Ellis v. Dodge Bros

• Decision Date: 19 October 1916
• Docket Number: 209.
• Citation: 237 F. 860
• Parties: ELLIS v. DODGE BROS.
• Court: U.S. District Court — Northern District of Georgia

237 F. 860

ELLIS v. DODGE BROS.

No. 209.

United States District Court, N.D. Georgia.

October 19, 1916

At Law. Action by Frampton E. Ellis, administrator of the estate of Samuel A. Pegram, deceased, against Dodge Bros., a corporation. On demurrer to petition. Sustained. Bryan, Jordan & Middlebrooks, of Atlanta, Ga., for plaintiff.

McGregor & Bloomer, of Detroit, Mich., and King & Spalding, of Atlanta, Ga., for defendant.

NEWMAN District Judge.

This suit was brought originally by Samuel A. Pegram, now deceased, and, since his decease, his administrator, Frampton E. Ellis, has been made party plaintiff. The suit is grounded largely, or almost entirely, on a contract between the parties; the one, Dodge Bros., a Michigan corporation, being a manufacturer of automobiles, and the other, Samuel A Pegram, doing business in the city of Atlanta under the name of Pegram Motor Car Company, being a dealer in automobiles. The contract is as follows:

'With a view to outlining the business relations that shall exist between Dodge Bros., to be known hereinafter in this agreement as the manufacturer, and Pegram Motor Car Company, of Atlanta, Fulton county, Ga., to be known hereinafter as the dealer, certain conditions and statements of facts are hereinafter set forth.

'Territory: The manufacturer grants unto the dealer the right to sell Dodge Bros. motor cars, and repair parts, during the life of this agreement, in the following described territory: Cobb, Fulton, De Kalb, Gwinnett, Henry, Clayton, Campbell, Douglas.

'Discounts: The dealer's purchases of complete motor cars shall be billed to the dealer and be paid for by him at the following percentages off the manufacturer's list price:

50 to 74 motor cars, inclusive . . . 18%

75 to 99 motor cars, inclusive . . . 19%

100 to 199 motor cars, inclusive . . . 20%

200 to 399 motor cars, inclusive . . . 21%

400 to 599 motor cars, inclusive . . . 22%

600 to 799 motor cars, inclusive . . . 23%

800 to 999 motor cars, inclusive . . . 24%

1000 motor cars or more . . . 25%

'(The copy of the contract as attached to the declaration includes the following three discounts not shown in copy of contract filed:

6 to 12 motor cars, inclusive . . . 15%

13 to 24 motor cars, inclusive . . . 16%

25 to 49 motor cars, inclusive . . . 17%)

'Each percentage of discount as shown above will apply only to its specific quantity of motor cars, and will not apply on the preceding quantity unit.

'Terms of payment: The manufacturer will ship cars to the dealer with sight draft against bill of lading attached, and the dealer shall pay such draft with exchange upon presentation. Upon failure to do so, the dealer will pay interest thereon at the rate of 6% per annum from date of presentation. All prices are f.o.b. Detroit, Mich.

'Service stations: In the interest of more universal service to Dodge Bros. car owners, the manufacturers will appoint Dodge Bros. service stations wherever possible, and will sell repair parts for Dodge Bros. motor cars in the above territory as follows:

To owner . . . List price C.O.D. net.

To repair shops . . . List price less 10% C.O.D. net.

To Dodge Bros. service station . . . List price less 15% C.O.D. net.

'Repair parts discounts: The dealer's purchases of repair parts shall be billed to the dealer and be paid for by him at 25% discount from manufacturer's list price. To encourage the dealer to make prompt payment of his repair parts account, the manufacturer will allow the dealer a discount of 5% from the net price of all repair parts, if payment therefor is made on or before the 15th of the month following date of invoice.

'Deposit: To protect the manufacturer against nonpayment of such parts accounts, and to avoid the necessity of C.O.D. shipments, the dealer shall deposit with the manufacturer the sum of $1,000. At the expiration of this agreement, the manufacturer agrees to refund to the dealer the amount of this deposit, with interest at 6% per annum, after deducting therefrom any amount that may be due the manufacturer.

'Associate dealers: The dealer agrees to appoint associate dealers at all points in his territory necessary to meet the manufacturer's ideas of proper representation in all local communities. The manufacturer will help toward the appointment of associate dealers, with the understanding that the dealer will be held responsible for the acts of such associate dealer. In order to receive full benefit of advertising, publicity, and sales promotion, it is essential that all associate dealers' agreements be made on forms provided by the manufacturer, and that such agreements be forwarded to the manufacturer for approval.

