Erskine v. Chevrolet Motors Co.

• Decision Date: 26 May 1923
• Docket Number: 542.
• Citation: 117 S.E. 706,185 N.C. 479
• Parties: ERSKINE ET AL. v. CHEVROLET MOTORS CO. ET AL.
• Court: North Carolina Supreme Court

117 S.E. 706

185 N.C. 479

ERSKINE ET AL. v. CHEVROLET MOTORS CO. ET AL.

No. 542.

Supreme Court of North Carolina

May 26, 1923

Appeal from Superior Court, Buncombe County; Lane, Judge.

Action by J. V. Erskine and others, individually and as partners doing business as the Erskine Motors Company, and another against the Chevrolet Motors Company and another. From a judgment of nonsuit, plaintiffs appeal. New trial.

An oral agreement made in December, 1919, between a motor company and a sales agency, whereby the motor company bound itself not to cancel the agency contract, indefinite as to its duration and to deliver promptly the automobiles theretofore ordered for the season beginning in January, 1920, and ending in July, held not affected by the statute as to contracts not to be performed within a year.

This action was before this court, on appeal by the defendants from an order denying the petition and motion of defendants for removal to the federal court. 180 N.C. 619, 105 S.E. 420. Defendants docketed the case in the federal court and subsequently filed a bill in equity in that court and procured an order enjoining the prosecution of this action in the state court. Upon a hearing in the federal court, the injunction was vacated and the suit dismissed. Thereupon a consent order was entered remanding this action to the state court, and the case was heard in the superior court of Buncombe county at the August term, 1922.

The following stipulation was made by the parties in the case: It is agreed that this action was regularly and properly constituted in the superior court of Buncombe county, and that the summons was duly issued on the 14th day of May 1920, but not served, and a warrant of attachment was duly issued on the same day, and certain property in possession of the Southern Railway Company seized by the sheriff of Buncombe county thereunder, and that said warrant of attachment was discharged on May 15, 1920, upon the defendants entering an appearance and executing a bond in the sum of $7,500, conditioned as required by statute, and that it will not be necessary to print the summons, warrant of attachment, bond to discharge warrant of attachment, order discharging warrant of attachment, or other papers connected therewith, and which are not material for the determination of the questions involved in this appeal. Defendants therefore entered a general appearance and submitted to the jurisdiction of the court. Scott v. Life Association, 137 N.C. 575, 50 S.E. 221.

We deem it unnecessary to set out, in extenso, the contracts of the two companies, the Chevrolet Motors Company and the Chevrolet Motor Company of Atlanta, Ga., as it will suffice to state the reasons assigned by the defendants why the same are not enforceable, as this may sufficiently indicate the nature of the contracts, with the aid of the further statement below. But we will state, what is tersely said by the defendants, in their brief, as to these contracts, and a subsequent oral contract supplementary thereto and amendatory thereof, which is as follows:

The instruments are the customary writings conferring the privilege of selling automobiles of a certain make within defined territory. There is no material difference in the two instruments. One confers the privilege in respect of the county of Henderson, and the other in respect of the city of Asheville. The plaintiffs did not rely solely upon these instruments at the trial. Their theory was that, subsequent to their execution, an oral agreement was made, and violated. In reviewing this judgment of nonsuit, the court is chiefly concerned, we take it, with the inquiry whether it is permissible to deduce from the evidence, construed in a light most favorable to the plaintiffs, the inference that a binding contract was violated. If such conclusion may reasonably be inferred, the judgment of nonsuit cannot be sustained. This was said by defendants.

In November, 1919, the individual plaintiffs were offered two agencies for the sale of the Chevrolet automobiles, trucks and parts, one covering the counties of Buncombe, Madison and Yancey, and to be known as that of the Erskine Motors Company, and the other covering the county of Henderson, and to be known as that of the Hendersonville Motors Company. The individual plaintiffs agreed to accept the agencies, and they were, subsequently, to form corporations under the same names "to handle the Chevrolet automobiles and trucks," and when formed M. A. Erskine was to be president and J. V. Erskine was to be secretary, and the applications and contracts were signed in the agreed names by M. A. Erskine, president, before the charters were applied for, it being fully understood that no charters had been granted and that the corporations were in "process of organization," to handle Chevrolet automobiles and trucks, and it was so written in the application.

