228 F. 730 | D. Mass. | 1915
This is an action at law to recover for an alleged breach of contract by the defendant to employ the plaintiff as its insurance broker or representative. A jury was waived and the case was tried before me upon fact and law.
The defendant operated a fleet of steamers and barges employed in coastwise transportation on the Atlantic coast. The plaintiff is a corporation engaged in the business of a broker in marine insurance. It had placed for the defendant during the early or middle part of the
By January 12, 1912, the parties had reached a satisfactory understanding as above stated, and on that date the defendant’s directors passed the following vote:
“Resolved, that a contract be entered Into with Messrs. Johnson & Higgins authorizing them to place insurance on the fleet oí the Harper Transportation Company tor the next two years, commencing on or about October 1, 1012, at rates to be approved by the board oí directors oí the Harper Transportation Company beiore lina! acceptance.”
The plaintiff was within a few days notified orally of this resolution. Thereafter both parties understood that a contract as above stated was in force between them.
“Pursuant to tlie following resolution passed on January 12, 1912, as follows:
“Resolved, that a contract be entered into with Messrs. Johnson & Higgins authorizing them to place insurance on the fleet of the Harper Transportation Company for the next two years, commencing on or about October 1, 1912, at rates to be approved by the board of directors of the Harper Transportation Company before final acceptance” — we herewith enter into a contract with you for the insurance covering said fleet as per the terms of said resolution.
“Very truly yours.”
To which the plaintiff replied on March 11, 1912, as follows:
“Dear Sir: We have your favor of the 8th inclosing copy of resolution passed at your January 12th meeting and also note your confirmation of the contract with us to handle the insurance on your fleet for at least two renewals, commencing 1912. This we have placed on file and in good time will take up the matter of renewals and will see that they are arranged at the lowest Xjossible rate and upon the most favorable terms securable.”
It is these two letters, in connection with the correspondence more particuarly referred to hereafter, which are relied upon by tire plaintiff as constituting a memorandum in writing of the contract, upon which recovery is sought in this action.
By the terms of the contract the defendant reserved the right to approve the rates at which the insurance was to be placed by the plaintiff. A dispute arose between the parties as to whether, according to the contract, it was the business of the plaintiff to procure and submit offers from underwriters of rates on the required insurance for approval by the defendant, or of the defendant to indicate rates which it would approve. The rates on marine insurance in large amounts are not uniform, and are reached by bargaining between the underwriters, the broker, and the insured in each particular case. The plaintiff’s objection to the method proposed by the defendant was not so much that
I see no reason to doubt that the plaintiff would have been able to get the insurance on as favorable terms as the other broker secured, and could have placed it, if left free to do so. Under date of August 6, 1912, it offered to the defendant cover notes covering all the insur-
The plaintiff’s substitute declaration was drawn after I had, in conference with counsel, intimated in a general way what my findings were likely to be; and I find that; except as stated otherwise in this opinion, the allegations of fact in the first 11 paragraphs of it are true. _
_ The defenses relied upon are: (1) That there was no definite contract, and no legal consideration for tire defendant’s agreement with the plaintiff; (2) that the agreement was not to be performed within a year, was therefore within the statute of frauds of the state of New York, where it was made, and is not evidenced by any sufficient memorandum in writing; (3) that the defendant was justified in repudiating the contract by the plaintiff’s breach thereof.
To complete the contract within one year would have been an unusual transaction, which could not have been put through upon terms advantageous to the defendant, which would have involved elements of uncertainty (e. g., a vessel insured under a 1912 policy might be lost during that year, and not be in existence when the 1913 renewal was due to attach), which would have subjected the defendant to liability for two years’ premiums, instead of o'ne, and which was plainly outside of any reasonable construction of the contract. In order to obtain the best rates, the insurance for each year had to be arranged for as a whole, and not by merely renewing indi vidual, policies as they expired. With this qualification, both parties understood by the contract that Johnson & Higgins were to have the placing of the defendant’s marine insurance in 1912 and in 1913 as the policies expiring in those years ran out. It was not the understanding of either party that the defendant was to be put to any disadvantages of the kinds above suggested by reason of this contract. It contemplated future business to be done in the usual way. So construed, the contract could not be performed within a year, whether it be regarded as taking effect from the date of the communication to the plaintiff of the defendant’s vote of January 12, 1912, or from the date of the formal letter from the defendant stating the contract, March 8, 1912. The significance of the expression, “commencing on or about October 1, 1912,” is not perhaps entirely clear. The defendant has made no contention that the contract, .if made, did not cover the insurance which began to expire on August 21, 1912. Indeed, it attempted to cancel the contract for the plaintiff’s alleged failure to act before August 1st. The plaintiff in its letter of March 11, 1912, rc-fered to the contract as covering “at least two renewals, commencing 1912,” omitting the words “October 1.” The renewals contemplated by the parlies were plainly those to be effected in the year 1912 and in the year 1913. “About October 1” was apparently taken as an approximate average date on which the 1912 policies should attach. The contract was not one which, “according to the reasonable interpretation of the terms,” could be performed within a year, and is within the statute of frauds.
