Court Opinion

ID: 9637277
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:02:16.364277+00
Date Added: 2024-06-11T18:09:55.023791
License: Public Domain

EVANS, Circuit Judge
(dissenting).
I find myself forced to dissent because influenced by certain facts which stand out in such bold relief as to make it impossible for me to ignore them.
Briefly stated, plaintiff, a salesman for defendant, a manufacturer of tools, found himself called to Washington at the beginning of the war to become a Government Dollar-A-Year mail, a position he accepted reluctantly.
He was a $5,000.00 a year man — a good salesman, with an established territory. He had a plus commission clause in his salary contract. He became a Dollar-A-Year Government employee and his compensation through commissions from defendant jumped from $5,000 to $85,000 a year— largely, if not entirely, through sales by *905defendant to the Government or to war industries whose tool purchases were paid for or guaranteed by the U. S. Government.
Now, just what a Dollar-A-Year Government job means is not entirely clear — ■ at least to me. I shall assume that the old rule that one can not serve two masters who are dealing at arms’ length with one another, applies, unless, of course, it is shown that his double employment was known to and acquiesced in by both parties. The question naturally arises: Who did plaintiff represent when it came to recommending for purchase tools to the Government such as defendant made?
I can not believe that any rule of law would be a safe or sound one which would permit a Dollar-A-Year man to represent the Government and at the same time represent a private company which would pay him a commission for the sale of its goods to said Government. It would be against public policy to permit of such an arrangement.
And it would be the same whether the goods were sold to the Government or to a war industry working for the Government for which the Government is guaranteeing purchase payments. It is the position the Dollar- A-Year man finds himself in, which provides the basis for the rule we must invoke and apply. It may seem like a harsh rule in some cases. Doubtless there are cases where it is harsh. Yet it is the only safe rule to apply, to hold that the Dollar-A-Year man, like any other agent or employee, can not profit by his position, through sales made to the Government, or its agents, upon which he receives a commission.
Now, the trouble element in this case is not with the rule, but with its application to the facts disclosed. Both plaintiff and defendant say that plaintiff never had any occasion as a Dollar-A-Year man to influence the purchase of defendant-made tools by the Government. He was an expert on such tools. That is why he was chosen. Both defendant and plaintiff belittle the inquiry as to what were his duties. It seems to me there was an avoidance of inquiry rather than a real effort to ascertain what he did.
I quote briefly from the record.
“Q. You had a desk there with them, didn’t you, in the Army and Navy Munitions Board?
“A. After I was there for several months, I had a desk in one of the offices; yes.
“Q. And did they consult you about where these machine tools would be available?
“A. Sometimes they would, yes.
“Q. Then, what was your office with the War Production Board?
“A. I didn’t have an office in the War Production Board.
“Q. Well, I mean what was your job with the War Production Board?
“A. Technical adviser, was the title.
“Q. What were your duties with the War Production Board?
“A. To check second-hand machines, to see if they would be suitable or capable of manufacturing critical parts that the. priority division were anxious to get.
“Q. Now, the Army and Navy Muni-' tions Board recommended to the Defense Plant Corporation contracts for machine tools, did it not?
*****
“A. Yes.
“Mr. Jeffs: Q. And the War Production Board also made recommendations to the Defense Plant Corporation as to the purchase of machines?
“A. Yes.
“Q. Did you have anything to do with the recommendations for the purchases of machines ?
“A. No.
“Q. Pardon me; your recommendations, you said, were made by the Army and Navy Munitions Board, and the War Production Board?
“A. I had nothing to do with them individually.
“Q. And did you have anything at all to do, ever, with the purchasing of the product of companies like the defendant company by any instrumentality or agency of the Government, or the Government itself ?
“A. At no time did I have anything to do with it.”
Defendant’s witness testified:
“I told him that while he was in the employ of the Government he would have to be particularly careful and not to do anything that would have any bearing on the New Britain Machine Company; that he could not do anything that would in*906fluence a customer to buy machines of the New Britain Machine Company; that he could not do anything to influence, through his position with the Army and Navy Munitions Board, the Army and Navy Munitions Board recommending pool orders for our machines; * * *
“A. I told him that his duties with regard to the Ohio territory could not remain the same. He eould not perform his duties, the required duties in the Ohio territory, while he was on the job at Washington; it would be just impossible to do it.
