U.S. Supreme Court
Goddard v. Foster, 84 U.S. 17 Wall. 123 123 (1873)
Goddard v. Foster
84 U.S. (17 Wall.) 123
A., at Valparaiso, was the agent, under an agreement of May 7, 1849, of B., at Boston, who was sending him adventures and shipments of goods, he selling the goods and investing the proceeds in other merchandise consigned to B., who sold the return cargoes; keeping an account of the profit and loss. A. was to have one-quarter of the net profits of B.'s business, that he, A., "conducted to completion," but was at liberty to withdraw from the arrangement at any time,
"by giving B. so much notice that any voyage he, B., may have commenced previous to receipt of such advice, shall receive the full benefit of all A.'s service to its final accomplishment."
On the 22d of February, 1850, A. wrote to B. that he had resolved to join a Valparaiso house, which he named, but added:
"I will manage your business as usual until 31st December, which will afford you ample time
to make your arrangements for sending someone out, if you are inclined."
B. received this letter May 29th, 1850, and afterwards loaded and dispatched a ship consigned to A., or "in his absence," to the house which he had mentioned as the one he had resolved to join. A. concluded the whole business of this voyage as he had done that of previous voyages, but it was not "conducted to completion" prior to December 31, 1850.
Held that A.'s letter of 22d February was to be taken as if he had said:
"In the interval, before the arrival of any new agent to represent you, I will perform the same services for the new voyages not covered by the contract of May 7, 1849, that I have rendered in the voyages covered by the contract, and that your new agent would perform were be here,"
and, accordingly, that for all services performed by him in regard to this voyage he was entitled to be paid what the services were reasonably worth.
2. The rule of law that the interpretation of written instruments is a question of, law for the court, is applied with full force to agreements to be deduced from the correspondence of the parties, and the fact that the language of the letters containing the offer or acceptance is doubtful, does not relieve the court of this duty, or make the question one of fact for the jury. It is only where terms used are technical, or terms having a peculiar meaning in a particular trade or place, that the aid of the jury is invoked to ascertain their meaning.
3. Where interest is allowed, not under contract, but by way of damages, the rate must be according to the lex fori.
In June, 1843, G. J. Foster and W. W. Goddard entered into an agreement, in writing, under seal, by which Foster agreed to go to the west coast of South America, and there reside as Goddard's agent for five years, selling the outward cargoes, purchasing return cargoes, collecting and forwarding information, and attending to the business and dispatch of the defendant's ships, giving his whole time to the business, in consideration of one-tenth of the net profits at the end of the term, or $1,000 per annum if the one-tenth of the profits amounted to less than that sum.
Under this agreement, Foster went to the west coast of South America, and there resided during the five years, performing his part of the agreement, and at its expiration, in 1848, returned to Boston, where the parties made a new agreement in writing and under seal, dated May 7, 1849, chanroblesvirtualawlibrary
by which Foster agreed to return to the west coast, upon a similar employment, giving his whole time to Goddard's business in consideration of "one-quarter of the net profits of Goddard's business in that trade, that he (Foster) shall have conducted to completion," to be paid to him on his return. This agreement provided that Foster was to leave in Goddard's hands his share of the profits under the former agreement; that Foster might withdraw from this arrangement,
"which he is at liberty to do at any time, by giving said Goddard so much notice that any voyage he may have commenced previous to receipt of such advice, shall receive the full benefit of all said Foster's services to its final accomplishment, and not otherwise."
It also provided that Goddard might "annul the agreement whenever he may choose to do so," and that Foster should be liable "to the full extent of his interest and means for all losses in the business, and for all risks and casualties attendant thereon."
Foster under this agreement, returned to the coast and continued to transact the business required of him, and on the 22d of February, 1850, wrote to Goddard that he had determined to join the house of Alsop & Co. on the 1st of January, 1851. In this letter he said:
"I will manage your business as usual until the 31st of December, which will afford you ample time to make your arrangements for sending someone out, if you be inclined."
On the 13th of April, 1850, Goddard replied:
"I am very glad to learn your decision to join the house, it being what I would have advised for your own interest."
Goddard's reply was received by Foster May 29, 1850.
