Procedural Posture

Plaintiff trucking company appealed the judgment of the Superior Court of Sacramento County (California), which declared a nonsuit against the trucking company in its breach of contract suit against a manufacturer.

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Overview

The manufacturer used trucking companies to ship products between its plants, storage points, and customers. The manufacturer’s traffic manager agreed that the trucking company would do local hauling for one year and at the conclusion of that year the contract was renewed for an additional year. While performing under the second one-year contract, the traffic manager agreed to give the trucking company a 15-year exclusive contract for hauling certain products and the trucking company purchased equipment in reliance on the purported contract. The manufacturer began to give hauling covered by the alleged contract to other carriers and the trucking company suffered financially. The trial court declared a nonsuit against the trucking company in its breach of contract action. On appeal, the court held that there was no contract because the traffic manager had neither actual nor ostensible authority to bind the manufacturer for 15 years. Where the previous contracts were only for one year and were formally executed by an agent in another state, the manufacturer did not engender in the trucking company the belief that the traffic manager could bind it to an exclusive 15-year contract.