Respondents Brief — Buggs v. Ford Motor Co.

DEAR ERC IT OTT oF

nin SRS He SOR CE CEE AREAL AE

ESS OLN D ELLY ONE LIED MPO

FULD

SEP 26 1940

CHARLES ELUDAE 780

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1940

No. 396

— OSS

ROBERT F. BUGGS, Petitioner,

vs.

FORD MOTOR COMPANY, a Foreign Corporation,

ae Respondent.

Opposing Granting of Writ of Certiorari.

CARL MUSKAT, |

773 North Broadway,

Milwaukee, Wisconsin.

CLIFFORD B. LONGLEY,

WALLACE R. MIDDLETON,

1400 Buhl Building,

Detroit, Michigan.

Attorneys for Respondent,

Ford Motor Company.

Index, Summary of Argument and

List of Authorities Cited.

Page

. Opinion of Court Below—Cirecuit Court of Ap-

PONS anenccscccecnssnceensssassncsnnsonecansenssssnssecsossnessesencsnuccnsenees 1

TE eR aac cciscccrncncscnscnccccnccnoscivenensensconmsunssnnense 1

III. Statement of Case ..................c..c.ccsccecssseccscececssssesenee 2-5

Inaceuracies and omissions in petitioner’s

statement and petitioner’s brief pointed out,

answered, and the correct state of the rec-

OFd Presented .........-.---cscesececeeeeeseceseseeecsneecenes

» APgUMent ...........cceccesesesceseencssnesesnsennesecsnenssesnenensenesees 5-16

(A) The decision of the Circuit Court of

Appeals for the Seventh Circuit in this

case is not in conflict with the decision

of the Cireuit Court of Appeals for

the Fourth Circuit, in the case of Ford

Motor Company vs. Kirkmyer Motor

Company, 65 Fed. (2d) 1001............-... 5-8

(B) The sales agreement of May 26, 1932

(R. 41-46) involved in this case is a

perfectly valid contract between the

parties containing a provision for its

termination and was properly termi-

nated in accordance with that termina-

tion clause and hence the decision of

the Cireuit Court of Appeals for the

Seventh Circuit in this case is clear-

Ly COTTOCE .......--n:s-secceeeeeseeeesseensesetenessesesenes 8-10

(C) If the contract lacks mutuality, peti-

tioner likewise has no cause of action

LOT GAMABOS ...-.-.-.-.-.-.-e-ceereeernsoseensseneneosere 10

Summary of Argument—Continued.

Page

(D) The decision is not in conflict with

local law or local decisions 11-14

(E) Should the court be of the opinion that

the Wisconsin Statute, if valid, gov-

erns this case, then a decision of the

case would necessarily involve the

questions raised on the record as to

the validity of the Wisconsin Statute

and as to the rights conferred by that

statute 15-16

List of Authorities Cited.

Almy vs. Harris, 5 J ohns. (N. Y.) 175 we

Bastian vs. J. H. DuPrey Company, 261 Mich. 94, 245

Lv. 13

Buggs vs. Ford Motor Company, 113 Fed. (2d) 618....

Decorative Stone Co. vs. Building Trades Council of

Westchester County, 23 Fed. (2d) 426, 18 Fed.

(2d) 333, 48 S. Ct. 530, 977 U.S. 592, 72 L. Ed. 1005 14

E. L. DuPont de Nemours & Co. vs. Claibourne-Reno,

64 Fed. (2d) 224 .. Ss plaiiacananant 10

Erie R. Company vs. Tompkins, 304 U. S. 64......------- 13

Ford Motor Company Vs. Alexander Motor Company,

993 Ky. 16, 2S. W. L031...-----------------nnrvrrnn 9

Ford Motor Company vs. Boone, 944 Fed. 335.........--- 8

Ford Motor Company vs. Kirkmyer Motor Company,

G5 Fed. (2d) LOOL......-.------------c---nseesseesseenseenssersrne 5, 6, 7, 10

Globe Newspaper Co. vs. George H. Walker, 210 U. 8.

