Reynolds v. Goodwin-Hill Corporation, 220.
| Decision Date | 03 April 1946 |
| Docket Number | No. 220.,220. |
| Citation | 154 F.2d 553 |
| Parties | REYNOLDS v. GOODWIN-HILL CORPORATION. |
| Court | U.S. Court of Appeals — Second Circuit |
Forrest S. Chilton, of New York City, for appellant.
Hyman Goldstein and Maurice M. Kreis, both of New York City, for appellee.
Before L. HAND, SWAN, and PHILLIPS, Circuit Judges.
The defendant appeals from a judgment awarding the plaintiff a commission, earned as its broker or sales agent, for procuring a contract between it and the United States Army Engineering Corps. The only defence is that, since the commission was concededly contingent upon the plaintiff's success in procuring the contract, it was for that reason illegal within such decisions as Tool Co. v. Norris, 2 Wall. 45, 17 L.Ed. 868; Oscanyan v. Arms Co., 103 U.S. 261, 26 L.Ed. 539; and Hazelton v. Sheckels, 202 U.S. 71, 26 S.Ct. 567, 50 L. Ed. 939, 6 Ann.Cas. 217. The case was tried to a judge, who found that, in December, 1944, the defendant employed the plaintiff "in the capacity of sales director, and then and there agreed to pay him for his services a sum equivalent to five per cent of the gross amount of all contracts for the manufacture of products by the defendant, procured through the efforts of the plaintiff." He also found that thereafter the plaintiff "entered upon his duties as sales director of the defendant, and proceeded to Boston, Massachusetts and other parts of the country, and there endeavored to obtain contracts for the manufacture of products by the defendants." Finally he found that in the course of these services he procured a contract for the defendant with the Army Engineering Corps for the manufacture of 24,000 anchors, under which the defendant manufactured and delivered nearly 20,000 anchors. For this he awarded the plaintiff five per cent upon the gross amount received by the defendant.
The testimony as to the contract between the parties was contradictory. The defendant's witnesses swore that it had not employed the plaintiff as "sales director" at all, but only to secure this particular contract, promising to pay him five per cent if he could obtain a price of $14.50, but adding that, if the price was as low as $13.50, "we would have to see how the job ran." They testified that when he offered the defendant the price of $13.85, they told him that his commissions must be left indefinite. The plaintiff, on the other hand, testified that the defendant employed him generally as its "sales director"; that he signed the contract with the Army Engineering Corps as such; and that the price was left to him with an agreed commission of five per cent. In fact he did not procure any other contract for the defendant; though he testified that he attempted to do so. On such a conflict we must accept the finding that the defendant employed the plaintiff generally as its "sales director," and agreed to pay him five per cent upon all contracts which he might procure.
On July 7, 1942, the War Department promulgated revised Regulations for the Procurement of Supplies (Chapter VIII, Title 10, Code of Federal Regulations), § 81.323 of which appears in the margin,1 and was incorporated into the contract between the Engineering Corps and the defendant. Some time in 1945 the Judge Advocate General's Office issued a gloss upon this section which also appears in the margin.2 Even though we assume for argument that the contract here in suit would be illegal under the decisions which we mentioned at the outset — a point we do not decide — this appeal turns upon whether the regulation just mentioned absolved it. We think that it did. In obtaining its supplies the War Department was free to impose upon bidders such conditions as it thought...
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