Tahir Erk v. Glenn L. Martin Co.

• Decision Date: 06 January 1941
• Docket Number: No. 4706.,4706.
• Citation: 116 F.2d 865
• Parties: TAHIR ERK v. GLENN L. MARTIN CO.
• Court: U.S. Court of Appeals — Fourth Circuit

116 F.2d 865 (1941)

TAHIR ERK v. GLENN L. MARTIN CO.

No. 4706.

United States Circuit Court of Appeals, Fourth Circuit.

January 6, 1941.

Louis O. Bergh, of New York City, and Helen Sherry, of Baltimore, Md. (Turnbull & Bergh, of New York City, and Max Rhoade, of Washington, D. C., on the brief), for appellant.

W. Randall Compton, of Baltimore, Md. (David R. Owen, Semmes, Bowen & Semmes, and William A. Fisher, Jr., all of Baltimore, Md., on the brief), for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

DOBIE, Circuit Judge.

This is an appeal from an order granting a motion to dismiss the action because the complaint fails to state a claim upon which relief can be granted and, in turn, denying a motion for leave to file an amended complaint. See Tahir Erk v. Glenn L. Martin Co., D.C.Md.1940, 32 F. Supp. 722.

In considering a motion to dismiss the complaint for failure to state a claim upon which relief can be granted, we must treat every allegation of the complaint as admitted. See Leimer v. State Mut. Life Assur. Co., 8 Cir., 1940, 108 F.2d 302, 305; Smith v. Blackwell, D.C.E.D.S.C.1940, 34 F.Supp. 989, 994. See also Woodall v. Clark, 4 Cir., 1918, 254 F. 526. Hence, inasmuch as the appellee (hereinafter called the defendant) has substantially approved of the summary of the complaint in the brief of the appellant (hereinafter called the plaintiff), we will adopt this summary with certain minor changes. The following is a summary of the complaint that was filed on June 21, 1939, in support of the plaintiff's claim for damages for the alleged breach of a written sales-agency contract:

That in October, 1930, the defendant, a corporation doing business in Maryland under the name of the Glenn L. Martin Company, made an agreement with Erdogan, Ltd., a limited company, of which A. Djemil Tahir Erk, the plaintiff, was co-owner, doing business in Turkey, which agreement is represented by three letters, copies of which are annexed to the complaint as exhibits and made a part of the complaint. (Pars. 2 and 3.)

That defendant, engaged in the manufacture of military airplanes exclusively, employed Erdogan, Ltd., as its agent, for an indefinite period of time, to negotiate with the Republic of Turkey for the sale of military airplanes manufactured by the defendant, with the right of either party to terminate such employment upon sixty (60) days' notice; and with a commission of five (5%) percent on all sales; and that such commission upon cancellation "should be payable to Erdogan, Ltd., upon any business which the plaintiff may have instigated prior to the date of said cancellation, provided said business be closed by the defendant within six months after the date of cancellation of such employment". (Par. 3.)

That Erdogan, Ltd., "proceeded to and did negotiate with various officials of the Republic of Turkey for the purpose of inducing the said Republic of Turkey to purchase military airplanes manufactured or to be manufactured by the defendant". (Par. 4.)

That in April, 1932, Erdogan, Ltd., went into liquidation and that the plaintiff, who had been co-owner, succeeded to and carried on the business of Erdogan, Ltd., and that the plaintiff, with the consent of the defendant, succeeded to all the rights and obligations of the said Erdogan, Ltd., under the said contract. That thereafter the plaintiff "continued to act under said contract for the defendant, and zealously and diligently continued negotiations with the Republic of Turkey pursuant thereto for a long period of time and at considerable expense to the plaintiff, and while such negotiations were in progress" in July, 1933, the defendant notified the plaintiff that it had entered into an agreement with the United States of America "whereby the defendant undertook not to export or enter into negotiations for the sale of military airplanes to any foreign country" and further advised plaintiff that under such circumstances it was cancelling the agency; and that thereafter the plaintiff wrote the defendant requesting "that the said agency contract should be continued" and that thereafter the defendant acquiesced in this request, and it was then "mutually agreed" to disregard the letter of cancellation, and that thereafter the plaintiff "resumed and continued its negotiations with the officials of the Republic of Turkey" until June 14, 1935, when the plaintiff received a cable from the defendant purporting to cancel his appointment; and that at the time "he was engaged in active sales negotiations with the officials of the Republic of Turkey which was then ready, willing and able to purchase military airplanes from the defendant as soon as the defendant was ready, willing and able to sell the same." (Par. 5.)

