Citations
- 100 F. Supp. 271
Full opinion text
DONOVAN, Judge.
The above-entitled matter was tried to the court, at the City of St. Paul, Minnesota, on the 8th, 9th and 12th of March, 1951, further trial being then continued to the 24th of April, 1951, upon which date the trial was completed.
Plaintiff brings this action for money had and received, and for conversion of property claimed to be owned by it. Defendant, by answer, alleges payment in full of all accounts due plaintiff, and denies the conversion. It also. counterclaims for alleged breach of contract.
At the trial, and before testimony was taken, defendant admitted a credit balance in favor of plaintiff in the sum of $4,080.60, but contends plaintiff is indebted to defendant in excess of said balance by reason of the claimed breach of contract. Defendant assumed the burden of proving its counterclaim, as it admitted that it had received $4,080.60 as an advance by plaintiff, but this has been credited by defendant to expense incurred in connection with the contract they claim plaintiff breached. Throughout, the trial counsel referred to plaintiff as “Ceraseal” and to defendant as “Design.” Consistent therewith, the parties will hereinafter be designated in like manner.
Design is a Minnesota corporation which engaged in manufacturing products, including a portable glycolator or vaporizer, at its plant in St. Paul, Minnesota.
Ceraseal is an Indiana corporation. Its agents, impressed with the possibilities of marketing Design’s vaporizers, conferred with agents of Design from time to time, representing that Ceraseal would engage in an extensive advertising campaign with a view to selling the vaporizers to. the public, and particularly to poultry raisers. Ceraseal and Design agreed on a price for the vaporizers and an order for 1,000 units initiated the agreements and disagreements that followed. Visits in person and by telephone disclosed that while Design was possessed of engineering skill and commendable industry, it lacked the capital necessary to keep step with Ceraseal’s high-powered salesmanship. As a result, Ceraseal advanced money to Design, which furnished some needed working capital, and which was to be applied to orders supplied by Ceraseal as distributors of the product. Ceraseal complained that production by Design was falling too far behind purchase orders forwarded for shipment to the trade, and additional telephone conversations resulted in a conference between the parties at Ceraseal’s offices on or about June 6, 1949. Not a scratch of a pen was made by either party to express the understanding and intent of the parties, until the summer of 1949.
Ceraseal’s anxiety over money advanced Design and not accounted for led. to some discussion between the parties relative to the need for an understanding with reference to “Sight Draft Bill of Lading shipments.” Ceraseal evidenced a studied attempt to avoid any positive commitment towards liability for orders except as obtained by it from the trade, but finally did represent to Design that Ceraseal could handle 500 vaporizers per week. By the end of June, 1949, it became obvious that what each party had originally visualized with so much enthusiasm was headed for the shoals. Ceraseal had advanced money and obtained orders, and Design had purchased parts and made preparation for production of 2,500 or 3,000 units per month.
Ceraseal sent its top officers to St. Paul for a conference with the top1 officers of Design, on July 6, 1949. At the trial said officers were witnesses, and they were thoroughly disagreed as to what was said, done and agreed upon. However, the day following this meeting Ceraseal dispatched a letter to Design, purporting to summarize the conversations of the officers present.
Except for negative action taken on sales and patent agreements referred to, the letter remained unanswered by Design. At the trial Design claimed they proceeded on thc understanding that they were to1 pro