Opinion ID: 2364862
Heading Depth: 1
Heading Rank: 5

Heading: The court failed to give proper instructions respecting damages:

Text: We take up these points in order. I. Chrysler's first point is that Quimby took no action of a definite and substantial character to invoke the doctrine of promissory estoppel. Restatement of the Law of Contracts § 90. If the series of negotiations between Quimby and Neely be viewed as a whole, it is apparent that this contention must fail. If his testimony is accepted  and the jury evidently did accept it  Quimby paid out $38,000 for Mrs. Randall's stock at a time when he had been assured that Randall Motors would get the franchise if he stood ready to transfer 51% of the stock to the man named by Chrysler. At that time  May 9  Neely's promise ripened into a binding contract, which Quimby was willing and able to perform. The jury might have concluded that Neely led Quimby on to buy Mrs. Randall's stock under repeated assurances that Randall Motors would get the franchise if Quimby accepted the successive conditions that Neely imposed, never intending, as indicated by his letter of January 26, that Quimby should have it. The jury might also have concluded that Neely's motive in so doing was to obtain for Mrs. Randall, to whom he said Chrysler had a moral obligation, a fair price for her stock. Certainly the evidence justifies such a conclusion. The promissory estoppel was thus made out. Restatement, Contracts, § 90; Boyer, Promissory Estoppel, 98 U. of P. Law Rev. 459. But defendant argues that the series of negotiations must not be viewed as a whole; Neely's promise of April 13 was withdrawn before it was acted on by Quimby on May 9. On April 13 Quimby had only an option (and an unenforceable option) to buy; he was not obligated to buy. When Neely told Quimby that Quimby would have to associate in the business an experienced automobile man, says Chrysler, the promise was withdrawn, citing illustration 4 from § 90 of the Restatement. But Neely's demand could be taken, not as an unqualified withdrawal of his promise, but as merely the imposition of an additional condition. No doubt Quimby could have chosen to treat it as a withdrawal, but he was not bound to do so. In like manner the third demand, that Quimby must transfer to a person named by Chrysler 51% of the stock, could be viewed in the same light. The rule invoked by Chrysler is inapplicable. Chrysler makes the further contention that the charge of the trial court embodied this very point, and withdrew from the jury's consideration the two subsequent assurances and conditions referred to. The court charged the jury as follows: The first question relates to whether or not Quimby obtained the control of all of the outstanding shares of Randall as contended for by him on or about April 13, 1951. In respect to this question, if you should conclude that he did not obtain the control of all of the outstanding shares as contended for by him on or about April 13, 1951, he would not have performed his obligations under the promise of Neely of March 13th and in such case your verdict would be for the defendant Chrysler. On the other hand, if you should conclude from the evidence that he did obtain control of all of the outstanding shares of Randall, including Kitty Randall's on or about April 13, 1951, and so informed Neely of this fact on or about that date, then you should conclude that he had performed his obligations under the March 13th promise by Neely which then ripened into a contract. Neither side had requested these instructions. They were, in our opinion, insufficient, because they contained no reference to the additional conditions imposed on Neely's promise before Quimby acquired Mrs. Randall's stock, and erroneously referred to the date of April 13 instead of May 9 as the date when the promise ripened into a contract. On April 13 Quimby had only an unenforceable option to acquire Mrs. Randall's stock. Chrysler, quoting the second instruction, urges that it was clearly erroneous, since the jury could not have found, under the undisputed facts, that Quimby had obtained control of Mrs. Randall's stock on April 13. We agree that this instruction was an error, as was the preceding instruction. But the point comes too late here. Rule 51 of the Superior Court, Del.C.Ann., relating to instructions to the jury, provides:    The court shall inform counsel of its proposed action upon the requests prior to their arguments to the jury, but the court shall instruct the jury after the arguments are completed. No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objections. No objection to the quoted instructions was made by either party. Nor did either party ask for an appropriate instruction on the legal effect of the entire negotiations. Under the explicit terms of the rule Chrysler may not now claim error in respect of the quoted instructions. II. Chrysler's second point raises the issue of authority. This issue was submitted to the jury and the trial court's instructions upon the issue are not challenged as erroneous. Chrysler's argument is that neither Neely, the Regional Manager, nor Condon, the Sales Executive of the Chrysler Sales Division, had any authority to award a direct dealer's contract; that Quimby knew this, because the 1944 Chrysler contract with Randall Motors carried the signature of the Regional Manager as recommending approval and the signature of the General Sales Manager; and that nothing done by Chrysler could have justified Quimby in believing that in dealing with either Neely or Condon he was dealing with an agent authorized to bind Chrysler by a promise to award a dealer's franchise. There is no dispute about the applicable legal principles. The question is whether there was any evidence of authority justifying the submission of the issue to the jury. Cerchio v. Mullins, 3 W.W.Harr. 245, 33 Del. 245, 138 A. 277. It is admitted that neither Neely nor Condon had any actual authority to award the contract. Nor could Neely's position as Regional Manager, considered alone, have led Quimby to believe that he did have such authority. And at the outset of Neely's talks with Quimby, Chrysler had not held out Neely as having such authority. To hold Chrysler Quimby must produce some evidence of Chrysler's manifestation of consent to Quimby that Neely should act as its agent in awarding the franchise. Restatement, Agency, § 68. Hence if Quimby's case rested entirely on his talks with Neely, the question of authority arising from conduct permitted by the principal (often