"That the period following June 14, 1935, during which the plaintiff was entitled under the said agency agreement to commissions on business or sales of which he was the instigating cause, did not begin to run earlier than the date, unknown to the plaintiff, in June, 1936, when the United States of America removed the said ban, restriction or embargo, and permitted the defendant to sell its aircraft to the Republic of Turkey, whereupon the defendant advised certain officials of the Republic of Turkey that it was ready, willing and able to sell to the Republic of Turkey military airplanes to be manufactured by it, and thereafter, sometime during the month of December, 1936, the defendant received an order from the Republic of Turkey for military airplanes of the value of more than two million dollars ($2,000,000.00) which order has been filled and payment therefor received by the defendant; and the plaintiff alleges that he was the instigating and procuring cause of the aforesaid sale and that the aforesaid cable dated June 14, 1935, purporting to cancel the employment of the plaintiff, which cable and purported cancellation plaintiff then and always has protested, was sent by the defendant to the plaintiff with full knowldege on the part of the defendant * * * that at its request the Department of State of the United States of America would consent to the sale of military airplanes by the defendant to the Republic of Turkey, and with full knowledge on the part of the defendant that the Republic of Turkey was ready, willing and able to purchase from the defendant a large number of military airplanes as soon as the defendant was ready, willing and able to sell the same and that such purported cancellation of the employment of the plaintiff was for the purpose of endeavoring to deprive the plaintiff of his just rewards for his efforts in instigating such sale; and without any fault or default on the part of the plaintiff in the performance of his duties and undertaking in the premises, the defendant has wholly neglected, failed and refused to pay the plaintiff the said commission of five per cent (5%) on the amount of said sale, or any part thereof, or any reward or compensation for his said services whatsoever, though frequently requested to perform its obligations to the plaintiff." (Par. 7.)

The eighth paragraph states a claim in quantum meruit, based on 5% of the sales price; and the ninth paragraph states that the exact amount of the sales price is unknown to the plaintiff, except that plaintiff is informed and believes and therefore avers that such price was more than $2,000,000.

The prayer for relief asks judgment in the amount of $175,000 or such additional amount as the plaintiff may be entitled to, and a full accounting and disclosure respecting all sales by the defendant to the Republic of Turkey that may be germane to the suit.

On July 6, 1939, the defendant's counsel filed a written motion to dismiss the action on the ground that the complaint failed to state a claim upon which relief could be granted. After the oral argument of the respective counsel on February 2, 1940, Judge Coleman granted orally the defendant's motion to dismiss the action. Counsel for the plaintiff immediately moved for leave to file an amended complaint; but, though requested by the court, he did not state the nature and substance of the proposed amendment. The motion to file an amended complaint was denied. The court, however, did grant the plaintiff's motion to file within 10 days a memoranda of law in opposition to the defendant's motion to dismiss. On February 12, 1940, the plaintiff filed a written motion for leave to amend the original complaint and, in addition, submitted a memoranda of law in opposition to the defendant's motion to dismiss and in support of the proposed amended complaint. The plaintiff's motion for leave to amend was orally denied on February 26, 1940; and, in a written opinion filed on April 20, 1940, the defendant's motion to dismiss the complaint was granted. Final judgment thereon was entered on May 2, 1940.

In support of its motion to dismiss, the defendant takes the position that it had contracted to compensate the plaintiff only for business actually secured by him; that this contract was cancellable by either party upon sixty days' written notice; that, acting within its contractual right, it had cancelled this contract sixteen months before it had received the alleged $2,000,000 aircraft order; that this order was not completed until after the plaintiff's eight-month grace period had elapsed and after all of the plaintiff's contractual rights had expired; and that there had been no breach of the contract in either the termination of the agency relationship or in the refusal to pay the claimed commissions.

The plaintiff, on the other hand, makes four different contentions in support of his claim: (1) that the defendant cancelled the agency in bad faith for the purpose of depriving the plaintiff of his commission at a time when the plaintiff, in the words of the contract, had "instigated a sale"; (2) that, notwithstanding the attempted cancellation, the plaintiff was entitled to a reasonable time after the lifting of...