Callan v. Andrews

• Decision Date: 09 March 1931
• Docket Number: No. 242.,242.
• Citation: 48 F.2d 118
• Parties: CALLAN v. ANDREWS.
• Court: U.S. Court of Appeals — Second Circuit

48 F.2d 118 (1931)

CALLAN v. ANDREWS.

No. 242.

Circuit Court of Appeals, Second Circuit.

March 9, 1931.

David L. Podell, of New York City (Herman Shulman, Mortimer Hays, and Joseph Lotterman, all of New York City, of counsel), for appellant.

Weill, Wolff & Satterlee, of New York City (Lloyd P. Stryker, Henry F. Wolff, and William Gilligan, all of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

L. HAND, Circuit Judge.

The plaintiff, Callan, was a tax expert, who had been continuously employed for some two years before the events in question by the defendant, Andrews, a promoter. Andrews was interested in securing the "listing" on the Chicago Stock Exchange of an issue of bonds of the General Vending Corporation, which the Exchange refused to admit while Andrews remained trustee of a voting trust of the company's stock. Unless the bonds were "listed" by January twentieth, he stood to take $1,500,000 of them from Lisman, a banker; if they were, he was relieved. In December at New York at an interview at the office of his attorneys, Andrews asked Callan to go to Chicago that day and try to get the bonds "listed." Callan agreed to do so, except that he could not leave that day. They had another interview on the next day, when, according to Andrews, he told Callan that if he went, he, Andrews, would try to get Lisman, who was present, to give him a thousand shares of General Vending stock. Callan's story was that Andrews promised to give him the shares himself. It was then also agreed that if the exchange would not accept Andrews as voting trustee, Callan might be substituted.

Callan went to Chicago, failed to get the bonds "listed" so long as Andrews was a trustee, but succeeded, when he, Callan, was put in his place. On his return he wrote, asking for the shares, and Andrews replied that he would try to get them from certain shares reserved for employees, or from Lisman's shares. Andrews had himself a large number of shares, all held in escrow, under a contract not necessary to describe. Lisman had other shares; there were still others in the hands of third persons, and, as above mentioned, there were some reserved by the company for employees, over which Andrews had some control. How far Callan knew, when he went to Chicago, that Andrews' own shares were all deposited in escrow, was in dispute. At the second interview Andrews had made him a director of the company and had given him an option to buy certain of the shares. These were in the form of voting trust certificates, but Callan denied that he knew that they were in escrow. In May Callan demanded the shares, Andrews refused to recognize any liability, and Callan brought suit.

On the main issue the judge left to the jury only the question whether Andrews had promised to give Callan the shares himself, or had said no more than that he would try to get them from Lisman. He refused to charge that they might find Andrews' promise to have been no more than a gift. As to damages he also refused to charge that the jury might find that Callan knew that Andrews' shares were in escrow, and that the time of delivery might therefore be that of their release. He left it to them to find the value of the shares within a reasonable time after Andrews' refusal in May. As the release of Andrews' shares from the escrow took place some time later, and after they had fallen in value, this made a substantial difference. The jury found a verdict, based upon the value at the time of the repudiation, on which judgment was entered.

The appeal raises two main questions; first, whether the evidence was such as required a dismissal, because the promise was gratuitous, or at least a submission of that question to the jury; second, whether the measure of damages was wrong. The appellant also raises the question whether the jury might have found that Callan's promise was in consideration of his election as director, and the concomitant option. We can, however, find no exception which raises this, and in any case, in the view we take, it becomes immaterial upon this record.

Andrews' theory is that, Callan having at the first interview already agreed to go to Chicago, his own promise on the next day to give him one thousand shares of stock could not have been the inducement for the services rendered, and was therefore without consideration. This, because the consideration for a promise must be a quid pro quo, something given in exchange; else it is merely for a gift and nudum pactum. We are not disposed to enter into a discussion of the question so sought to be raised, or to consider how far the general rule has now been modified. Restatement of Contracts, § 90 Amer. L. I. In the case at bar the evidence did not justify a dismissal, and the requests to charge did not raise the question. It was certainly permissible from the earlier relations of the parties, for a jury to infer that there was an implied promise to pay a reasonable price for the services to be rendered. If so, nothing was left but to settle the amount, and this might be later agreed upon. On the following day, when Andrews said, as we must assume he did, that he would give Callan one thousand shares of the stock, and when Callan assented, the price became fixed which had before been uncertain. Put into paradigm, Callan agreed to release his unliquidated claim and to substitute the shares; Andrews agreed to give the shares in consideration of the release of the unliquidated claim. The evidence admitted of only this interpretation, provided that Callan's first promise had not been an office of friendship. It would certainly have been improper to direct a verdict for the defendant.

The requests to charge did not raise any question as to the character of Callan's original promise. We may take the third as the least imperative, and that to which the defendant was best entitled. This in substance was that if Callan agreed to go, and went, to Chicago as the result of the first interview, and if the...