Robie v. Ofgant, 5968.

• Decision Date: 12 July 1962
• Docket Number: No. 5968.,5968.
• Citation: 306 F.2d 656
• Parties: Richard S. ROBIE, Defendant, Appellant, v. Edwin I. OFGANT, Plaintiff, Appellee.
• Court: U.S. Court of Appeals — First Circuit

306 F.2d 656 (1962)

Richard S. ROBIE, Defendant, Appellant, v. Edwin I. OFGANT, Plaintiff, Appellee.

No. 5968.

United States Court of Appeals First Circuit.

Heard May 2, 1962.

Decided July 12, 1962.

James D. St. Clair, Boston, Mass., with whom Blair L. Perry and Hale & Dorr, Boston, Mass., were on brief, for appellant.

Thomas J. Carens, Boston, Mass., with whom Robert J. Sherer, Boston, Mass., and Roche & Leen, Boston, Mass., were on brief, for appellee.

Before HARTIGAN and ALDRICH, Circuit Judges, and GIGNOUX, District Judge.

ALDRICH, Circuit Judge.

This is an action for breach of an alleged oral contract made, if anywhere, in Massachusetts. The plaintiff is now a citizen of Puerto Rico, the defendant of Massachusetts. Both parties are experienced automobile dealers. In 1958 they were associated in an unsuccessful Miami agency. Plaintiff informed defendant that there was a better opportunity in San Juan, Puerto Rico if defendant would finance it. After defendant allegedly promised to provide the financing plaintiff moved to San Juan and took steps to start the business. Defendant did not perform. Plaintiff brought suit and obtained a verdict. Defendant appeals, claiming the evidence was too indefinite as to terms to permit a finding that any contract was entered into, and alleging various errors with respect to damages.

The evidence favorable to the plaintiff would warrant the following. In July 1958 plaintiff went to San Juan to investigate the possibility of a Chrysler distributorship. On his return he telephoned defendant and sought to interest him. He told defendant that it would require an outlay of $250,000, and that he did not have any money. At defendant's suggestion plaintiff went to Detroit and obtained a franchise agreement. Defendant then stated that he would put in $125,000 as capital and make available an equal amount through a finance corporation he controlled. Plaintiff accepted this modification. The parties discussed a prospectus of estimated business. It was agreed that plaintiff would receive a salary of $18,000 a year from the corporation and 25 per cent of the profits. Plaintiff stated that he and his wife would move immediately to Puerto Rico, but nothing was said about defendant's bearing this expense. During the conference defendant telephoned his attorney, a Mr. Ryan, and informed him that he and plaintiff "have completed some arrangements here on a deal in Puerto Rico for the Chrysler distributorship, and I wondered if you could go down next weekend to take care of the details and get this thing set up?" Defendant told plaintiff that what they had discussed was "substantially agreeable" and that Mr. Ryan "would finalize everything." He instructed plaintiff "to get the deal going."

Thereafter counsel in San Juan received detailed instruction from Ryan to form a Puerto Rico corporation containing the names of both parties. Defendant was to supply cash in the amount of $125,000, but the apportionment between capital and indebtedness was left to be later determined. It was understood that the eventual corporate officers and directors were to be defendant, plaintiff, and a number of defendant's designees. The first corporate meeting was held, a building was leased, employees were hired, and the company started doing business, all with defendant's approval but without any expenditure by him. Seemingly this was done on credit, on advances from plaintiff, and with profits from completed sales.¹

On October 6 defendant informed plaintiff that he was no longer interested in being the sole investor. He gave plaintiff the names of two persons in New York and Miami. Plaintiff called upon both, but failed to interest them. On October 25 plaintiff, defendant and two possibly interested Puerto Ricans met in Boston, following which defendant stated that he would make no commitment at all, although he might consider a limited investment at some future time. Plaintiff stated that the company had $12,000 in immediate bills. Defendant gave plaintiff a check for $5,000 and took back a note.² The Puerto Ricans thereafter decided not to invest. Plaintiff endeavored to find other investors, and apparently succeeded in mid-January. However, at that time he became employed in another capacity, and claims no damages after that date. Pausing here parenthetically, we think it clear that defendant committed a total breach at least by October 25, and that his leaving the door informally open thereafter was of no legal consequence.

