Godsol v. Nash Motors Co.

Thomas, J., delivered the opinion of the Court. This suit was brought in the Baltimore City Court by the appellant, now known as Frank Joseph G-odsol, against the Mash Motors Company, to recover1 commissions to the amount of $5,590,970, alleged to be due him on sales of motor trucks and “spare parts” sold by the defendant company to the Government of the United States. In August, 1915, the appellant entered into the following contract with The Thomas B. Jeffery Company, a corporation of the State of Wisconsin: “This Agreement, Made and entered into on the day of its date between The Thomas B. Jeffery Company, a corporation of the State of Wisconsin, United States of America, hereinafter named The Manufacturer/ and F. J. Goldsoll, of the City of Paris, France, hereinafter named The Dealer/ witnesseth that: “1. The manufacturer agrees that the dealer shall, during the term and life of this contract, have the sole right to sell the motor cars, tractors, trucks and all other products of the manufacturer in the following territory, — that is to say, in the countries of France, Servia and Belgium on the Continent of Europe. “2.

The sole right hereby granted by the manufacturer to the dealer shall be deemed to include, and shall include, the right on the part of the dealer to sell said motor cars, tractors, trucks, and other ³⁹⁷ products of the countries named and to any and all of them, and also to or for the governments of the countries named for nse hy them without the said territory. “3. This is not a contract for the sale of cars, and no contracts or orders for the sale of motor cars and trucks made by the dealer hereunder shall be binding on the manufacturer for any purpose until such orders are accepted by it or its duly authorized representative at the office of the manufacturer at Kenosha, "Wisconsin. “é. The prices at which sales of motor cars, tractors, trucks and other products made hereunder shall, unless otherwise mutually agreed, be the regular list prices for such cars, trucks, etc., as such list prices are fixed and established by the manufacturer from time to time, and such as are in force in the territory described at the time any given sale is made. Provided, however, that hy mutual agreement between the parties hereto the price at which sales are made of cars, trucks, tractors or other products hereunder to a country engaged in war may be varied and fixed at such amounts as the circumstances of each particular case warrant, and that whenever special equipment is required by any nation engaged in war, or by any other purchaser, such variation shall be made to the regular list price of the manufacturer for the cars, trucks, tractors, or other products to which such equipment is applied as, to the parties, hereto,.may seem reasonable under all of the circumstances of the transaction. “5.

The manufacturer shall collect and receive from each purchaser the entire purchase price of all cars and trucks sold and delivered in the territory described during the life of this contract, and the compensation of the dealer for all work, labor and services rendered, and for all expenses incurred by him in connection with the sale of motor ears, tractors, trucks, etc., hereunder shall be twenty per con- ³⁹⁸ turn (20%) of the list price of the chassis of each motor car, tractor and truck, together with all excess over the price made by the manufacturer to the dealer on all bodies, and all excess over list prices of chassis, and twenty per centum (20%) of list prices of all parts or other property sold by the manufacturer in or for the territory, and the dealer agrees to' receive the aforesaid said sums as full compensation for all claims and demands of every name and nature growing out of the sale of motor cars, tractors, trucks, and other property hereunder. “6. Upon the collection by the manufacturer from any purchaser of motor cars, tractors, trucks, or other products, sold in or for said territory during the term hereof, of the selling price or any instalment thereof, said manufacturer agrees to immediately account to the dealer for the portion thereof due to him hereunder, and to pay the same over to him or as he may direct. If such moneys or any part thereof are remitted to the dealer outside of the United States of America, such remittances shall be made at his expense and risk. “7. The dealer agrees to use his best efforts during the term of this contract in making sales of the motor cars, tractors, trucks and other products of the manufacturer in the territory described, which agreement on his -part is declared to be of the essence of this contract; and in case that he uses the name * Jeffery’ in connection with any sales of motor cars <or trucks hereunder, to discontinue the use of such name at the time of the termination hereof, and thereafter to refrain from its use in connection with the sale of motor trucks or motor cars or parts therefor.

It is understood and agreed that during the term hereof and within the said territory, the dealer may sell and deal in motor cars, tractors, trucks, etc., produced by other manufacturers. “8. The manufacturer agrees to exercise reasonable diligence in the manufacture and delivery of ³⁹⁹ motor cars and trucks sold by the dealer hereunder, but does not bind itself to make deliveries of said cars or trucks at any fixed time, or in any fixed amount, or otherwise than as may be particularly specified in each sales agreement. “9. The term of this contract in so far as it relates to the country of France shall be during the continuance of the war in which the said country is now engaged and for two years following its close.; and for the countries of Belgium and Servia the term of this contract shall be during the time of the continuance of the said war and until peace is declared. “10. It is the intent and purpose of the parties hereto that the terms of this agreement shall apply to cover and include all sales of motor cars, tractors, motor trucks, and other products of 'the manufacturer covered hereby in or for the territory herein described for the full term hereof, whether such sales are made directly or indirectly by or through said dealer, directly or indirectly by the manufacturer ; and also in case deliveries are made after the termination hereof upon contracts or orders received and accepted by the manufacturer before the time of such termination. “11.

