Smith v. Doughty

199 N.W. 663, 227 Mich. 638, 1924 Mich. LEXIS 713
CourtMichigan Supreme Court
DecidedJuly 24, 1924
DocketDocket No. 64.
StatusPublished
Cited by4 cases

This text of 199 N.W. 663 (Smith v. Doughty) 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
Smith v. Doughty, 199 N.W. 663, 227 Mich. 638, 1924 Mich. LEXIS 713 (Mich. 1924).

Opinion

STEERE, J.

During the year 1920 and for some time previous defendant, Doughty, ran a garage and was engaged in the automobile business in the city of Detroit having the exclusive agency of the Franklin motor car in said city, for which purpose he maintained salesrooms and repair shop and a used car department in charge of an employee acting as man *640 ager, with sub-agents employed in selling his ears on commission. Plaintiff, Smith, was one of his salesmen and had been in his employ for nearly four years at the time he left. The agents were required to own Franklin demonstration cars and during that period Smith had purchased four or five from defendant, the first in the spring of 1917. He disposed of them from time to time and bought new ones from Doughty, selling the old and using the proceeds to buy the new. None of them was sold at a loss except the car involved in this controversy. Doughty carried insurance on the cars which Smith bought from him. The last before the one in controversy was damaged by fire. Smith sold the chassis for $1,400 paying that amount and giving a note for $950 to Doughty for a new one. When the insurance was paid he was credited with a sufficient amount by Doughty to liquidate the note.

On September 15, 1919, while Smith was still in Doughty’s employ the latter wrote the following letter to his salesmen and caused it to be hung up in his salesroom:

“Dear Sir: Kindly be advised that dating from today, September 15, 1919, as follows:
“Commissions on sale of all new cars will be four (4) per cent, of list price.
“Salesmen will be charged one hundred ($100.00) dollars plus cost, for new cars when purchased by themselves.
“Any loss on sale of demonstrators will not be charged to salesman, as he will receive the same amount that he paid for car on re-sale. Sale price of demonstrator must be approved by W. J. Doughty before sale.
“Allowance of ten ($10.00) dollars per month will be allowed each salesman for upkeep of his demonstrator, provided demonstrator is used for demonstrations.
“Very truly yours,
“W. J. Doughty.”

*641 Smith testified that Doughty gave him a copy- of this “agreement,” and he bought his last demonstrator car relying on it. He found an opportunity of which he desired to avail himself for employment with the Cadillac Motor Car Company. He so notified Doughty, and on September 1, 1920, left his employ. A few days before he left he had a talk with Doughty and requested him to take back the Franklin car which he had bought of him the previous February to use as a demonstrator. He testified Doughty told him he could leave it with the used car man, Montgomery, and- have him sell it for him, or “to do what I was a mind to do with it.” Smith took his car with him when he went to his employment with the Cadillac Company where he tried, and had the Cadillac people try, to sell it. His reason for not leaving the car with Montgomery was that Doughty would not take the responsibility himself “and release me of possible responsibility of a lot of joy riding that was smashing up a few cars around there. * * * I felt he was the man it should go back to, not the used car man.” After he had gone to the Cadillac Company he requested Doughty to take the car back, to take it off his hands and sell it, “possibly ten days or two weeks after, the second time I went back. * * * Q. What was his reply? A. Well, that he said, ‘the car belongs to you and you can do as you are a mind to with it.’ ” Following this he sent, through an attorney, a notice to Doughty which in brief advised him that he having refused to take the car back when tendered to him the best offer possible in the open market would be obtained, and submitted for his approval, “in order to mitigate damages” and he would be looked to for the difference between the $2,350 Smith had paid him for the car and the price obtained for it in the open market. Doughty replied to the attorney’s letter that Smith was *642 not in his employ “and as for your instructing your client what to do with the automobile is immaterial to me as he owns his car.” Notice was thereafter sent Doughty that Smith had sold his car on October 23, 192,0, for $1,800, being the highest price obtainable in the open market, and $550 less than Smith paid him for it, to which no reply is shown.

Doughty’s version of the interview is that before Smith quit,—

“I said ‘What about your automobile?’ He said, T need it. I want to paint it, and think I can get more from the Cadillac for it than what you can get for it here.’ I said, ‘All right;’ and he'took the car and left. I did not see him again until some weeks or months later, and he came with a gentleman, I think his name was Mr. Hafner, and when he left he said, ‘What about your car?’ I said, ‘Mr. Smith, it is yours, you left and took it with you.’ He did not at any time ask me to take the car back and buy it, or did he at any time offer me the car to enable me to sell it.” .

Smith denied making the statements imputed to him before he left by Doughty and explained that the Cadillac people had then agreed to furnish him a car, he had no use for his Franklin any more, and Doughty was in a better position to dispose of it than they were at the Cadillac.

These and other analogous conflicts in the testimony raised issues of fact which the court submitted to the jury. Plaintiff had verdict and judgment for $550. Defendant’s contentions summarize to the propositions that there was no contract, and if there was plaintiff violated it by selling the car without Doughty’s approval, for which reasons a verdict should have been directed for defendant as asked.

The promissory feature of the letter Doughty wrote his salesmen and emphasized as a continuing offer by posting it up in his salesroom is the statement, to be read in connection with the rest of the letter, that—

*643 “Any loss on sale of demonstrator will not be charged to salesman, as he will receive the same amount that he paid for car on re-sale. Sale price of demonstrator must be approved by W. J. Doughty before sale.”

Defendant’s counsel contend that this paragraph “is a mere statement of intention and there was no meeting of minds in a common intention” which must always be shown as the foundation of every valid contract. In support of this counsel cite 13 C. J. pp. 263, 266, 287, 542, and other unquestioned authorities covering various features of that elementary principle in the law of contracts. But it is not essential that an offer and acceptance be simultaneous. The minds of the parties are construed to meet when the unrevoked proposal or offer is accepted by those to whom it is directed by word or act involving a consideration. This general offer or proposal by Doughty to his salesmen that if they bought a demonstrator car of the kind he dealt in he would protect them from loss and see that on resale they received the same they paid, was an offer to a class. That feature of the law of contracts is also elucidated in 13 C. J. pp.

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Bluebook (online)
199 N.W. 663, 227 Mich. 638, 1924 Mich. LEXIS 713, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-doughty-mich-1924.