185 N.C. 479 | N.C. | 1923
after stating the case: the plaintiffs and defendants, as plaintiffs allege, or, at least, plaintiffs and defendant Obevrolet Motor Company of Atlanta executed certain paper-writings called contracts, wbicb were so skillfully prepared by defendants, as contended by plaintiffs, as to inveigle plaintiffs into the belief tbat plaintiffs would be afforded protection thereby, and that they would be warranted in incurring the great expense necessary in advertising defendants’ output and in establishing agencies for defendants in the designated territory. the efforts of a competitor to take the Asheville agency from plaintiffs caused them to examine the alleged contracts, and plaintiffs then became aware tbat the paper-writings did not constitute contracts, if defendants’ contentions proved correct, and, therefore, tbat they were entirely at the mercy of the defendants. Huffman v. Page Motor Co., 262 Fed., 117; Adler v. Dodge Bros., 237 Fed., 860; Battle v. Smith, 113 S. E. (Ga.), 235, 239. When the plaintiffs realized tbat their agencies might be taken from them by defendants, at will, they offered to surrender the contracts without incurring further expense, but the general agent of defendants refused to accept the contracts, and assured the plaintiffs tbat the contracts would not be canceled, and agreed tbat the automobiles covered by the shipping orders for the months of January to July, 1920, inclusive, would be delivered as therein ordered. It was solely on the faith of- this subsequent agreement tbat plaintiffs went ahead and gave their time and expended large sums of money in establishing the agencies, wbicb were expected to be mutually profitable to plaintiffs and defendants. So confident were plaintiffs in the success of their undertaking tbat they bound themselves to take 67 automobiles in addition to those covered by the original shipping orders.
If tbe original contracts (Exhibits “A” and “B”) were not binding, and tbe oral agreement of 18 December, 1919, was tbe first and only contract, or if Exhibits “A” and “B” did constitute obligations which
The plaintiffs refused to continue as agents of defendants, and to give the time and money required for the establishment of the agencies, unless the defendants would bind themselves to deliver the particular cars ordered for the months of January to July, inclusive. The consideration moving to the plaintiffs was the profits they would receive on those particular cars, and the considerations moving to defendants were the receipt by them of prices fixed for the cars, and the advertisement of their automobiles so that the demand for their output would be greater. Mfg. Co. v. McPhail, 181 N. C., 205. The contract was not unilateral, a mere nudum pactum, but valid and binding, reciprocal duties and obligations being. assumed by each side. The defendants obligated themselves to sell and the plaintiffs obligated themselves not only to buy at the prices fixed by defendants, but also to continue as agents of defendants for the sale of Chevrolet automobiles and trucks, and to rent a garage, employ mechanics and salesmen, advertise defendants’ product, and to do what was necessary for the mutual advantage of the contracting parties. Approximately $8,000 was expended by plaintiffs in establishing the agencies on the faith of the oral contract. This money was paid out by direction of defendants and for the benefit of defendants, and the only consideration therefor was the agreement of the defendants to deliver the automobiles .and trucks that had been ordered. Now the defendants repudiate their contract, refuse to deliver the automobiles and trucks, and insist that plaintiffs are without remedy, and that defendants can take the benefit of plaintiffs’ time and money without giving anything in return. This position is one of the first impression, and is not supported by law. Holt v. Wellons, 163 N. C., 124. Plaintiffs contend that even if the oral agreement in controversy had been unilateral, the defendants would be bound, as they received the benefits of the consideration for which they bargained, viz.: the plaintiffs continuing as agents, and using their time and money in advertising and establishing the agencies. Richardson v. Hardwick, 106 U. S., 252; 27 Law Ed., 145; Storm v. United States, 94 U. S., 76; 24 Law Ed., 42. “If mutuality, in a broad sense, were held to be an essential element in every valid contract, in the sense that both contracting parties could sue on it, there could be no such thing as a valid unilateral or option contract, or a contract to enforce a reward, offer, or a guaranty, or in many
The court below held that the original contracts are void and not enforceable as contracts, and that the oral contract is not binding because it is based on those paper-writings, which are of no effect, and dismissed the action.
