Tamm v. Ford Motor Co.

• Decision Date: 08 January 1936
• Docket Number: No. 10335.,10335.
• Citation: 80 F.2d 723
• Parties: TAMM v. FORD MOTOR CO.
• Court: U.S. Court of Appeals — Eighth Circuit

80 F.2d 723 (1936)

TAMM v. FORD MOTOR CO.

No. 10335.

Circuit Court of Appeals, Eighth Circuit.

December 17, 1935.

Rehearing Denied January 8, 1936.

E. H. McVey, of Kansas City, Mo. (C. A. Randolph, Spurgeon L. Smithson, and Stanley Garrity, all of Kansas City, Mo., on the brief), for appellant.

John G. Madden, of Kansas City, Mo. (James E. Burke and Madden, Freeman & Madden, all of Kansas City, Mo., on the brief), for appellee.

Before GARDNER, WOODROUGH, and FARIS, Circuit Judges.

FARIS, Circuit Judge.

Plaintiff, appellant herein, as trustee in bankruptcy of Herb Ford, Inc., sued defendant in an action at law for damages. The trial court sustained a demurrer to his third amended petition. He declined to plead further, and thereupon the court rendered a final judgment against him, and he appealed.

Plaintiff (for we shall for clarity refer to the parties as they stood below) filed four petitions in the case. All of these, though three of them constitute abandoned pleadings, he has seen fit to incorporate in the record before us. Two of these petitions were voluntarily abandoned. To the third in point of time of filing, a demurrer was sustained by the trial court. Thereupon plaintiff filed his third amended petition; again a demurrer thereto was filed and sustained. There were five grounds alleged in the demurrer. The order sustaining the demurrer is a general one and does not disclose the particular reason or reasons for which the court nisi deemed the petition bad or insufficient.

We have had the very greatest difficulty in ascertaining whether the third amended petition is an action ex delicto, or ex contractu. In many aspects it has features allocating it to the category of a breach of contract, as also those which should place it among actions for a tort, to wit, fraud and deceit. In this dilemma, it is permissible and proper to adopt the legal characterization of plaintiff himself, who we think plainly allocates it among actions ex delicto. For he characterizes it in his brief thus: "This is an action at law, brought by Albert Tamm, Trustee of the bankrupt estate of Herb Ford, Inc., (a Missouri Corporation), against the Ford Motor Company, a Michigan Corporation for damages arising out of certain false statements and inducing misrepresentations of defendant."

Candor and "a decent respect to the opinions of mankind," no doubt require that as much of the petition, held had below should be set forth, as shall serve to make plain the nature of the action, and to illustrate the successful attack made in, and sustained by the trial court, on its sufficiency. Such salient parts thereof read thus:

"Plaintiff states that in the latter part of July, 1931, defendant through its manager, M. D. Brown, informed Herb Ford, Inc., that it would be necessary for it to move to another location, and if it refused to do so, the contract would be cancelled; that the dealership or agency of the defendant at 2705-9 East 15th St., Kansas City, Missouri, could be purchased; that said agency had a large clientele and an established name and reputation, and its business, in the event of purchase, would accrue to Herb Ford, Inc. Said branch manager represented to said Herb Ford, Inc., that the defendant company would by the 10th day of September, 1931, have in production and delivery to its readers, including Herb Ford, Inc., a new model car with necessary parts and accessories, which new car could and would meet competition and find a ready sale. And defendant further represented to said Herb Ford, Inc., that if it would purchase said 15th Street Agency and move thereto, its contract would be continued and it would promptly fill all orders procured by Herb Ford, Inc., for said new car, and have said new car ready for delivery after September 10, 1932. Plaintiff states that said representations were made to Herb Ford, Inc., for the purpose of inducing it to give up its Mill Creek location and purchase the said 15th Street Agency and to continue as the dealer under the hereinbefore mentioned contract, and to induce said Herb Ford, Inc., to continue the advertising and sale of defendant's products, and plaintiff states that said Herb Ford, Inc., relied upon said representations, and in reliance thereon purchased said East 15th Street Agency on or about August 10, 1931, paying therefor the sum of Twelve Thousand Five Hundred ($12,500.00) Dollars; that it expended the sum of Two Thousand Five Hundred ($2,500.00) Dollars in moving its business and equipping the new premises and making installations therein; that it was necessary to cancel its lease upon the premises at Mill Creek and said Herb Ford, Inc., was compelled to and did obligate itself in the sum of Fifteen Hundred ($1,500.00) Dollars as consideration for cancellation of said lease; that said Herb Ford, Inc., did further give up its Mill Creek place of business to the loss of its good will therein established.

