240 F. 801 | E.D. Pa. | 1917
A summary of the reasons for a new trial now urged and the rulings of this court thereon may be helpful in the' subsequent proceedings in the cause.
The evidence was excluded on the ground that the breach of one con - tract by the plaintiff would be no legal justification for the breach of another contract by the defendant. The latter could avail itself of pri- or contracts as a defense only through the medium of what would be in substantial effect a set-off. The mere fact that the plaintiff had breached a former contract would not justify the inference, nor be any evidence, that the parties had, by a course of dealings or otherwise, defined for themselves the meaning of the subsequent contract. The ability of the plaintiff to find sales for the nymber of automobiles ordered was to some extent in issue, and the volume of business he had been able to do the previous year did have .some bearing upon the volume of business which he was able to command for the following year. To this extent the inquiry was permitted, and the answer went in evidence. The inquiry excluded was confined to the point of whether the defendant had forgiven the breach of the prior contract. The complaint of the above ruling is embodied in the first reason for a new trial.
3 and 4. Reasons 3 and 4 must be based upon an error. The question referred to in reason 3 was directed on re-examination to the testimony given by the witness on cross-examination as to the transactions of the previous year. The question was therefore allowed to the extent to which it had permitted the defendant to go into the transactions of the previous year. It developed, however, from the answer, that
The remaining reasons, other than purely formal ones, relate to complaints of the charge, and will be considered together. They will be discussed in the order in which presented in the brief submitted.
The contract, therefore, on the part of the defendant, in practical effect meant this: So far as we now know, we will be able to deliver to you 300 automobiles whenever you are ready to take and pay for them; the deliveries, however, to be made at the times mentioned in the accompanying schedule. It may, however, be that we will not be able to live up to this contract, and because of that uncertainty we reserve the right to cancel at any time. The plaintiff was in a like situation and reserved the like right. It is, of course, obvious that no court would attempt to enforce such a contract, so far as it was executory and related to the future. Such an attempt would be futile, inasmuch as the party required to perform could abrogate the contract. If, however, this right was not exercised, and the contract remained in full force so far as it became' an executed contract, it is difficult to explain why it should not be given full effect.
-The position of the plaintiff may be summed up in this: The contract to deliver was in force until annulled. It is conceded that the defendant had the right to annul it. The effect of such annulment would have been to have relieved the plaintiff of his contractual obligations. Whatever the practical consequences of the annulment might have been to the plaintiff, he would have had no legal grounds of complaint; but the defendant could not leave the contract in force and refuse to comply with it.
There is nothing in the cases cited inconsistent with this. The rule in the Yelie Case, in which a somewhat similar contract was under con
Oakland v. Indiana, 201 Fed. 499, 121 C. C. A. 319, was a somewhat similar case in its facts, except that the litigants were reversed, and the dealer was there the plaintiff, and the manufacturer the defendant. The defendant there was under no obligation to deliver, unless it had received and had accepted orders to deliver, and it had also reserved the right to cancel. Plaintiff had agreed to purchase 50 cars during the term of the contract, and as many more as it could handle and the defendant could supply. The agreement was dated September 16, 1908, and expired on September 1, 1909. The case was to recover damages for the breach of the contract. The breach was the cancellation of the contract by the defendant on October 31st. At the trial the plaintiff limited its claims to the failure to deliver the 50 automobiles, abandoning all further claims for damages. There was a verdict and judgment in the court below for the plaintiff. This judgment was reversed, and the ruling of the appellate court-supports-three propositions: (1) That-the right of cancellation made the contract, so far as executory, unenforceable. (2) That there was no contract, even to deliver the 50 cars, unless an order was first given therefor, and accepted. (3) That the contract for future supply and delivery of cars was unenforceable, because there was no agreement as to the kind or character or value of the cars to be delivered.
