Gallaudet v. Kellogg
Gallaudet v. Kellogg
Opinion of the Court
(dissenting.)—On the 27th of August, 1886, the defendants, under the name of the Union Bridge Company, secured .the contract for the construction of the bridge across the Hudson River at Poughkeepsie, for which they were to be paid two million dollars. The contract has been performed by the defendants and they have been paid the stipulated compensation. 'This action is based upon the allegation that the plaintiffs were instrumental in procuring the contract for the defendants and for which services the defendants agreed to pay the plaintiffs the sum -of $100,000. The complaint avers that the plaintiffs and defendants entered into an agreement, by the terms of which the plaintiffs promised to assist, further and aid the defendants in procuring the contract for the construction of the bridge, and the defendants, in consideration thereof, promised to pay the plaintiffs for such services, in the event of procuring the contract, the sum above mentioned. That in consequence of the services, aid and influence of the plaintiffs to that end, the contract was awarded to the defendants, but that they have not paid to the plaintiffs the compensation for the services promised and neglect and refuse to pay the same. At the close of all the evidence the trial judge
There is no dispute as to the fact that for several months prior to August, 1886, active negotiations were on foot and pending for consummating two contracts in reference to the construction of this bridge. The first and most important one, and that upon which the other depended, was the contract between the plaintiffs and the Manhattan Bridge Building Company for marketing the bonds of the Poughkeepsie Bridge Company, which were to be or had been issued, to the amount of five million dollars, and from the sale of which bonds, alone, the money was to be procured for the expense of the enterprise. This contract was completed on the same day and at the same place as the contract by the defendants for performing the work and furnishing the materials. The plaintiffs by this contract undertook to place the bonds and furnish from the proceeds the funds by means of which the contractors were to be paid. They were also to make advances to the contractors, when money was not on hand from sales of bonds, but of their own funds. For these services and advances the plaintiffs, were to be paid commissions and interest in cash and in stock of the bridge company to a large amount, but the Manhattan Bridge Building Company were given the power to terminate this contract on ten days notice, and this right was actually exercised after the plaintiff had expended several thousand dollars in advertising and preparing to market the bonds, and before he had sold to exceed $300,000 of them.
But during all the negotiations it seems to have been assumed by all the parties that the plaintiff was to have this contract, and that as a banker and broker he was the person to whom all the parties looked to raise the money out of which the contractors, whoever they might be, were to be paid and the bridge built It is obvious that the position which the plaintiff occupied in this respect gave him great power and influence in all matters relating to the enterprise, and it would seem quite reasonable to suppose that he could be, if he so desired, of great assistance to the defendants in procuring the contract for construction and, from the plaintiff’s version of the transaction, the defendants were willing to pay for this assistance and for the influence which the plaintiffs were in a position to exercise, with respect to the disposition of the contract for building. There is evidence in the case tending
About two hours before the two contracts above mentioned were executed, and while they were awaiting the signature of the parties in the office of the attorney by whom they were drawn, one of the defendants came to the plaintiffs’ office by request for the purpose of giving some written evidence to the plaintiffs of the agreement, under which the defendants were to compensate the plaintiffs for their services and influence in procuring the construction contract. This agreement, though partially performed, if the testimony of the plaintiff is to be accepted, still rested in words and was not evidenced by any writing whatever. The plaintiffs informed the defendants that they wanted some written memorandum to show what the actual agreement was. When Mr. Clarice, of the defendants’ firm, called at the plaintiffs’ office both he and Mr. Gfallaudet were in a hurry to meet their appointment to attend at the office of the attorney where the construction contract and that for marketing the bonds, both of which were then drawn, were to be executed. The former on coming into the office called for writing materials and immediately drew and signed the following paper :
“ The Union Bridge Company agrees to pay P. W. Gfallaudet A Co. a commission of five (5) per cent up to the amount of one hundred thousand dollars ($100,000) to be deductedpro rata from each cash payment to the Union Bridge Co. from the money received from sale of bonds of the Poughkeepsie Bridge Co. for assisting, furthering and aiding said Union Bridge Company in the financial arrangement necessary to complete said bridge within the specified time of contract.
“ Kew York, August 27, 1886.
“ Union Bridge Co.,
“ Witness: W. B. Cox.” “ per Thomas C. Clarke.
St. Bep., Yol. XLV. 94
The defendants claim that this writing correctly states the terms of the only contract they had with the plaintiffs for the payment of a commission up to one hundred thousand dollars, and upon this point the defendants succeeded at the trial. The disposition of the case in this court must depend entirely upon the effect which, under all the circumstances disclosed, should be given to this paper. The general rule invoked by the learned counsel for the defendants, that all oral negotiations are merged in a subsequently executed written contract concerning the matters which were the subject of the negotiations, cannot be questioned. But, here a valid contract without writing had been made, according to the plaintiff’s testimony, months before, and existed prior to and independent of the execution of the paper. Not only had the agreement been made but it had been partially, if not substantially performed, if the plaintiffs’ claim is sustained as matter of fact. The formal execution of the written contract for the construction of the bridge was all that remained to be done before-the commissions were earned or payable, but the service for which the commission was to be paid had been entered upon and performed before. In such a case, where parties enter into a valid oral contract, and it has been wholly or partially performed,, mutual rights and obligations spring up that are not merged in or obliterated by a subsequent writing made and signed, as in this case, by one of the parties, for the purpose of furnishing written evidence of the terms of the previously existing oral agreement, unless the writing is accepted by both parties as embodying what before existed only in verbal promises, and was intended to take the place of the verbal agreement The rule that all paroi negotiations are merged in the writing does not apply to a case where a previously existing verbal contract has been acted upon and one of the parties subsequently signs and delivers a paper purporting to embody what before rested in paroi. Beach v. Raritan & Del. Bay R. R. Co., 37 N. Y., 462-3 ; Bostwick v. B. & O. R. R. Co., 45 id., 712; Guillaume v. Gen. Trans. Co., 100 id., 491; Brigg v. Hilton, 99 id., 517; Swift v. P. Mail S. S. Co., 106 id., 219; 8 St. Rep., 602; Routledge v. Worthington Co., 119 N. Y., 592 30 St. Rep., 195.
If the plaintiffs’ testimony was accepted by the jury they had a verbal contract which was perfectly valid, and which had been
The learned trial judge held as matter of law that the plaintiffs accepted the instrument as a complete substitute for the previously existing verbal understanding. The defendants denied that any verbal agreement was ever made to pay the plaintiffs anything for aiding in procuring the contract, and the proof on their side was to the effect that the paper contained the whole contract between the parties and was received and accepted by the plaintiffs as such. It may be that the great preponderance of proof on this and on the other questions in the case is on the side of the defense. The only point that we are now concerned with is whether there is any evidence on the part of the plaintiffs tending to show that the paper was not so aeeepted, and we think there is.
The judgment should be reversed and a new trial granted, costs to abide the event
Judgment affirmed, with costs, on opinion of general term.
Earl, Ch. J., Andrews, Finch and Gray, JJ., concur. 0!Brien reads for reversal; Peokham and Maynard, JJ., concur.
Reference
- Full Case Name
- Peter W. Gallaudet, App'lts v. Charles W. Kellogg, Resp'ts
- Status
- Published