Jordan v. Buick Motor Co., 5190.

• Decision Date: 19 March 1935
• Docket Number: No. 5190.,5190.
• Citation: 75 F.2d 447
• Parties: JORDAN et al. v. BUICK MOTOR CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

75 F.2d 447 (1935)

JORDAN et al. v. BUICK MOTOR CO. et al.

No. 5190.

Circuit Court of Appeals, Seventh Circuit.

February 4, 1935.

Rehearing Denied March 19, 1935.

T. H. Spence and Arthur Wickham, both of Milwaukee, Wis., for appellants.

Edwin S. Mack and J. G. Hardgrove, both of Milwaukee, Wis., for appellee Buick Motor Co.

Before ALSCHULER, EVANS, and FITZHENRY, Circuit Judges.

EVANS, Circuit Judge.

The complaint in substance alleges that two agents of Buick Motor Company, with authority to so speak, represented to appellants (and appellee Hansen) that if $40,000 more capital were secured for the E. M. Jordan Buick Company, it would be granted an exclusive agency to sell and service Buick cars in the county of Milwaukee and would be given the use of a Buick showroom located in Milwaukee. Appellants contributed the additional capital amounting to $40,000. For a short period Jordan Company was given the use of the showroom, but no exclusive agency was ever granted. The complaint attempts to state a cause of action ex contractu and also one ex delicto for damages in the sum of $40,000. A statement of the detailed allegations appears later.

Appellees advance numerous reasons for sustaining their demurrer.

As to the first cause of action, viz., the one based on the breach of contract, the chief reliance of appellees is the indefiniteness of the agreement. They assert the agreement which is pleaded was too indefinite as to duration, terms, details of agency's rights, etc., to be enforceable.

As to the second cause of action, the one sounding in tort, they support their demurrer on the grounds that (a) there was an improper joinder of several independent causes of action, there being no proper basis for their joinder; (b) the complaint improperly joined several causes of action for fraudulent representations, each one accruing to a different individual; (c) if any cause of action exists, it was in favor of the Jordan Buick Company; and (d) the representations upon which the deceit action is predicated were innocuous because they were pure prophecy of possible profits. These were matters of opinion concerning which appellants were as well or better informed than appellee Buick Company.

Because of its length, only the substance of the complaint is set forth:

The allegations material to the first cause of action are that Carter was the regional manager in Chicago, and Truax, the branch manager of the Buick Company in Milwaukee; that they had charge of its business in the city and county of Milwaukee and had authority to contract on its behalf and transact the business "hereinafter set forth"; that E. M. Jordan Buick Company was a Wisconsin corporation engaged in selling and servicing automobiles, largely Buick makes, in the county of Milwaukee; that E. M. Jordan was its president and managing officer; that in September, 1930, Jordan was called to Chicago by Truax and Carter and advised that it was necessary for the E. M. Jordan Buick Company to secure additional capital; that Jordan replied that he would not attempt to secure additional capital until he had obtained some definite assurance that the local situation in Milwaukee with respect to unethical practices engaged in by certain dealers was remedied; that Carter, who was acting on behalf of the Buick Motor Company, thereupon made the following offer, that if $40,000 additional capital was invested in the Jordan Company, the Buick Company would grant it the exclusive right to sell automobiles manufactured by Buick Motor Company, and the exclusive right to service said cars and to have the exclusive right to act in said city as the Buick dealer.

Carter also offered to permit the Jordan Buick Company to use the show room floor of said Buick Motor Company which was located on East Wisconsin Avenue in said city for the purpose of soliciting sales and selling Buick automobiles; that Carter then represented that if the additional capital were invested in the Jordan Company and the exclusive rights as above set forth were granted, the net profits to the Jordan Company would be from $75,000 to $100,000 per year. It was impliedly represented that said exclusive rights would be granted for such a period of time as would be reasonable under the circumstances. It was further agreed that the said offer and the said representations were thereafter made by the Buick Company to the plaintiffs and to defendant Hansen, jointly, that the plaintiffs and Hansen did jointly accept said offer and did pay into the treasury of the Jordan Buick Company the sum of $40,000 and, upon said payment, certificates of preferred stock of said Jordan Company were issued to them.

The complaint further alleges that the Buick Company did, for a short period of time permit the Jordan Buick Company to use its show room floor and that thereafter, although Jordan Buick Company was ready, willing and desirous of carrying out the exclusive right of acting as Buick dealer, the Buick Company refused to grant such exclusive right; that the defendant Hansen is made a party defendant because he refused to join as party plaintiff.

It further alleges that because such agreement was not carried out certain economies could not be effected and Jordan Company was unable to make the profits which it otherwise would have made; that had such contract been carried out the preferred stock of the Jordan Company would have had a reasonable market value of $40,000.

It is further alleged that because of the breach of said contract by Buick Motor Company, Jordan Buick Company became a bankrupt and was duly so adjudged and the estate of said bankrupt was wound up and the trustee ultimately discharged and the said plaintiffs and said defendant Hansen received nothing from said estate and nothing will be paid to them because of their preferred stock; that said preferred stock now is of no value and that they have suffered a loss of $40,000 by reason of Buick Company's wrongful and unlawful breach of the contract.

For their second cause of action appellants repeat the allegations of the first cause of action and state in addition thereto:

"That on the occasions when said Carter and said Truax made said offer jointly to the plaintiffs and the defendant Hansen, they impliedly represented and did in fact positively assert and represent to the plaintiffs and the defendant Hansen jointly that the defendant Buick Motor Company would grant said exclusive rights either to said E. M. Jordan Buick Company or to this company and another company which would be controlled by and the stock of which would be owned by said E. M. Jordan Buick Company; that said offer and the representations then made as plaintiffs are informed and believe, were not made in good faith but with an intent to deceive and injure the plaintiffs and the defendant Hansen; and that they were made by said agents as plaintiffs are informed and believe without any knowledge or reason to believe that their principal, the defendant Buick Motor Company, would perform the terms and conditions which said agents had held out that it would perform, recklessly and with no regard as to the truth of said representations."

The second cause of action also charges:

"That the defendant Buick Motor Company, as plaintiffs are informed and believe, knew and was advised of the offer made jointly to the plaintiffs and the defendant Hansen, and of the representations then made; that such was some time prior to the time that the plaintiffs and the defendant Hansen paid the sum of Forty Thousand Dollars ($40,000.00) to said E. M. Jordan Buick Company; that in the meantime the plaintiffs and the defendant Hansen believed and acted on their belief that such exclusive rights would be granted; that they and each of them were justified and entitled to so do; that they and each of them were thereby misled; that the defendant Buick Motor Company knew and should have known that the plaintiffs and the defendant Hansen would probably act upon said offer and said representations and...