Weinstein v. Studebaker Corp.
Weinstein v. Studebaker Corp.
Opinion of the Court
This case affords an illustration (although it is not quite a characteristic instance) of that class of contracts in which fact and substance are wholly ignored, and fiction and form are made to do duty in their stead. In fact and substance the business'proposed by the parties to be done was the manufacture of automobiles by the defendant, to be delivered to the plaintiff’s bankrupt at a price, and to be sold by the latter at another price, and to be paid for on delivery. The gross profit to the bankrupt would therefore be the difference between the prices thus fixed and its net profits this difference, less freight and the expenses of selling the automobiles to the ultimate purchasers'. To accomplish this an agreement was made in anticipation of tfie contract of sale. To secure to the manufacturer all the benefits of such a transaction, without any of its attendant risks, certain writings were made and signed. These are not with flippancy, but with earnestness, characterized by counsel for defendant, as a jumble of a contract of sale which was no sale, an agency agreement which created no agency, an order for automobiles and its acceptance, which was neither an order nor an acceptance, a contract of bailment where there was no bailment, and, to crown all, provisions were added that the agreements might be annulled, and the order, or its acceptance, canceled at will, and claims for any breaches of the contract were waived. In fact, he charges the agreements with being so one-sided, inequitable, and lacking in mutuality as to be absolutely void, and so meaningless as to be unenforceable. We may accept his characterization without the concession of the right of his client to make a hard bargain and then refuse to abide by it. Indeed, this seemingly difficult accomplishment of traveling in opposite directions at one and the same time and of attaining the unattainable was nevertheless accomplished through the simple expedient of entering into an agreement setting forth the terms and conditions upon which any orders given by the bankrupt for automobiles and accepted by the defendant were to be deemed to have been accepted. The arrangement between the parties was all embodied in writings, the only features of which now of importance to us are the following (at least, these will serve as illustrations of all which now concern us):
The action is by the trustee in bankruptcy, the claim being made for the lost profits on the cars not delivered, less those the order for which was canceled, and less also cars which were to have been shipped before the date when the first cars were shipped. The reason for this latter deduction will later appear. It is clear that the transaction as arranged between the parties was in substance this: .
The cars to be sold by the bankrupt to> its customers had not been manufactured. The bankrupt did not know how many it could sell, nor did the defendant know how many it would- be able to manufacture, nor how rapidly it could turn them out. Neither party was willing to bind itself by a hard and fast contract. Their agreement therefore was nothing more than a tentative estimate of what each expected, or at least hoped to be able, to do. The defendant sought to protect itself by the reservation of at least two rights. One was to withhold deliveries unless the cars were paid for before or on delivery. The other was, if the demand for cars was accompanied with the offer of payment, to terminate the contract. If it had the cars to spare, it
The bankrupt was not so happily circumstanced, but it was confronted with a very practical- situation. It could not expect the defendant to make an absolute agreement to deliver, unless it made an absolute agreement to pay for the cars when delivered, whether purchasers had been found or not. It therefore accepted the only agreement it could get. There was a well-founded expectation that the defendant would be as willing as itself to fill orders for all cars which could be sold. It did not attempt to force the delivery, because it knew this would result in the contract being called off. It was therefore content to- plead for the cars it wanted, instead of demanding them.
The discussion of the defense took a wide range and issues of fact were presented to the jury which had no proper place among the real issues. The trial was conducted by both counsel with signal ability and earnestness. If the trial tactics employed were open to question, it was in the bringing into the defense of some extraneous matters and an over-anxiety on the part of plaintiff to meet anticipated defenses. One of these features of defense now made the subject of complaint was the charge that the defendant had been deceived and misled into making the contract, by a false show of credit and financial strength on the part of the bankrupt. It is now asserted (and perhaps with truth) that this prejudiced the jury against the plaintiff. Obviously this had no bearing upon the issue of performance, except that so far as deception was admitted-to'have been practiced by a witness it went to his credibility. The evidence thus made of defensive value was not only in the case without objection, but was introduced, and its value first discussed and presented to the jury for appraisement, by the plaintiff himself. The introduction of this evidence could not, therefore, be permitted to. disturb the verdict. To the mind of the trial judge it had no value or bearing upon the real issues, and in his opinion was best disposed of by ignoring it and directing the attention of the jury to those real issues as the only ones.
Plaintiff did nothing, and in still further consequence had no right to recover anything, unless this feature of the contract was waived or changed. The best, therefore, which could be done for the plaintiff, was to submit this question of waiver. This was done, and therefore
The trial judge was fully justified in submitting the case on this theory, because it would have been an injustice to plaintiff for the trial judge to have jeopardized plaintiff’s case by insisting upon giving instructions to the jury more favorable to the plaintiff than those for which it asked. After taking the position which was taken, it was too late to return to the other, and the court was not bound to charge otherwise than was done.
The verdict may be practically accounted for by either of two possible findings. The jury may have found no waiver, and in consequence no breach. It is practically possible they found the waiver, but no damages. In the latter event, there should have been a verdict for the plaintiff for nominal damages. It would have been well if the jury had been specifically so instructed. This was,- however, the logic of the charge, which the jury must be taken to have appreciated and applied. This feature of the trial is of practical value only as affecting costs, and the error is of the too remotely possible kind to justify disturbing the verdict.
The financial ability of the bankrupt to handle business and its ability to make sales had, it must be kept in mind, a bearing upon the question of the breach of the contract, because bearing upon the question whether the nonreceipt of cars was, due to- the default of the defendant, or due to the fact that the bankrupt did not really want the cars delivered, either because it could not finance its business, or because it had no sale for the cars.
The real complaint of the plaintiff is voiced in the refusal of the trial judge to affirm those of its points which set forth its right as matter of law to have a verdict directed to be rendered in its favor, because it had introduced evidence, and the defendant had not, or at least to have the jury instructed that the preponderance of the proofs was in its favor. To have so charged would have been a usurpation of the functidns of the jury, and to relieve the plaintiff, of the-burden placed upon him to prove the facts affirmatively to be established.
The rule for a new trial is discharged, and defendant may enter judgment on the verdict in its favor.
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Reference
- Full Case Name
- WEINSTEIN v. STUDEBAKER CORP
- Status
- Published