Fletcher v. Stutz Automobile Company of America, Inc.

• Decision Date: 15 November 1929
• Docket Number: 13,187
• Citation: 168 N.E. 585,96 Ind.App. 398
• Parties: FLETCHER, RECEIVER v. STUTZ AUTOMOBILE COMPANY OF AMERICA, INC
• Court: Indiana Appellate Court

168 N.E. 585

96 Ind.App. 398

FLETCHER, RECEIVER v. STUTZ AUTOMOBILE COMPANY OF AMERICA, INC

No. 13,187

Court of Appeals of Indiana

November 15, 1929

Rehearing denied November 19, 1930. Transfer denied April 26 1933.

From Marion Superior Court, Linn D. Hay, Judge.

Action by William H. Fletcher as receiver of the Weidely Motors Company against the Stutz Automobile Company of America Incorporated. From a judgment for defendant, the plaintiff appealed.

Affirmed.

Miller, Dailey & Thompson, Jess B. Fields, Samuel D. Miller and Sidney S. Miller, for appellant.

Roemler, Carter & Rust, for appellee.

OPINION

MCMAHAN, C. J.

This is an action by William H. Fletcher, as receiver of Weidely Motors Company, hereafter referred to as Weidely, against the Stutz Motor Car Company, hereafter referred to as Stutz, to recover damages alleged to have been sustained by Weidely by reason of the failure of Stutz to take and pay for a large number of motors which it is claimed the latter ordered Weidely to manufacture for it pursuant to a prior written contract. A trial by jury resulted in a verdict and judgment for the defendant. Plaintiff appeals and assigns as error the overruling of his motion for a new trial, the specifications of which challenge the sufficiency of the evidence, the giving and refusing to give instructions, the admission and exclusion of evidence. The cause was tried on the issues presented by a complaint in two paragraphs, and by an answer of denial and of payment.

The first paragraph of the complaint alleges that in June, 1932, Weidely and Stutz began negotiations looking to an agreement whereby Weidely would manufacture and sell, and Stutz would buy motors to be used in its motor cars. These negotiations resulted in a contract under date of December 5, 1922, the salient features of which are as follows:

Weidely agreed to manufacture for and to sell to Stutz and Stutz agreed to purchase its requirements, between December 5, 1922, and December 31, 1923, of a certain model gasoline engine, production of which would begin January 1, 1923, the buyer's first order to be placed therewith and to be confirmed by a regular purchase order, and to cover 500 engines for delivery as therein specified; the engines to be same design as sample, unless altered by mutual consent. Seller to warrant engines to equal sample in material, workmanship and performance. Upon development of any objectionable features, buyer was given the right to cancel contract unless seller promptly made corrections; seller to deliver engines without charge for boxing, crating or cartage at buyer's plant in Indianapolis, at such times between date of contract and December 31, 1923, as buyer might designate on its regular purchase orders. Weidely agreed to increase or decrease deliveries as Stutz directed upon receiving from buyer notice so to do.

Weidely agreed to carry an excess stock of repair parts of the motors and not to sell motors to anyone except Stutz and Auburn without the written consent of appellee, except seller had the right to complete contract with H. C. S. Motor Car Company. In case of insolvency of either party, in case application was made to have either declared bankrupt, or in case of the appointment of a trustee or receiver for either or in case of default in the observance of any of the covenants, the party affected might cancel the contract without notice. No agreements or understandings between parties not expressed in the contract and no alterations or variations of the terms thereof were to be valid or binding upon either party unless made in writing and signed by both parties.

