Corbit v. J. I. Case Co.

• Decision Date: 23 February 1967
• Docket Number: No. 37508,37508
• Citation: 70 Wn.2d 522,424 P.2d 290
• Court: Washington Supreme Court
• Parties: Philip C. CORBIT and Shirley L. Corbit, husband and wife, and Corbit Equipment Co., Inc., a corporation, Respondents, v. J. I. CASE COMPANY, a corporation, Whitworth College, Inc., a corporation, Northern Pacific Railway Co., a corporation, and J. I. Case Credit Corporation, a corporation, Appellants.

Page 522

70 Wn.2d 522

424 P.2d 290

Philip C. CORBIT and Shirley L. Corbit, husband and wife and Corbit Equipment Co., Inc., a corporation, Respondents, v. J. I. CASE COMPANY, a corporation, Whitworth College, Inc. a corporation, Northern Pacific Railway Co., a corporation, and J. I. Case Credit Corporation, a corporation, Appellants.

No. 37508.

Supreme Court of Washington, En Banc.

Feb. 23, 1967.

[424 P.2d 292] Hart Snyder, Spokane, for J. I. Case Co.

Brown & Thayer, Spokane, for Whitworth College.

Francis J. McKevitt, Spokane, for Northern Pac. Ry. Co.

Quackenbush, Dean & Beschel, Justin L. Quackenbush, R. Max Etter, C. C. Rowan, Spokane, for respondents.

ROSELLINI, Judge.

This factually and legally complex controversy arose out of a prolonged effort by the plaintiffs, Philip C. Corbit and Shirley L. Corbit, husband and wife, and their wholly-owned corporation, Corbit Equipment Co., Inc., to establish both a retail dealership and a transfer dealership ¹ based upon alleged contracts and protracted negotiations with the J. I. Case Company, a national manufacturer of farm and industrial implements and machinery.

The plaintiffs brought this action against three distinct defendants: (1) J. I. Case Company and its subsidiary, J. I. Case Credit Corporation; ² (2) Northern Pacific Railway Co.; and (3) Whitworth College, Inc. Although the complaint contained only two counts, it seems to us that the plaintiffs in effect are asserting five separate theories of recovery. Initially, there is a rather nebulous allegation and referral to an 'overall agreement or contract' between the plaintiffs and all of the defendants.

Secondly, the plaintiffs sought to prove breach of a separate contractual duty by each of the defendants. With respect to J. I. Case Company, the plaintiffs claimed breach of a contract to grant a transfer dealership to Corbit Equipment Co., Inc., and breach of the retail dealership contract. With respect to Northern Pacific Railway Co., the plaintiffs claimed damages arising from a breach of the Northern Pacific's alleged contract to sell certain real estate to the plaintiffs. Finally, with respect to Whitworth College, the plaintiffs assert a claim for damages arising out of Whitworth's failure to carry out its alleged obligation to purchase the aforementioned Northern Pacific right-of-way land from the plaintiffs, erect a warehouse thereon, and lease back the premises to the plaintiffs.

The plaintiffs additionally attempted to prove grounds for recovery in promissory estoppel, collectively and individually, against all of the defendants. In effect, the plaintiffs sought to prove that all of the defendants had expressly or inferentially extended joint promises to carry out their respective parts of an over-all arrangement; that the defendants could reasonably have expected that this 'collective' promise would induce the plaintiffs to undertake specific action of a definite and substantial character; and that injustice would thereby result if plaintiffs were not given a remedy. In the same vein, the plaintiffs made an effort to show grounds for recovery under a theory of Finally, the plaintiffs attempted to prove a conspiracy on the part of all of the defendants to defeat the alleged contractual interrelationships between the parties and to deprive plaintiffs of a 'transfer dealership' in products of the J. I. Case Company.

promissory estoppel against each of the defendants individually.

Thus, the five distinct theories of recovery were: (1) breach of an over-all contract; (2) breach of individual contractual obligations; (3) promissory estoppel against all of the defendants collectively; (4) promissory estoppel against each of the defendants individually; and (5) conspiracy on the part of all of the defendants to defeat the various legal relationships between the parties and to deprive the plaintiffs of the J. I. Case Company transfer dealership. Unfortunately, the first four theories mentioned above were lumped together in the plaintiffs' complaint during trial, and in the instructions to the jury in a single claim. In the words of the plaintiffs-respondents' brief:

The First Count is an action for damages for breach of duty, or violation of obligation with a consequent interference with the rights of Respondents, which resulted in substantial damages and prevented them from earning commissions and profits. It arises out of agreements to establish Respondents as the retail dealer and distributor (Transfer dealer) for Case products at Spokane, Washington, by November 1, 1959.