'Territory infringement: The manufacturer appeals to the dealer's sense of fairness to prevent the dealer from selling Dodge Bros. motor cars for use in territory included in other Dodge Bros. dealers' agreements. If, however, there be any infringement brought to the attention of the manufacturer, the offending dealer agrees to immediately remit, without protest, to the manufacturer, the sum of $200, to be apportioned as seems fair and equitable, in the best judgment of the manufacturer.

'Report of sales: To assist in permanently increasing the dealer's earning capacity, and to assist the manufacturer to equitably distribute his product, the manufacturer requests the dealer to forward to him at Detroit the triplicate copies of all retail orders immediately upon being signed by the purchaser.

'Provision for cancellation: This agreement shall expire by limitation June 30, 1915, or may be canceled by the manufacturer or dealer upon fifteen days' notice. The termination or cancellation of this agreement will immediately act as a cancellation of all orders received from the dealer for motor cars or parts which have not been delivered prior to date of cancellation.

'Transfer of agreement: The dealer agrees not to transfer or assign this agreement without the written permission of the manufacturer.

'Claims for shortages and damages: To facilitate and expedite the adjustment of claims for shortages, the dealer agrees to make claims within ten days after the receipt of shipment. The manufacturer's responsibility ceases upon delivery to the transportation company, and all claims for damages should be made by the dealer direct upon the transportation company.

'Use of words 'Dodge Brothers': The dealer agrees to use the words 'Dodge Brothers' in advertising Dodge Bros. motor cars, but he agrees not to use the words 'Dodge Brothers' as a part of any corporate or firm name.

'Change in list price: The manufacturer reserves the right to change the list price of Dodge Bros. cars by giving the dealer 30 days' notice in writing.

'Dealer's order: The dealer authorizes the manufacturer to make shipment of Dodge Bros. motor cars in the quantities and according to the schedule printed below. The dealer agrees to accept and pay for such motor cars as shipped, and will not cancel any motor cars in this schedule without giving the manufacturer fifteen days' written notice, in which event the manufacturer will have the right to cancel a number of motor cars equal to those canceled by the dealer.

Rds. T. C.

Oct. 8

Nov. 2 7

Dec. 2 16

Jan. 2 19

Feb. 3 21

Mar. 2 25

Apr. 3 24

May 3 30

June 3 30

'Repair parts stock: The dealer agrees to purchase from the manufacturer and to carry in stock at all times a stock of Dodge Bros. repair parts that will inventory at all times during the life of this agreement not less than $3,000 at list price. Upon termination of this agreement, the manufacturer agrees to purchase from the dealer any new Dodge Bros. repair parts in good condition that he may have in stock at that time, the dealer to prepay transportation charges on such parts to the Dodge Bros.' factory at Detroit.

'Display cars: In order to obtain the maximum retail business, the dealer agrees to keep in stock at all times at least one Dodge Bros. motor car for display purposes.

'Retail sales at list price: It is the intention of the manufacturer to at all times establish list prices which represent a fair value to the car owners and a legitimate profit to the dealer, discounts considered. Therefore the dealer should sell only at these list prices, to enable him to successfully conduct a permanent business.

'Warranty: The manufacturer warrants each new motor vehicle manufactured by him, whether passenger car or commercial vehicle, to be free from defects in material and workmanship under normal use and service, his obligation under this warranty being limited to making good at his factory any part or parts thereof which shall, within ninety (90) days after delivery of such vehicle to the original purchaser, be returned to him with transportation charges prepaid, and which his examination shall disclose to his satisfaction to have been thus defective; this warranty being expressly in lieu of all other warranties, expressed or implied, and of all other obligations or liabilities on his part, and he neither assumes nor authorizes any other person to assume for him any other liability in connection with the sale of his vehicles.

'This warranty shall not apply to any vehicle which shall have been repaired or altered outside of his factory in any way so as, in his judgment, to affect its stability or reliability, nor which has been subject to misuse, negligence or accident, nor to any commercial vehicle made by him which shall have been operated at a speed exceeding the factory rated speed, or loaded beyond the factory rated load capacity.

'He makes no warranty whatever in respect to tires, rims ignition apparatus, horns or other signaling devices, starting devices, generators, batteries,...