Kuhl Motor Co. v. Ford Motor Co.
Decision Date | 28 June 1955 |
Citation | 270 Wis. 488,55 A.L.R.2d 467,71 N.W.2d 420 |
Parties | , 55 A.L.R.2d 467 KUHL MOTOR CO., a Wisconsin corporation, Appellant, v. FORD MOTOR CO., a Delaware corporation, Respondent. |
Court | Wisconsin Supreme Court |
A. W. Schutz, Milwaukee, for appellant.
Shaw, Muskat & Paulsen, John G. Quale, Milwaukee, for respondent.
Rieselbach & Nelson, Milwaukee, amicus curiae.
The following facts are disclosed by the complaint. Plaintiff is a corporation located in the city of Milwaukee engaged in the business of selling and serving motor vehicles. Defendant is a manufacturer of motor vehicles, parts and accessories. On December 12, 1938 plaintiff and defendant entered into a written 'Ford Sales Agreement,' which provided that it could be terminated at any time at the will of either party by sixty days' written notice. On April 17, 1954 plaintiff received from the defendant a notice of its intention to terminate the agreement (Exhibit E). Plaintiff alleges:
Defendant demurred to the complaint on the grounds (1) that it does not state facts sufficient to constitute a cause of action, and (2) that the court has no jurisdiction of the subject of the action.
It was held by the trial court, first, that, disregarding sec. 218.01, Stats., the agreement of December 12, 1938 was valid and the notice of April 17, 1954 effectively terminated said agreement, basing its opinion on Bushwick-Decatur Motors, Inc., v. Ford Motor Co., 2 Cir., 1940, 116 F.2d 675; Buggs v. Ford Motor Co., 7 Cir., 1940, 113 F.2d 618; Biever Motor Car Co. v. Chrysler Corporation, 2 Cir., 1952, 199 F.2d 758; and Martin v. Ford Motor Co., D.C.1950, 93 F.Supp. 920.
In the last named case, 93 F.Supp. at page 921, it was held:
'The court concurs with the holding in Bushwick-Decatur Motors, Inc., v. Ford Motor Co., 2 Cir., 1940, 116 F.2d 675 as properly applying the law of Michigan with respect to the right of termination under a similar agreement, and with the holdings in Buggs v. Ford Motor Co., 7 Cir., 1940, 113 F.2d 618. * * *
'In the instant case it is clear that Martin's dealership was to continue no longer than either he or the Ford Motor Company desired it to continue and that its right to terminate it was subject to no conditions as to good or bad faith, motive, intent or results, except as to the requirement of advance notice if such termination was desired by the Ford Motor Company.'
Section 218.01(3), Stats., so far as material, provides:
'(a) A license may be denied, suspended or revoked on the following grounds: * * *
This statute was in effect at the time the agreement herein was made.
In 1945 section 218.01(8)(d), Stats., was enacted, providing:
'(d) Any person or persons violating subsection (3)(a) 15, 16 and 17, may in addition to, or in lieu of, the general denial, suspension or revocation penalties in said subsection, be subject to a fine of not more than $5,000 or be subject to a suspension or revocation sentence of not more than a year effective only in the territory formerly served by the unfairly canceled dealer, or by both such fine and suspension or revocation, except that in a metropolitan area serviced by several dealers handling the same motor vehicle, the suspension or revocation order shall not be applicable to the remaining dealers.'
This action is not a proceeding under ch. 218 which sets forth the administrative procedure to be followed to invoke the penalties for unfair cancellation of a motor vehicle manufacturer-dealer contract. Plaintiff seeks to enjoin termination of the contract on the ground that paragraphs 16 and 17 of section 218.01(3) define public policy and constitute a valid exercise of the police power of the state to prohibit unfair cancellations of sales agreements.
On this question the trial court held:
'The legislature of the State of Wisconsin in enacting Chapter 218 undoubtedly was of the opinion that because of the economic advantages which a motor manufacturer enjoys over a dealer the latter should be protected against harsh treatment when a manufacturer exercises his right under the contract to cancel his sales contract with the dealer.
'There is no indication in the legislation in question of any intent on the part of the legislature to change or to declare illegal or void any term of the contract in question.'
In discussing the attitude of the judiciary toward the importance of the individual's right to contract, it is stated in 12 Am.Jur., Contracts, sec. 172, p. 670:
Any impairment of that right must be specifically expressed or necessarily implied by the legislature in a statutory prohibition and not left to speculation. The general rule to be applied in this case is expressed in 17 C.J.S., Contracts, § 202, p. 558, as follows:
'It would seem that in all cases the true rule is that the question is one of legislative intent, and the courts will look to the language of the statute, the subject matter of it, the wrong or evil which it seeks to remedy or prevent, and the purpose sought to be accomplished in its enactment; and if from all these it is manifest that it was not intended to imply a prohibition or to render the prohibited act void, the courts will so hold and will construe the statute accordingly.'
The intent expressed in the introductory language of section 218.01(3)(a), Stats., is that of a regulatory measure. No words are used in paragraphs 16 and 17 requiring the conclusion that the legislature intended to prohibit unfair cancellation of sales contracts. They simply state that a manufacturer who engages in such a practice is subject to penalty under the prescribed administrative procedure. And an inference of invalidity does not necessarily follow from the fact that the statute prescribes a penalty. The statute must be judged by itself as a whole. In re Peterson's Estate, 1950, 230 Minn. 478, 42 N.W.2d 59, 18 A.L.R.2d 910. Where the legislature has intended to impress certain terms upon contracts, as, for instance, the omnibus coverage clause in automobile liability insurance contracts, it has expressly so provided. But here it has used no language 'prohibiting' unfair cancellations, making them 'void' or directing that every sales contract shall contain provision for cancellation only 'with just provocation' or 'for cause.' Nor are there any specific provisions insuring...
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