356, 52 L. Ed. 1096, 38 Sup. Ct. R. 726....-..---------- 14

Griswold vs. Camp, 149 Wis. 399 14

—

List of Authorities Cited—Continued.

Page

Huffman vs. Paige-Detroit Motor Car Co., 262 Fed.

116

Ken-Rad Corp. vs. Bohannan, Inc., 80 Fed. (2d) 251...

Memphis Furniture Mfg. Co. vs. Wemyss Co., 2 Fed.

(2d) 428 os

Moon Motor Car Co. vs. Moon Motor Car, Inc., 29 Fed.

(2d) 3 a

Moore vs. Shell Oil Co., 2 Pac. (2d) 216 m

Motor Car Supply Company vs. General Household

Utilities Company, 80 Fed. (2d) 167

Progressive Miners of America Local Union No. 109

vs. Peabody Coal Co., 7 Fed. Supp. 340; 75 Fed.

(2d) 460 7

State ex rel Waldorf vs. Hill, 217 ME i ckeiienscedenen

Wardell vs. Williams, 62 Mich. 50, 28 N. W. 796......--

10

Statutes.

Michigan Uniform Sales Act

Sec. 121.09 (1), Wisconsin Statutes, 1931, Wisconsin

Uniform Sales Act -....--.------------------sc-s-sessserseeeesenennes

See. 218.01 (3) (a), paragraphs 15, 16, 17, Wisconsin

Statutes, 1937

Laws of Wisconsin, 1937, Chapter 378 -......-----------------

United States Constitution -.......----------------------- 2

Wisconsin Constitution -......-.-------------------------

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1940

No. 396

ROBERT F. BUGGS, Petitioner,

vs.

FORD MOTOR COMPANY, a Foreign Corporation,

Respondent.

BRIEF OF RESPONDENT

Opposing Granting of Writ of Certiorari.

I.

Opinion of the Court Below.

The opinion in the Circuit Court of Appeals (R. 120-125)

is reported in 113 Fed. Rep. (2d) 618.

II.

Jurisdiction.

Respondent opposes the granting of the writ of cer-

tiorari on the ground that there are no special and im-

portant reasons set forth therefor, under Supreme Court

Rule 38-5.

2

III.

Statement of Case.

The following additional statement is deemed necessary

for the correction of inaccuracies and omissions in peti-

tioner’s statement.

The gist of petitioner’s (plaintiff below) complaint is

an alleged violation of a written ‘‘franchise’’ dated May 26,

1932 (R. 12-16). It is undisputed and the district court

found (R. 99-104) that the only written agreement between

the parties dated May 26, 1932 is the sales agreement in

question (Exhibit A attached to defendant’s pleadings R.

41-46). Petitioner did not aver any other ‘‘franchise’’ but

did aver that cancellation of his ‘‘franchise’’ was in viola-

tion of paragraphs 15, 16 and 17 of sub-section (3) (a) of

Section 218.01 of the Wisconsin Statutes of 1937 quoted in

full on pages 19-35 of petitioner’s brief and asked damages

for alleged violation of the claimed ‘‘franchise’’ and the

statute (R. 12-16). Accordingly, petitioner is necessarily

relying on the very written document he claims is void.

Respondent (defendant below) avers (R. 17-39) that

this sales agreement of May 26, 1932 (R. 41-46) was valid

and exclusively controls the rights and obligations of the

parties, was terminable at the will of either party without

cause, and was in fact terminated pursuant to notice (Ex-

hibit B, R. 47) and that the statute has no application. Re-

spondent claims that termination of said agreement pur-

suant to its terms did not create any cause of action for

damages in the petitioner either under the agreement or

the statute and further that the statute is unconstitutional

and in violaion of the Wisconsin and United States Consti-

tutions (R. 22-23-25). The agreement of May 26, 1932,

authorized petitioner to maintain ‘‘Ford’’ signs and re-

quired him to remove those signs on termination of the

contract. Petitioner failed to remove the signs on termina-

3

tion of the sales agreement (R. 63-81, 87-91) and respondent

in its pleadings included an equitable defense and counter-

claim wherein it sought a mandatory injunction to compel

petitioner to remove said signs (R. 25-39).

