Martin v. Richmond, F. & P. R.

WOODS, Circuit Judge. In these consolidated actions against James C. Davis, Director General of Railroads, and the Richmond, Fredericksburg & Potomac Railroad Company, the plaintiff, C. Delaney Martin, claims $39,041.14 damages for breach of contract and also on quantum meruit for services performed. The question is whether the District Judge was right in directing a verdict for the defendants. The facts are not in dispute. On July 1, 1917, the plaintiff, Martin, contracted with the Richmond, Fredericksburg & Potomac Railroad Company to supply for three years all its fuel coal, buying it at his own expense and on his own credit, and delivering it to the railroad at cost and a commission of 5 per cent. He furnished coal under the contract to the entire satisfaction and advantage of the railroad company until December 28, 1917, when under the act of Congress (Act Feb. 28, 1920, § 206 [Comp. St. Ann. Supp. 1923, § 10071i4.cc]) the railroad was taken over by the President through the Director General. Thereafter until June 4, 1918, Martin continued to deliver all fuel coal for the railroad company under the orders of the Director General. Deliveries and payments were made under the terms of the contract. On June 5, 1918, the Director General, through the president of the railroad company, notified Martin that the coal contract would not be recognized by him and that, unless Martin would deliver the coal at the regular price without the commission, some other arrangements would be made to supply it. On the same day Martin answered, protesting against the injustice done him in the annulment of the contract, but saying: “I will continue to purchase coal for you as suggested in your telegram, without prejudice to my rights under the contract.” The Director General by letter and in person several times reiterated his repudiation of the contract. After June 4, 1918, he continued to receive the coal from Martin, but paid therefor only the cost price and expenses, without the 5 per cent, commissions or other compensation until January 1, 1919. On that day Martin agreed with the Director General to deliver to the railroad its fuel coal supply until the end of the federal control, receiving therefore the .cost price of the coal and expenses of purchasing, and $200 a month compensation. In making this agreement, however, Martin again expressly reserved his rights under the original contract. The agreement with the Director General provided that if Martin should establish his right to the 5 per cent, commission according to the contract, the amount found io be due him thereunder should be credited with the expenses and the $200 per month paid him under the new arrangement. When the government released control on March 1, 1920, the railroad company immediately resumed with Martin the relations established by the contract of July 1, 1917, and paid him commissions accordingly for four months, the remainder of the contract period. The claim of the plaintiff is for 5 per cent, commissions for services rendered in purchasing coal from June 5, 1918, when the Director General gave notice of his refusal to adopt the contract of July 1, 1917, to March 1, 1920, when the railroad company was returned to its owner, loss the sums paid him for expenses and compensation. Evidently, the railroad company is not liable for services rendered by Martin after the government frustrated the contract by taking over the properly. Missouri Pacific Railroad Co. v. Ault, 256 U. S. 554, 41 Sup. Ct. 593, 65 L. Ed. 1087. It is equally clear that the Director General, taking possession under the authority of the federal statute, was not bound to carry out the contract of the railroad company with Martin, and that no action for its breach would lie against him, unless by his action he adopted it. Omnia Commercial Co., Inc., v. United States, 261 S. W. 502, 43 Sup. Ct. 437, 67 L. Ed. 773. He had, however, the option of adopting the contract vfrith Martin under the provisions of subdivision (h) of section 4 of the contract between himself and the railroad company. Martin’s right to recover must stand or fall on the issue whether tho Director General adopted the contract of July 1, 1917, between Martin and the railroad company. It will be observed that throughout all of the correspondence and negotiations Martin stood on his rights under the contract of March 1, 1917, protesting always against the injustice of not carrying it out, when he had abandoned his former business to enter into it. His consent of June 5, 1918, to go on purchasing coal without receiving com [28] missions, and his agreement of January 1, 1919, to perform the service for a compensation of $200 a month and expenses, were expressly without prejudice to Ms rights under that contract. But there was no reservation of any other right. If he cannot recover, therefore, under the contract, he cannot recover at all. We do not think that it can be said there was no evidence of adoption of the contract by the Director General. For five months from December 28, 1917, to June 4, 1918, he and Ms agents in charge .of the railroad received coal and made payments in accordance with the contract. It is true that the Director General 'had a reasonable time to obtain the information necessary for him to make an intelligent election whether he would adopt or reject the contract. Missouri Pac. R. Co. et al. v. Ault, 256 U. S. 554, 562, 41 Sup. Ct. 593, 65 L. Ed. 1087; Quincy Missouri & Pacific R. Co. v. Humphreys, 145 U. S. 82, 12 Sup. Ct. 787, 36 L. Ed. 632; United States Trust Co. v. Wabash Western Ry. Co., 150 U. S. 287, 299, 14 Sup. Ct. 86, 37 L. Ed. 1085. In deciding what was a reasonable time, the existing emergency and the immensity and number of questions to be decided by the Director General are to be taken into account; but it is also to be taken into account that the Director General had the benefit of the services and opinion and advice of. the President, Superintendent and General Counsel, who were performing the functions of' their respective offices for him and who were thorougMy familiar with Martin’s contract and services. The question decisive of the case, for the determination of the jury, was, therefore, whether under all the circumstances the Director General, by acting under the contract and receiving its benefits for five months, should be considered to have adopted it. If the Director. General gave notice within a reasonable time of his election to reject the contract, the plaintiff cannot recover. If, on the other hand, the Director General received the benefits and made payments under the contract for a longer time than was reasonably necessary for an intelligent election, then he should be held to have adopted it. This issue, we tMnk, should have been submitted to the jury. If both parties had asked for a directed verdict and nothing more, then the finding of the District Judge on the issues would be binding on both. Beuttell v. Magone, 157 U. S. 154, 15 Sup. Ct. 566, 39 L. Ed. 654; Empire State Cattle Co. v. Atchison, Topeka & Sante Fé R. Co., 210 U. S. 1, 28 Sup. Ct. 607, 52 L. Ed 931, 15 Ann. Cas. 70; Sena v. American Turquoise Co., 220 U. S. 497, 31 Sup. Ct. 488, 55 L. Ed. 559. Plaintiff asked for a directed verdiet, and in refusing it the District Judge, without request, directed a verdict for the defendant. The authorities do not go to the extent of holding that a request by one party for a directed verdict is a submission of all issues to the court. The judgment' is affirmed in the action against the railroad company, and reversed in the action against the Director General.