Ellis v. Dodge (D. C.) 237 Fed. 860, was also the case of dealer against manufacturer. This case was ruled upon a demurrer. The declaration set forth a contract by which the defendant granted the" plaintiff the right to sell its cars within a prescribed territory. There was a provision as to tire prices to be paid by the plaintiff for the cars supplied to him by the defendant. There was a provision for cancellation, which operated as a cancellation of all unfilled orders. The dealer agreed to accept and pay for such cars as should be shipped to him under the agreement, subject to his right to cancel; but there was no agreement on the part of the manufacturer to deliver any cars. There was an averment of the failure and refusal of the defendant to supply cars, but no date of repudiation of the contract is given. It would appear that the contract was allowed to run its course without any act of the defendant, other than its failure to supply the cars
It is to be observed that the action there was upon the contract, and the cause of action the failure of the defendant to supply cars. The ruling is therefore supported by the proposition that the defendant could not be held answerable for a failure to supply cars which it had not agreed to supply. The court, it is true, expressed itself to be of opinion that a contract which may be determined at the will of either party is no contract at all, and therefore cannot be made the basis for an action of .damages. This is voiced in the expression that “to agree to do something, and reserve the right to cancel the agreement at will, is no agreement at all.” The court further stated its view that, even if there had been a contract to deliver, the reserved right to cancel would have made this undertaking no contract at all. It is clear that these expressions are purely obiter and have a wholly argumentative purpose. If an agreement to deliver, subject to the right of cancellation, is a nullity ab initio, of course, the absence of, the agreement would present the a fortiori argument.
The case is authority for the proposition that where a defendant has not agreed to deliver he cannot be held answerable in damages for not having delivered, but it is not an authoritative ruling for the proposition that a defendant who has agreed to deliver need not comply with his contract because he had the right to end it at will. The expressions quoted are not to be taken as the view of the court as to the law of the case now before us. They certainly do not carry any implication, beyond the effect of the words used. It may be well said of a contract, as was said in the case under consideration, that a corn-tract to do a thing, coupled with the right of revocation at any time, would indeed seem to be no contract at all. This is, however, an entirely different thing from ruling that, where a party to a contract has defaulted, he may not be held answerable for his default, even although he had the right to have relieved himself of the obligation by a revocation. The retort would be invited that he had the right to thus relieve himself from his obligation, but if he wished to be relieved he should have exercised his right within the time given to him in which to exercise it, and that he could not refuse to exercise it, and thus hold the other party to the contract as written, and yet receive all the benefits of a revocation which he never made.
All the court in Ellis v. Dodge said is what any one would say of such a contract, that a contract which could be called off is no contract at all. This is true, but what is meant is this: All the party whoi made this contract is required to do is to declare it off. This, of course, he will do, and because of this it is nothing. If, however, he does not call it off, but elects to keep it in force, it is difficult to understand why he should not be bound by it. Such a contract is the equivalent of this agreement: You may send me orders for delivery, and you may assume I agree to fill them, unless I notify you to the contrary. The other party has the right to act upon this assumption. The practical situation of parties affected by such a contract is illustrated by the facts of this case. The plaintiff expected, as he had tire right
The proper course would, therefore, seem t'o have been for the trial judge to have submitted to the jury to find to what the reference in the cancellation paper was, and to have instructed them that, if it had reference to the agreement ■ reached at the conference, it took effect as an ending of the contract for the future; if the reference was not to this, then the only thing to which it could refer was the contract itself (or rather the modification of it, eliminating the 10 days’ notice of cancellation), andJ that the paper then operated as a cancellation, affirming the seventh point of defendant. This was clearly the instruction meant to be given and as given. Reading simply the formal answers to the points, without the explanations given in the presence of the jury, this does not so clearly appear. The exceptions taken by defendant do, however, show it clearly, because the only exception taken was to the refusal of the court to flatly charge that the legal effect of the paper signed was to cancel the agreement
The rule for a new trial is discharged, and plaintiff has leave to enter judgment on the verdict.