i‘li we could have an understanding with you that we would act as your brokers say for a period of three years, our finance committee would probably be willing to extend credit on the following conditions.”
Then follow statements of the amounts due for the different kinds of insurance, aggregating about $110,000, and proposed dates of payment extending to June 15, 1912. The letter then suggests that the consent of the trust company, which held title to the vessels, would have to be obtained, in order that the extension of credit might not operate to discharge its liability, if any, for the insurance premiums. The letter also provides that collections 'for losses should be held against the premium accounts, and adds:
“Whatever arrangement we may agree upon would, of course, simply apply to the premiums under discussion, and any further premiums will, in the absence of any specific agreement, be subject to the usual cash settlement.”
This letter presents a complete and carefully worked out plan to relieve the defendant from its immediate difficulties.
The defendant wrote on December 18, 1911, that:
“We were all in accord with the position taken by you [which was, in substance, an oral restatement of that outlined in the letter just referred to, except as to dates and amounts of payments and sums which might be received for losses, and included also arrangements for the impending premiums on the' 1912 policies] and are going to get the approval of the remaining directors of entering into a contract with your good, selves for the handling of this insurance for the next two years.”
I think — and I find — that this letter, fairly construed, has the same meaning as if the words “on that basis” were added after the final words in it, “next two years.”
The plaintiff wrote on December 30, 1911:
“We have your telephone message to the effect that you are prepared to negotiate a contract with us along the lines suggested in our letter of November 18th”
The defense on this point is of the most technical character. There can be no doubt that the defendant made the promise sued on; it is in black and white over the defendant’s signature, supported by a resolution of its board of directors. The defendant contends that it cannot be held to its promise, because a statement of the exact consideration which was to be received therefor, and which the defendant has in fact fully received, cannot be found in writing. It is sufficient, however, if, taking the writings as a whole, the court can ascertain from them with reasonable certainty what the entire contract between the parties was. Of course, the writings are to be read in the light of the surrounding facts. So construed, it seems to me, and I accordingly find and rule, that they evidence with sufficient clearness and certainty the contract sued on.
Upon all the evidence, I find and rule that there was a sufficient memorandum to satisfy the New York statute of frauds.
As to 3: The final question is whether, assuming that there was a
As to the first of these: For reasons before stated, I do not think that the delay prior to July 26th is any more chargeable to the plaintiff than to the defendant. Having on that date approved rates and given definite instructions as to the insurance’ desired, the defendant was bound to give the plaintiff a reasonable time thereafter in which to obtain the insurance. There was not time enough between July 26th and August 1st for the plaintiff to do so. I find that there was no breach of the contract in this particular by the plaintiff.
The commissions which tire plaintiff would have been entitled to, as nearly as can now be estimated, on the 1913 business which it has lost, would have amounted to $8,175.50. There would have been a slight expense in connection with cables, etc., the exact amount of which does not appear. I estimate the net worth to the plaintiff of that business at $8,000, and I find that it is entitled to recover that amount as damages for the loss sustained by it through the defendant’s breach of the contract in respect to the 1913 business.
The defendant has presented 167 requests for rulings of law and findings of fact. I have fully indicated in the foregoing memorandum of decision such findings of fact and rulings of law as seem to me necessary to a decision of the case. I give such of the defendant’s requests as are contained therein, or are consistent therewith; the others I refuse. Of the plaintiff’s requests, it is only necessary to pass upon the ninth, which I give; the case having been decided, as the foregoing memorandum indicates, without regard to the evidence' referred to in this request.
Judgment for the plaintiff for $16,453.94, with interest from the date of the writ.