E. G. Dailey Co. v. Clark Can Co.

87 N.W. 761, 128 Mich. 591, 1901 Mich. LEXIS 636
CourtMichigan Supreme Court
DecidedNovember 4, 1901
StatusPublished
Cited by20 cases

This text of 87 N.W. 761 (E. G. Dailey Co. v. Clark Can Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E. G. Dailey Co. v. Clark Can Co., 87 N.W. 761, 128 Mich. 591, 1901 Mich. LEXIS 636 (Mich. 1901).

Opinion

Grant, J.

(after stating the facts). 1. The argument of the learned counsel for defendant is that the written proposal and acceptance constituted not a mutual, but a. unilateral, contract, or a mere option, by which defendant at most was only bound to furnish such cans as plaintiff should specifically order before the offer was withdrawn, and that, after having filled all such orders, and withdrawn its offer, all liability ceased. This contract must be construed in the light of the surrounding circumstances. Plaintiff had been in the canning business since 1893. A large part of its material had been put up in tin cans. Defendant, during the year 189?, had furnished cans to the plaintiff to the number of 1,787,591, and had a contract with it covering one-half of that year, but did not supply all the cans then used. Mr. Dailey himself testified that plaintiff did not obtain all its cans used in 1897 from the defendant. Both parties understood that plaintiff would need and would use a large number of cans in its business. It was essential that they be furnished promptly as needed, in order that plaintiff might make contracts in advance, and supply the market. Defendant agreed to supply plaintiff with all that it would use in its factory during the time covered by the contract, and in consideration thereof plaintiff agreed to buy all the cans it would use in its business, at the prices named. Neither knew just how many would be required. One was willing to bind itself to buy what it would use, and the other was willing to bind itself to manufacture and sell that number, whatever it might be. The use of tin cans by plaintiff during the life of the contract was contemplated by both parties. It was made with the knowledge that the greater part of the plaintiff’s goods had always been put up in such cans, and that they had always been in use by other manufacturers of like goods. So anxious was each party to bind the other for the entire time, that it was agreed that defendant should furnish the cans even if its factory was destroyed by fire. The proposal and the acceptance constituted a mutual [595]*595contract, binding upon both parties. Plaintiff could not go outside to buy without violating it, and the defendant •could not refuse to supply plaintiff’s demands without equally violating it. The validity of the contract was recognized and acted upon by both parties for nearly a year, and to within three months and a half of its termination. Not until the price of tin — which constituted the main item of cost in these cans — was increased did defendant raise any question under the contract. Neither -does it appear to have had any difficulty in furnishing all the cans plaintiff ordered. The case is ruled by Cooper v. Wheel Co., 94 Mich. 272 (54 N. W. 39, 34 Am. St. Rep. 341), and Hickey v. O’Brien, 123 Mich. 611 (82 N. W. 241, 49 L. R. A. 594, 81 Am. St. Rep. 227), where contracts of this character are discussed and authorities cited. See, also, Minnesota Lumber Co. v. Whitebreast Coal Co., 160 Ill. 85 (43 N. E. 774, 31 L. R. A. 529). The court below was correct in holding that the contract was valid.

2. The questions of fraud and the increase of the capacity of the plant may be disposed of together, as the testimony upon which these defenses are based is substantially the same. Both questions were left to the jury. Upon the question of fraud the instruction of the court is summed up in the following excerpt from the charge:

“If you find that the plaintiff represented or induced the defendant to believe that, at the time the contract was made, in 1897 it had used no other cans than those bought of the defendant, and that the quantity of cans then used at the time of making the contract would be substantially all the cans used or bought in 1897; and if you find further that the plaintiff had, in 1897, used other cans than those he had bought of the defendant; and if you find the plaintiff had greatly increased the capacity of his factory, and knew that it was using more cans than he had used in 1897, and that he was using more cans in 1898; and if you believe that the defendant had no knowledge of the increase in capacity of the factory; and if you believe that the defendant actually believed that the number of cans that they were using in 1898 would be substantially the [596]*596same as those sold by the defendant to the plaintiff in 1897, and, so relying and believing, the defendant entered into the alleged contract; and if you find that those representations were false, — that is, if you find that the comparison between 1897 and 1898 was false, — then your verdict must be for the defendant. In making out a case of fraudulent representation, it is not necessary to prove express affirmative representations. . The whole conduct of the parties, and the impression that it is designed to make, must be considered.”

Upon the question of the changes the court instructed the jury as follows :

“No change in the factory or increase in its capacity after or subsequent to November 19, 1898, would justify the defendant in refusing to fill the terms of the contract, unless such change or increase was greater or other than that which would be demanded by the legitimate increase and growth of the Dailey Company’s business.”

The judge very clearly and very fully elucidates this branch of the case. These instructions were certainly as favorable to the defendant as, under the record, it was entitled to. It is very doubtful whether there was any question of fraud to be left to the jury. Plaintiff made no statement to the defendant of the number of cans it manufactured in 1897 or 1898. Mr. Clark did not ask Mr. Dailey for the number of cans used in 1897, and there is no testimony that Mr. Dailey informed him as to the number. His testimony is as follows:

‘ ‘ I asked him [Dailey] how many cans he would want or use. He said: ‘Clark, I can’t tell you; but I will look it up and let you know.’ So I went back to Mr. Dailey, and asked him, and he said, ‘Clark, I haven’t had time to look it up; but,’ he said, ‘you know, and can look it up as well as I can.’ ”

This conversation is denied by Mr. Dailey, who testified that in one conversation he told Mr. Clark he thought plaintiff would use about 3,000,000, and that, when Mr. Clark asked him if he knew how many cans he would want in 1899, he replied, “You know that just as well as [597]*597I do.” Without any further inquiries or any further representations, this contract on the part of the defendant was executed.

Many of the improvements now complained of were either then completed or were in progress at the time the contract was made. There is evidence to show that Clark knew of these improvements; that he went through plaintiff's plant; that he congratulated plaintiff’s manager, Dailey, upon the increase of business; that Dailey informed him that its business was growing; that he wanted a contract to deliver him just as many cans as were needed; and that Dailey told him the company contemplated building a new brick building, so as to further ■extend the business. Defendant evidently made this contract, not with the understanding that the capacity of the factory should remain the same as it had been previously, •or that the machinery should remain the same as it was, hut with the understanding that plaintiff might make improvements incident to the increase of business and the requirements of trade.

3.

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Bluebook (online)
87 N.W. 761, 128 Mich. 591, 1901 Mich. LEXIS 636, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-g-dailey-co-v-clark-can-co-mich-1901.