Alaska Packers' Ass'n v. Domenico

|- cellpadding="10" border="1" !majority |written by Ross |-

FACTS:

• Parties entered into a contract on 5/22/1900 in which Alaska Packers’ (D/appellant) promised to pay Domenico (and other libelants/sailors/P) sum of $100 each for services rendered and to be rendered
  • D denied execution on its part
  • Averred that the contract was without consideration
  • Alleged that the work performed was under different contracts than sued upon and that prior to filing each of the sailors was paid in full for the amount due thereunder on the original contracts – each one executed a full release of claims and demands
• Sailors agreed to go from San Fran to Alaska and work for D during the fishing season; agreed to do regular ship’s duty, and whatever other work was requested by the captain→ to be paid $50 for the season and $.02 for every red salmon in which a sailor took part in
• 21 sailors signed shipping articles and shipped as seamen on Two Brothers, vessel chartered by D→ signed for $60 and $.02 per salmon→D had $150k invested in salmon cannery; Ps unloaded the ship but stopped in May and demanded higher pay and stated unless they were paid more they would stop working entirely and return to San Fran
• It was impossible for D to get other men to work; tried for several days without success to get Ps to work and then yielded to their demands→ clerk was instructed to copy contracts executed in San Fran and substitute $50/$60 for $100; Ps all signed before shipping commissioner
  • Superintendent handling the situation testified he told Ps that he was without authority to enter into any contracts or alter them
• Company denied validity of new contracts upon return to San Fran; refused to pay anymore than what was originally contracted for
  • Originally asked for increased wages due to defective fishing nets

PROCEDURAL HISTORY:

• Trail Court: ruled against Ps, no evidence of defective nets; Ps were not justified in refusing performance b/c their pay depended upon catching fish, so D would have provided good nets
  • Real question was whether or not the new contracts were supported by sufficient consideration

ISSUE(S):

• Is there consideration when one party refuses to uphold the terms of the original contract to the detriment of the other party?

HOLDING: No.

ANALYSIS:

1. Ps, without any valid cause, absolutely refused to do their work that they contracted for unless D consented to pay more money
   1. The demand for more pay under the circumstances was without consideration→ D gained nothing more from the new agreements – basic contractual objection is no additional consideration
   2. Ps willfully and arbitrarily broke the original agreements→ they should have been liable to D for damages
   3. No voluntary waiver on the part of D for breach of the original contracts
   4. Superintendent also explicitly informed the sailors he had no authority to modify or enter into contracts
   5. King v. Railway Co. (MN 1902)
      1. A party who refuses to perform and coerces a promise from the other party for increased compensation takes an unjustifiable advantage of the necessities of the other party→this promise cannot be legally enforced
   6. Ligenfelder v. Brewing Co. (MO 1891)
      1. Court voided a contract of which the building owner agreed to pay its architect an additional sum b/c of the architect’s refusal to otherwise proceed
      2. Architect extorted necessities; promise is not valid → permitting him to recover for building owner’s nonpayment would be to offer a premium upon bad faith; invites violating contracts

FINAL DEPOSITION: Reversed and remanded – Judgment for Alaska