After setting out the contract, this paragraph alleges that from December 5, 1922, to July 19, 1923, appellee, pursuant to the contract, ordered Weidely to manufacture 4,000 motors, which orders were accepted, said motors to be delivered to appellee from time to time between December 5, 1922, and October 1, 1923, as rapidly as the exigencies of the business of Weidely and the market for material to be used in the motors and labor and manufacturing conditions would permit; that during said period Weidely manufactured and delivered to Stutz, under the contract, 2,191 motors, of the value of $ 605,000; that on July 19, 1923, 124 motors were ready for delivery and a large part of the remaining motors so ordered were in course of construction; that Weidely had purchased or contracted for the necessary materials and had engaged labor to manufacture the remaining motors so ordered; that Stutz was fully acquainted with the conditions existing in appellant's plant; that relying upon the contract, Weidely, in anticipation of the manufacture of the motors ordered, obtained and contracted for materials, and expended therefor $ 664,000, and had expended $ 500,000 for labor, that of the 4,000 motors so ordered by Stutz and not delivered, 124 were ready for delivery July 19, 1923, 1,685 were in the course of construction but not then ready for delivery; that "on July 19, 1923, when said Weidely had all necessary arrangements made to complete the manufacture and delivery of the uncompleted portion of said motors (namely, 1,685 motors), and while said contract was in full force and effect, without any legal cause or excuse whatsoever, but in direct violation of its obligations and the rights of Weidely under said contract, Stutz notified Weidely to cease the manufacture of motors and to make no further delivery of motors to it under said contract; that after said time Stutz, without right, refused to take and has never taken any of the additional motors from Weidely which Stutz had contracted to take and ordered under and pursuant to the terms of said contract, although Weidely demanded that Stutz go forward and fulfill said contract; that by its refusal to accept and take said motors and to permit Weidely to go forward with the manufacture and completion thereof, Stutz thereby, without legal right, excuse or cause whatsoever, repudiated, breached and violated said contract; that at the time of said breach of said contract by Stutz, Weidely was ready, able and willing to go forward and complete and carry out its contract for the manufacture and delivery of the remainder of said motors so ordered by Stutz as aforesaid; that, as hereinbefore alleged, Weidely, at all times, except so far as it was prevented from so doing by Stutz, as aforesaid, performed all the terms, conditions and obligations on its part to be performed." (Our italics). That the materials Weidely had on hands at the time of the alleged breach were of the value of $ 300,000; that such materials could not be used except in the manufacture of motors and because of such breach Weidely was damaged because of depreciation in value of materials, $ 250,000; that it was damaged $ 23,071, because of the depreciation of the 124 motors alleged to have been ready for delivery July 19; and that it was damaged $ 110,000 because of labor expended.

It also alleges that at the time of making the contract, Stutz represented to Weidely that it would desire to have motors manufactured at the rate of 10,000 a year for at least two years and enjoined upon Weidely the necessity of making adequate preparations to that end; that appellant, relying upon the contract, purchased special tools and equipment at a cost of $ 92,000, which would not have been necessary except for the purpose of meeting the requirements of appellee under the terms of the contract; that by reason of the alleged breach, the special tools and equipment have become of no value to appellant's damage in the sum of $ 92,000; that its profit on each motor under the contract was $ 30, and that by reason of the failure of appellee to take the 1,800 motors it was damaged in the sum of $ 54,000; that by reason of the breach of the contract Weidely became insolvent and that appellant was, on July 26, 1923, appointed receiver thereof in an action pending in the Marion Circuit Court.

The second paragraph is in substance the same as the first. The material difference between the two paragraphs is that in the second paragraph appellant sets out a letter of December 5 1922, from Weidely to Stutz with reference to certain things which were to be done by Weidely in connection with financing itself so as to be able to go forward with and perform the conditions of the contract; a letter from Weidely to the attorney representing Stutz in the nature of a report as to what Weidely had done in the way of preparing its finances so as to fulfill the contract; a written order from Stutz, under date of December 6, 1922, for 500 motors, "subject to conditions on your (Weidely) letter of December 5, 1922, and purchasing contract therein referred to," the directions as to deliveries in the order being as follows: 15 at once, 35 in December, 100 in January, 150 in February, 200 in March; a letter from Stutz to Weidely dated January 2, 1923, confirming a conversation concerning delivery of motors; a letter from Weidely to Stutz, dated January 18, 1923, stating the daily program of Weidely as to the number of motors to be manufactured in January, February and March, the motors so expected to be ready for delivery during that time being 1,123, of which 523 would be for Stutz and 600 for the Auburn Company. This letter closed with the statement that the schedule named was not a definite promise on the part of Weidely but was named as a mark to "shoot at," with an assurance that it would be increased if possible; that a few days later Stutz wrote a letter to Weidely, wherein, after referring to the two orders theretofore placed for deliveries from December to April for 1,500 motors, Stutz urged more rapid deliveries and gave Weidely authority to ship motors as fast as its...