Bobrick Chemical Co. v. Prest-O-Lite Co.

This action was instituted by plaintiff corporation, which is the assignee of G. A. Bobrick of a contract for a term of three years under which Bobrick agreed to furnish defendant, an Indiana corporation, eleven thous- and sets of parts of tire-inflating apparatus (each set consisting of one valve, one coil, and one bushing), for a specified price per set, the defendant agreeing to order and pay for five thousand of said sets during the first year of the term, and three thousand óf said sets during each of the second and third years of the term. The contract was dated December 6,1906. By a provision contained therein, defendant at once ordered three thousand of said sets, at the scheduled price of $4.45 per set. On June 4, 1907, it notified both Bobrick and plaintiff that it canceled this agreement, and would not receive any more goods thereunder. It had then received 1137 of the three thousand sets ordered, which it retained and paid for. This action was brought to recover $8290.35 for the remaining 1863 sets of the three thousand sets ordered, which defendant refused to receive or pay for, and $23,600.00 loss of profits on the remaining eight thousand sets, caused by defendant’s refusal to go on with the contract, making an aggregate of $31,890.35. Judgment went for defendant, and we have here an appeal by plaintiff from such judgment.

The appliances referred to in this agreement were the result of an invention of Mr. Bobrick, constituting, according to his claim, a great improvement in the appliances then in use for the inflation of tires, and one that could be manu

There was evidence sufficient to sustain conclusions that the devices covered by Bobrick’s later contract with defendant involved some features that were the product of an earlier invention by him which he had conveyed to the Air & Oxygen Company; that these features were contained in the devices covered by the contract of the Air & Oxygen Company with defendant; that this contract was defendant’s sole authority for the sale of any device containing such features, and that it was therefore essential to defendant’s being able to sell the device covered by the Bobrick contract that the Air & Oxygen Company contract should remain in force. It was also important that said contract should remain in force to protect it from competition in the sale of such devices as were covered thereby. At the same time, it is clear that defendant considered it absolutely necessary that it should be relieved from the burden imposed by paragraph XII of that contract, if it was to assume the burden proposed to be created by the Bobrick contract. Bobrick was, at the time of the negotiations preceding the execution of his contract and at the time of such execution, a director and vice-president and mechanical engineer of the Air & Oxygen Company, and had been sent east from

The evidence was also ample to support the conclusion that defendant relied on such assurances, and would not have entered into the Bobrick agreement except therefor.

Bobrick endeavored to obtain this modification of the Air & Oxygen Company contract, but the directors of that company at first refused to grant the same, with the result that, defendant refusing to comply with the provision thereof requiring it to order and pay for at least one thousand of the devices referred to therein, on April 24,1907, a resolution was adopted by said directors annulling such contract and directing formal notice of such annulment to be sent to defendant. Such notice was given to defendant, whereupon defendant, on May 28, 1907, notified Bobrick thereof by

The trial court further found, in accord with allegations contained in defendant’s pleadings, that the device to be furnished by Bobrick under his contract, failed to do and perform the work it was sold to do and perform, that it was defective, and would not cause the liquid gas contained in the tanks to enter the tire in a gaseous condition, but the same would freeze up, so that said liquid contained in the tanks would not enter the tire in a gaseous condition, and that the valves in said device were also defective, and would leak after using the same a few times by the operator.

It appears- to be conceded that it was necessary, in order to render the device reasonably fit for the particular purposes contemplated by all parties, that the liquid gas should be wholly changed into gas while passing through the appliance and should enter the tire to be inflated solely in the form of gas. While it is true that from the time of the very first delivery by Bobrick under his contract to the time of the attempted rescission there were many complaints by defendant in regard to the working of the appliances furnished, the evidence indicates that defendant did not know until after its cancellation of the contract how unsatisfactory they proved to be to those purchasing from it. It was in evidence on behalf of defendant that at the time of the trial it still had on hand, including those that had been returned as unsatisfactory, over nine hundred of the eleven

Taking up the finding last discussed, we are of the opinion that it furnished sufficient basis for a judgment for defendant in this action to recover damages for refusal on its part to take any further sets under the contract of December 6, 1906. Aside from its claim that this finding is not sufficiently sustained by the evidence, a claim that we have concluded cannot be maintained, the only point made by plaintiff is that, if the sets offered were defective, the only remedy of defendant was to refuse to accept them and insist upon the delivery of sets complying in all respects with the contract, and that it could not, while accepting and paying for a portion of the goods, base a refusal to accept further goods upon defects in those already accepted. This contention is supported by the authorities in so far as a mere failure of the vendor to deliver articles of the quality and character stipulated for is concerned. (See Guernsey v. West Coast Lumber Co., 87 Cal. 249 , [ 25 Pac. 414 ]; Vallens v. Tillman, 103 Cal. 191 , [ 37 Pac. 213 ].) In the first of the cases just cited, the contract was for the sale and purchase of lumber, and the complaint was that the lumber delivered was cut “too thin,” and in the other case the claim was that cigars delivered under a contract for the sale and purchase of cigars did not come up to the sample that had been furnished and constituted a part of the contract. But, as we have seen, the finding here implies a material defect in the device itself, as distinguished from a failure of the articles manufactured and furnished to accord with the device as invented and constructed by Mr. Bobrick. The sets furnished were manufactured in accord with the device and

It follows that the conclusion of the trial court upon this question furnishes sufficient basis for the judgment in favor of defendant.

The finding in regard to the parol understanding as to the elimination of paragraph XII of the Air & Oxygen Company contract, which is also sufficiently sustained by the evidence, presents a case in which it would appear exceedingly unfair to require defendant to proceed with the Bobrick contract unless the Air & Oxygen Company contract was modified in the respect stated, and as so modified continued in force. No such modification was made prior to defendant’s cancellation of the contract. There is, however, some question whether

The judgment is affirmed.

Shaw, J., and Sloss, J., concurred.

Hearing in Bank denied.

In denying a hearing in Bank the court in Bank filed the following opinion on July 17, 1911:

The decision in this case was placed by the opinion solely on the ground that the device to be furnished by Bobrick under his contract failed to do and perform the work it was sold to do and perform, etc. Upon this point we see no reason for receding from the views set forth in the opinion. The opinion is erroneous in stating that there was evidence sufficient to sustain the conclusion that the devices covered by Bobrick’s contract with defendant involved some features that were contained in the devices covered by the contract of the Air & Oxygen Company with defendant, and that the latter contract was defendant’s sole authority for the sale of any device containing such features. In view of the sole ground upon which the decision is based this error is not material, and does not warrant a rehearing.

The petition for a rehearing is denied.