Noble v. Mead-Morrison Manufacturing Co.

129 N.E. 669, 237 Mass. 5, 1921 Mass. LEXIS 881

• Court: Massachusetts Supreme Judicial Court
• Decided: January 5, 1921
• Status: Published

Opinion

Rugg, C. J.

This is an action to recover a commission, which the plaintiff alleges to be due under an express oral contract with the defendant to pay him five per cent for his services in connection with its obtaining from the British government a contract to make one hundred thousand six-inch shells at $18 each. Confessedly the defendant under date of September 20, 1915, made such a contract with the British government. The defendant pleaded a general denial and illegality of the contract. It filed specifications of illegality to the effect that the contract contemplated that the plaintiff would exercise “improper influences” — “his supposed personal influence” — upon the agents of foreign governments to induce them to give to the defendant a contract or contracts, and that the natural tendency of the contract was to induce the plaintiff to use improper and personal influences upon agents of foreign governments.

There is no specification of illegality on the ground of maintenance or champerty. See Blaisdell v. Ahern, 144 Mass. 393; Hadlock v. Brooks, 178 Mass. 425.

When the case was reached for trial the defendant filed a motion, supported by affidavits, for postponement on the ground of absence from the country of material witnesses. The plaintiff refused to admit that the witnesses would testify as stated in the affidavits. Rule 25 of the Superior Court (1915). The refusal to grant a postponement presents no question of law. It was for the court to determine whether there had been due diligence in trying to secure the attendance of the witnesses or to procure their depositions or whether for any reason justice required a postponement. To this end the rule of court permits the introduction of evidence. No evidence aside from the affidavits appears in the record, although it is recited that there was a hearing. Ordinarily the granting of a continuance is for the presiding judge alone. Pickering v. Reynolds, 111 Mass. 83. Kittredge v. Russell, 114 Mass. 67. Sullings v. Ginn, 131 Mass. 479. Soper v. Manning, 158 Mass. 381. There is nothing in the case at bar to indicate abuse of discretion or arbitrariness in requiring the trial to go on.

The defendant’s motion for a directed verdict, filed at the close of the evidence, was denied. In answer to six questions the jury found in substance (1) that the contract between the defendant and the British government was obtained as a result of the services rendered by the plaintiff and those associated with him, (2) that such services were effective in enabling the defendant to obtain that contract, (3) that such services were rendered at the ■ request of or with the knowledge and consent of the defendant, (4) that the defendant agreed with the plaintiff to pay a sum equal to five per cent upon the gross amount of the contract to the plaintiff for his services, provided they resulted in its obtaining a munitions contract, (5) that the agreement between the plaintiff and the defendant was not in whole or in part for the exercise of personal influence by the plaintiff upon the agents of the British government authorized to award contracts, (6) that the agreement between the plaintiff and the defendant was for making negotiations as attorney or agent for furnishing information and proper arguments to enable and induce officials of the British government to act for its best interests.

There was evidence tending to show that as early as May, 1915, the plaintiff had a talk with one Martin, the vice-president and general manager of the defendant (whose authority in the premises is not questioned and on the evidence could not well be assailed), concerning the manufacture of munitions by it, during which he said in substance that the defendant was looking for business and ready to make munitions, but he "did not care to enter into any arrangement about it; if anybody brought in any business he would pay for it.” There were subsequent communications between the parties, and on July 30 Martin and one Boutwell met the plaintiff at his office, where after some discussion as to war contracts and a proposed meeting the next day in New York between the plaintiff and a General Pease of the British government, this conversation occurred (according to the testimony of the plaintiff): "I said, ‘I have told Mr. Boutwell that I will not present the name of any concern to General Pease unless I have a definite agreement as to my compensation, because I want no dispute about it afterwards.’ And Martin said, ‘Bout-well says you have got to have five per cent,’ and I said, ‘Yes, that is so.’ He said, ‘Well, that will be satisfactory provided we get an order and .don’t have to pay anybody else.’ ” And the plaintiff then agreed that he would settle with others associated with him and would protect the defendant from their claims. Further conversation at the same interview related in part to the price at which the defendant would manufacture shells, wherein Martin said, “I don’t want you to talk the business end of it at all; I will talk prices myself . . . what I want is to get in touch with some man who can talk for the government and I will do the talking.” Boutwell testified that he told Martin, before going to the plaintiff’s office, that he thought the plaintiff could get some contracts “with a commission of five per cent that Mr. Noble wanted,” and that when the three were together in the plaintiff’s office “this matter of five per cent was brought up, and if I recollect correctly, it was agreed to. . . . Mr. Martin said that I had mentioned that he wanted five per cent to get the business. . . . Well, he [Mr. Noble] said so.” Martin in his testimony denied that such conversation took place, but said that the plaintiff was to represent the defendant as attorney.