Articles for the incorporation of the Erskine Motors Company and Hendersonville Motors Company were prepared, and a charter was granted to the Erskine Motors Company on February 9, 1920, but the Hendersonville Motors Company never was incorporated. The Erskine Motors Company was incorporated subsequent to the breach of contract which is the basis of this suit.

Both of the contracts are dated December 1, 1919, and were executed in behalf of the defendant Chevrolet Motor Company of Atlanta by M. J. Herold, sales manager, and in behalf of the plaintiffs by M. A. Erskine, president. At the time the contracts were executed, and as a part thereof, the plaintiffs gave shipping order for 207 automobiles and trucks covering their requirements from December to July, inclusive; the last month being the end of the season in the automobile business. These orders were taken by the agent of the defendants, and payment of machines covered thereby was guaranteed by plaintiffs.

Soon after the contracts were entered into between plaintiffs and defendant the Chambers & Weaver Company, the former agent of the defendants, brought suit for damages on account of the agency being taken from it, and attached certain automobiles that had been shipped to plaintiffs under the contracts with plaintiffs. Plaintiffs notified the defendants of the attachment, and the attachment was discharged by defendants giving bond, and the automobiles were then delivered to plaintiffs. At that time plaintiffs were assured that they would experience no further trouble. On December 18, 1919, M. J. Herold, the sales manager, arrived in Asheville, and expressed his regret that plaintiffs had had trouble with the first shipment of cars, and stated that plaintiffs should not be alarmed; that the arrangement with Chambers & Weaver Company had never been satisfactory; and that the attachment was one of the things they were doing to annoy defendants. A part of the conversation as narrated by M. A. Erskine, one of the plaintiffs, is as follows:

"Mr. Herold talked to us at great length, and then I said to Mr. Herold: 'Mr. Herold, we hear it rumored in Asheville that there is some question as to whether or not we are going to keep these contracts or not.' He Herold replied to me: 'Now, don't let that alarm you at all. We never had the representation in this part of the country that we should have had. We believe that after a thorough investigation that we now have the representation we are seeking, and the Chevrolet Motor Company of Atlanta has no idea of canceling your contract. The Chevrolet Motor Company is going to do everything in its power to assist you in making this business a success.' I said to him: 'Mr.

Herold, we haven't invested very much money in this business up to this time. Mr. Chambers, of Chambers & Weaver, is a good personal friend of mine. I don't want to do anything against Mr. Chambers, and if he wants the contract and you will give it to him, I am perfectly willing to give it up.' I reached in my desk, took the contracts, handed them to Mr. Herold, and told him: 'If we are going to be bothered with lawsuits and controversies, here are the contracts. You can take them. We are perfectly willing to lose what little money we have already put into this, but we don't want to go ahead any further, with the idea of losing the contracts or with the idea of any controversy.' Mr. Herold said to me: 'Mr. Erskine, I can assure you, for the Chevrolet Motor Company, that you will not lose the contracts, and that our relations with you are exactly what we have been seeking. We have investigated you thoroughly, and we are perfectly satisfied.' At that time my brother, John, spoke and said: 'Mr. Herold, that is all right. That sounds good, but suppose we have the contracts and the cars are not shipped to us--the contracts would be no good.' He Herold said: 'I want to assure you, for the Chevrolet Motor Company of Atlanta, that your contracts will be canceled; that the cars will be shipped according to the schedule attached, and that we will take special pains in seeing that the parts you order are shipped promptly; in other words, the Chevrolet Motor Company is going to do everything in its power to make this agency a big success, and we want to co-operate with you in every way. I want to say to you for myself, personally, that I am the representative of the Chevrolet Motor Company of Atlanta, and that I will take a personal interest in your orders, and will see that everything you want is shipped to you promptly, and for the Chevrolet Motor Company I want to tell you that we will ship everything according to the schedule, and you may rest assured that the Chevrolet Motor Company will furnish you the cars."

The original contracts between plaintiffs and defendants provide:

(a) "If for any reason we do not ship during the month any orders specified

...