Respondent filed a motion for summary judgment (R.

55-91), in opposition to which petitioner filed affidavits (R.

93-97). On the hearing on this motion for summary judg-

ment, petitioner consented to the injunction (R. 98) and

the court made findings of undisputed facts and conclusions

of law (R. 99-104) upon which the judgment was based dis-

missing the complaint of the petitioner on the merits and

issued an injunction as prayed for by respondent (R. 105-

107).

By the terms of the sales agreement of May 26, 1932

(R. 41-46) petitioner was required to maintain a place of

business suitably located and equipped as sales room and

service station and acceptable to Company; to conspicu-

ously display effective signs; to carry an adequate stock

of genuine Ford parts; to install and maintain tools and ma-

chinery in said service station as recommended by Com-

pany; to employ competent salesmen; and to make repairs

in a workmanlike manner on products of the Company

whether sold by the dealer or not. In return, Company

agreed to sell to petitioner Company products and gave

petitioner the right during the period said contract was in

operation to hold himself out as an authorized Ford dealer

and to display Ford signs (see paragraph 7 (a) and (g) of

sales agreement, R. 42, 44).

The District Court found that the ‘‘franchise’’ upon

which petitioner relied was said sales agreement of May

26, 1932 (R. 41-46), that the statute was enacted long after

the sales agreement was made and therefore found that

the statute had no application to this case, and dismissed

the petitioner’s action without passing on the constitutional

questions raised by respondent (R. 98-107). The Circuit

—

4

Court of Appeals affirmed the judgment of the District

Court and likewise made no decision respecting the consti-

tutionality of the Wisconsin Statute (R. 120-126, 113 Fed.

(2d) 618-621).

Petitioner’s brief contains inaccurate statements of fact

and ambiguous language that may be misleading:

(a) It is not denied that the effective date of the pro-

visions of the statute relied upon by petitioner was July

14, 1937 and that the date of cancellation of petitioner’s

sales agreement by respondent was September 27, 1937,

but it is also undisputed that the date of the sales agree-

ment, May 26, 1932, was long before the statute became ef-

fective. Both the District Court and the Cireuit Court of

Appeals held that the statute had no application to this

agreement because it was enacted after the agreement was

made. Therefore, the statements on page 6 of petitioner’s

brief that ‘‘The statute * * * was applicable to the parties

at the time petitioner’s cause of action arose, * * * (is)

admitted on the record,’’ and on page 7 of petitioner’s brief

that ‘‘This statute was applicable to both parties at the

time of the alleged wrongful act,’’ are inaccurate.

(b) The opinion of the Cireuit Court of Appeals says

(R. 122, 113 Fed. (2d) 619):

‘*The legal questions are:

‘1. Ts the Wisconsin statute (Wis. Stats.

218.01 (3) (a) 17) valid? Is it retroactive?

‘*9. Ts one aggrieved by the inexcusable cancel-

lation of his dealer’s contract entitled to maintain an

action for damages because of this statute which pro-

vides for cancellation of the manufacturer’s right to

do business in the State of Wisconsin in case it in-

excusably and unjustifiably cancels a dealer’s agree-

ment?

‘*3. Was the last written agreement between

plaintiff and defendant invalid because unilateral?

5

‘*4. If invalid, were there valid contractual ob-

ligations binding on the parties on September 22,

1937, which made applicable the aforesaid Wisconsin

statute?’’

The Cireuit Court of Appeals only decided that the sales

agreement was a valid contract and that the statute was not

retroactive and left the other questions undecided. Hence

the allegation on pages 6 and 7 of petitioner’s brief that the

court below did not question a statutory duty by respondent

is inaccurate.

IV.

Argument.

A— The decision of the Circuit Court of Appeals for the

Seventh Circuit in this case is not in conflict with the

decision of the Circuit Court of Appeals for the Fourth

Circuit, in the case of Ford Motor Company vs. Kirk-

myer Motor Company, 65 Fed. (2d) 1001.

