McGinnis v. Studebaker Corp. of America

• Decision Date: 09 March 1915
• Citation: 75 Or. 519,146 P. 825
• Parties: MCGINNIS v. STUDEBAKER CORPORATION OF AMERICA.
• Court: Oregon Supreme Court

146 P. 825

75 Or. 519

MCGINNIS v. STUDEBAKER CORPORATION OF AMERICA.

Supreme Court of Oregon

March 9, 1915

Department 2.

Appeal from Circuit Court, Multnomah County; Geo. N. Davis, Judge.

Action by Clinton D. Phelps against the Studebaker Corporation of America, in which F. E. McGinnis, administrator, was substituted as plaintiff after the death of the original plaintiff. From an order granting a new trial after verdict for plaintiff, plaintiff appeals. Affirmed.

The defendant, an automobile manufacturer, maintained a retail sales department in Portland, Or. The plaintiff was employed by defendant on January 21, 1913, as a retail salesman. Thereafter the defendant transferred its retail business to the Oregon Motor Car Company, and for that reason on April 8 1913, the employment of plaintiff was terminated. Claiming that his services had been engaged until December 31, 1913 and that defendant had agreed to pay a commission of 5 per cent. on each car sold, the plaintiff commenced this action for the recovery of damages and obtained a verdict of $1,200. The jury awarded $300, of the amount recovered, as damages suffered between January 21, 1913, and April 8th following on account of the failure of defendant to comply with its agreement to keep a sufficient number of cars to demonstrate with; and, after deducting earnings received while in the employ of others, plaintiff was allowed $900 on account of the loss of commissions, which he would have earned on the sale of cars between April 8th and December 31st, if defendant had not terminated the employment. On the motion of defendant, a new trial was granted, and the plaintiff appeals.

Arthur I. Moulton, of Portland, for appellant. John McCourt, of Portland (Veazie, McCourt & Veazie, of Portland, on the brief), for respondent.

HARRIS J. (after stating the facts as above).

In substance the complaint alleged that plaintiff could have sold more cars between January 21, 1913, and April 8th, if defendant had provided cars for demonstrating purposes; that it was agreed that the early portion of the year for which plaintiff was employed should be devoted by plaintiff to securing lists of prospective purchasers and interesting them in the cars sold by defendant; that plaintiff did devote about ten weeks of his time securing names of prospective purchasers, and by April 8th had turned over to defendant a large list of prospective purchasers which list defendant delivered to other parties, who then negotiated with the persons, whose names appeared on such list; and that, if plaintiff had been permitted to continue in his employment, he would have made sales to the persons listed and other prospective purchasers sufficient to have brought him $1,500 in commissions.

The defendant manufactured three types of automobiles, which were priced at $1,650, $1,290, and $885. When the plaintiff entered the service of defendant, he was without experience in the sale of automobiles. He sold eight cars between January 21st and April 8th. The company employed three or more salesmen, whose compensation and duties were the same as plaintiff's. It was the duty of each salesman to make a daily report showing the names of persons who might become interested in the purchase of an automobile, and the persons thus reported were known as "prospects." The plaintiff had seen five or six of his "prospects" driving Studebaker cars after April 8th, and for that reason assumed that these cars had been purchased. The plaintiff testified that he had worked up a lot of cases, so that a demonstration was all that was necessary to effect a sale, because he had been led to believe that purchases would be made if the car was demonstrated and proved to be satisfactory. There was no evidence tending to show that any of plaintiff's "prospects" purchased a Studebaker car, except W. W. Graybeal and John P. Miller, each of whom purchased a $1,290 car, and except Harvey O'Brien and W. W. Graves, who bought $885 cars. The Oregon Motor Car Company received from the defendant a list of plaintiff's "prospects." It appears also from the evidence that names of persons on the Studebaker prospect list might also be on the prospect list of concerns selling other makes of automobiles.

The pith of plaintiff's complaint is that the termination of his employment deprived him of the opportunity of selling to the prospective purchasers listed by him, and the evidence is largely directed to that phase of the case.

The theory of the law is to award compensation for gains prevented and for losses sustained when a contract is broken and a person breaking a contract is liable for the direct, natural, and proximate result of his act. The party damaged is not precluded from recovering anticipated profits merely because they are such, since the loss of anticipated profits is a damage that should be compensated for just as much as is the destruction of property. Repeated decisions of this court, as well as the announcements made by courts in other jurisdictions, have firmly established the doctrine that if the business of which the complaining party was deprived was contemplated or could reasonably be presumed to have been contemplated by the parties at the time of making the contract, and if it is reasonably certain that a gain or benefit would have been derived, then damages may be recovered. Uncertainty as to the amount of damages does not prevent recovery but uncertainty as to whether any benefit or gain would have been derived at all does bar a claim for damages. If it is reasonably certain that a gain or benefit has been prevented, then plaintiff is entitled to damages for the amount of that gain or benefit. Blagen v. Thompson, 23 Or. 239, 31 P. 647, 18 L. R. A. 315; Hoskins v. Scott, 52 Or. 271, 96 P. 1112; Bredemeier v. Pacific Supply Co., 64 Or. 576, 131 P. 312; Fields v. Western Union Tel. Co., 68 Or. 217, 137 P. 200; Griffin v. Colver, 16 N.Y. 489, 69 Am. Dec. 718; Hichhorn v. Bradley, 117 Iowa, 130, 90 N.W. 592; Wakeman v. Wheeler & Wilson Co., 101 N.Y. 205, 4 N.E. 264, 54 Am. Rep. 676; Wells v. Nat. Life Ass'n of Hartford, 99 F. 222, 39 C. C. A. 476, 53 L. R. A. 34; Emerson v. Pacific Coast, etc., 96 Minn. 1, 104 N.W. 573, 1 L. R. A. (N. S.) 445,...