover, and it then matters little whether the compensation for the service actually rendered has been fixed by agreement, or is left to depend upon a custom.

But the case at bar does not fall within that class of cases. It is a case of special contract which plaintiff had not performed, when defendants refused to be bound by it any longer. It was, therefore, competent *108for them to prescribe new conditions, upon which they would continue bound, and upon such new conditions being made known to plaintiff, he - had his option to assent or to withdraw. Not having withdrawn, whatever services were subsequently rendered by him must be deemed to hane been rendered as if no agreement for compensation, except such as the law implies, had been made. As the case stands, his protest is unavailing in the absence of proof that it was heeded by the defendants, and that it led to a hew promise or agreement on their part, to pay the compensation originally named. It is not enough that he has rendered valuable services to the defendants. For these he may be entitled to a reasonable reward. But before he can recover the specific compensation sued for, it must appear, that before the change in the prices was communicated to him, he had done the very thing for which the reward that he demands was promised. True, strict performance could not be insisted upon, if it appeared that plaintiff, at the time in question, had substantially performed, and that the defendants had waived or prevented full performance. But the question of excuse for non-performance does not arise in this case. «

The referee therefore erred in computing plaintiff’s compensation claimed under the first and third causes of action alleged in the complaint upon the basis of defendants’ proposition contained in the letter of July 9, and in adjusting the accounts between the parties upon such erroneous computation ; and as such error necessitates a reversal of the whole judgment and the granting of a new trial, the point presented by plaintiffs’ appeal in consequence of the refusal of the referee to allow anything on account of the second cause of action alleged in the complaint does not require further consideration at present. Plaintiff’s claim in that respect will have to be examined again *109upon the new trial, upon the evidence which may then be produced, and determined according to the rules of law called for by the facts as they may then be made to appear.

In conclusion it may be well to say a few words yet concerning the settlement made between the defendants and the Remingtons.- This, it is true, contained an admission by the defendants that the prices which they were entitled to receive, were only those contained in the letter of July 9. But such admission was not absolute proof of the fact, and the plaintiff himself has proved the contrary, as hereinbefore stated. On this state of facts the inference is that the Remingtons were wronged, and that they are entitled to recover the difference according to the proof in this case. But the plaintiff has no right to hold on to that difference.

The judgment should be reversed, the order of reference vacated, and a new trial ordered, with costs to defendants to abide the event.

Sedgwick, J., concurred.