This contract shall discharge and set at naught all former contracts and understandings made between the parties hereto, and its execution by each is accepted by the other as full settlement, satisfaction and discharge by each of the other of all claims and demands of every name and nature up to this date. “12. The manufacturer agrees not to sell any of the products covered hereby to parties other than the dealer for resale in or for the territory aforesaid, and to this end will include in all other contracts that it makes during the term of this agreement for the sale and delivery of its products outside of the United States of America the ultimate destination of the products contracted for, and furthermore will ⁴⁰⁰ stipulate that the contractants shall not directly or indirectly resell the product in or for the territory herein mentioned, but it does not bind itself in any way to answer in damages to the dealer unless it breaches the specific conditions of this paragraph. It will, however, upon demand, assign and set over to the dealer any claim that the manufacturer may have against any contractant who breaches the condition of any contract that he shall not sell the products of the manufacturer in the territory covered by this agreement. “Nothing herein contained shall be deemed to constitute the dealer as the agent of the manufacturer for any purpose; and the manufacturer shall not be bound in respect of any act or representation of the dealer otherwise than in relation to the performance of specific sales contract accepted by the manufacturer or its representative as hereinbefore set forth, “The failure of either party to keep and perform this contract according t,o its spirit, purpose and real intent shall give to the other party the right to terminate the same upon ninety (90) days’ notice in writing. “In witness whereof -the parties hereunto have herein set their names this third day of August, in the year 1915. “(Signed) 'The Thomas B, Jeffery Company (Mfr.), “By Charles Jeffery, “President. “F. J. Goldsoll.” The contract of August 3rd was amended by two supplemental agreements between the appellant and the Jeffery Company, one dated October 12th, 1915, and the other dated September 7th, 1916, increasing the commissions to be paid the appellant and providing “that the term of said contract ⁴⁰¹ in so far as it relates to the Republic of France” should “expire with the close of the present European War.” In June, 1916, Congress passed the Act of June 3rd, 1916, known as the Rational Defense Act (TI. S. Statutes at Large, vol. 39, ch. 134), section 120 of which empowered the President, “in time of war or when war is imminent,” through any department of the Government, in addition to the existing methods of purchase or procurement, to place an order with any firm, company, corporation, or organized manufacturing industry for such product or material that may he required of the kind usually produced or capable of being produced by such company.

Compliance with such orders, which were given precedence over all other orders or contracts previously placed with such company, was made obligatory, and in case such company refused to comply with such orders, or to give the United States preference in the execution thereof, or to furnish the supplies ordered at a reasonable1 price, as determined by the Secretary of War, the President, through any department of the Government, was authorized to take immediate possession of the plant. Section 120 also provided that any company, or corporation, or thei responsible heads of such industry, who refused to comply with its provisions, should he deemed guilty of a felony, and be subject to fine and imprisonment, and that the compensation to he paid for such products or materials or as rental for the use of any manufacturing plant should be fair and just. In August, 1916, the appellee, the Rash Motors Company, took over the business of the Thomas B. Jeffery Company and assumed all of the obligations of the latter company. After the United States entered into the war, the Government, through the War Department, purchased from the appellee in all 10,164 motor trucks.

The orders or contracts for these trucks were dated July 27th, 1917, December 7th, 1917, April 13th, 1918, July 12th, 1918, and July 14th, 1918, and each contract called for delivery of the specified number of trucks at 'Kenosha, Wisconsin, and for the payment of the ⁴⁰² specified price as the just and fair compensation therefor, and also contained the following covenant: “Covenant Against Contingent Rees. — The contractor expressly warrants that it has employed no third person to solicit or obtain this contract in its behalf, or to cause or procure the same to be obtained upon compensation in any way contingent, in whole or in part, upon such procurement and that it has not paid, or promised or agreed to pay, to any third person, in consideration of such procurement, or in compensation for services in connection therewith, any brokerage, commission, or percentage upon the amount receivable by it hereunder; and that it has not in estimating the contract price or compensation demanded by it, included any sum by reason of any such brokerage, commission, or percentage; and that all moneys payable