The decision of the Cireuit Court of Appeals for the

Seventh Circuit in this case holds, ‘‘We are convinced that

the agreement before us is not unilateral and is valid (R.

123, 113 Fed. (2d) 619).

There is nothing in the record or in published opinions

from which it can be determined that the contract in the case

at bar is identical with the written contract mentioned in

the Kirkmyer case. The quotations of some particular

paragraphs of that contract while similar to corresponding

paragraphs in respondent’s sales agreement (R. 41-46) are

somewhat at variance and do not purport to state the entire

contract and hence indicate that the contracts are on dif-

ferent forms.

However, the Kirkmyer case is based upon an alleged

‘“‘verbal’’ contract. In the Kirkmyer ease, Kirkmyer was

6

a Ford dealer in Richmond who alleged that he was induced

to his damage to move to ‘‘South Richmond”’ on a “‘verbal”’

promise by an agent of Ford Motor Company to award

Kirkmyer a dealership in the ‘‘West End”’ in case Ford

Motor Company appointed an additional dealer Ahere.

Kirkmyer was not granted the additional dealership created

in the ‘West End.’’ Kirkmyer operated in ‘‘South Rich-

mond”? under a sales agreement negotiated simultaneously

with or subsequent to the alleged verbal agreement. The

real decision in the Kirkmyer ease was that the alleged

verbal agreement was lacking in mutuality and entirely too

indefinite to form the basis of a binding obligation. In

that decision the court said, 65 Fed. (2d) 1003:

“To say that the parties contemplated that plaintiff

should be given a contract of the character that de-

fendant was making with other dealers in 1930, such

as it entered into with plaintiff in South Richmond

or with Womble Motor Company for the West End,

does not help plaintiff’s position; for this written

contract does not obligate defendant to deliver a

single car or truck and may be terminated at any

time at the will of either party. It merely furnishes

a basis upon which dealings are to be conducted ; and

while it is a binding contract to the extent that it is

performed in that it attaches to and becomes a part

of transactions entered into so long as tt remains un-

cancelled * * * and imposes certain obligations as to

how dealings shall be conducted, it imposes no obli-

gation on defendant to sell or on the dealer to buy

and furnishes no basis for recovery of damages if

defendant refuses to sell’’ (italics ours).

The Kirymyer case refers to the sales agreement therein

mentioned as a ‘‘franchise.’? It appears from the above

quotation that the court did not say that the contract was

void but said that it became a part of the transactions be-

tween the parties so long as it remained uncancelled. The

statement in the Kirkmyer ease is essentially not that the

written sales agreement was void but that if a verbal con-

PS

7

tract had been made to enter into such a sales agreement,

it was entirely too indefinite to form the basis of a binding

obligation, as the sales agreement could, after execution,

be terminated by either party at will.

Petitioner has an inconsistent position in this case. He

claims to have held a written franchise (R. 13). He ean

show no other written document than the sales agreement

of May 26, 1932. He claims that the decision in the Kirk-

myer ease is at divergence with the decision of the case at

bar. The Kirkmyer case refers to a written sales agree-

ment as a franchise. So petitioner is arguing on the author-

ity of the Kirkmyer case that his franchise is void (Peti-

tioner’s Brief page 8) and a nullity (Petitioner’s Brief

page 7) which could not possibly help him to recover dam-

ages for cancelling it.

The Kirkmyer case states that the relationships of the

parties under the written sales agreements are governed

by the terms of that sales agreement and that those relation-

ships may be terminated at will by cancelling the contract

in accordance with its terms without liability. Therefore,

so far as the issue involved in the ease at bar is concerned,

the decision of the Cireuit Court of Appeals for the Seventh

Cireuit is not in divergence with the decision of the Circuit

Court of Appeals for the Fourth Circuit in the Kirkmyer

case,

The court below did not admit that there was a di-

vergence of opinion between the Kirkmyer case and this

ease as claimed by petitioner on page 7 of his brief. The

court says (R. 122, 113 Fed. (2d) 619):

‘““The ease which most strongly supports plaintiff’s

position is Ford Motor Company vs. Kirkmyer, 65

Fed. (2nd) 1001, a decision by the Cireuit Court of

Appeals of the Fourth Circuit.”’