We see nothing in defendant's point that the agreement lacked specificity. "The courts * * * of Massachusetts, are slow to turn a plaintiff out of court for the reason that the promise given and relied on was so vague that it can be given no effect." Weiner v. Pictorial Paper Package Corp., 1939, 303 Mass. 123, 131, 20 N.E.2d 458. Agreements far less complete than this one have been enforced. Cygan v. Megathlin, 1951, 326 Mass. 732, 96 N.E.2d 702; Shayeb v. Holland, 1947, 321 Mass. 429, 73 N.E.2d 731. It is true that the details of the loans had not been determined, nor the extent that defendant's capital participation would be represented by stock and by indebtedness. But we think that the jury could be permitted to find that since defendant's chief contribution was the financing, plaintiff's share of the net profits was to be computed before all financing charges. Logan v. Dockray, 1888, 146 Mass. 296, 15 N.E. 635. Hence it was a matter of indifference whether or how defendant divided his share, if any, between dividends and interest. Nor was the agreement illusory because no term was stated for plaintiff's employment. Even though there was no specified term, having in mind that plaintiff was the finder and entrepreneur we think the jury could well find an implied undertaking that defendant's support, and plaintiff's participation, would last a reasonable length of time. This was not a case of simple employment. Plaintiff had furnished consideration in obtaining the distributorship and his returns could not be cut off by discharging him forthwith. Cf. Allied Equipment Co. v. Weber Engineered Products, Inc., 4 Cir., 1956, 237 F.2d 879; Jack's Cookie Co. v. Brooks, 4 Cir., 1955, 227 F.2d 935, cert. den. 351 U.S. 908, 76 S.Ct. 697, 100 L.Ed. 1443.

The Statute of Frauds defense is not worth discussing. Defendant cites no authority for the proposition that an agreement to form and finance a corporation of which he was to be sole stockholder as a means of conducting a joint enterprise with plaintiff was a promise to pay the debt of another. This would be a radical extension of Guinn Co. v. Mazza, D.C. Cir., 1961, 296 F.2d 441. We find the suggestion singularly unappealing. See P. Berry & Sons, Inc. v. Central Trust Co., 1924, 247 Mass. 241, at pp. 244, 245, 142 N.E. 58, at p. 59, where the court said, "This section * * * does not apply where the promisor receives something from the promisee for his own benefit."

Plaintiff tried his case, so far as damages were concerned, with no apparent unitary concept. We pass the fact that the evidence was introduced in substantial measure unsystematically, for which the court chided both counsel, except to say that the burden was primarily on the plaintiff.³ The more fundamental difficulty was the lack of a legal as distinguished from a factual pattern. Thus, while the sole agreement was for the corporation to pay plaintiff at the rate of $1500 a month, plus 25 per cent of the profits, plaintiff sought the salary, the cost of moving to Puerto Rico and his entire living expenses. In addition he sought reimbursement for all corporate and pre-incorporation bills paid for by him, and payment for various unpaid bills without showing that he was legally responsible.

Plaintiff's position is that he is entitled to be made whole. There is no question about that, but there are two other principles — his damages must be proven, that is, they must not be speculative, and he must not be made more than whole. The true measure of damages in this case is the salary plaintiff would have received, and his share of the profits, had defendant fully performed for such period as the jury should find it was reasonable to hold defendant was obligated, less whatever diminution should be attributed because of plaintiff's duty to mitigate damages.⁴ No evidence was introduced as to profits. As this was an untried business, this was a typical speculative area. See Narragansett Amusement Co. v. Riverside Park Amusement Co., 1927, 260 Mass. 265, 157 N.E. 5243 and cases cited. But cf. Standard Machinery Co. v. Duncan Shaw Corp., 1 Cir., 1953, 208 F.2d 61. However, plaintiff was permitted to show, in addition to his salary, not only his moving costs, but the full living expenses of himself and his wife from arrival until...