There was evidence sufficiently explicit to support a finding that a contract actually was made in substance as testified by the plaintiff. The subsequent conduct and correspondence between the parties, and assertions in letters from Martin to the plaintiff (as to the force of which see Huntress v. Hanley, 195 Mass. 236, Callahan v. Goldman, 216 Mass. 234, Sargent v. Lord, 232 Mass. 585), all were for the consideration of the jury. It cannot be said that as matter of law they overcame the, direct and positive testimony of the plaintiff.

The testimony offered in behalf of the plaintiff was sufficiently certain in its terms to constitute a contract. So far as not precisely expressed in words, it fairly implied that the plaintiff should use rational efforts to the end that the defendant might procure a contract for the manufacture of munitions and that the defendant should pay him, within a reasonable time thereafter, the stated commission. The words used do not specify the sum on which the percentage is to be computed. The several words descriptive of the thing to which the percentage referred were “order,” “contract,” “business.” It fairly is inferable from the context in which these words were used that a commission to be paid by a percentage on “an order” for the manufacture of shells is to be reckoned on the gross price of the order, contract or business. If it had been intended to narrow the subject of percentage to the profit arising from the contract, to the cost of the goods, to the gross price of goods actually manufactured and delivered, or to any other more restricted basis, that thought naturally would have been expressed in apt language. The contract was not vague, uncertain or meaningless. The case at bar is distinguishable from decisions like Cheney Bigelow Wire Works v. Sorrell, 142 Mass. 442, and Marble v. Standard Oil Co. 169 Mass. 553. It was sufficiently definite to warrant recovery. The defendant’s requests for rulings, numbered 7 to 13, were denied rightly. Noble v. Joseph Burnett Co. 208 Mass. 75.

The contract was oral and there was sharply conflicting testimony as to its terms. The ascertainment of the contract as actually made must be left to. the jury. Gassett v. Glazier, 165 Mass. 473,480. Pheniz Nerve Beverage Co. v. Dennis & Lovejoy Wharf & Warehouse Co. 189 Mass. 82.

The instructions of the trial judge w'ere adequate touching the point that, in order that a contract could be found to have been made, the minds of the parties must have come into accord about the subject, and their understanding of its essential terms must have been mutual. The principle is plain. Dzuris v. Pierce, 216 Mass. 132. To say that, in order that there might be a contract, the parties must “get together” and that there must be “some agreement between the parties,” and that the plaintiff must prove “some agreement... on the part of the defendant to pay him,” cannot, under all the circumstances and in the light of the rest of the charge, have left the jury in any rational doubt as to the exact point in issue and the burden of proof resting on the plaintiff. The defendant’s twelfth request for ruling was covered adequately by the charge.

The jury were justified in finding on all the evidence that the plaintiff and his associates were the efficient cause in the procurement by the defendant of its contract with the British government. Summarily stated, there was testimony to the effect that Martin had tried and failed to secure a contract for shells; that he had said he would not pay his fare to New York for that purpose again; that the plaintiff then visited General Pease of the British Army in New York, who was member of an advisory commission and a representative of the British government but without authority to execute contracts; that at this interview the plaintiff presented to General Pease a drawing of the shell which the defendant preferred to make and described the defendant’s facilities for making them; that as a result of that conference another member of that commission immediately visited the defendant’s works in Boston, bearing a letter to Martin and the defendant signed by General Pease, in which he referred to the conference with Mr. Noble and to representations made by one of the plaintiff’s associates to one Thomas, another British representative, as the reason for the inspection; that the report of the examination of the defendant’s plant was favorable. The inspector, called as a witness by the defendant, testified that he made this inspection as a result of Mr. Noble’s conference with General Pease. Immediately after the inspection Martin saw General Pease and was in frequent communication with him and with representatives of J. P. Morgan and Company, the authorized agents of the British government, until September 20, 1915, when the contract for one hundred thousand shells at $18 each was signed. There were other inducing and subsidiary circumstances which if the main facts were found to be as narrated might be regarded as supporting the contention that the real cause of the award of the contract to the defendant was the effort of the plaintiff. Whether the chain of causation leading to that result was the work of the plaintiff both before and after the interview of July 30 when the contract was made according to the plaintiff, or whether that chain did not exist at all or was broken before the result was reached, were questions of fact concerning which the jury reasonably might have taken the view favorable to the plaintiff if they gave credence to his testimony and drew the inferences from other testimony confirmatory of his contentions.