—— scene asastis sera ee:

es rey niet EAMONN Po HEAR IE et TE Wie AE Oe RELIES PA RO On

5 Se See Pek) ee met Mere hee ak ee a

However, the court also says (R. 123):

‘‘Such disagreement as seemingly exists in the de-

cisions may be partly attributed to the differences in

the terms of the agreements under attack.’’

B—The sales agreement of May 26, 1932 (R. 41-46) in-

volved in this case is a perfectly valid contract between

the parties containing a provision for its termination

and was properly terminated in accordance with that

termination clause and hence the decision of the Cir-

cuit Court of Appeals for the Seventh Circuit in this

case is clearly correct.

‘The purchase of an automobile is not like the purchase

of a sack of potatoes’’ (see Ford Motor Company vs. Boone,

244 Fed. 335, 338). Since in order to maintain its business

and good will, a manufacturer must provide means for re-

pair and servicing of its products, the only practicable

method of fulfilling this necessity is to maintain a dealer-

ship organization, the duties of which are defined by con-

tract between the manufacturer and such dealers. The con-

tract in question (R. 41-46) provides for the sale of Ford

products to petitioner for resale. As it is a continuing con-

tract it does not recite the exact price of the goods to be

sold, but instead provides for sale at list prices or at such

discount from published prices as is from time to time fixed

by the company, and as stated by the Cireuit Court of Ap-

peals, ‘These net list prices and published list prices were

the same to all dealers,’’ and the Cireuit Court of Appeals

held that it lawfully ‘‘provided a method whereby the price

could be definitely ascertained at any time’’ (R. 125, 1138

Fed. (2d) 620; and see cases cited in the Opinion).

This contract is a basic contract which sets up the con-

ditions under which the parties will operate. In return for

establishing one place of business equipped, manned and

displaying effective signs in a manner acceptable to Com-

PEELE NPT SNE MORI MERA AY: —

a Rat ct ssa? a Pe AE Ite OT a POLE RADE A AGO ly ET IRIN TE et

9

pany to sell and service Ford products, the dealer gets

the privilege of holding himself out as a Ford dealer, of

displaying the Ford signs and of trading on the Ford name

so long as the contract remains in effect and no longer.

This is admittedly a right of some value to the dealer.

If it were not so, there would be absolutely no point to the

petitioner’s claim for damages for terminating that right.

Petitioner’s entire claim goes to a claimed right to have the

dealer relationship as provided by the sales agreement (R.

41-46). It therefore seems perfectly clear that in entering

into the sales agreement Buggs not only agreed to main-

tain certain facilities and conduct his business in a certain

way but also there moved from Ford Motor Company to

him a consideration of value, to-wit, the right to display the

Ford signs over his place of business and to hold himself

out as an authorized Ford dealer. Such being the case,

there was ample consideration on both sides of the contract

and hence there was mutuality and the contract was per-

fectly valid. It seems rather stange that someone who

claims that the right to be a Ford dealer is no consideration

to him and therefore his contract is void, should be suing

the other party to such a contract for $150,000.00 in dam-

ages for the termination of his right to be a Ford dealer.

See also argument under subdivision (D) following, and

decision of Cireuit Court of Appeals herein setting forth

its reasons why the contract is valid (R. 123-125, 113 Fed.

(2d) 619, 620).

