Olin's Tire Service, Inc. v. UNITED STATES RUBBER COMPANY
| Decision Date | 12 September 1967 |
| Docket Number | No. 22631.,22631. |
| Citation | 382 F.2d 852 |
| Parties | OLIN'S TIRE SERVICE, INC., W. O. Williams and Geraldine S. Williams, Appellants, v. UNITED STATES RUBBER COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
S. Gunter Toney, Tallahassee, Fla., for appellants.
Harry Lewis Michaels, Tallahassee, Fla., for appellee.
Before WISDOM, BELL and GODBOLD, Circuit Judges.
This is an appeal from the granting of appellee's motion for partial summary judgment against Olin's Tire Service, Inc. The order of the district court granting the motion is set out in full in the margin.1
The original complaint was filed by Olin's against United States Rubber Company, alleging that U.S. manufactured and consigned to Olin's tires and tubes which Olin's sold to the public, that U.S. warranted them to be of merchantable quality and fitness for the purpose of resale to the public (whether the warranty was express or implied was not alleged), and that the warranty was breached.2 It was alleged that Olin's was required to, and did, adjust U.S. tires and tubes for customers of the parties, that is replaced defective tires and tubes, and that the tires supplied by U.S. were defective, resulting in unusually high and excessively numerous adjustments. All damages claimed were stated to have occurred as a proximate result of U.S.'s breach of warranties; included as damages were amounts described as loss in adjusting tires, loss of past profits and loss of future profits.
U.S.'s answer admitted the existence of the warranty on new tires but denied the breach.
The differences leading to this suit arose from the following course of events, as established by the data available to the court for summary judgment purposes.2a Olin's is a corporation formerly known as Royal Tire Service. Royal was the franchised distributor of U.S.'s tires, tubes and other products in the Tallahassee, Florida, area. It was heavily indebted to U.S. W. O. Williams and wife Geraldine Williams entered into negotiations with representatives of U.S. for the purpose of considering the advisability of accepting the franchise distributorship. Appellants assert that during the negotiations U.S. made two vital representations — that U.S.'s products were equal in quality to those of its leading competitors, and that adjustments and claims handled by a distributorship normally could be expected not to exceed 2% of new tire sales.
The Williamses acquired all capital stock of Royal. Contemporaneously, or nearly so, they executed on behalf of Royal U.S.'s form "Distributor's Consignment Agreement" and numerous other documents of a security nature. The Williamses individually entered into many other security undertakings for the benefit of U.S.
The Williamses began operating Royal. They experienced many more customer adjustments than had been expected. In 1961 adjustments ran 21.5% of new tire sales; in 1962, 36.7%; in 1963, 38.2%.
Williams complained repeatedly to U. S., and sought to discontinue as distributor, but was told the problem with the tires was from separation caused by heat, that U.S. had changed specifications and the problem had been corrected. Williams, fearing acceleration of the indebtedness, continued Olin's as distributor.
Appellants fell into default on their obligations to U.S., which began pressing them. Olin's then filed this suit. It admitted indebtedness to U.S. on notes and an account. U.S. counterclaimed on the notes and the account and for attorney fees and crossclaimed against the Williamses as guarantors of the same obligations.
Olin's and U.S. moved for summary judgment. The court granted U.S.'s motion except as to Olin's claims concerning defective recap material. (See footnote 2 supra). Under its disposition of the case the district court did not reach the issue whether the arrangement between Olin's and U.S. for new tires was consignment or sale or conditional sale or a transfer of title with a retention of security interest.
The effect of the court's ruling was to deny Olin's any recovery on its suit for breach of warranty as to new tires, not on the ground that the warranty was not made (for its existence is admitted), nor on the ground that it was not breached (for that is a controverted material issue of fact), but by a two-pronged determination confined to Olin's claims for damages for breach of warranty. The court made a finding that the contract provided for reimbursement to Olin's for all customer claims handled and that it had been stipulated that Olin's had been fully compensated for all adjustments made. The form agreement between the parties (re-executed from time to time and amended and renewed from time to time) obligated Royal ¶ 19 (f) to:
"Handle Customer Claims involving the Consignor\'s merchandise in accordance with the terms of its policy in effect from time to time for handling Customer Claims."
Handling of adjustments, and payment to Royal for handling, were provided for as follows:
...
To continue reading
Request your trial
-
Wirtz v. Wohl Shoe Company
... ... W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellant, ... WOHL ... Mitchell v. Sunshine Department Stores, Inc., 5 Cir. 1961, 292 F.2d 645 ... ...
-
L. C. L. Theatres, Inc. v. Columbia Pictures Industries, Inc.
...we note that the law of damages is "substantive," and hence in this case governed by state law. See Olin's Tire Service, Inc. v. United States Rubber Co., 382 F.2d 852 (5th Cir. 1967). Appellees charge non-performance of contractual obligations owing and due solely in Texas, claims clearly ......