Oakland Motor Car Co. v. Indiana Auto. Co.

• Decision Date: 01 October 1912
• Docket Number: 1,891.
• Citation: 201 F. 499
• Parties: OAKLAND MOTOR CAR CO. v. INDIANA AUTOMOBILE CO.
• Court: U.S. Court of Appeals — Seventh Circuit

201 F. 499

OAKLAND MOTOR CAR CO. v. INDIANA AUTOMOBILE CO.

No. 1,891.

United States Court of Appeals, Seventh Circuit.

October 1, 1912

[Copyrighted Material Omitted]

The Oakland Motor Car Company, plaintiff in error, was defendant below in the suit brought by the Indiana Automobile Company to recover damages for alleged breach of contract. On trial of the issues to a jury, verdict was rendered against the defendant, assessing the damages at $6,500, and reversal of the judgment thereupon is sought under various assignments of error. The contract relied upon for recovery, through rescission thereof on the part of the defendant below, reads as follows:

'This agreement, made and entered into at Pontiac, Michigan, this 16th day of September, 1908, by and between the Oakland Motor Car Company, of Pontiac, Michigan, hereinafter called the manufacturer, and Indiana Automobile Company Indianapolis, Indiana, hereinafter called the dealer, witnesseth as follows, viz.:

Oakland Motor Car Company,

'(The Manufacturer,)

'By E. M. Murphy, Prest.

'Indiana Automobile Co.,

'(The Dealer,)

'By S.W. Elston.

'This agreement shall in no way be binding upon the manufacturer unless approved by an officer of the Oakland Motor Car Company.

'Approved:

'Oakland Motor Car Company,

'(The Manufacturer,)

'By E. M. Murphy, President.

'Addition to above agreement:

'In consideration of the territory specified herein, the dealer agrees to purchase 50 cars from the manufacturer during the term of this agreement, and as many more as their wants may require and we can supply. The dealer to deposit $50 apiece on 25 cars and will deposit $50 on each of the other 25 cars as soon as the sample cars can be delivered.'

The issues and facts involved for consideration are stated in the opinion.

Henry W. Wales and Sidney S. Gorham, both of Chicago, Ill., for plaintiff in error.

Morris M. Townley, David B. Gann, and Geo. H. Peaks, all of Chicago, Ill., for defendant in error.

Before BAKER and SEAMAN, Circuit Judges, and ANDERSON, District Judge.

SEAMAN Circuit Judge (after stating the facts as above).

The verdict and judgment against the plaintiff in error, defendant below, rest solely on this proposition: That the agreement in suit constitutes a binding contract for purchase and sale of 50 of its two-cylinder automobiles, of the type listed at $1,250, making their price to the plaintiff below (as dealer) $937.50 each. While the plaintiff's declaration contains several counts, charging breaches of the agency agreement referred to in various forms, its testimony at the trial was limited to the assumed phase thereof above stated, as averred in the fourth count. Accordingly the trial court instructed the jury, not only (in effect) eliminating all other counts from consideration, but 'that the plaintiff has proved a contract whereby the defendant agreed to sell the plaintiff 50 automobiles' so specified as to type and price, together with the further instruction that 'the defendant committed a breach' thereof, by notifying the plaintiff, on October 31st, without justification, that it 'declined to deliver any further or additional automobiles thereunder,' and that the only question for the jury to consider was the amount of 'damages to be awarded to the plaintiff' for such breach. It is both obvious and undisputed, therefore, that the judgment can be upheld only upon conclusive evidence of such contract obligation to sell and deliver the particular cars so described. Exceptions are preserved, both to the above instruction and for denial of the defendant's request to direct a verdict in its favor, also for denial of other instructions requested as to the effect of the agreement, and we proceed to consideration of the question thus stated, without taking up the further inquiry suggested, whether the provision referred to was rightly treated as severable from the agency contract for independent enforcement.

The contract in suit was entered into September 16, 1908, with its main provisions in the printed form used by the defendant as manufacturer of 'Oakland automobiles,' for an agreement establishing selling agencies for its products. Referring to the defendant as 'the manufacturer' and the plaintiff as 'the dealer,' it grants to the dealer 'the exclusive right of sale of Oakland automobiles and parts thereof' for several counties named in the state of Indiana, and provides (clause 12) that the 'contract expires by limitation September 1, 1909, or may be canceled for just cause by either party giving a 30 days' written notice. ' In respect of all provisions in the body of the contract as signed by the parties, it is both conceded on behalf of the plaintiff and unquestionable, that the terms thereof create no mutual obligation for purchase and sale of the automobiles as between manufacturer and dealer, and that the only agreement in that line is contained in clause 5, providing for sale to the dealer; and this is qualified by the terms of clause 11, that any order sent in by the dealer shall not be 'binding upon said manufacturer' unless accepted by it 'at least 30 days prior to date for delivery. ' Another provision, however, appears in writing at the foot of the contract (below the signatures), which is the one relied upon for support of the instruction to the jury, reading as follows:

'Addition to above agreement:

'In consideration of the territory specified herein, the dealer agrees to purchase 50 cars from the manufacturer during the term of this agreement, and as many more as their wants may require and we can supply. The dealer to deposit $50 apiece on 25 cars and will deposit $50 on each of the other 25 as soon as the sample cars can be delivered.'

When the contract was completed, the plaintiff deposited the $1,250 above stipulated, and ordered three cars of the two-cylinder type described in the above-mentioned instruction, which were then ready for delivery; and such cars were shipped and settled for in conformity with the agreement. In October, however, the defendant became dissatisfied with the conduct of the agency--which was carried on under the name of the 'Independent Automobile Company,' and at a place for showroom apart from the plaintiff's other agency-- and on October 31st returned to the plaintiff $1,100 remaining on hand of its deposit under the agreement, with written notice that, 'in accordance with the terms of the contract between' them of September 16th, 'the said contract is hereby canceled and ended, for just cause and because the terms and conditions of said contract have been violated by you. ' The notice further specifies the matters...