Case ID: ohio-app_21/html/0369-01.html
Source: Caselaw Access Project
Author: {"author": "Richards, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Franck v. The Seavey Mfg. Co.
    
      Contracts — Extension of option without consideration — Constitutes new agreement and revocable before acceptance— Telegram accepting and letter specifying changes, not unqualified acceptance.
    
    1. Letter, if deemed an extension of an option, held without consideration and subject to revocation at any time before acceptance.
    2. Extension of option without consideration is a new agreement revocable at any time before acceptance.
    3. Telegram, “Ready to close with minor changes in contract. Letter following explaining this. Enter binding order one hundred immediate shipment,” or the accompanying letter specifying changes desired, held not unqualified acceptance of offer of distributorship for electric cleaners.
    4. Extension of option without consideration held lawfully revoked before acceptance.
    (Decided February 23, 1926.)
    Error: Court of Appeals for Lucas county.
    
      Messrs. Bitter & Brumback, for plaintiff in error.
    
      Messrs. Tracy, Chapman & Welles, for defendant in error.
   Richards, J.

An action was commenced by Franck in the court of common pleas to recover $242,500 damages for breach of a contract to constitute plaintiff the exclusive distributor of Air-Way electric cleaners in the state of New York and certain adjacent territory. The trial resulted in a directed verdict in favor of the defendant, and this proceeding in error is brought to secure a reversal of the judgment rendered on that verdict.

The one important and controlling matter in this case is to determine whether the parties had in fact made a contract. The answer to this question is reached by ascertaining whether an option given by the defendant was accepted within proper time¡ The plaintiff resided in the state of New York, and the defendant in the city of Toledo, and they had much negotiation by telegrams and letters looking to the execution of a contract for the distribution of Air-Way cleaners in the state of New York. The negotiations were delayed in order to give the plaintiff an opportunity to test certain sample Air-Way cleaners which were shipped to him, and, by reason of the nature of the correspondence, all propositions made prior to February 16, 1920, cease to be of importance.

On February 16, 1920, the defendant, under the name of the Air-Way Company, wrote the plaintiff a letter in which it used the following language : “We received your wire to express you three AirWay cleaners. This we are doing with the understanding that you are to decide on the distributorship for the state of New York within the next week or ten days.” The letter then gave certain prices, and closed as follows: “As previously stated, we shall hold this matter open for another ten days.”

An invoice was sent plaintiff showing a charge to plaintiff for three Air-Way cleaners, at $29 each. This letter constituted an option for a period of ten days from its date and was based on sufficient consideration, and would expire on February 26, 1920. The plaintiff did not accept the option within that time, bnt telegraphed, on February 25, asking that the same be extended for ten days from the date of the telegram, but no such extension was granted.

The defendant did, however, write on February 18 that it had theretofore shipped the new Air-Way cleaners, but that owing to an embargo they were still in Toledo. The company advised that the embargo would be lifted within a day or two, and the letter contains the following paragraph, on which the plaintiff relies as an extension of the option theretofore given:

“Upon receipt of these machines I hope that you will at once set about it to make up your mind to take on exclusively the Air-Way, as our New York distributors. The writer believes that you should be in position to tell us within the next two weeks, and we surely will appreciate your early action.”

Treating this letter as an extension of the option theretofore given, it was clearly without consideration and could be revoked at any time before acceptance. The rule is concisely stated in 13 Corpus Juris, 295, as follows: “Where an option on consideration is for a definite time, an extension of the option without consideration constitutes a new agreement and the option is revocable at any time before acceptance.”

On February 27 the plaintiff telegraphed as follows: “Samples received. They operate wonderfully. Ready to close with a few minor changes in contract. Letter following explaining this. Enter, binding order one hundred immediate shipment.”

This telegram certainly conlcl not be an acceptance of an option, because it contains a reservation providing for changes in the contract, and the letter which accompanied it specified four substantial changes which the plaintiff asked to be included therein. The defendant insists that the telegram and letter amount to a counter proposition and therefore a rejection of the option, while the plaintiff contends that they were only a request for the inclusion of these additional provisions. But in no sense could either the telegram or the letter be treated as an acceptance of the option. On the morning of February 28 the defendant telegraphed Franck that owing to his delay in reaching a decision a 60-day option had been given other parties. The plaintiff replied by wire that he had signed and mailed the contract without change, and that his option did not expire until March 3. That the telegram of revocation, dated February 28, preceded the telegram of acceptance of the same date is apparent from the fact that the telegram sent by the plaintiff reads, “Signed contract, without changes, mailed,” and the letter reads, “Your telegram of even date, in which you notify me that you have given a sixty-day option to other parties, * * * has just been received.”

While it is true that the option was extended for two weeks by the letter of February 18, and would not expire until March 3, yet that option being without consideration was lawfully revoked before acceptance by the telegram of February 28. The minds of the parties never met.

These conclusions render it unnecessary to determine some very interesting questions argued by counsel as to whether the telegram and letter bearing date of February 27 constituted a counter proposition, and therefore the rejection of the option, or whether they simply amounted to an inquiry for better terms. It also becomes unimportant to determine whether the formal contract which was submitted was required to be signed by an executive officer, it not having been signed by any one on behalf of the defendant. Nor is the question of damages important.

For the reasons given, .the judgment will be affirmed.

Judgment affirmed.

Williams and Young, JJ., concur.