In the ease of Ford Motor Company vs. Alexander

Motor Company, 223 Ky. 16, 2S. W. (2d) 1031, the court

said:

‘Tt is a well-settled rule of law that a right to cancel

a contract, incorporated or reserved therein, is a

part of the contract itself, and, upon the exercise of

such contractual right, all obligations under the con-

tract cease and determine, and no liability arises

from the eancellation. Louisville Tobaeeo Ware-

house Co. vs. Ziegler, 196 Ky. 414, 244 8S. W. 899.

is ’

<2 odin gu toed a Ween Se eae eed et

10

‘‘Parties may lawfully enter into agreements like the

one here involved, and the courts enforce them as

written. If parties agree that the rights, duties, and

obligations arising from a contractual relation shall

endure only at the will or pleasure of either, the

courts have no right to substitute a different dura-

tion for such rights. Executory contracts, termin-

able at will, insofar as they are unexecuted at the

time of termination, afford no basis for a cause of

action to either party. Rehmzeiher Co. vs. Walker

Co., 156 Ky. 6, 160 8. W. 777, 49 L. R. A. (N. 8.) 694;

Paragon Oil Co. vs. Hughes, 193 Ky. 534, 236 S. W.

963; Daniel Boone Coal Co. vs. Miller, 186 Ky. 561,

217 S. W. 666; Soaper vs. King, 167 Ky. 126, 180

S. W. 46; Ross-Vaughn Tobacco Co. vs. Johnson,

182 Ky. 325, 206 S. W. 487; Goff vs. Saxon, 175 Ky.

330, 192 S. W. 24.

“Such contracts are binding on both parties, until

the right of cancellation is exercised by one or the

other. Guffey vs. Smith, 237 U. 8. 101, 35 S. Ct. 526,

59 L. Ed. 856’’ (italics ours).

C —If the contract lacks mutuality, petitioner likewise has

no cause of action for damages.

The court found that there was a valid contract, and

as we have pointed out the same is a valid contract, and

there are no decisions holding that this form of contract

is invalid, yet if the Court deem it one without mutuality, as

claimed by the petitioner, he likewise has no cause of action

for damages, and the court’s decision is still correct.

E. I. DuPont de Nemours & Co. vs. Claiborne-

Reno, 64 Fed. (2d) 224;

Huffman vs. Paige-Detroit Motor Car Co., 262

Fed. 116;

Ford Motor Company vs. Kirkmyer Motor Com-

pany, 65 Fed. (2d) 1001, 1006 (cited by peti-

tioner) ;

Motor Car Supply Co. vs. General Household

Utilities Co., 80 Fed. (2d) 167 (cited by pe-

titioner).

11

D — The decision is not in conflict with local law or local de-

cisions.

Petitioner’s claim that the decision is in conflict with

local law seems to be based upon the provision of the

sales agreement declaring it to be a Michigan contract

governed by the laws of Michigan and a claim that the de-

cision is in conflict with Michigan decisions, citing two

Michigan cases (petitioner’s brief, pp. 13 and 14). Pe-

tition also cites certain cases which petitioner claims show

that the decision repudiates the established law of con-

tracts (petitioner’s brief, pp. 14 to 17).

The fact that the contract (R. 41-46) contemplates the

establishment, equipment according to certain standards,

and maintenance of a place of business for the rendering

of repair service to any Ford automobiles in that place of

business and the obvious grant of a right to the petitioner

to hold himself out as a Ford dealer and display Ford

signs, completely nullifies all of that argument of the pe-

titioner.

That argument is based upon the erroneous premise

that the sales agreement involves nothing but merely an

agreement to buy and sell automobiles at an indefinite price

to be later determined. The Cireuit Court of Appeals, in

finding that this is not a correct construction of the contract,

said:

‘*Vital and determinative are paragraphs 1 and 2.

The first obligates defendant to sell, but upon ‘terms,

conditions and provisions hereinafter specifically set

forth.’ These conditions and terms are set forth in

paragraph 2, which provides defendant ‘will sell its

products to plaintiff f. 0. b. Detroit, Michigan at such

net list price, or at such discounts from published list

prices as are from time to time fixed by Company.’

This seems, under the authorities and on reason, suf-

ficiently definite.