"Plaintiff states that defendant failed to have its new car for delivery on September 10, 1931; but the defendant then represented to Herb Ford, Inc., that its new car would be ready for delivery and available for sale by November 1, 1931, and in reliance thereon said Herb Ford, Inc., continued its business, but plaintiff states that defendant failed to have its car in production for delivery by November 1, 1931, and did not have its said car in production for delivery until the month of June, 1932. But plaintiff states that during said intervening period of time defendant thereafter made like continuing representations to said Herb Ford, Inc., that its new car would be in production and delivery early in December, 1931, and again early in January, 1932, and early in February, 1932, and early in March, 1932, and early in April, 1932, and early in May, 1932, all of which representations were believed and relied upon by said Herb Ford, Inc., and in reliance thereon said Herb Ford, Inc., continued in its business at said East 15th Street location to its loss as herein set out. Plaintiff states that the representations aforesaid were false to the knowledge of the said defendant, or were made recklessly, it knowing at the time of the making of said representations that the new model car would not and could not be made ready for delivery within the times represented. Plaintiff states further that the manufacturing business of defendant is and was carried on by what is known as `mass production,' and that the bringing out of a new model automobile requires a large amount of preparation in advance, including the installation of new machinery and equipment, rearrangement and reorganization of its factory units and its manufacturing facilities, and that the state of preparation and knowledge of the time when the factory would be in a position to manufacture and deliver the new car was information within the exclusive knowledge of the defendant and wholly unknown to Herb Ford, Inc. (Italics supplied.)

"That the defendant at the time of or prior to the date of the representations aforesaid, to-wit: August, 1931, ceased the production of its Model A cars, parts, and accessories, but information as to the coming of the new model car became known to the general public as early as October, 1931, whereby the value of Model A cars became greatly depreciated; that said Herb Ford, Inc., by reason of the foregoing, had no new automobile for sale after September 10, 1931, but relying upon the agreements aforesaid Herb Ford, Inc., maintained and continued its business at its East 15th Street location at the instance of defendant as aforesaid from September 10, 1931, to June 10, 1932, at an operating loss during nine months, in the sum of Twenty-two Thousand Five Hundred ($22,500.00) Dollars.

"Plaintiff states that when defendant ceased production of Model A cars, the defendant instructed Herb Ford, Inc., to procure as many orders as possible for its new model car and said Herb Ford, Inc., acting under the instructions aforesaid, employed salesmen and incurred expense in soliciting orders for the new model car, and did secure one hundred forty-one orders therefor, which orders were lost by reason of the failure of defendant to supply the new model car for delivery as herein set forth. That under the agreements with defendant, Herb Ford, Inc., had a profit of One Hundred Ten ($110.00) Dollars per car, or a gross profit of Fifteen Thousand Five Hundred Ten ($15,510.00) Dollars on said orders secured by it and lost as aforesaid.

"Plaintiff states that had the said new car been available for delivery on September 10, 1931, or within a reasonable time thereafter, said Herb Ford, Inc., could and would have continued its business, but relying upon the representations of defendant as hereinbefore set out, said Herb Ford, Inc., incurred costs and expenses in the continuance of its business, and in advertising the products of the defendant and in establishing the name, custom and good will, whereby said Herb Ford, Inc., by reason of the foregoing, sustained such losses that it was compelled to cease business and thereby its plant, machinery, equipment, and parts depreciated in value, to its loss in the sum of Twenty Thousand ($20,000.00) Dollars."

Of the five grounds of demurrer, in the view we are constrained to take of the case, only three need be mentioned. These are: (a) "That plaintiff does not have legal capacity to sue; (b) that several causes of action have been improperly united; and (c) that the petition does not state facts sufficient to constitute a cause of action against defendant." All three of the above grounds of demurrer are warranted by the statute of Missouri (section 770, R.S. of Missouri 1929 Mo.St. Ann. § 770, p. 1000), which in matters of practice and procedure in actions at law controls a federal court, and constitutes the legal test of goodness, vel non of the petition under discussion. Ward v. Morrow (C.C.A.) 15 F.(2d) 660; Slocum v. Erie Railroad Co. (D.C.) ...