Forbes v. Gordon & Gerber, Inc.

• Decision Date: 02 July 1937
• Citation: 9 N.E.2d 416,298 Mass. 91
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: FORBES v. GORDON & GERBER, Inc.

298 Mass. 91

9 N.E.2d 416

FORBES

v.GORDON & GERBER, Inc.

Supreme Judicial Court of Massachusetts, Suffolk.

July 2, 1937.

Action of contract by Charles R. Forbes against Gordon & Gerber, Inc., wherein trial judge found for plaintiff in the sum of $4,125. The Appellate Division dismissed a report and defendant appeals.

Reversed, with directions.Appeal from Municipal Court of Boston, Appellate Division; Adlow, judge.

Lee M. Friedman and F. L. Kozol, both Boston, for defendant.

E. M. Dangel, L. E. Sherry, and S. Andelman, all of Boston, for plaintiff.

LUMMUS, Justice.

This is an action by an agent for a commission of 10 per cent. on the purchase for the defendant of a lot of railroad rails. There was a written agreement between the parties, dated December 11, 1935. By it the plaintiff was employed ‘for the purpose of the purchase and/or sale of materials dealt in by the [defendant] corporation, at such prices, terms and conditions as may be determined and decided upon by the corporation.’ The defendant agreed, ‘in its discretion,’ to make reasonable bids upon such materials as might be brought to its attention by the plaintiff, and ‘in its discretion’ to fulfil ‘such requirements as may be necessary to qualify such bids.’ The plaintiff was to receive an amount equal to half the net profits made by the defendant upon sales and purchases in which the plaintiff should be concerned. The contract further provided: ‘(4) The corporation agrees to pay to the said Forbes an amount of money equal to 10% of the amount of any sale and/or purchase at the time that such transaction is completed, which amount shall be credited against and deducted from the 50% share of the said Forbes as hereinabove provided * * *; said payment of 10% is to be made to Forbes as soon as the purchase price for any materials purchased by the corporation shall be paid for by it or as soon as the corporation shall receive payment for any materials sold by it. The said Forbes agrees that in the event of any transaction resulting in a loss to the corporation that any advance made to him by the corporationshall be deducted from the share of the profits to which he shall be entitled. * * * The corporation agrees to make payments of the said share of said profits to said Forbes when and as the same are received by the corporation.’

There was evidence of the following facts. The plaintiff discovered that the Southern Railway Company was asking for bids upon steel rails which it was selling, as scrap, free on board at various points on its line. Payment was expected ‘at the time shipping directions are furnished.’ By authority of the defendant, the plaintiff bid for a large quantity of rails $13.75 a ton F. O. B. Pittsburgh, which apparently was not on the line of the Southern Railway Company. That company, however, issued a written ‘award’ to the defendant, dated January 17, 1936, in which the price was stated as ‘13.75 Pittsburgh or 11.00 So. Ry. tracks' and the terms as ‘Delivered, F. O. B. cars As shown above.’ The ‘award’ provided that ‘this award is subject to cancellation at our option if shipping directions, or cash payment, are not received within ten (10) days from its date.’ On January 20, 1936, the defendant told the plaintiff by telephone that it wished the rails delivered F. O. B. Pinner's Point, Virginia, a point on the line of the Southern Railway Company, at $11 a ton.

On January 24, 1936, however, the defendant wrote to one Finard, who apparently was associated with the plaintiff, complaining that the defendant faced a loss on the bid that had been made. The defendant did not send the purchase price nor shping instructions to the Southern Railway Company or the plaintiff. The Southern Railway Company cancelled the ‘award’ on February 6, 1936, and the transaction was at an end. There was no delivery, no payment, and of course no profit.

The judge found for the plaintiff. He found ‘that the transaction was completed in every respect except that the defendant refused to give shipping instructions to the seller or to make payment for rails and that wilful refusal of the defendant prevented completion of the transaction.’ The Appellate Division dismissed a report, and the defendant appealed to this court.

What the plaintiff sought in this action was not half the profits, for there were none, nor damages for breach of an agreement by the defendant to make good its bid, but the 10 per cent. of the amount of ‘any * * * purchase’ which was payable ‘at the time that such transaction is completed’ or, as otherwise stated in the written agreement, ‘as soon as the purchase price for any materials purchased by the corporation shall be paid for by it.’

The paragraph of the written agreement that comes nearest to contemplating what happened in this case is the one numbered (2), by which the defendant agrees to ‘make reasonable bids' and to ‘fulfil such requirements as may be necessary to qualify such bids,’ its agreement being restricted, however, in each instance by the words ‘in its discretion.’ The only remedy of the plaintiff for the failure of the defendant to bid on goods called to its attention by the plaintiff was to terminate the agreement at his option. We need not consider whether, as the Appellate Division thought, the defendant reserved discretion only as to the making and preliminary qualification of bids, and by inference agreed absolutely to make good its bids once made and qualified. This action is not one for damages for breach of such an agreement.

This case turns upon the construction of paragraph numbered (4). It is true that the words ‘sale’ and ‘purchase’ may mean contract to sell or purchase. Walker v. Russell, 240 Mass. 386, 389, 390, 134 N.E. 388;Buono v. Cody, 251 Mass. 286, 290, 146 N.E. 703. But in construing those words, and the accompanying expressions making the 10 per cent. ‘of the amount of any * * * purchase’ payable ‘at the time that such transaction is completed’ and ‘as soon as the purchase price for any materials purchased by the corporation shall be paid for by it,’ we must keep in mind the insistence of the defendant that its agreement to make and qualify its bids was subject to ‘its discretion,’ and the fact that in the end the plaintiff was to benefit only by receiving a share of the profit resulting from his transactions as a whole. The case is unlike Canton v. Thomas, 264 Mass. 457, 162 N.E. 769,...