‘‘The parties had been dealing with each other

prior to the execution of the last contract. They

knew of the practices of each other. The dealer

12

knew that automobiles were redesigned and new

models appeared yearly and as a result prices

changed at least seasonally. Defendant’s business

was nationwide and its agents were many. It was to

this known situation that the contract referred. The

parties negotiated with a background of past deal-

ings and mutual knowledge of the practices of the

trade. ‘The net list prices and discounts from pub-

lished list prices’ appearing in paragraph 2 were well

known to both parties. These net list prices and pub-

lished list prices were the same to all dealers. They

changed as necessity required. They were not lack-

ing in definiteness, but provided a method whereby

the prices could be definitely ascertained at any

time’ (R. 124-125, 113 Fed. 2d 620).

The Michigan Uniform Sales Act enacted in 1913 con-

tains the following clause:

‘‘Definition and Ascertainment of Price * * *. The

price may be fixed by the contract, or may be left to

be fixed in such manner as may be agreed, or it may

be determined by the course of dealings between the

parties.’’ C. L. 1929 See. 9448.

The Wisconsin Act is identical and is found in See.

121.09 (1) Statutes of 1931. The sales agreement provided:

*«(2) Company will sell its products to Dealer

f. o. b. Detroit, Michigan, at such net list price, or at

such discounts from published list prices as are from

time to time fixed by Company * * *’’ (R. 41).

It thus follows under both the Michigan statutes and the

Wisconsin statutes that the sales agreement of May 26,

«2

Ken-Rad Corp. vs. R. C. Bohannan, Inc., 6 Cir., 80 F.

2d 251;

Memphis Furniture Mfg. Co. vs. Wemyss Co., 6 ce.

2 F. 2d 428;

Moore vs. Shell Oil Co., 139 Or. 72, 6 P. 2d 216;

Moon Motor Car Co. vs. Moon Motor Car, Inc., 2

Cir., 29 F. 2d 3.”

13

1932 (R. 41-46) meets the requirements of the Uniform

Sales Act. The argument of petitioner with reference to

Wardell vs. Williams, 62 Mich. 50; and Bastian vs. J. H.

DuPrey Company, 261 Mich. 94, is based upon a theory

that the sales agreement involves absolutely nothing but a

sale of automobiles at an indefinite price. This is not true

and hence the argument is not in point. In the DuPrey case,

upon which petitioner relies, the Supreme Court of Michi-

gan holds that a contract to buy cucumbers to be grown and

delivered cluring the 1931 season was not void for want

of mutuality, and therefore that case is authority for the

respondent’s claim that the contract (R. 41-46) in question

was good rather than petitioner’s claim that it was void

under the Michigan law. Also, the Wardell case is no

authority on petitioner’s point, as the contract was held

void under the Statute of Frauds, and also because some-

thing was left to be negotiated before a contract was in-

tended.

' The other decisions cited in petitioner’s brief not spe-

cifically referred to herein, do not relate to matters of local

law or local decisions, and hence are not applicable under

Erie R. Company vs. Tompkins, 304 U. S. 64, and the last

rules of this court. Therefore the petitioner’s reasons set

forth under ‘‘C’’ in his petition, page 4, and under ‘‘3,”’

pages 6 and 14 to 17 of his brief, have no application.

The cases cited by petitioner at the bottom of page 6

and at the top of page 7 of his brief, and claimed to be in

support of his contention that the statute creates a cause

of action for money damages, have no application because

that is one of the questions that the Circuit Court of Ap-

peals herein did not consider, as we have heretofore pointed

out. Therefore, it is unnecessary to present an argument

at this time on this question. However, we will briefly

state why petitioner’s claim is incorrect. The statute in

question here relates merely to the granting of licenses and

REA Fah oF RI TS REED eee Mey PLOT RL AT EB ta ELA TELE Y: RI NS

|

14

provides under what circumstances licenses may be denied,

suspended or revoked, which is an exclusive remedy granted

the banking commission ; (however, a remedy that cannot be

applied against respondent for reasons presented herein,

and other reasons that need not be discussed here because

no question of revocation of licenses is involved). There

is no legislative intent to create a cause of action for dam-

ages for any alleged violation. There is no criminal penalty

provided for its violation. Petitioner has misconceived the

principles of law applicable. The following cases clearly

establish that this automobile licensing statute does not cre-

ate a cause of action for damages.