The instructions upon this branch of the case were accurate and sufficient. The jury were told that the plaintiff must prove that he and his associates were “the efficient cause in bringing about the contract, having it come to the defendant.” While this might have been amplified, it was correct in law and cannot be said to be inadequate. The controversy between the parties in this particular was whether the defendant secured the contract through the exertion of Martin or through the efforts of the plaintiff. The words of the charge are plain, easily understood and in common use. It is hardly likely that the jury could have misunderstood the respective rights of the parties and what they must find in order to reach a conclusion in favor of the plaintiff. The words “éfficient cause” often are used in judicial decisions to express the obligation of proof of one who seeks to recover a commission on a sale of property. Woods v. Lowe, 207 Mass. 1. Cohen v. Ames, 205 Mass. 186. The defendant’s requests 8, 9, 10 and 11 rightly were refused either as unsound or not pertinent to the issues.

The most troublesome aspect of the case is whether the contract was illegal as against public policy, in that its necessary tendency was adverse to public welfare and inconsistent with good morals. It is a principle of the common law, indubitable in its soundness and inflexible in its application, that contracts will not be enforced directly or indirectly, but will be stricken down as void, which tend injuriously to affect the public welfare, or which promote the use of personal influence or extraneous pressure upon the conduct of public officials. Activities, not openly and straightforwardly presented as agent or attorney but disguised as disinterested or as founded upon zeal for the public good, cannot be the foundation for a successful action at law although resting upon an express promise of financial reward. A contract respecting public service and public welfare is illegal, which by its express terms, by its inherent tendency, or by the means necessarily or by fair implication to be employed in its execution, requires the performance of acts corrupt in themselves or inclining toward the pollution of public or private honesty and integrity of purpose. Representatives of our own or of friendly nations in the making of contracts in behalf of their sovereign principals should be actuated solely by the best interests of their government and not be subjected either openly or furtively to influences springing from personal selfishness, pressure of friends or of powerful officials, considerations of political or business expediency, social or religious motives, or any other inducements which tend to warp their jhdgment or divert their conduct from the singleness of patriotic sincerity by which alone at all times they ought to be completely dominated. These principles were early declared and have been continuously and unswervingly adhered to by this court. Fuller v. Dame, 18 Pick. 472. Adams v. East Boston Co. 236 Mass. 121. The principle is recognized generally. McMullen v. Hoffman, 174 U. S. 639, 648. Meguire v. Corwine, 101 U. S. 108. Crocker v. United States, 240 U. S. 74. Sage v. Hampe, 235 U. S. 99. Hayward v. Nordberg Manuf. Co. 29 C. C. A. 438, 445, 446; 85 Fed. Rep. 4, 11. Veazey v. Allen, 173 N. Y. 359. In the application of these principles in other jurisdictions there have been statements of the law directed to particular facts then before the court, and conclusions reached, which perhaps may be hard to reconcile. The soundness of the principles is nowhere questioned.

The mere making of a contract concerning goods to be furnished to the government, where the compensation of the salesman is to some extent contingent upon his success, is not invalid. So far as concerns authority, that point is settled in principle in this Commonwealth by Kerr v. American Pneumatic Service Co. 188 Mass. 27. The plaintiff in that case was employed by the defendant to make for it mail contracts with the government on a stipulated salary, to be increased with increase of sales. It was said, page 29, that it could not “be ruled as matter of law that the contract calls for other than legitimate work on the part of the plaintiff. ... If such work only is contemplated, the provision for an increase of salary when the government mail contracts reach a certain amount cannot be said to be one which has a tendency to induce the use of corrupt or improper acts on the part of the agent.” The circumstance that in that case the entire time of the' agent was devoted to the business of his principal cannot be regarded as a determining factor. In Brown v. Winnisimmet Co. 11 Allen, 326, a contract for the chartering of a boat of the defendant at a stipulated price, the plaintiff to recharter at highest obtainable rate and divide the profit with the defendant, although made with the understanding that she was to be rechartered to the United States for war service, was held not to be illegal but valid and enforceable. Although the illegality of the contract was not pleadfed in that case, nevertheless the court took notice of alleged illegality of that nature as it was bound to do. Claflin v. United States Credit System Co. 165 Mass. 501, 503. O’Brien v. Shea, 208 Mass. 528.

