Monte Carlo Motors, Inc. v. Volkswagenwerk, G. M. B. H.

DOOLING, Acting P. J.

Plaintiff, a California corporation, appeals from a judgment in favor of defendant, a West

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German corporation, in an action for damages for breach of contract.

Defendant is the manufacturer of Volkswagen automobiles. In 1954 Riviera Motors Corporation was plaintiff’s wholesale distributor of Volkswagens in Northern California and plaintiff, under a contract with Riviera, had the sole retail agency for the sale of Volkswagens in San Francisco.

On March 15, 1954, Gottfried Lange, a representative of defendant, met with William Whittington, the president of plaintiff corporation, and stated to Whittington that he was dissatisfied with the representation of Riviera Motors Corporation and was interested in the possibility of giving the wholesale distributorship of Volkswagens to plaintiff. Lange requested information about plaintiff’s financial position and on March 17 by arrangement with Whittington he met with an official of the bank with which plaintiff did business to learn more of plaintiff’s financial status. Later the same day Lange met with Whittington and another officer of plaintiff and entered into an oral agreement with them which is the basis of this action. At the same time Lange exhibited to them a printed form of “Distributor’s Agreement,” signed by the defendant’s general manager in Germany, with a blank for the insertion of the name of the other party to the contract and other blank spaces including a blank space at the bottom for such party’s signature. He represented that this was the same type of contract as he had just given to the Volkswagen distributor in Los Angeles and promised that he would fill it in and deliver it to them on his return from a trip that he was taking to the southwest. On his return, however, after a few days delay, Lange stated that he had decided to retain Riviera as the Volkswagen distributor. In the meantime, at Lange’s request, plaintiff corporation had expended money and taken other actions to its disadvantage. The oral contract was admittedly one not to be performed within a year and hence required by the statute of frauds to be in writing. (Civ. Code, § 1624, subd. 1.) Under these circumstances the defense of the statute of frauds could only be avoided by plaintiff establishing that defendant was estopped to assert it.

During the trial, on defendant's motion, to which plaintiff made no objection, the trial court reserved to itself the decision of the questions whether defendant was estopped to