“I further told him at that time he was in no way to solicit business for the New Britain Machine' Company while he was in Washington on that job; further, that he was to do nothing while on that job which would smack of favor to the New Britain Machine Company. * * * He was instructed not to solicit any business for the New Britain Machine Company and he was instructed to not do anything in regard to running, the Ohio territory.”
The following facts stand out: Defendant’s business greatly increased. Its increase in sales was of tools upon whieh plaintiff here claims a commission. Said increased business was in sales made by defendant to the United States Government or to a war industry, the cost of which tools was paid' by or guaranteed by the United States. When these sales were made, plaintiff was the Government 'adviser- on what kind of- tools were suitable and proper. Upon his advice the- Govern-: ment relied and acted, in part at least,
Our question:' Is 'it cdnsistent with sound public policy to permit one situated as was -plaintiff -to receive a commission from a manufacturer on-sales made to the-Government? • I think -it is: not. Even though plaintiff refrained from exercising-, influence in the sale, even though he made aij heroic effort and perhaps succeeded in. closing his eyes to the effect pf his selection of tools, on the sales of defendant, the commission contract should not. be- permitted. Its enforcement -must be denied.
To hold otherwise would-. be. to , reward efforts to swell the war costs and'pass.them, on to the Government. Mqreover, I think the rule which prevents one from.accepting pay from two masters should be invoked and applied most strictly and without restriction when it comes to dealings wherein the Government is involved— that is, when the Government must foot the bills upon which, as in this case, an excessive profit is made.
No exception to the rule can be safely invoked which permits the plaintiff, a Dollar-A-Year man, to receive a commission from the manufacturer of goods where he had .anything to do with the choice, or with recommending the make or kind of goods sold to the Government. His commission made it impossible for him to act neutrally in the matter. In fact, it bars him from acting at all. In fact, I can see no justification for the Dollar-A-Year Government employees. Nor can I see why the defendant sought employment for its salesman, or why the salesman accepted the employment, save as they expected to profit thereby. The proper way in my opinion was for the Government to draft its experts like it did its soldiers and sailors, pay them a salary, prohibit commission contracts on sales made to the Government.
There is another point which is somewhat novel.
Defendant testified that the written contract was modified by a parol agreement which limited plaintiff’s -compensation to $25,000 for one year and to $20,000 for the second year. This testimony was disputed by the plaintiff. The jury found for the plaintiff, and we would, ordinarily hold that this closed the dispute so far as this fact, issue is concerned. But the jury, reached' its verdict on a charge which dealt specifically with this issue; and more particularly with the consideration for such modified, agreement.
In its instructions on this phase of the-case, the court said:
“The jury are instructed that even if you find from the evidence that the conversation -alleged to have taken place on January- 8, 1942, .between the -plaintiff and 'the witness Steinle. was in fact had, the same will not be binding upon the plaintiff unless ■* * * the plaintiff received a valuable consideration from the defendant which induced him to make the alleged oral agreement, as a -naked promise is void on general principles of law. The defendant on January 8, 1942, had no legal right to demand that plaintiff release it. from its obligation under the written contract, Exhibit A, nor to compel plaintiff to accept a less sum by’ way of compensation than that provided for in said Exhibit ^ * ❖ >f
The charge was clear and explicit. Was it’ correct as 'to the necessity of a valid consideration to support the modified agreement? Here again a somewhat new ques*907tion arises out of the unusual war status. Perhaps it could be said it also involves ethics in time of war.
Of course a consideration is necessary to make a valid contract or to modify an existing valid contract. Unless there is such consideration, the modification is not effective.
What then, is a valid consideration in war times? Specifically, is patriotic action a sufficient consideration? May A, who has a contract with B, change the contract with no consideration therefor other than a patriotic desire to win the war? To be still more specific, may not plaintiff who had a contract calling for a commission on sales of articles essential to carrying on the war, agree with his employer to accept a lesser commission or forego the commission feature altogether, because he wants to see his country win the war or desires to serve his country as a Dollar-A-Year employee?,
I think this is a sufficient consideration. Moreover, I think elimination of the commission feature was the only course which plaintiff could pursue and honorably discharge a duty as a Government Dollar-A-Year man. He simply had to get away from the commission feature of his contract.
Under the charge as given the jury could not have found a valid modification of the original agreement because of the charge on the lack of a valid consideration.