In principle the decision in Valdes v. Larrinaga, 233 U. S. 705, is to the same effect. In that case Larrinaga, who had been assistant secretary of a governmental department but had retired from office, agreed to help Valdes to procure a water franchise from the government of Porto Rico, the assistance to be rendered “in the steps to be gone through and in everything in connection with said concession, such as plans, projects, and all what concerns to the technical part,” including “personal or professional services” and to receive as compensation ten per cent of the concession. It was held that the things done pursuant to the contract, such as joining in an application to the Military Governor for a franchise, helping to present it to the Secretary of War and preparing plans and specifications for presentation to the Executive Council of Porto Rico, had “no sinister smack” and that there was nothing to control the decision of the district judge that the contract was not against the policy of the law. We are unable to perceive how a principle can apply to contracts for selling goods to a government different in its essence or in its general statement from that applicable to securing concessions from government. If a percentage contingent on success is valid in the one kind of case it would seem to be equally so in the other. In Oscanyan v. Arms Co. 103 U. S. 261, at pages 275, 276, it was said with reference to furnishing the government with "supplies of any kind: “It is legitimate to lay before the officers authorized to contract, all such information as may apprise them of the character and value of the articles offered, and enable them to act for the best interests of the country. And for such services compensation may be had as for similar services with private parties, either upon a quantum meruit, or, where a sale is effected, by the ordinary brokerage commission.” There are expressions in Tool Co. v. Norris, 2 Wall. 45, repeated in some subsequent decisions, which taken by themselves alone and applied as abstract tests might prevent the plaintiff’s recovery. It is plain from the facts disclosed in Tool Co. v. Norris, 2 Wall. 45, that Norris contracted solely for “concentrating influence at the War Department,” through senators and other persons supposed to possess it, for the purpose of procuring a contract for supplying firearms to the government, and that that was the single object of his exertions. Manifestly that contract was flagitiously illegal, both on its face and in the means naturally, and in truth intended, to be used in its performance. It is not necessary to discuss the question whether some of the sweeping expressions as to agreements for compensation to procure legislation concerning well established claims held against the government, or contracts from the government to furnish its supplies, found in Tool Co. v. Norris, are narrowed by or are inconsistent with later and more guardedly phrased judgments. See Nutt v. Knut, 200 U. S. 12,21, 22, affirming Knut v. Nutt, 83 Miss. 365; Parish v. MacVeagh, 214 U. S. ; McGowan v. Parish, 237 U. S. 285; Capital Trust Co. v. Calhoun, 250 U. S. 208, 217; Oscanyan v. Arms Co. 103 U. S. 261, 275, 276.

It generally has been held that agreements for fees for procuring legislation upon a matter of public or private interest, in respect of which the party has not a well established claim against the government, contingent upon success of the project, have an inevitable tendency to poison the purity of legislation and are invalid. Contracts for lobbying or having a manifest tendency to that end, are universally condemned. Marshall v. Baltimore & Ohio Railroad, 16 How. 314, 334-336. Trist v. Child, 21 Wall. 441. Hazelton v. Sheckells, 202 U. S. 71. It was an agreement of that character which was held invalid in Adams v. East Boston Co. 236 Mass. 121.

