Velie Motor Car Co. v. Kopmeier Motor Car Co.

• Decision Date: 02 January 1912
• Docket Number: 1,765.
• Citation: 194 F. 324
• Parties: VELIE MOTOR CAR CO. v. KOPMEIER MOTOR CAR CO.
• Court: U.S. Court of Appeals — Seventh Circuit

194 F. 324

VELIE MOTOR CAR CO. v. KOPMEIER MOTOR CAR CO.

No. 1,765.

United States Court of Appeals, Seventh Circuit.

January 2, 1912

[Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Jackson B. Kemper, for plaintiff in error.

Henry V. Kane, for defendant in error.

Before BAKER, SEAMAN, and KOHLSAAT, Circuit Judges.

KOHLSAAT Circuit Judge (after stating the facts as above).

Plaintiff contends that the contract is, in law, an agreement for the sale by plaintiff to defendant of 50 automobiles at an agreed price which plaintiff was willing to perform, and that by repudiating the contract defendant subjected itself to liability to respond as for a breach.

Defendant, on the other hand, contends that the contract is an executory agency contract, the consideration for which rests in mutual promises; that by reason of the option reserved by plaintiff to terminate it at its pleasure, defendant was entitled to a like option; 'and that,' in the language of the trial judge:

'This right to cancel the contract arbitrarily conferred upon the plaintiff destroys the mutuality, whether the contract be one of sale or agency; that until there has been some performance under the contract, it was nudum pactum and would not sustain the present action.'

In support of its contention that the contract was one of sale, plaintiff cites the following excerpts from said contract, viz.:

'In consideration of the above, it is understood and agreed that the Velie automobiles shall be invoiced to the party of the second part at the following net prices, f.o.b. Moline, Illinois' (giving same).

'Party of the second part agrees to keep at least one Velie automobile in stock for exhibition and demonstrating during the life of this agreement, and to order for shipment at least 50 before October 31, 1910.'

Also:

'The party of the first part agrees and does hereby extend to the party of the second part, the exclusive right of sale during the continuance of this contract for the Velie line of automobiles in the following territory:' (Some 21 counties in the state of Wisconsin.)

Plaintiff further contends that defendant held and enjoyed such exclusive right of sale in said territory from the time the contract went into effect, i.e., the fall of 1909, and that defendant thus having received the consideration agreed to be given to it, the contract was in part executed, and therefore not wholly executory.

For defendant the following clauses, in substance, of said contract are cited, in support of the claim that the contract was executory and one of agency. The contract imposes upon defendant certain conditions in the handling of Velie automobiles, in substance as follows, viz.: To sell under a one-year guaranty, to pay transportation charges to and from factory; to keep cars sold by them in good repair and satisfy their customers; and to maintain a repair shop; and also confers on plaintiff the right to return the $1,000 and cancel the contract, giving notice by writing a letter to that effect to defendant.

From the foregoing, it will be seen that plaintiff did not obligate itself to sell and deliver to defendant any automobiles. It virtually reserved the right to do nothing at all. Defendant had the right to sell to its customers, but was entirely at the mercy of plaintiff when it came to filling the order. Whatever automobiles plaintiff might choose to supply to defendant were to be invoiced at a...