Global Commerce Corp. v. Clark-Babbitt Industries

• Decision Date: 17 December 1956
• Docket Number: Docket 23975.,No. 13,13
• Citation: 239 F.2d 716
• Parties: GLOBAL COMMERCE CORPORATION, S.A., Plaintiff-Appellant, v. CLARK-BABBITT INDUSTRIES, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

239 F.2d 716 (1956)

GLOBAL COMMERCE CORPORATION, S.A., Plaintiff-Appellant, v. CLARK-BABBITT INDUSTRIES, Inc., Defendant-Appellee.

No. 13, Docket 23975.

United States Court of Appeals Second Circuit.

Argued October 10 and 11, 1956.

Decided December 17, 1956.

Walter Herzfeld, New York City, Sereni & Herzfeld, New York City, for plaintiff-appellant, Bernard J. Wald, Brooklyn, N. Y., of counsel.

Francis A. Brick, Jr., New York City, Donovan Leisure Newton & Irvine, New York City, for defendant-appellee, Douglas V. Lewis, New York City, of counsel.

Before CLARK, Chief Judge, and HAND and SWAN, Circuit Judges.

HAND, Circuit Judge.

The plaintiff appeals from a judgment dismissing its complaint in an action upon two counts, tried to a judge without a jury. The first count was on a contract for a sale by the defendant to the plaintiff in Mexico of 10,000 tons of copra; the second count was for a commission to the plaintiff for procuring a buyer in Mexico for 5,000 tons of "steel bars." The defendant denied that the parties had ever come to a final agreement as to the terms of either contract; and pleaded as defences to the copra count (1) that the contract was invalid under the Statute of Frauds, and (2) that the defendant was prevented by law from performing it; and as defences to the "steel bars" count, (1) that the contract was invalid under the law of Mexico, where the plaintiff's authority was to be executed, and (2) that the plaintiff had never produced a buyer.

The plaintiff did a general importing business in Mexico City, and in September, 1946, read an advertisement of a New York corporation of which the manager was one Meyers, to whom it mailed an inquiry, in response to which Meyers offered 3,000 tons of steel bars a month for three months (later reduced to a total of 5,000) at a price of 100 to 105 dollars a ton, including plaintiff's commission of two and one-half per cent. Five days later, on the 16th, the plaintiff received from Meyers a second wire offering 10,000 tons of copra "monthly," at stated prices, which the defendant confirmed by letter on the same day. This letter did not, however, reach the plaintiff until the 20th, and meanwhile Meyers and Klein, the plaintiff's manager, had exchanged several telegrams and had talked on the telephone. The plaintiff insists that by the defendant's letter of September 16 it recognized Meyers's authority to act for it because the letter did not advise it of any limitation upon Meyers's apparent authority. Be that as it may, certainly after September 18 the plaintiff understood that Meyers had no such authority, for in a letter answering the defendant's letter of the 16th, Klein said that "Meyers has informed the writer during the telephone conversation of the day of September 18th, that he is acting for your company as export consultant, and that we will have to deal with you." Moreover, even though the defendant's letter of the 16th had not reached Klein before the 18th and they had already come to an agreement, it would not have bound the defendant, because, not only did Meyers have no authority in fact, but Klein had no warrant for assuming that he did have.

Coming then to the details of the exceedingly ill-defined interchanges between the parties, Meyers's wire of the 16th which the defendant confirmed in its letter of the same day contained no mention of a "performance bond," but Klein testified that on the 18th in his telephone talk with Meyers, the question had come up of such a bond, and Klein had said that he "had in mind" the "usual five percent" bond. Meyers had answered him that he was then in Thomas's office and, after leaving the telephone, he had come back and said that Thomas agreed to such a bond provided that Klein was in a position to buy the 10,000 tons of copra "right away." This testimony as to Thomas's assent was indeed hearsay, but it was not objected to on that score, and, if believed, it would have supported a finding that a contract had been made on that day, — the 18th. Furthermore, Klein also testified that he had a telephone talk with Thomas himself on the 21st, in which, when he mentioned a 10% performance bond, Thomas had replied that "the agreement was for 5 percent." On the other hand, at that same interview Klein had said to Thomas that the reason why it was urgent for him to speak to Thomas was that he was asking for something else than what had been agreed upon. He did so because his "customer's" directors had asked their manager to try to get a 10% bond instead of a 5%. Thomas answered that his bank was averse to giving any bond whatever and asked him not to insist upon one. The question of a bond came up again in a talk on the 22nd, and Klein then agreed to a five percent bond, but Thomas refused to give any bond at all. On the 23rd Klein wired that his customers insisted upon a bond and that letters of credit would be "immediately opened simultaneously with agreed upon performance bond." Meyers countered on the 24th by a wire, saying that the "unjustifiable and unwarranted request for performance bond makes it impossible to continue discussion. Airmail letter follows." The carbon copy of the letter dated the same day, which Judge Bondy held to have put an end to the negotiation, was probably this letter; but it is not necessary to find that the plaintiff ever received it, because nothing could be a more definitive termination of negotiations than Meyers's wire that we have just quoted, provided that in this instance the defendant had given him authority.

If the record had stopped there, we might perhaps have had to assume that Judge Bondy considered Klein's testimony, and that it had not convinced him; and in that event we should scarcely have been justified in holding his finding "clearly erroneous" that the parties had never come to an agreement at all. However, the negotiations did not come to an end with the wire of the 24th, or the "airmail letter," if it was received, because, on the 25th Klein wired the defendant that he insisted...