Jones v. Don L. Gordon Corp., 5875

• Decision Date: 15 November 1978
• Docket Number: No. 5875,5875
• Citation: 60 Haw. 12,586 P.2d 1024
• Parties: Horace JONES, Plaintiff-Appellant, Cross Appellee, v. DON L. GORDON CORPORATION, Defendant-Appellee, Cross Appellee, and Star Manufacturing Co., Defendant-Appellee, Cross Appellant.
• Court: Hawaii Supreme Court

Page 1024

586 P.2d 1024

60 Haw. 12

Horace JONES, Plaintiff-Appellant, Cross Appellee, v. DON L. GORDON CORPORATION, Defendant-Appellee, Cross Appellee and Star Manufacturing Co., Defendant-Appellee, Cross Appellant.

No. 5875.

Supreme Court of Hawai'i.

Nov. 15, 1978.

Syllabus by the Court

1. Where contract of sale existed between dealer and customer with respect to goods shipped by supplier to dealer, in the absence of evidence that customer and supplier agreed upon the terms of the release of the goods to the customer or manifested an intent that the supplier should be substituted for the dealer in the contract of sale, no contract existed between the supplier and the customer.

2. Where contract of sale existed between dealer and customer with respect to goods shipped by supplier to dealer, in the absence of a contract between supplier and customer, customer cannot maintain an action against supplier for nondelivery of goods.

Charles R. Kozak, Honolulu, for plaintiff-appellant, cross appellee.

Alan M. Oshima, Honolulu (Raymond S. Iwamoto and Joseph T. Kiefer, Honolulu, on the briefs; Carlsmith, Carlsmith, Wichman & Case, Honolulu, of counsel), for defendant-appellee, cross appellant.

Before RICHARDSON, C. J., and KOBAYASHI, OGATA, MENOR and KIDWELL, JJ.

KIDWELL, Justice.

This action seeks damages for delayed and defective delivery of a steel building fabricated on the mainland and shipped to Hawaii in a disassembled condition. The circuit court granted recovery from the mainland manufacturer and denied recovery from the Hawaii distributor of the building. We reverse as to both defendants.

On July 5, 1972 plaintiff-appellant Jones, a building contractor and developer, contracted with defendant Don L. Gordon Corporation (Gordon) for the purchase of three prefabricated steel buildings to be manufactured by defendant cross-appellant Star Manufacturing Co. (Star). Gordon was the distributor, under a franchise, for Star's products in Hawaii. The parties agreed that the first building would be shipped six weeks after approved plans were received by Star.

The controversy in this case revolves around the effect of Jones', Gordon's, and Star's subsequent actions. After Jones and Gordon had concluded their agreement, Gordon submitted its purchase order and plans to Star. Jones withdrew the plans because a mistake had been made in the building's length. This change resulted in a price increase. On September 14, 1972, Gordon submitted revised plans and a new purchase order to Star and rescinded its July purchase order.

There was no express agreement between Jones and Gordon as to a new date for shipment or delivery. Gordon was notified in November that Star would be able to ship on November 17 and told Jones that the building would arrive December 1, 1972. However, Star did not ship until January 1973. The building arrived in Honolulu on February 15, 1973, Gordon requested payment, and Jones paid the remaining $19,966.44 owed. Gordon, however, could not deliver the building. Star had shipped the pieces for Jones' building mixed with those for another customer, and the whole lot had been consigned to a freight forwarding company which refused to release any of the shipment to Gordon until Star was paid for both orders.

After Gordon tried unsuccessfully to get Star to release only Jones' order, Jones contacted Star directly. He made seven or eight phone calls but in the end was told that nothing would be released until payment was received for both orders. Jones then sought and obtained on March 23, 1973 a court order for the release of the building. He obtained possession on April 15, 1973.

In a jury-waived trial, the circuit court found that a direct contractual relationship existed between Jones and Star after the February 15, 1973 delivery of the steel to the Honolulu dock. By failing to deliver and by delivering defective materials, Star was held to have breached that contract and therefore to be liable for Jones' subsequent losses. As to Jones's claim against Gordon, the circuit court found that a new contract existed between these parties in September 1972, but that no specific date for delivery was agreed upon and no liability existed.

Based on these findings, judgment was entered in favor of Jones against Star for damages due to delayed delivery and defects in the materials delivered, and in favor of Gordon on Jones' claim. The cross-claim of Star against Gordon was dismissed. The cross-claim of Gordon against Star for indemnification was not dealt with. Jones and Star have appealed.

I

We are faced with difficulty in our review of this case as a result of the circuit court's paucity of findings and conclusions on the terms of the contract which it held to have arisen between Jones and Star after arrival of the building in Honolulu. There are no findings of fact which pertain to the circumstances of the creation of the new contractual relationship, other than a finding that Jones made repeated telephone calls to Star requesting that the building be released to him, which requests were refused by Star. Furthermore, the court concluded that Gordon was an independent dealer selling Star's buildings in Honolulu and was not the agent of Star in dealing with Jones. The record fully supports this conclusion. It follows that the contract of sale with respect to the building was one to which...