On this first count, the jury returned a verdict for plaintiffs of $220,128.81 against all defendants. On the conspiracy count, the jury exonerated Whitworth College, rendered a verdict only against Northern Pacific Railway Co., J. I. Case Company, and J. I. Case Credit Corporation, in the amount of $171,688.56.

The three defendants have appealed separately from the trial court's judgment entered on the verdict and from its denial of motions by each of the defendants for judgment notwithstanding the verdict or for a new trial. In the interests of brevity and clarity, we shall not make an attempt to set out in any detail the voluminous facts involved in this In 1957, appellant J. I. Case Company began inquiring of the respondent Philip Corbit (formerly a J. I. Case Company trainee in the machinery and equipment business) as to whether he would be interested in becoming Case's retail dealer in Spokane, Washington. At that time, Corbit and his wife owned and operated a small farm machinery dealership at Davenport, Washington. After protracted negotiations between the parties, Corbit agreed to accept the retail dealership. At this time, the parties discussed and apparently contemplated that Corbit would also function as the distributor of Case machinery for eastern Washington and northern Idaho. Since the existing Case facilities in Spokane were inadequate for such an operation, it was initially contemplated that J. I. Case Company would construct and lease to plaintiffs a warehouse sufficient for both a retail and a transfer dealership.

litigation. The following condensed factual narration contains only the pertinent evidence, viewed in the light most favorable to the plaintiffs' case.

After Corbit and his wife liquidated and closed up their financially shaky Davenport business and commenced to operate as a retail dealer in Spokane, the J. I. Case Company changed its plans about constructing and operating a warehouse under a lease arrangement with the Corbits. Thereupon, Corbit apparently accepted this change in plans and began to look for prospective local financing to undertake the construction and leasing of a warehouse facility which would be adequate to house a transfer dealership. Months later, the search for capital led Corbit to several individual trustees of the defendant Whitworth College, Inc., who expressed an interest on behalf of the college in the venture. The secretary of the board of trustees of that institution signed a so-called 'commitment letter' on June 24, 1959, whereby Whitworth College, Inc., apparently indicated its willingness to buy land from Corbit which Corbit would purchase from Northern Pacific Railway. In other words, Whitworth was to build the required warehousing facility and then lease the premises back to Corbit. However Meanwhile, Corbit and representatives of J. I. Case Company had been in touch with and/or negotiating with Northern Pacific Railway for the sale of approximately 7 1/2 acres of railroad right-of-way land in Spokane which was suitable for the contemplated transfer dealership. On July 13, 1959, Northern Pacific made an express offer to sell the land to Corbit, conditioned upon receipt of a check for $80,733.75, the agreed-upon consideration. Although plaintiffs allege that they accepted this offer, the check as specified in the Northern Pacific offer was never tendered, and thus the consideration was never paid.

Rosenquist, the secretary of the board of trustees, and/or the several trustees of the board involved in the negotiations, such as they were, wanted some assurance from J. I. Case Company that it would stand behind the lease in the event that Corbit was unable to meet his obligations in that respect.

All of the defendants or their representatives, or purported representatives, began to have qualms apparently about their proposed roles in relation to the transfer dealership venture during the latter part of September 1959. Whitworth's actual or alleged representatives were unable to make certain as to the availability of the needed finances, apparently due to an increase in the interest rate, and perhaps for other reasons. On September 28 and 29, 1959, Case informed Northern Pacific that the J. I. Case Company did not intend to give Corbit Equipment Co., Inc., the transfer dealership for Case products; and further, that it intended to terminate its retail dealership with that company. On that basis, Northern Pacific wrote to Corbit on October 5, 1959, withdrawing its offer to sell the railway right-of-way property. There is evidence that J. I. Case Credit Corporation people began to interfere with the conduct of Corbit's retail business during this period by talking to prospective Corbit customers. On October 7, 1959, J. I. Case Company changed the locks on the building it shared with Corbit, and on October 12, 1965, Case representatives gave Corbit two letters which purported to cancel any and all contracts between J. I. Case Company and Corbit.

Corbit subsequently made demands upon each of the three defendants to follow through on their respective alleged promises and offered to complete his obligations. Having been refused by each and all of the defendants, he commenced this lawsuit.

The defendants, appealing separately, have submitted a total of 75 assignments of error. We will not deal with each individual assignment of error, but will...