Holt Motor Co. v. Nicholson Universal S. S. Co.

56 F. Supp. 585, 1944 U.S. Dist. LEXIS 2240
CourtDistrict Court, D. Minnesota
DecidedJuly 1, 1944
DocketCivil Action No. 590
StatusPublished
Cited by4 cases

This text of 56 F. Supp. 585 (Holt Motor Co. v. Nicholson Universal S. S. Co.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holt Motor Co. v. Nicholson Universal S. S. Co., 56 F. Supp. 585, 1944 U.S. Dist. LEXIS 2240 (mnd 1944).

Opinion

NORDBYE, District Judge.

Plaintiff brings this action to recover damages for breach of contract. Its business was that of dealing in automobiles at wholesale and retail, and, as a part thereof, it distributed Chrysler and Plymouth automobiles through dealers in territory generally appurtenant to Minneapolis, its principal place of business. It contends that on November 7, 1940, it advised the defendant, a common carrier by water on the Great Lakes, that it was in a position to arrange with the manufacturers of Chrysler and Plymouth cars to advance the normal production schedules of the factory manufacturing said cars so as to deliver some 500 cars to the plaintiff; that it could not arrange for the manufacture of such cars unless they could be transported by water from Detroit, Michigan, to Duluth, Minnesota, before the close of the 1940 navigation season; that transportation by water was cheaper than by rail and that, if the cars were ordered and could not be shipped by water that season, this plaintiff would be unable to sell the cars as promptly to its dealers, which would result in damage by reason of extra expenses such as the difference between the cost of transportation by rail as compared with the tariff charges by wafer, extra incidental expense caused by rail transportation, storage of cars in Minneapolis, and interest on the money invested. It is alleged that the defendant well knew the damages which plaintiff would suffer if it ordered the cars and if the same could not be transported by water as before stated, and that, with full knowledge of the situation, defendant promised and agreed that, if plaintiff would place its order for the 500 cars and cause them to be delivered to it promptly and before the close of the 1940 navigation season, the defendant would cause the same to be transported by water from Detroit, Michigan, to Duluth, Minnesota, at the regular tariff rates for such services. Plaintiff contends that, thereafter, relying on such promise, it ordered the 500 cars and notified defendant that it had done so; that there was delivered to the defendant after that date 125 cars out of the total 500 contemplated by the agreement and which number was transported by water as agreed, but that, on November 13, 1940, defendant notified plaintiff that, by reason of weather conditions, it had declared an embargo on any further shipments by water on the upper Great Lakes, and therefore it would not accept any more cars for shipment over its lines from Detroit, Michigan, to Duluth, Minnesota. The navigation season on Lake Superior closed for 1940 on November 26th. It is contended, therefore, that defendani thereby breached the agreement above referred to. Damages caused by such breach are alleged to be a substantial sum. If plaintiff has a right of recovery, damages in some sum have unquestionably been proven.

I. The negotiations between the parties for the shipment of the cars in question were all oral and were carried on by Walter M. Shirley, the general manager of the plaintiff company, and Fred L. Hewitt, Jr., general manager of the defendant company, on November 7, 1940. These parties had done business together for several years and plaintiff had shipped many cars by water over the defendant’s lines from Detroit to Duluth. That Shirley outlined the plan of advance production for the Plymouth and Chrysler cars to Hewitt, conditioned upon obtaining water transportation from Detroit to Duluth, seems reasonably free from doubt. Moreover, it seems clear that Hewitt at least assured Shirley that he was sure, or reasonably sure, that defendant could handle the cars as suggested. According to Shirley’s testimony, however, Hewitt staled in substance, after learning of the proposed arrangement with the manufacturer: “We can take those 500 cars up to November 26th. We will sail as late as midnight, November 26th, which will include your production of that day if the cars are down by that evening.” According to Shirley, he (Shirley) replied: “If you are sure you can handle these cars by the 26th, that is O.K. I told him, ‘We can’t afford to have anything go wrong with that deal.’ He (Hewitt) said they could handle them by the 26th.” Later, Shirley contends that he told Hewitt he had ordered the cars and that Hewitt replied: "'That is good news. We will haul the cars.” Hewitt’s version of the conversation is to the effect that he told Shirley that [588]*588he thought that the defendant company could handle the shipment, or that he felt reasonably sure that they could handle it. He did state, however, that he did not recall the exact conversation and therefore was not in a position to deny what Shirley might contend as to that which took place. Gwatkin, a soliciting agent for the defendant, was present during the conversation, and he testified in part as follows:

“A. Mr. Shirley asked Mr. Hewitt if he could move 500 cars, and he told him that he believed he could. * * *
“Q. Later that day you and Mr. Shirley and Mr. Gillespie had a conference or conversation with Mr. Hewitt; is that correct? A. That is correct.
“Q. I believe you testified that he, Mr. Hewitt, at that time said that he believed he could move the cars ? A. That is right.
“Q. Is that the sum and substance of that later conference? A. I think Shirley mentioned that he didn’t want to order the cars unless they could be moved.
“Q. And what was Mr. Hewitt’s response? A. He thought he could move them.
“ * * * A. The exact words he used, as I recall it, is I believe, T believe we can move them all right.’ ”

It should be noted that the conversation between the parties will not justify the view that the plaintiff in any way obligated itself to deliver any certain number of cars to the defendant carrier. It could not be held for breach of contract if production lagged at the factory, or if for any other reason the number of cars referred to were not available for shipment prior to the close of navigation on or about November 26th. Moreover, the good faith of any statements or assurances given by Hewitt are not questioned. There is no claim of fraud. It must be assumed that the parties knew that any agreement they made was dependent upon certain contingencies such as the weather, embargoes, etc. Furthermore, it is to be doubted that there was any intention on the part of the parties to enter into a firm agreement. Even accepting Shirley’s version of that which took place, it seems reasonable to find that Hewitt merely assured him that, in his opinion, the defendant company had facilities which could handle the cars which were to be ordered. There were substantially 19 days of navigation to be reckoned with. Hewitt undoubtedly felt sure that, in that period, the contemplated number of cars, could be moved. Presumably, he was bound to exercise reasonable diligence to carry out his assurances. But to spell out of the conversation as related by Shirley, Hewitt and Gwatkin, an unequivocal agreement to carry 500 cars from Detroit to Duluth between November 7th and 26th, seems contrary to the inherent probabilities of the situation. The nature of the agreement entered into by the parties seems to be somewhat clarified by considering the correspondence that took place between them. It was on November 13, 1940, that Hewitt addressed the following letter to Mr. Shirley:

“I wired you today as follows: Regret unable to accept future Duluth Shipments after midnight tonight due weather conditions. Letter follows.

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56 F. Supp. 585, 1944 U.S. Dist. LEXIS 2240, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holt-motor-co-v-nicholson-universal-s-s-co-mnd-1944.