After sending this letter, Goddard loaded and dispatched from Boston the ship Harriet Erving, upon a voyage styled hereinafter "her third voyage." She left Boston on the 21st of August, arrived at Valparaiso on the 8th of December, and sailed thence December 27th, for points on the coast, to complete her cargo, and thence to Boston.
From the inception of this voyage, Goddard advised Foster chanroblesvirtualawlibrary
by letter of his intentions in relation to her outward and return cargoes, and instructed him fully as to what he, Foster should do on the coast in relation to the same.
The cargo was consigned to Foster "or, in his absence, to Alsop & Co."
When the ship sailed from Boston, Goddard instructed the captain by letter as follows:
"I wish you to proceed in her with all possible dispatch direct to Valparaiso, where my agent, Mr. G. J. Foster or, in his absence, Messrs. Alsop & Co., will dispose of your outward cargo, provide for the wants, and direct your further movements."
Foster concluded the whole business of this voyage in the same manner in which he had done that of previous voyages, prepared and forwarded to Goddard a note or memorandum of cargo suitable to be sent to the coast, purchased and had in readiness for the ship her return cargo, and dispatched her from the coast, directed the sale of her outward cargo, and was in constant communication with Goddard in relation thereto.
He joined the house of Alsop & Co. on the 1st of January, 1851. At that time, there had been sold of the outward cargo $96,000, and there was afterwards sold $150,000. The entire service had been performed, so far as the homeward cargo was concerned, and nine-tenths of his whole services in relation to the voyage had been performed.
After joining the house of Alsop & Co. he completed the business of the voyage by directing, as before, the sale of the remainder of the cargo. This was done with the knowledge of and, as it appeared, without objection on the part of the other partners in the house of Alsop & Co.
After joining the house, he it appeared, without objection on the part of the other partners in the house of Alsop & Co.
After joining the house, he it appeared, without objection on the part of the other partners in the house of Alsop & Co.
After joining the house, he sent a part of the cargo to other points on the coast for a better market, in the exercise of his discretion as Goddard's agent, as he had done with previous cargoes, which Alsop & Co. never did for any of their correspondents, unless expressly authorized. The sales between January 1 and June 30, at Valparaiso and Lima, chanroblesvirtualawlibrary
amounted to $135,000, and the remainder, about $15,000, was sold during the years 1851, 1852, and 1853.
The sales of the outward cargoes and the purchases of the homeward cargoes were made by Alsop & Co., who advanced the necessary funds, and charged and received a commission therefor.
Foster advised Goddard, by private letter of February 25, 1851, of the sales he was making of the outward cargo, and that he should work off part of the goods "through Callao," the port of Lima.
Alsop & Co. rendered accounts of the sales at Valparaiso and Lima to Goddard.
In November, 1851, one Erving arrived on the coast, to act as Goddard's agent in the same business, in subsequent voyages. He took no part in the unfinished business of this voyage.
Foster returned to the United States in 1856, when Goddard expressed himself perfectly satisfied with everything he had done in his business.
On the 1st of May, 1857, Foster filed a bill in equity against Goddard in the circuit court for the District of Massachusetts, for an account, and to recover his share of the profits under the two agreements of 1843 and 1849. Goddard having appeared and answered, a decree for an account was entered, and an account was taken before a master. Upon that accounting Foster claimed, under the agreement of May 7, 1849, a quarter of the profits of the voyage of the Harriet Erving, on the ground that by a subsequent agreement of the parties, shown by their correspondence, it was to be considered as included in that agreement, and that it was substantially brought to a completion before January 1, 1851. The master so decided, and reported as due to Foster for his share in the profits of this voyage, $21,943. Upon exceptions to the master's report, the circuit judge disallowed this item, [Footnote 1] holding that this voyage of the Harriet Erving was not covered by the agreement between the parties of chanroblesvirtualawlibrary
May 7th, 1849, and upon appeal this Court affirmed (and upon the same ground) the final decree, whereby this item was disallowed in that suit. [Footnote 2] Goddard satisfied the final decree in that suit.
In this state of things Foster sued Goddard in assumpsit for services rendered by him in this voyage of the Harriet Erving.
The first count was on a special agreement to pay one-fourth of the profits of the outward and homeward voyages, being $23,600.44, with interest from March 1st, 1858. [Footnote 3] The second, on a promise to pay a reasonable compensation. The third, on a promise to pay a reasonable compensation for services to January 1, 1851. The fourth and fifth counts were the common counts of indebitatus assumpsit and quantum meruit. The damages were laid at $50,000.
