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ASHTON v. CHRYSLER CORP.

May 25, 1965

Harry ASHTON (formerly known as Harry Asciutto or Harry Ash), Vincent J. Di Costa and Frank Bages, Plaintiffs,
v.
CHRYSLER CORPORATION, Defendant


Mishler, District Judge.


The opinion of the court was delivered by: MISHLER

MISHLER, District Judge.

Plaintiffs state three claims arising out of the failure to consummate a Dodge-Plymouth dealership at Wrightstown, New Jersey.

 The first claim is based upon the wrongful refusal "to grant the plaintiffs the agency as promised and agreed upon" (par. Sixth); the second claim is based upon a false and fraudulent statement that Wrightstown "was not to be classified as an open point" (par. Eleventh); the third claim is based upon the negligent and careless representation that Wrightstown "was an open point * * * when later said defendant declared that it was not an open point" (par. Fifteenth). *fn1"

 FACTS

 On January 24, 1957, plaintiff, Harry Ashton, as Vice President of Dix-McGuire Motors, Inc., executed an "Application For Sales Agreement" together with other supporting papers - all being forms composed by defendant and customarily used by its applicants for dealerships - characterized as an application package. Dix-McGuire Motors, Inc. was organized by plaintiffs for the purpose of entering into a sales agreement with defendant granting a franchise for the sale of Dodge and Plymouth motor vehicles and service of the same. The application provided as follows:

 
IT IS UNDERSTOOD that this application is not binding upon us nor does it obligate the Chrysler Corp., in any way to enter into a Dodge-Dodge Truck Plymouth Agreement with us. Any options on real estate or investments of any kind made by us in contemplation of the acceptance of this application are done solely on our own responsibility and do not obligate the Chrysler Corp., or any of its representatives in any way.
 
IT IS ALSO UNDERSTOOD that the execution of a Dodge-Dodge Truck Plymouth Agreement between the Chrysler Corp., and us is the only manner by which the Chrysler Corp. may accept this application. We admit that no representations or statements have been made to us in behalf of the Chrysler Corp., which would in any way tend to change or to modify the terms of this application. (Ex. 3)

 On January 25, 1957, a proposed sales agreement was executed by Dix-McGuire Motors, Inc. which by its terms expressly provided that the agreement was not effective unless signed by a duly authorized officer at defendant's principal office in Detroit, Michigan.

 Plaintiffs then advised defendant, at its zone office in Philadelphia, that the proposed location was changed. A new proposed sales agreement, showing the change in location of the plaintiffs' business, was executed on February 6th. It duplicated mutatis mutandis the agreement originally executed by plaintiffs and to be executed by a duly authorized officer of defendant.

 Plaintiffs deposited $30,000 in a corporated bank account as required by the terms of application package (Ex. 6, 39). Dix-McGuire Motors, Inc. entered into an agreement for the purchase of property in which the corporate business was to be conducted. A wholesale line of credit was not obtained until March 1, 1957 (Ex. 7, 41).

 The application eventually won approval from the zone and regional offices in Philadelphia and the eastern area office in New York. When it was received in Detroit, a market study was made. During this study, defendant's representative, Ray C. Ayer, had occasion to view the proposed facilities for the Wrightstown dealership and to interview plaintiffs. His report disapproved the dealership in Wrightstown and the proposed location. He orally reported to Arthur Nielsen, vice-president of defendant, his disapproval of plaintiffs' proposed corporate structure and business enterprise. Based upon this report, Mr. Nielsen, vested with authority to grant or decline the application for the franchise, chose to decline it.

 Subsequently, at plaintiffs' insistence, a newly appointed regional manager of defendant's Philadelphia office, James R. Jarvis, gave plaintiffs a letter stating that the application had been denied because Wrightstown was not an "open point."

 The complaint, however, is founded upon events that transpired prior to plaintiffs execution of the application package. Plaintiffs rely upon statements made, and acts performed, ...


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