Roig v. Electrical Research Products, 2622.

• Citation: 57 F.2d 639
• Decision Date: 07 April 1932
• Docket Number: No. 2622.,2622.
• Parties: ROIG v. ELECTRICAL RESEARCH PRODUCTS, Inc.
• Court: U.S. Court of Appeals — First Circuit

57 F.2d 639 (1932)

ROIG v. ELECTRICAL RESEARCH PRODUCTS, Inc.

No. 2622.

Circuit Court of Appeals, First Circuit.

April 7, 1932

James E. Duross, of New York City (Gonzalez, Fagundo & Gonzalez, Jr., of Humacao, Porto Rico, on the brief), for appellant.

John Carr, of Boston, Mass. (Francis B. Turner, of Waltham, Mass., and Abbott, Drew, Rogerson & Carr, of Boston, Mass., on the brief), for appellee.

Before BINGHAM and WILSON, Circuit Judges, and MORTON, District Judge.

MORTON, District Judge.

This is an action upon a contract; it was tried jury waived in the District Court; the plaintiff recovered judgment, and the defendant appealed. The trial judge made full findings of fact and stated briefly his conclusions of law upon the facts found.

The plaintiff manufactures and sells apparatus for exhibiting talking motion pictures. The defendant owns and operates a theatre at Humacao, P. R. He made with the plaintiff a preliminary written contract for the purchase of one of its machines. In its material parts, the contract was as follows: "Referring to our correspondence relative to the installation of electrical sound reproducing equipment in your Oriente Theatre in Humacao, Porto Rico, we desire to set forth herewith our understanding of the arrangement between us. 1. You hereby place an order for a 2-S Equipment to be installed in the above mentioned theatre, such order to be covered by an agreement and lease on a form for Porto Rico, which you agree to sign for this installation. This form will be similar to our standard form of agreement for the United States, copy of which is enclosed, with such modifications as may be necessary to include special conditions and so as to conform, in the opinion of our counsel, to the laws of Porto Rico.

"Subject to the conditions herein set forth, this equipment will be shipped from our warehouse on or about September 14th, 1929.

"2. The regular charges fixed by us for furnishing and installing such equipment are payable, ten percent (10%) as an initial payment upon signing this general agreement, fifteen percent (15%) within three days after the completion date, and the remaining seventy-five percent (75%) in twelve monthly notes with interest at the legal rate obtaining in Porto Rico.

"In addition to these payments, there will be a weekly charge to cover servicing the equipment. We propose that this latter charge shall be equitably averaged over the various equipments which we from time to time have under lease in Porto Rico."

"3. We propose to have the business in connection with the leasing and installation of equipments in Porto Rico carried on through a subsidiary company, and we reserve the right to assign all of our right, title and interest in this agreement and lease covering each installation executed by such subsidiary. Whatever subsidiary company we may use for the purposes above-mentioned, we assure you that we will guarantee the performance by it of all obligations which it enters into with you.

"If the agreement outlined in this letter is acceptable to you, kindly indicate your acceptance on both copies of this letter and return them to us, one of which, when completely executed by us, will be returned to you."

A copy of the United States standard form referred to in the letter was sent to the defendant as stated. Both parties understood that this was a preliminary agreement, putting them into contractual relations with each other as therein stated, and that it was to be followed by a fuller and more formal instrument; it is referred to by the parties as the "binder contract" or "binder."

On October 27, 1929, the installation of the apparatus in the defendant's theater was completed, and it was put into use. The definitive agreement remained in abeyance, however, until some time in March, 1930, when the plaintiff for the first time presented a draft of it to the defendant for signature. The defendant at once objected to the draft, saying in his letter to the plaintiff under date of March 19, 1930: "Inasmuch as this document tries to impose upon me obligations that were not specified at the time of the first deal, and that it also calls for payments of lease and service that were not agreed upon originally, my proposal to you now is that you return such monies as I have paid to you amounting to $2,700, that is, $1,080 paid in New York and $1,620 here later, and you, of course, to take your apparatus"; and in his letter of September 6, 1930, that "I have refused to sign the contract because it contains conditions which were not agreed upon and which are prejudicial to my interests." The plaintiff insisted upon the draft tendered by it, and ultimately brought the present action. The complaint is based on the contract of August 29, 1929, without the United States standard form. It alleges as breaches thereof...