Oedekerk v. Muncie Gear Works

• Decision Date: 16 February 1950
• Docket Number: No. 9917.,9917.
• Citation: 179 F.2d 821
• Parties: OEDEKERK et al. v. MUNCIE GEAR WORKS, Inc.
• Court: U.S. Court of Appeals — Seventh Circuit

179 F.2d 821 (1950)

OEDEKERK et al. v. MUNCIE GEAR WORKS, Inc.

No. 9917.

United States Court of Appeals Seventh Circuit.

February 16, 1950.

Walter D. White, John B. Beasley, Muncie, Ind. (White & Haymond, Muncie, Ind., of counsel), for appellant.

George P. Ryan, Alan T. Nolan, Indianapolis, Ind. (Ross, McCord, Ice & Miller, Indianapolis, Ind., of counsel), for appellee.

Before MAJOR, Chief Judge, and KERNER and DUFFY, Circuit Judges.

KERNER, Circuit Judge.

The issue in this case was simple. The basic facts are undisputed. Plaintiffs sued defendant to recover freight charges and for handling and packing costs in making two shipments of rocket tubes from California to Muncie, Indiana, and back to Pasadena, on the ground that defendant had breached a contract for the purchase of the tubes. That is, plaintiffs were forced to reship the tubes to their plant in California because defendant would not accept the shipments. No question was raised as to the freight costs on the shipments or the packing and crating costs in connection therewith. The ultimate question was whether plaintiffs had the right to ship the tubes as they did. The case was tried by the court, which made special findings of fact, pronounced its conclusions of law thereon, and rendered judgment in favor of plaintiffs. This judgment, defendant seeks to reverse.

On May 1, 1945, the parties entered into an oral agreement under the terms of which plaintiffs were to ship to defendant 10,000 rocket tubes, subject to inspection by a representative of the Navy Department at the place of manufacture before shipment, on the understanding that defendant would return a like number of tubes to plaintiffs at a later date, and that a value of $9 per tube would be set for billing purposes to serve as a basis for terminating a Navy contract under which defendant was manufacturing rocket tubes, if such termination occurred before the agreement was performed. Pursuant to the agreement, defendant on May 5 mailed to plaintiffs a purchase order which specified the terms of the May 1 agreement. This purchase order was enclosed in a letter in which defendant stated: "* * * These tubes are to be returned to you * * * but if you see fit to just sell these tubes outright without replacement please let us know so we can cancel our raw tubing orders." In response, plaintiffs on May 10 wrote defendant a letter in which they stated: "* * * We would prefer to sell these to you outright without replacement, so you may cancel your raw tubing orders. * * *" May 12 defendant wired plaintiffs inquiring as to shipping date, amount, and routing of the first carload. On the same day plaintiffs advised defendant that the first shipment would be made on Monday, May 14, via Santa Fe, and inquired whether a sight draft was satisfactory, and defendant wired plaintiffs: "* * * sight draft satisfactory on carload shipment Monday * * *"

Plaintiffs shipped the first carload of 5,000 tubes under a sight draft for $45,000, and notified defendant to that effect. The telegram, however, did not mention the amount of the sight draft. May 16 defendant wrote a letter which was received by plaintiffs on May 21 approving an outright sale, but defendant objected to the $9 price, and said: "* * * I would like to purchase them at the price of $7.50 each which would include the box." May 17 plaintiffs shipped the second carload of tubes, and on May 18 wired defendant that the shipment had been made. May 25, after the first shipment of tubes had arrived in Muncie, Indiana, Harry Oedekerk called M. J. Haughey, defendant's production manager, over the long distance telephone, and they agreed to a sales price of $7.50 per tube and to the sight draft on the basis of that price. Later that day, however, Kenneth Spurgeon, defendant's president, called Oedekerk and objected to the sight draft at $7.50, on the ground that defendant would thereby be prevented from inspecting the tubes before payment. May 31, 1945, plaintiffs notified defendant that they had ordered the shipments returned, and the shipments were returned to plaintiffs.

The court found inter alia that on May 1, 1945, the parties made an oral agreement under the terms of which it was agreed that plaintiffs would ship to defendant 10,000 rocket motor tubes subject to inspection by a representative of the Navy Department at the place of shipment, and that defendant would return a like number of tubes to plaintiffs at a later date, and that a value of $9 per tube would be used for billing purposes; that in place of the original arrangement for the exchange of the rocket tubes, defendant, by the letter of May 5, offered to purchase the tubes at $9 each, subject to inspection by a representative of the Navy Department at the place of manufacture before shipment, and that plaintiffs, on May 10, accepted defendant's offer. It also found that the tubes included in the shipments had been inspected and approved by the Navy Department before they were shipped.

The determinative issue is whether the parties entered into an enforceable contract of sale.

Before we discuss defendant's...