Rexite Casting Co. v. Midwest Mower Corp.

• Court: Missouri Court of Appeals
• Writing for the Court: PER CURIAM
• Citation: Rexite Casting Co. v. Midwest Mower Corp., 267 S.W.2d 327 (Mo. App. 1954)
• Decision Date: 20 April 1954
• Docket Number: No. 28840,28840
• Parties: REXITE CASTING CO. v. MIDWEST MOWER CORP.

Page 327

267 S.W.2d 327

REXITE CASTING CO. v. MIDWEST MOWER CORP.

No. 28840.

St. Louis Court of Appeals, Missouri.

April 20, 1954.

A. P. Kaufmann, Fred Armstrong, R. A. Hetlage, St. Louis, for appellant.

Martin A. Rosenberg, Rodney Weiss, St. Louis, for respondent.

HOUSER, Commissioner.

Action on a written contract. Plaintiff corporation, Rexite Casting Company, and defendant Midwest Mower Corporation entered into a contract based upon a letter dated November 19, 1947 and an attached purchase order for 100,000 cast aluminum side frames for use in the manufacture of lawn mowers, at a unit price of 52cents each. By the terms of the contract plaintiff was obligated to procure and furnish the necessary permanent molds for casting these parts, but defendant was not to be liable for any cost of molds until they were accepted by defendant as satisfactory as evidenced by sample parts produced. The actual cost of the molds as evidenced by invoice (not to exceed a total of $3,600) was to be amortized over 100,000 parts at a sum not to exceed 3.6cents each. The molds were to be and remain the sole property of the Midwest Mower Corporation, which had the right to cancel the purchase order without recourse upon 30 days' written notice, in which event the mower corporation would pay 'the balance due on molds after all payments have been credited to the cost of the molds.' After the molds were procured and satisfactory sample castings made plaintiff, in June, 1948, commenced production of the side frames. After approximately 17,000 to 20,000 castings had been shipped, and on August 16, 1948 William F. Reck, Jr., vicepresident of plaintiff company, notified Sigmund Rudman and Harry Bobroff, officers of defendant corporation, that it was necessary to increase the price of the castings due to increased metal costs which plaintiff's officers could not foresee when the contract was negotiated in November, 1947; that unless plaintiff increased the price it would be losing money every time it made a casting; and that defendant could 'take it or leave it,' i. e. either pay the increase or plaintiff would not make delivery. According to plaintiff's evidence defendant's officers opposed the increased price but, after discussing the 'pros and cons' of the upward price, finally 'acquiesced' and told Reck to write a letter to that effect. Plaintiff's letter 'confirmed' the parties' conversation 'regarding adjusted price on future delivery of permanent mold castings' at the 'adjusted price' of 78 3/4cents, the new price to become effective after delivery of the castings already finished and awaiting delivery on plaintiff's floor, which were to be invoiced to defendant at the old price.