called, perhaps inaccurately, apparent authority) might well have been one for the court alone. Quimby, although testifying that approval of the Regional Manager's recommendation is almost pro forma, admitted that the contract must be approved in the Detroit office. But Chrysler's argument overlooks the possible inferences that a jury might draw from Quimby's Detroit visit and his conversation with Condon. The background of this conversation must be kept in mind. Quimby was applying for the franchise to the home office of the General Sales Manager  the officer who had full authority to award dealers' contracts. He was dealing with a man who enjoyed the somewhat large-sounding title of Sales Executive and who was on the General Manager's staff. Condon's duties included assignments in connection with dealers or dealers' organizations. Quimby might reasonably have believed that he was dealing with a person with some real authority over his application. He had obtained Condon's name from the Regional Manager. It is not unusual for deputies or assistants to the head of a department of a large corporation to possess considerable powers. Certainly Condon's statements about the conditions that Quimby must meet, if he wanted the franchise, were those of someone undertaking in the General Manager's office to speak with authority for Chrysler. The jury might have reasonably found that Quimby had no reason to question that authority. See Bridgeton v. Fidelity & Deposit Co., 88 N.J.L. 645, 96 A. 918, involving a transaction with a corporation's Contract Department at the home office; and General Motors Truck Co. v. Texas Supply Co., 4 Cir., 64 F.2d 527. Condon did not give Quimby the explicit assurance that Quimby wanted; but he told Quimby to work through Neely and to do whatever Neely told him (Quimby) to do if he wanted the franchise. Chrysler says that this statement to Quimby was a routine referring of Quimby to Washington in accordance with normal procedure. Possibly it may be so regarded, but it is also possible to infer that Condon, having stated conditions of his own, encouraged Quimby to believe that if Quimby complied with Condon's conditions and with such as Neely might prescribe, Randall Motors would get the franchise. At all events such an inference is not manifestly unreasonable. But this is not all. When Condon told Quimby to go back and work through Neely there was reposing in the files of the General Sales Manager's office Neely's letter of January 26 to O'Malley, stating that under no circumstance would he (Neely) recommend that Quimby receive the franchise. We assume that Condon himself did not know this; but when he undertook to deal with the matter of Quimby's application, he should have known it. When Quimby applied to the General Sales Manager's office he was entitled to be treated fairly. He should have been told at once at the very least that it was very doubtful whether he could get the franchise. Instead, he was in effect encouraged by the home office not only to deal with Neely but to meet whatever conditions Neely prescribed. If his testimony is accepted, Quimby was misled to his injury  unwittingly, no doubt, so far as concerns Condon, but misled nevertheless. In the light of all the circumstances, we think that the issue of authority by estoppel was one for the jury. Since the question before us is essentially factual, we do not pause to analyze all the cases cited to us. Each case turns on its facts. In Brownell v. Tide Water Associated Oil Co., 1 Cir., 121 F.2d 239, relied on by Chrysler, there was no such dealing at the home office as here shown. In Colish v. Brandywine Raceway Association, 10 Terry 493, 49 Del. 493, 119 A.2d 887, the court was dealing with an unusual transaction that it found not to be in the ordinary course of the corporation's business. The situation here is wholly different. There were in 1951 about 3400 Chrysler direct dealer contracts handled by the General Manager's office. As above stated, there was no error in submitting to the jury the issue of authority. III. Chrysler's third point is that the evidence established no contract, but merely a conditional willingness to agree to a dealer agreement. Chrysler invokes the principle announced in Universal Products Co. v. Emerson, 6 W.W.Harr. 553, 36 Del. 553, 569, 179 A. 387, 394, 100 A.L.R. 956: Where it is clearly understood that the terms of a proposed contract, though tentatively agreed on, shall be reduced to writing and signed before it shall be considered as complete and binding on the parties, there is no final contract until that is done. This is a sound principle of law; but whether in any particular case involving oral negotiations it is clearly understood that the proposed contract is tentative only is a question of intention to be inferred from the evidence. Where the evidence is conflicting and two inferences are possible, as here, the question is for the jury. If the jury believed Quimby's version of the negotiations, an intention to be bound could be inferred. The promise was to execute the standard dealer's contract, and the action is for breach of that promise. Clark v. City of Bradford, 11 Del.Ch. 178, 98 A. 368. IV. Chrysler contends that the action is barred by the Delaware three-year statute of limitations. 10 Del.C. § 8106. It was brought April 26, 1954, and the breach relied on occurred when Chrysler refused to issue the dealer's contract on the expiration of the old contract, i. e., May 13, 1951. Chrysler contends, however, that a breach of the contract (if one existed) occurred about the middle of April, 1951. This contention is based on Quimby's testimony that he considered that Neely's promise had been broken on or about April 13 when Neely told him that he had to get an experienced automobile man in the business with him. Much is said in the briefs on the question of determining the time when a contract is breached and the time when the statute begins to run, and the right or duty of the injured party to sue upon an anticipatory breach. In the view we take of the case, all this discussion is beside the point. There was on April 13, 1951, at the time of the conversation referred to, no contract in existence. Quimby considered that there was, but he was wrong. The promissory estoppel depended on Quimby's taking action to his detriment; and this did not occur until his purchase of Mrs. Randall's stock, as we have already pointed out. Since the contract sued on did not come into existence until May 9, 1951, the statute of limitations does not apply.