Plaintiffs rely upon the reported cases, which show, as they contend, that retail automobile dealers have been repeatedly victimized in relying on “written contracts” (Exhibits “A” and “B”) when in fact they were without protection, and in the instant case where defendants did bind themselves by a valid and enforceable oral contract and received the benefit of the time, labor, and money expended on the faith thereof; they should be required to answer in damages for losses sustained by plaintiffs on account of its wrongful breach by defendants.
It must be clearly understood that, in these various contentions of the plaintiffs, they are not relying solely upon the original written contract, which contained the reserved powers of cancellation. It is not necessary
Commenting on the Manhattan case, supra, Mr. Keener, in his excellent treatise on Quasi-Contracts (Ed. of 1893), p. 247, says: “Now it is submitted that no distinction can be drawn between Cutter v. Powell, 6 T. R., 320, and Manhattan Life Ins. Co. v. Buck, 93 U. S., 24. In each case there was an express condition to the effect that in the event in question the plaintiff should have no claim upon the defendant; in each case it is conceded that the plaintiff had no rights against the defendant on the contract itself. But by the terms of the contract, which provided that the plaintiff should have no rights on the contract in the event which has happened, it was distinctly stated in the case of Manhattan Life Ins. Co. v. Buck, supra, that the plaintiff was to have no rights of any kind against the defendant. If, then, the case of the Manhattan Life Ins. Co. v. Buck, supra, is to be supported, it must be put upon the ground that the court will relieve against a forfeiture, and
But it is not necessary that we adopt either of these views in the present instance, as the oral contract with Herold, the general agent or manager, so modifies the written contracts by eliminating the provisions as to cancellation, and in other respects, and his representations, promissory or otherwise, were of such a persuasive and tempting character, as to create a cause of action in favor of the plaintiffs, of quite a different kind from that which arose, if at all, upon the special written contract. To say the least of.it, the language, conduct, and manner of Herold was calculated to impress the plaintiffs to believe that they could safely go ahead with their projected scheme as agents or distributors of defendants’ cars and other vehicles, with the • assured, and even warranted, expectation that the defendants would comply with their orders promptly and assist them in every way to success in their venture, which was to inure more to their benefit than to that of the plaintiffs. Stronger or more effective inducement could not have been held out to the latter, or have encouraged them in the belief, and even conviction, that they could safely make the anticipated expenditures in installing and equipping their plant at Asheville and Hendersonville upon the assurance of the defendants that they would get their money back thus laid out, and realize a substantial profit from the enterprise. If we should hold that plaintiffs have no legal right to be reimbursed for their outlay, under such circumstances, and to recover their reasonable and certain profit thus promised to them, would be to disregard all well settled principles of the law in like cases.
If one makes a promise to another which at the time of making it he does not intend to perform, and induces the latter thereby to part with value, or to act to his own prejudice, he will be liable for the consequent damages to him who is thus misled by the false promise. It has been held by us that in cases of fraud, where the person committing it has been thereby enriched to the damage or detriment of the other, an innocent party, indebitatus assumpsit will lie upon the ground that the law implies a promise to restore what has been gained by the transaction. Armfield Co. v. Saleeby, 178 N. C., 298; 6 S. E. Digest, 866. Another well established species of fraud by a vendee is purchasing with a positive intention not to pay for the goods. If such intention were known to the vendor he certainly would not sell. Its suppression, therefore, is a legal fraud. Benjamin on Sales (I ed.), p. 410; Des Farges v.
Let us now apply these principles to the case in hand. If the defendants, acting through their general agent, having authority to bind the principals, represented what they would do, not intending at the time to do and perform what was promised, and thereby induced plaintiffs, relying on his statement, so to act as to bring loss upon themselves, if the promises and representations as to what would be done were falsely made, and were not carried out, and not intended to be executed, and plaintiffs were thereby made to suffer loss, the wrong was an actionable one, and they may recover for the loss or injury resulting therefrom. Both law and equity will afford relief in proper cases.