The plea was the general issue with notice of defenses:
1. A former recovery by the same plaintiff against the same defendant in the suit in equity in the circuit court for the District of Massachusetts, brought for an account under the agreement between the parties of May 7, 1849, and that the defendant's services, if any, now sued for, were rendered under that agreement.
2. The statute of limitations.
Pursuant to the notice the defendant offered in evidence the record in the equity suit as a bar to the pending action, but the court rejected the evidence.
He also offered the same record in evidence as a bar to all claim in the action for services rendered for him before the close of the year in which the plaintiff had given notice of his withdrawal from the second written agreement. But the court rejected the evidence as inadmissible even for that purpose.
Evidence was offered by the plaintiff of the value of his services, to which the defendant objected, insisting that the services of the plaintiff in respect to that voyage, if any, were rendered under the written agreement, but the court chanroblesvirtualawlibrary
ruled that the services shown were outside of that agreement, and admitted the evidence.
To all these rulings the defendant excepted.
The court having charged that neither party was to suffer in any way from the lapse of time, and thus disposing of the plea of the statute of limitations, charged further among other things:
1st. That the plaintiff could not recover under the first count of the declaration, nor any part of the profits of the voyage.
2d. That the plaintiff was entitled to recover such sum as upon the evidence the jury might regard to be the reasonable quantum meruit value of his services.
The court added:
"That includes a consideration by you of what his services were, the entire scope of the trade, and Mr. Foster's qualifications for those services at the time he rendered the services in reference to this voyage, and the consideration of how much these services were in bulk or in value before the 1st of January, 1851, and the consideration of the extent of these services after that date, and whether they are to be diminished after by any payment or allowance which ought to be charged against Mr. Foster because of any compensation he may have received as a member of the firm of Alsop & Co. The whole question is one of fact for you to pass upon as men of judgment and intelligence, and upon the evidence, applying your best faculties to it."
"If you arrive at any sum which you regard as proper for the value of these services, then Mr. Foster is entitled to interest on that sum at the rate provided by law of New York, 7 percent per annum, from the time of the commencement of this suit."
3d. That there was an agreement between the parties for the rendering of some service distinct and independent from that of May 7, 1849; that that agreement as matter of law, as one drawn from correspondence between the parties, the jury were bound to find, and that there was an agreement between the parties for the performance, by Mr. Foster of such services as he rendered in respect of the third chanroblesvirtualawlibrary
voyage of the Harriet Erving, to be compensated for at such rates as these services reasonably deserved.
To the second and third of the charges, as above given, the defendant excepted; no exception being taken by either party to the first. The jury found for the plaintiff $29,407, and the defendant brought the case here for review.
The reader has doubtless seen that, throwing out the question how far the meaning of the old contract had been settled by the decision in the equity suit in the circuit court for Massachusetts, and the question of interest, there were really but two questions in the case.
I. What did the agreement as made by the correspondence (Foster's letter of February 22, 1850, and Goddard's reply, being chief features in it) mean?
Did it mean, as Goddard, the defendant, insisted, that Foster would perform all the duties required by the old contract on the terms and for the compensation specified in it, that is to say, would perform them under that contract, a construction which, as this old contract gave nothing but for "business conducted to completion," would give nothing for any service performed before December 31, 1850, as the voyage in question was not so conducted, to a conclusion, before that date; while for any service performed after that date the argument was susceptible of being made that all that the plaintiff did he did as a member of the firm of Alsop & Co., and was paid by the commission given to that house.
OR, as Foster contended it was, was the meaning of the agreement as if he, Hoster, had written:
"In the interval, before the arrival of any new agent to represent you, I will perform the same services for the new voyages, not covered by the contract of May 7, 1849, that I have rendered in the voyages covered by the contract and that your new agent would perform were he here?"
a construction which would naturally imply that the new services were to be paid for at such reasonable rates as they were fairly worth.
II. Was the question
"whether there was an agreement
between the parties, shown by the correspondence, for the rendering of the services in question, distinct and independent of the agreement of May 7, 1850, a question of law to be determined by the court, or a question for the jury? "