Chrysler Corp. v. Quimby | Kessler, Gilmore & Kronman | August 29, 2012


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by Kessler, Gilmore & Kronman

CHRYSLER CORP. v. QUIMBY, 51 Del. 264,144 A.2d 123, 885 (1958). Randall was the President and active executive of Randall Motors, Inc., a Chrysler dealer in Washington, D.C., operating since 1944 under a franchise terminable by Chrysler on 90 days' notice. Quimby, a lawyer and long-standing friend, was a director and secretary of Randall Motors, owning ten shares of the corporation. On Randall's death Quimby told Neely, Chrysler's regional manager, that he wanted to see Randall Motors continue with the business. Neely reported to Chrysler that Quimby was making an effort to obtain the business for himself, and that he (Neely) could under no circumstances recommend that Quimby succeed Randall. On his recommendation, a 90-day notice of termination was given in accordance with the dealer agreement. Neely indicated to Quimby that this was largely a matter of form and that the franchise would be continued if Quimby would purchase the interest of Randall's widow and the rest of the stock from the other stockholders and transfer a 51 percent interest to a qualified person named by Chrysler. Quimby bought the stock of the widow for $38,000 and Randall Motors acquired the shares of the other shareholders so that Quimby became sole stockholder. He was however unable to perform the other condition because the transfer of 51 percent of the stock was prevented by Chrysler's failure to name the transferee. Chrysler gave the franchise to another dealer, thereby greatly reducing the value of the assets of the corporation and of the corporate stock acquired by the plaintiff in reliance on Neely's promise. Quimby sued Chrysler in his own name and as assignee of the corporation.


Assuming that Neely's motives for his assurances to Quimby were to obtain a fair price for the stock for Mrs. Randall, to whom Chrysler felt a moral obligation, is Quimby entitled to recover? If your answer is affirmative, would you decide the issue differently if Neely had not made his recommendation against Quimby succeeding Randall? Assuming, on theactual facts of the case, that plaintiff is entitled to recovery, what should be the measure of his damages?


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June 02, 2014 Chrysler Corp. v. Quimby Chrysler Corp. v. Quimby

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