Is a promise to pay additional compensation for services that the promisee is already contractually obligated to perform supported by sufficient consideration, where the promisee threatened to abandon the contract absent the extra pay?

Libelant sailors and fishermen contracted in writing with Alaska Packers' Association on March 26, 1900, to travel from San Francisco to Pyramid Harbor, Alaska, and work the 1900 fishing season, performing ship's duty and any other work requested. They were to receive $50 for the season plus two cents per red salmon caught. Twenty-one libelants later signed shipping articles on April 15, 1900, for $60 per season plus two cents per salmon. The company had about $150,000 invested in a cannery at Pyramid Harbor. After arriving in early April and beginning to unload the vessel and fit up the cannery, the libelants stopped work as a body on May 19, demanding $100 each and threatening to return to San Francisco otherwise. Replacement workers could not be obtained because of the remote location and short season. On May 22, the company's superintendent had a new document prepared substituting $100 for the earlier sums, and the libelants signed it, though he told them he lacked authority to alter the original contracts. On returning to San Francisco, the company refused to pay under the May 22 document. The libelants then accepted payment under the original contracts and signed full releases. The trial court rejected their claim that defective nets justified the demand.

The libelants brought a libel in admiralty in the federal district court to recover payment under the alleged May 22, 1900 contract. The district court found for the libelants, holding that the company could waive damages for the libelants' breach and enter into a new, mutually beneficial contract. The Alaska Packers' Association appealed to the United States Circuit Court of Appeals for the Ninth Circuit.

(Ross, J.)

No. A promise to pay additional compensation for services the promisee is already bound to perform lacks consideration and is unenforceable.

The May 22 agreement rested solely on the libelants' promise to render the exact services they were already obligated to perform under the March 26 and April 5 contracts. They assumed no new burden, and the company received no new benefit. Refusing to perform without valid cause and then demanding more money at a moment when replacements were unavailable is an unjustifiable exploitation of the company's necessities, not a bargained-for exchange.

The lower court reasoned that the company could waive its damages for the breach and enter a new contract. That reasoning fails because the record shows no voluntary waiver. The company's superintendent expressly told the libelants he had no authority to alter the original contracts, and the company itself did not learn of the breach until the expedition returned to San Francisco. An agent without power to change the contract has no power to waive rights under it.

The court adopted the reasoning of King v. Railway Co., 61 Minn. 482, 63 N.W. 1105, and Lingenfelder v. Brewing Co., 103 Mo. 578, 15 S.W. 844, which held that a party who refuses to perform and thereby coerces a promise of increased pay for doing what he is already bound to do cannot enforce that promise, and that enforcing it would reward bad faith. The court rejected the contrary Massachusetts line of authority beginning with Munroe v. Perkins, 9 Pick. 305, and Goebel v. Linn, 47 Mich. 489, as against the weight of authority and wrong on principle. The judgment is reversed and the case remanded with directions to enter judgment for the respondent.