Court Opinion

ID: 6639796
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:44:32.850323+00
Date Added: 2024-06-11T15:59:11.859239
License: Public Domain

WOODS, Circuit Judge
(dissenting). I dissent, for the reason that in my conception the majority opinion attributes to the Director General an implied contract which he expressly refused to make. The importance of the case seems to justify a full statement of the facts and the law involved.
On July 1, 1917, the plaintiff, Martin, contracted with the Richmond, Fredericks-burg & Potomac Railroad Company to supply for three years all its fuel coal, buying it at his own expense and on his own credit, and delivering it to the railroad at cost and a commission of 5 per cent. He furnished coal under the contract to the entire satisfaction and advantage of the railroad company until December 28, 1917, when under the act of Congress the railroad was taken over by the President through the Director General. Thereafter, until June 4/1918, Martin continued to deliver all fuel coal for the railroad company under orders of the Director General. Deliveries and payments were made under the terms of the contract. On June 4, 1918, John Barton Payne, counsel for the Director General, wrote to plaintiff concerning .the contract:
“I am directed by the Director General to advise you that the United States, being now in possession, operation and control of the Richmond, Fredericksburg & Potomac Railroad Company, declines to recognize the validity of said contract as binding on the United States, and will therefore decline ,to r'eeeive any coal pursuant to said contract from this date, unless you desire to deliver the coal at the regular price without payment of the 5 per cent, to you provided for therein. You may regard this as definite notification that the contract, so far as the United States is concerned, is not binding.”
On June 5, 1918, White, president of the Richmond, Fredericksburg & Potomac Railroad Company, telegraphed plaintiff:
“Have just received orders from Judge John Barton Payne, general counsel for the Director General of Railroads, that the contract made between you and these companies for fuel purchased will not be recognized by the United States, the government having taken over these railroads together with their outstanding contracts, that unless you will deliver coal at the regular price without payment of five per cent, commission we shall make other arrangements to secure coal. Please wire quick if you are willing to agree to this proposition transmitted by Judge Payne.”
By telegram dated June 5th plaintiff answered :
“Wire received. Am surprised at request of Judge Payne as my contract was made in good faith before any fuel administration orders and before government took over railroads. Have gone to great expense to enable me to perform this contract and should certainly have an opportunity to present my side of the matter before such summary action is taken. In the meantime however will continue to purchase coal for you as suggested in your telegram without prejudice to my rights under contract.”
, The Director General several times reiterated his repudiation of the contract of Martin with the railroad company. After June *314, 1918, in accordance with his agreement with Martin, the Director General continued to receive coal from Martin and paid therefor only the cost price and expenses, without the 5 per cent, commission or other compensation, until January 1, 1919. On that day Martin agreed with the Director General to deliver to the railroad its fuel eoal supply until the end of the federal control, receiving therefor the cost price of the coal and expenses of purchasing and $200 a month compensation. In making this agreement, however, Martin again expressly reserved his rights under the original contract. The agreement with the Director General provided that, if Martin should establish his right to the 5 per cent, commission according to the contract, the amount found to be due him thereunder should be credited with the expenses and the $200 per month paid him under the new arrangement. When the government released control on March 1, 1920, the railroad company immediately resumed with Martin the relations established by the contract of July 1, 1917, and paid him commissions accordingly for four months, the remainder of the contract period.
The claim of the plaintiff is for 5 per cent, commission for services rendered in purchasing coal from June 5, 1918, when the Director General gave notice of his refusal to adopt the contract of July 1, 1917, to March 1, 1920, when the railroad was returned to its owner, less the sums paid him for expenses and as compensation. Evidently, the railroad company is not liable for services rendered by Martin after the government frustrated the contract by taking over the property. Missouri Pacific Railroad Co. v. Ault, 256 U. S. 554, 41 8. Ct. 593, 65 L. Ed. 1087. It is equally clear that the Director General, taking possession under the federal statute, was not bound to carry out the contract of the railroad company with Martin, and that no action for its breach would lie against him, unless by his action he adopted it. Omnia Commercial Co., Inc., v. United States, 261 U. S. 502, 43 S. Ct. 437, 67 L. Ed. 773. He had, however, the option of adopting the contract with Martin under the provisions of subdivision (h) of section 4 of the contract between himself and the railroad company.
The letters and telegrams show beyond all doubt (1) explicit refusal of the Director General to continue the eontraet with Martin; .(2) refusal of the Director General to accept the coal in the future .unless Martin would agree to deliver it at the regular price without commission; (3) notice to Martin from the Director General that, in case of Martin’s refusal to deliver the coal at the regular price, the Director General would get the coal from another source; (4) Martin’s agreement to continue to deliver the coal on the terms named by the Director General — that is, without compensation above the regular price; (5) the reservation by Martin, acceded to by the Director General, that if it should turn out that the contract with the railroad company to pay 5 per cent, commission was binding on the Director General, then, and not otherwise, Martin should receive 5 per cent, commission above the regular price.
It turned out that the Director General was not bound by the contract with the railroad company. Therefore the condition upon which the parties agreed that Martin should receive compensation above the regular price failed, and he has no right of action against the Director General for compensation. By the majority opinion Martin is relieved of the condition and risk which he took by his express agreement with the Director General. His explicit contract to assume the risk and accept the condition, as it seems to me, is-set aside and annulled, and an implied contract to pay the value of his service is attributed to the Director General. I cannot agree that the' judicial power extends to substitution of an implied contract to pay for services the opposite of the contract actually made, fully understood and acted upon by both parties.
The authorities cited in the majority opinion do not seem to me to support its conclusion. There was one- issue of fact in the ease. Did the Director General so unreasonably delay repudiation of the contract that ho should be held to have adopted it? This issue was decided by the District Judge against the plaintiff on facts sufficient to support an answer either way. Hence the decision of the District Judge on this point was final.
I regret the additional labor imposed on the other members of the court and the counsel in the cause, due to my failure in writing the former opinion to observe that the case was tried by the District Judge without a jury.
I think the judgment should be affirmed.