The general principle fairly deducible from the decisions is that ordinarily no one factor is decisive in determining whether the contract concerning furnishing supplies to the government is void as contrary to public policy. Contingency of compensation upon success, percentage upon the amount involved in sales directly to the government, and the size of the fee, all are elements entitled to consideration. ' The words “contingent compensation” in connection with a contract may be used either in an obnoxious or in a harmless sense. The tenor of the contract may be such in connection with its setting as to stamp it with invalidity. If it bears any badge of fraud, either covertly or openly, it must be stricken down. The question of the legality of the contract in each case is to be determined by weighing all the elements involved and then deciding whether its inherent tendency is to invite or promote the use of sinister or corrupt means to accomplish the end or to bring influences to bear upon public officials of any other nature" than the single one of genuine advantage to the government. If such is its tendency, it must be pronounced illegal. If that point is open to fair doubt upon all the evidence, its purpose must be left to the jury under appropriate instructions. This seems to us to be the effect of the federal cases to which' reference has been made. It is supported by numerous other adjudications. Lyon v. Mitchell, 36 N. Y. 235. Dunham v. Hastings Pavement Co. 118 App. Div. (N. Y.) 127, affirmed in 189 N. Y. 500. Bush v. Russell, 180 Ala. 590. Kansas City Paper House v. Foley Railway Printing Co. 85 Kans. 678. Winpenny v. French, 18 Ohio St. 469. Bergen v. Frisbie, 125 Cal. 168. Opinion of the Justices, 72 N. H. 601. Saville Brothers Ltd. v. Langman, 79 L. T. Rep. (N. S.) 44. Stanton v. Embrey, 93 U. S. 548. Houlton v. Nichol, 93 Wis. 393. Denison v. Crawford County, 48 Iowa, 211. Workman v. Campbell, 46 Mo. 305. Stroemer v. Van Orsdel, 74 Neb. 132. Beal v. Polhemus, 67 Mich. 130. See Davis v. Commonwealth, 164 Mass. 241.

While the case is close upon this point, it cannot quite be said as matter of law that the plaintiff was not entitled to go to the jury or that the express finding of the jury, to the effect that the services to be rendered by the plaintiff were not to consist in whole or in part of personal influence upon agents of the British government, must be set aside as wholly unsupported by evidence.

The contract here in question plainly made the compensation of the plaintiff contingent upon his success in procuring for the defendant a contract from the British government for the manufacture of shells, and the amount of his compensation was dependent upon the size of the contract. Such a contract between individuals touching a matter, dissociated from government, is not illegal. Stanton v. Embrey, 93 U. S. 548, 556. Ball v. Halsell, 161 U. S. 72, 80. Such contracts are common in ordinary business. The commission to real estate brokers on the sale of land is a familiar illustration. The numerous varieties of brokerage commissions are agreements of this nature, where both the compensation and the amount of it are contingent upon the success of the transaction.

On its face the contract upon which this action is founded did not import the use of illegal means. Its terms are innocent of any taint. The inference is not required that the plaintiff held himself out as possessing or that the defendant thought it was purchasing political or other influence. The conduct of the parties did not necessarily indicate the use of personal or political influence as the means by which the end aimed at by the contract was to be accomplished. While there was some-correspondence with a member of the British Parliament, chiefly if not wholly before the contract here in suit was made, that was directed to the methods employed by the British government of doing business in this country, sought a change in those methods, and was expressly on its face for the benefit of that government. It was all open. The representative capacity of the plaintiff and his associates as acting in behalf of competent manufactures was kept manifest throughout. The general tone of the communications does not convey the intimation of sinister influences. The amount claimed by the plaintiff, while large, is not itself illegal. The percentage was the same as that upheld in Valdes v. Larrinaga, 233 U. S. 705. The record taken as a whole shows that the question whether personal influence and official pressure were a part of the contract could not have been ruled as matter of law. The case upon this point is fully covered by Barry v. Capen, 151 Mass. 99. The jury might properly have found, as they did, that the import of the plaintiff’s agreement was to act as attorney or agent in bringing the defendant to the notice of responsible representatives of the British government and in initiating negotiations in behalf of the defendant looking toward the consummation of a contract. The whole matter rightly was left to the jury under instructions which, while they well might have been more full, cannot be pronounced in view of the facts to have been inappropriate or inadequate. The several requests of the defendant for instructions upon this branch of the case either were fairly covered in the charge or denied rightly.

Numerous exceptions were taken to the admission and exclusion of evidence. Much of that admitted related to work done by the plaintiff and his associates in way of correspondence and negotiations, of which the defendant would not have knowledge but which was competent as bearing upon the work done. The order of its introduction was within the discretion of the trial judge. Evidence as to the value of the services of the plaintiff and his associates rightly was excluded, since the trial of the case was confined by pleadings to the express contract for a specified commission. For the same reason the number of shells actually made by the defendant under the contract was of no consequence. It was not essential as a prerequisite to the admission of evidence of correspondence and conferences with General Pease and Thomas to show their exact authority as representatives of Great Britain. It all constituted a part of the situation of which the defendant was kept advised at his request and desired to take advantage. Without their precise powers being shown, the contract of the defendant with the British government may have been found to have been dependent upon them. Without reviewing these exceptions further in detail, it is enough to say that in them we discover no reversible error.

Exceptions overruled.