Progressive Miners of America Local Union No.

109 vs. Peabody Coal Co., 7 Fed. Supp. 340

(District Ct. E. D. Illinois, May 7, 1934) af-

firmed 75 Fed. (2d) 460, (C. C. A. 7th Cireuit)

February 6, 1935;

Globe Newspaper Co. vs. George H. Walker, 210

U. 8. 356, 52 L. Ed. 1096, 38 Sup. Ct. R. 726,

June 1, 1908;

Decorative Stone Co. vs. Building Trades Council

of Westchester County, 93 Fed. (2d) 426 (C.

C. A. 2nd Circuit) affirming decree, 18 Fed.

(2d) 333, certiorari denied 48 S. Ct. 530, 277

U. 8. 592, 72 L. Ed. 1005;

Almy vs. Harris, 5 Johns. (N. Y.) 175;

Griswold vs. Camp. 149 Wis. 399;

State ex rel. Waldorf vs. Hill, 217 Wis. 59.

15

E— Should the Court be of the opinion that the Wisconsin

Statute, if valid, governs this case, then a decision of

the case would necessarily involve the questions raised

on the record as to the validity of the Wisconsin Stat-

ute and as to the rights conferred by that statute.

The District Court and the Cireuit Court of Appeals

found it unnecessary to decide these questions because

those courts found that the statute was not intended to have

retroactive effect on contracts made before it was enacted

and the sales agreement in question was a valid contract

between the parties terminated in accordance with its

terms. This enabled those courts to enter a judgment in

favor of the respondent without deciding the other ques-

tions involved in the case. But any decision in favor of

the petitioner would necessarily have involved the deter-

mination of the other questions presented on the record as

petitioner’s claim seems to be based on the statute in

question while respondent in its pleadings and before the

District Court and the Circuit Court of Appeals has claimed

both that the statute in question does not give rise to a civil

cause of action by an automobile dealer like the petitioner

under any circumstances and has also likewise asserted

that the statute in question is a violation of the constitu-

tions of the State of Wisconsin and of the United States

(R. 22, 23, 25, 104, 122, 113, Fed. (2d) 619). Respondent

asserted that such statute is unconstitutional on the ground

it would impair the obligation of contracts, violate the due

process clause and unconstitutionally delegate legislative

power to the banking commission and also violate the com-

merce clause of the Federal Constitution, and would deny

this respondent the equal protection of the laws. We are

not presenting our argument on the question of the con-

stitutionality of this statute in this brief because both courts

below did not decide this question for the reason that they

found it unnecessary to do so in the disposition that was

16

made of the case. The Circuit Court of Appeals in its

opinion expressly stated:

‘‘Having reached the conclusion that the agree-

ment was valid and binding and therefore subject to

cancellation by either party upon the giving of writ-

ten notice, the only remaining question is the effect

of the Wisconsin statute upon such an existing con-

tract.

‘¢We are convinced that the legislature did not in-

tend to make its legislation, nor did the legislation,

by its own terms, apply to and include existing con-

tracts. We must give to it a construction which will

avoid a successful attack on its unconstitutionality”’

(italics ours) (R. 125, 113 Fed. (2d) 621).

For the above reasons, the writ of certiorari prayed

for should be denied.

Respectfully submitted,

CARL MUSKAT, of Milwaukee, Wisconsin,

(773 North Broadway)

CLIFFORD B. LONGLEY,

WALLACE R. MIDDLETON, of Detroit, Michigan,

(1400 Buhl Building)

Attorneys for Respondent Ford Motor Company.

Appendix.

Paragraphs 15, 16 and 17 of Subsection (3) (a) of See-

tion 218.01 of the Wisconsin Statutes of 1937, were created

by Chapter 378 of the Laws of 1937, effective July 14, 1937.

Reference to the above Chapter 378 of the Laws of 1937 is

omitted from the Appendix in petitioner’s brief and should

be added at the end of page 35 of petitioner’s brief.