Of if the defendants, by themselves or their duly authorized agent, made promises or representations, upon which the plaintiffs had the right to rely, and they were misled thereby to their prejudice, they may recover the resulting loss.
The defendants further contend- that there is no mutuality, as between the parties to the contract, which they say means no consideration to support it as an enforceable agreement. But there is such consideration, it being the benefit and advantage defendants were to receive from the wide advertisement and sale of their cars, and from other advantages, which they were so keenly anxious to reap, as their agent intimated, and furthermore, as a part of the consideration, they were to have the services, efforts, and expenditures of the plaintiffs in that behalf. "What more would they want or could they require? Besides all this, there was mutuality and consideration sufficient to uphold the contract, as defendants were not only to lay out large sums of money in preparation for the fulfillment of their agency to sell the defendant’s cars, but were to pay the scheduled prices, or in default of that, the reasonable prices of the defendants for the same. It must be kept in mind that plaintiffs are not relying altogether upon the written contracts, as amended subsequently, but upon the oral representations and promises of the defendants, by which they were deceived and thereby lost. Plaintiffs were to pay the list prices, subject to changes of the same according to the rise or fall of prices in the market, but still they were to pay. The cars were to be shipped “according to schedule attached,” and Herold said, with impressive words and manner, “We will take special pains in seeing that what you order is shipped promptly, and the company agrees, through me, to do everything, in its power, that will make this agency a big success, and we will cooperate with you in every way to that end.” These were not only impressive words, but calculated to inspire the plaintiffs with confidence in their truth, and sincerity, and to induce
Where no time is fixed, if it is not fixed here, for the performance, duration, and completion of the contract, the law implies that a reasonable time will be allowed. Winders v. Hill, 141 N. C., 694; Michael v. Foil, 100 N. C., 178; Bunch v. Lumber Co., 134 N. C., 116; Waddell v. Reddick, 24 N. C., 424.
The orders for cars were given by plaintiffs in reliance upon the representations and promises of Herold, the defendants’ general agent, and not necessarily upon the written contracts, unmodified by the oral agreement, or even as modified "by it, as there are considerations, independent of the written agreements, upon which the oral agreement may well rest.
The agreement is not affected by the statute of frauds, the two cases relied on by defendants for the suggestion as to the statute, viz., W. City Fire Ins. Co. v. Lichtenstein, 181 App. Div. (N. Y.), 681, 685; Pearlberg v. Levischn, 112 Misc. (N. Y.), 95, were both decided in New York, the statute of that State and ours being essentially different as to contracts not to be performed within a year, and in other respects.
The position that the contracts were executed in the name of the plaintiffs as individuals seems to be untenable, if not trivial, the intention manifestly being that the plaintiffs should act individually until their incorporation. This objection is more technical and formal than substantial. It does not prejudice the defendants materially that the incorporation of plaintiffs has been delayed. It may be that the incorporation might take place now, and the corporations made parties, as successors to the individual plaintiffs. We do not see how the merits of the transaction will be materially affected either way. The Code provides, Pell’s Revisal, sec. 415: “No action shall abate by the death, marriage, or other disability of a party, or by the transfer of any interest therein, if the cause of action survive or continue, but the Court, on motion at any time within one year thereafter, or afterwards on a supplemental complaint, may allow the action to be continued by or against his representative or successor in interest.” It is plainly evident that this contention must have been an afterthought of the defendants, and not the substantial reason for the failure to comply with their contracts.
We have thus carefully considered all reasonable grounds of objection set up by the defendants, and find none of them to be tenable. The rulings of the Court are consequently reversed, and the nonsuit is set aside. This necessitates the calling of a jury to try the case.
New trial.
This opinion was written by Me. Justice Walkek in accordance with the decision of the Court, and was filed after his death.