Meyer v. Ford Motor Co

In Meyer v. Ford Motor Co. (1969) 275 Cal.App.2d 90, the plaintiff, a former Ford Motor Company dealer, sought damages for the termination of his agency by Ford. Among other things, he alleged breach of an oral agreement by several Ford representatives that if plaintiff agreed voluntarily to give up his dealership, Ford would help him find a buyer and the sales price would be sufficient to satisfy his existing indebtedness. (Id. at p. 98.) A jury found that Ford breached this oral agreement and Ford appealed, contending that there was no evidence that any of its agents had either actual or ostensible authority to promise plaintiff that he would not be hurt financially on the sale and the sale price would be sufficient to satisfy his existing indebtedness. (Id. at p. 101.) The court disagreed. It noted that although a manager is clothed with apparent authority to do only those things that are essential to the ordinary conduct of a business, "such a characterization gives no meaningful guidelines to the third party who must gauge whether the agent's words or deeds in fact typify the 'ordinary' conduct of the business. This is especially so where, as here, the principal is a distant, prestige corporation which carries on massive activities in the third party's geographic area." (Id. at p. 102.) It concluded: "The circumstances of this case were such as to constitute a holding out to plaintiff that Ford's agents had authority to make all the promises. The . . . promise of the regional sales manager and the San Jose district personnel was clearly made during their prosecution of a matter ordinarily entrusted to them by Ford--the obtaining of a signed 'Request for Assistance in Selling.' Substantial evidence showed that this . . . promise was made for the direct purpose of producing that result, an object of benefit to, and desired by, Ford. Hence, the promise was unquestionably within the scope of the agents' ostensible authority." (Id. at p. 103.)