Defendant's officers claimed that after beginning the delivery of castings at the contract price plaintiff changed the invoice price to 78 3/4cents without any prior agreement, and that when defendant's representatives complained and pointed to the contract price Reck told them 'in no uncertain terms' that he would have to raise the price, and that 78 3/4cents would be the price 'or else we would get no castings.' Defendant had a substantial number of orders for lawn mowers for which delivery had been contracted at a fixed, established price. And officer of defendant testified that plaintiff raised the price of the castings (approximately 50%) at a time when defendant was in heavy production in an amount which, if paid, would absorb enough of the comtemplated profit to make the operation unprofitable. The frame castings were an essential part of the lawn mower, without which the whole manufacturing operation would have to shut down. It was too late to contract for castings from other sources for delivery during that production year. It takes months to make the necessary molds. If defendant did not agree to pay the increased price the plant could no longer operate--they would not be able to deliver and therefore would lose all of their customers. According to defendant's officers defendant was 'over a barrel' on the matter; plaintiff had put defendant in an untenable position and defendant had no choice but to agree; had 'no other recourse, to stay in business.' Defendant's officers felt that plaintiff had 'gone back on the original deal.' Defendant did not reply in writing to plaintiff's letter of August 16 but did order, receive and pay at the increased price for several lots of castings which were delivered by plaintiff during the fall of 1948 and until it had enough castings to carry it through that season. The payments made at the advanced price included the stipulated payment on account of the molds. Defendant quit taking castings from plaintiff in December 1948. Immediately after the price was raised defendant made efforts to procure molds elsewhere. On January 5, 1949, after three or four months of negotiating, defendant entered into a contract with Missouri Die Casting Company for the manufacture of side frames, using the die casting method, and for the production of the necessary dies at a guaranteed maximum price of $3,600. The castings were to be supplied at the cost of 57cents per unit. Defendant refused to take more castings from plaintiff as soon as Missouri Die Casting Company had assured defendant that it could produce the castings in sufficient quantity during the coming season. Thereupon defendant made demand for reimbursement for overcharges, claiming the difference between the contract and the 'adjusted price' on all deliveries made under the increased price. After defendant refused to take more castings plaintiff demanded payment for castings furnished but not paid for and offered to turn over the molds to defendant provided defendant paid plaintiff the balance of $2,937.21 claimed to be due on the molds.

Rexite Casting Company then brought suit against Midwest Mower Corporation in two counts. Count I was for the balance due for castings made and delivered but not paid for, in the sum of $783.22, figured at the rate of 78 3/4cents each, based upon the written contract as amended and modified. Count II was for the balance due on the molds in the sum of $2,937.21, based upon the original written contract, without any allegation as to modification. The mower corporation, answering Count I, admitted the existence and terms of the original contract but denied that there was a modification thereof. In answer to Count II the mower corporation alleged that the casting company had breached the contract; that it agreed to pay the increase demanded by the casting company under duress; that the increase was without consideration and void, and that because of the casting company's breach of contract the latter was not entitled to recover the balance claimed on the molds. The mower corporation also filed a counterclaim in which it sought to recover as overcharges the difference between the contract price and the increased price paid on parts case and delivered after the price hike went into effect, in the sum of $2,301.75, and for $662.79 paid on the molds at the times the overcharges on the parts were paid, less $578.25 which the mower corporation conceded was due the casting company on unpaid invoices figured at the original contract rate of 52cents each.

The trial court submitted the issues arising on Count I and on the counterclaim to a jury, which returned a verdict for the casting company and against the mower corporation on Count I of the petition for the full amount, figured at the rate of 78 3/4cents each for castings delivered but not paid for, and for the casting company on the mower corporation's counterclaim. The court directed a verdict for defendant mower corporation on Count II of the petition. The trial court filed a memorandum opinion holding that plaintiff's refusal to deliver castings at the contract price constituted a breach of contract, relieving defendant of all obligations to make further payments under the contract; that there was no consideration for any agreement to pay a higher price, and that 'It would be strange law if plaintiff could commit a flagrant breach of contract and thus recover the cost of these molds which it declined to use under the terms of this contract.' No appeal was taken from the judgment on Count I of the petition, or from the judgment entered on the counterclaim. Plaintiff casting company has appealed to this court from the judgment directing a verdict for the mower corporation on Count II of the petition.

On this appeal plaintiff, passing over the question of breach of the original contract, bases its right to recover for the molds upon the existence of an amended or modified contract, for which it claims there was adequate consideration. Plaintiff makes the further contention that the provisions of the contract relating to molds were distinct from those relating to castings, and that a change in the price of the castings (relieving defendant of further obligation with reference to the castings) would not relieve defendant from liability to pay for the molds. Plaintiff also raises the point that it was error to take the case from the jury; that defendant pleaded the doctrine of 'flagrant breach' of contract, or economic duress, and that although plaintiff regards that fact as immaterial, it was an issue of fact which should have been submitted to the...