FEINBERG, Circuit Judge:
This bitter litigation is an object lesson on the virtues of the individual calendar system and the burden imposed by diversity jurisdiction on the increasingly overcrowded dockets of the federal district courts.
Prior to March 8, 1968, plaintiff Terkildsen owned and operated Singer and Carlberg, an international agency engaged in the business of registering trademarks and patents in foreign countries on behalf of American clients, principally attorneys. On that date, plaintiff entered a contract with defendants in which she agreed to sell her business. The purchase price consisted of (1) a $22,500 down payment allocated to various assets being transferred; and (2) five per cent of gross billings, payable in monthly installments, collected by
Under a separate provision of the contract of sale, plaintiff-seller covenanted
Defendants' counterclaim is based on this contractual clause and upon a letter, mailed to plaintiff's former clients shortly after execution of the contract over the signatures of both firms (the joint letter), which stated in part that
In a memorandum opinion, Judge Bonsal found that plaintiff was liable to defendants in the sum of $22,573.43 under the terms of the undertakings set forth above. Plaintiff appeals from that determination.
Plaintiff argues that there "is absolutely no evidence that the defendants ever paid a penny of the $22,573.43 for which they were awarded judgment. . . ." However, defendants adequately established certain critical facts. First, when Haseltine, Lake acquired plaintiff's business, they acquired client accounts in which work on pending matters remained uncompleted. Second, client pre-payment of fees for future work to be performed was customary in the profession, and plaintiff conceded that she had been paid for work not yet completed. Third, in accord with the joint letter, defendants were thereafter billed in the sum of $22,573.43 by "correspondents" or "associates" situated abroad for services performed by them to facilitate the filing of patent or trademark applications in foreign countries. Finally, payment to foreign associates for services rendered is a significant aspect of work performed by an international agency; in monetary terms, from 50 to 75 per cent of fees received from clients are generally paid over to foreign associates.
If the reimbursement clause of the contract means what it seems to say, this proof was sufficient to permit recovery under the counterclaim. Plaintiff was pre-paid to do work which she did not do, and the extent of work undone is reasonably measured by the sums claimed by foreign associates, as reflected in the bills or debit notes they submitted to defendants as contemplated by the joint letter. Plaintiff contends, however, that defendants cannot recover absent proof that bills presented by the foreign associates for work performed for plaintiff's clientele were in fact paid by Haseltine, Lake; plaintiff argues that no shred of documentary proof of defendants' disbursements — e. g., cancelled checks, receipts — was ever introduced into evidence. We believe that though the testimony as to payments was not crystal clear, it was sufficient to permit the district judge to find as he did. Defendant Waters, the principal co-partner in Haseltine, Lake, adequately explained the absence of cash disbursements to the foreign associates and correspondents. These individuals were paid instead through internal bookkeeping procedures of Haseltine, Lake. Accounts receivable due from these associates and correspondents were cancelled
The remaining questions on appeal concern the award to plaintiff of pre-judgment interest on her claim. Defendants assert in a cross-appeal that pre-judgment interest is inappropriate on the facts of this case; plaintiff contends that the six per cent rate for that interest is too low. In support of their position, defendants rely on their contractually reserved "right to offset" sums owed by plaintiff under the reimbursement clause against periodic installments payable over five years to plaintiff under the 5%-of-gross-billings component of the purchase price. If defendants' computations are correct, then throughout the contractual term, by operation of this right to offset, plaintiff always owed defendants more than they owed her. If so, defendants argue that plaintiff has never been deprived of the use of any funds owed and should not recover interest to compensate for such deprivation. See Candiano v. Moore-McCormack Lines, Inc., 407 F.2d 385, 387 (2d Cir. 1969).
Putting to one side the question whether defendants' "right to offset" did not require some affirmative action on their part in view of the common law principle that mutual debts, even when arising out of the same transaction, do not cancel each other,
Under these circumstances, we see no reason to depart from the general rule of practice which forecloses appellate consideration of issues not raised below. See, e. g., Hormel v. Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 85 L.Ed. 1037 (1941). Adherence to the rule is particularly apt where, as here, factual
We come, finally, to plaintiff's contention that she is entitled to pre-judgment interest at a rate greater than six per cent. Briefly put, plaintiff's argument is that she should get the benefit of the higher legal rate of interest in effect when installments owed her became due.
We have often enough manifested our willingness to construe notices of appeal liberally, e. g., Bancroft Navigation Co. v. Chadade S.S. Co., 349 F.2d 527 (2d Cir. 1965). We have expressed our view that the federal appellate rule requiring designation of "the judgment, order or part thereof appealed from"
On the other hand,
9 Moore's Federal Practice ¶ 203.18, at 756.
We think that plaintiff's notice of appeal, designating only defendants' recovery on the counterclaim as the part of the judgment appealed from, clearly falls within the second category, and manifests an intent to leave the judgment on her own claim undisturbed. It seems that only after defendants took a cross-appeal challenging the award of interest on plaintiff's claim did plaintiff, as an afterthought, seek to enlarge her recoverable interest. As appellee with respect to the cross-appeal, she may not do so. See United States v. American Ry. Express Co., 265 U.S. 425, 435, 44 S.Ct. 560, 68 L.Ed. 1087 (1924). We cannot fail to notice that this leaves plaintiff and defendants with judgments of almost the same amount, see note 11 supra, after years of contentious maneuvering; this does not seem an inappropriate result.
Nor, with but one exception, have we found any case in this circuit where interest issues were considered on appeal without having been raised below. The exception is United States v. L. N. White & Co., 359 F.2d 703, 714 (2d Cir. 1966), where, in the concluding paragraph of the opinion, the court devoted one sentence to affirming the district court's exercise of discretion in awarding pre-judgment interest, after pointedly complaining of failure to raise the point prior to appeal.