Michels v. Young Metal Products, Inc., 1069A198

• Decision Date: 24 March 1971
• Docket Number: No. 1,No. 1069A198,1069A198,1
• Citation: 267 N.E.2d 572,148 Ind.App. 502
• Parties: George MICHELS and National Culvert Co., Inc., Defendants-Appellants, v. YOUNG METAL PRODUCTS, INC., Plaintiff-Appellee
• Court: Indiana Appellate Court

Page 572

267 N.E.2d 572

148 Ind.App. 502

George MICHELS and National Culvert Co., Inc., Defendants-Appellants, v. YOUNG METAL PRODUCTS, INC., Plaintiff-Appellee.

No. 1069A198.

Appellate Court of Indiana, Division No. 1.

March 24, 1971.

John W. Barce and George Vann, Barce, Barce & Vann, Kentland, for defendants-appellants.

Owen W. Crumpacker, Harold Abrahamson, Hammond, for plaintiff-appellee.

SULLIVAN, Presiding Justice.

This is an appeal from the granting of a new trial to plaintiff-appellee following a jury verdict for defendants in a replevin action. Plaintiff-seller's complaint in essence alleged immediate entitlement to possession of various personal property by reason of defendant-purchaser Michels' default upon a purchase agreement for such property. The purchase agreement in question contemplated the sale of various business property and interests, the pertinent provisions of which are as follows:

'6) The Buyer agrees to buy and pay for said inventory the sum of ONE HUNDRED EIGHTY FIVE THOUSAND DOLLARS ($185,000.00) as follows:

'FIFTY THOUSAND DOLLARS ($50,000.00) cash on March 31st, 1964, the date for closing of this transaction, and agrees to pay the balance of ONE HUNDRED THIRTY FIVE THOUSAND DOLLARS ($135,000.00) as follows: Seventy Five Hundred Dollars ($7500.00) on the 1st day of June, 1964, and Seventy Five Hundred Dollars ($7500.00) on the first day of each month thereafter up to and including May 1, 1965; Ten Thousand Dollars ($10,000.00) on the first day of June, 1965; Ten Thousand Dollars ($10,000.00) on the first day of July, 1965; Ten Thousand Dollars ($10,000.00) on the first day of August, 1965; and fifteen Thousand Dollars ($15,000.00) on the first day of September, 1965 * * *' (Emphasis supplied).

'* * *

'9) Seller agrees to execute a sublease of the Gary Plant to the Buyer herein for a period of two (2) years from March 1, 1964, at a rental of EIGHT HUNDRED AND FIFTY DOLLARS ($850.00) per month, to be paid in advance, * * *'

'* * *

'12) The Buyer being the owner of a one-half interest of the property described in the sublease heretofore referred to shall purchase the one-half interest of the Seller in and to the said items of buildings, furniture, fixtures, machinery and equipment (subject to wear and tear subsequent to the date hereof) and shall obtain an assignment of the existing lease between the E.J. & E. Railroad and the Seller, upon payment of FIFTY THOUSAND DOLLARS ($50,000.00) at any time within two (2) years from the date of this Agreement * * *'

'13) * * *

'The parties agree that at the present time there is a so-called Pakistan order, * * * now outstanding for the manufacture of structural pipe therein specified in said order, which order is in the sum of TWENTY THREE THOUSAND SIXTY FIVE DOLLARS AND 28/100 ($23,065.28); the Buyer agrees to complete said order in accordance with the specifications in said order; when the Buyer completes said order for the Seller, the Seller agrees to pay the Buyer the sum specified in said order when said order is paid by Pakistan * * * Payment for inventory used shall be deferred until the receipt of said.$23,065.28 from Pakistan * * *' (Emphasis supplied).

'* * *

'17) Upon the failure of the Buyer to make the payments, or any part hereof, as herein provided; or upon default of the covenants and conditions herein contained * * * and after notice to Buyer and Buyer's failure to remedy the default as herein provided, the Seller, at its option, shall have the right to terminate the Buyer's rights under this Agreement, * * * and upon termination, all sums paid hereunder and Buyer's and any assignee's title, right and interest to the property set forth in 'Exhibit A' shall pass to and be retained by the Seller herein as liquidated damages, * * *

'If Seller desires to terminate this Agreement because of any default of the Buyer hereunder, * * * Seller shall give the Buyer written notice addressed to it at the Gary Plant, or at such address as the Buyer shall notify Seller, by Certified Mail, Return Receipt Requested; and on failure of the Buyer to remedy the default within ten (10) days from the delivery of said notice, as evidenced by return receipt, Seller may declare contract terminated and forfeited as herein provided.'

Plaintiff contended, and correctly so, that defendants did not make the final $15,000.00 inventory payment on or prior to September 1, 1965 as required by the contract. Plaintiff accordingly argues that it exercised the option provided by the contract on September 1, 1965 by sending defendants a 'notice of termination'. Said notice referred solely to the alleged default committed by defendants in failing to make the final $15,000.00 payment.

Under the contract, in event of a default, defendants were permitted a ten day period to remove or remedy the cause of default, failing which plaintiffs were authorized to terminate the purchase contract and declare forfeiture. Defendants did not make the $15,000.00 payment within ten days following receipt of the September 1 notice of termination, and plaintiff thereupon on September 15 sent a letter advising defendants that the contract 'was terminated'.

Resolution of the issue before us depends upon the validity of defendants'-appellants' contention that they complied with all provisions of the contract; that they paid $170,000.00 under the contract but did not make the final $15,000.00 payment 'because they were not obligated under the contract to make such payment, said payment being deferred until payment was received for an order from the Pakistan government, which defendants had completed'. Such contention was initially made in support of defendants' unsuccessful motion for summary judgment. That motion was opposed by plaintiff, which in a...