Ellis v. Dodge Bros.

• Citation: 246 F. 764
• Decision Date: 17 December 1917
• Docket Number: 3033.
• Parties: ELLIS v. DODGE BROS.
• Court: U.S. Court of Appeals — Fifth Circuit

246 F. 764

ELLIS v. DODGE BROS.

No. 3033.

United States Court of Appeals, Fifth Circuit.

December 17, 1917

Shepard Bryan and Madison Richardson, both of Atlanta, Ga., for plaintiff in error.

Alex C King and Daniel MacDougald, both of Atlanta, Ga. (King &amp Spaulding, of Atlanta, Ga., and McGregor & Bloomer, of Detroit, Mich., on the brief), for defendant in error.

Before WALKER and BATTS, Circuit Judges, and GRUBB, District Judge.

BATTS Circuit Judge.

Suit was instituted by Samuel A. Pegram against Dodge Bros. on an instrument which describes itself as a dealer's agreement. Upon the death of Pegram his administrator became a party. The material parts of the agreement may be thus summarized:

(1) The manufacturer grants unto the dealer the right to sell Dodge Bros. motorcars and repair parts during the life of the agreement in the territory described.

(2) The price at which cars are to be billed is indicated, running from 6 to 12 motorcars, inclusive, at 15 per cent. off manufacturer's list price, to 1,000 cars or more, at 25 per cent. off.

(3) The prices of repair parts are indicated.

(4) A deposit of $1,000 is required to protect the manufacturer against nonpayment of repair parts accounts; the deposit to be returned upon the expiration of the agreement, with interest at 6 per cent.

(5) The dealer agrees to appoint associate dealers.

(6) '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 cent. per annum from the date of presentation.'

(7) 'This agreement shall expire by limitation June 30, 1915 or may be canceled by the manufacturer or dealer upon 15 days' written notice. The termination or cancellation of this agreement will immediately act as a cancellation of all orders received from the dealer for motorcars or parts, which have not been delivered prior to date of cancellation.'

(8) The dealer is to make claims for shortage within 10 days after receipt of a shipment.

(9) The manufacturer reserves the right to change list prices at any time.

(10) 'The dealer authorizes the manufacturer to make shipments of Dodge Bros. motorcars in the quantities and according to the schedule printed below. The dealer agrees to accept and pay for such motorcars as shipped, and will not cancel any motorcars in this schedule without giving the manufacturer 15 days' written notice, in which event the manufacturer will have the right to cancel a number of motorcars equal to those canceled by the dealer. ' The list is then given, as follows: October, 8 touring cars; November, 2 roadsters and 7 touring cars; December, 2 roadsters and 16 touring cars; January, 2 roadsters and 19 touring cars; February, 3 roadsters and 21 touring cars; March, 2 roadsters and 25 touring cars; April, 3 roadsters and 24 touring cars; May, 3 roadsters and 30 touring cars; June, 3 roadsters and 30 touring cars.

(11) The dealer agrees to purchase repair parts that will inventory not less than $3,000. Upon the termination of the agreement, the manufacturer agrees to purchase from the dealer any new repair parts that he may have in stock, the dealer to prepay transportation to Detroit.

(12) '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.'

(13) A provision as to the manufacturer's warranty.

The agreement was dated July 29, 1914. During the period covered by the agreement, 64 cars were delivered to the plaintiff. Plaintiff, contending that 136 cars were still due under the contract, sought to recover damages for the failure to deliver these cars. The plaintiff alleged that in order to carry out the contract he had rented property at the rate of $210.60 per month, that he had devoted his time to the business contemplated by the agreement, that he had maintained a selling force during the period of the contract, and that he had incurred other expenses which were set up in the petition. The petition is in a number of counts; the first, third, fourth, and fifth being based upon the theory that the agreement, having never been canceled, was continuing until expiration under its terms, and that, plaintiff having completely performed, and Dodge Bros. having accepted the benefits accruing to it by his performance, the defendant became bound to perform its part of the agreement. Counts 2 and 6 are upon the theory that, at all events, the dealer's agreement constituted an offer to sell the cars therein set out, and this offer was accepted by Pegram's placing orders for the 200 automobiles specified in the agreement.

The defendant filed a number of special exceptions to the petition, and by general demurrers raised the following issues:

(1) That the contract was in law a nullity.

(2) That it was not a binding offer to sell, by reason of the arbitrary right of cancellation, and that the acceptance of the offer would not make a binding contract, as one party would be bound and the other not; the effect being to make the contract unilateral and void.

(3) That if the cars were ordered, and not delivered, no right of action would arise, unless the orders were first accepted.

(4) That no...