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Weissman v. Cole Products Corp.

July 7, 1959


Author: Parkinson


PARKINSON, Circuit Judge.

Plaintiffs-appellants Gustave L. Weissman and Paul Weissman, as successors in interest and title to the partnership of Automatic Dispensers Company, brought this diversity action against the defendant-appellee Cole Products Corporation in the District Court "on a contract and for unjust enrichment", as there asserted by the plaintiffs, but, as stated by the plaintiffs now in their brief here on appeal, "to recover damages occasioned by the defendant's breach of a contract with said partnership."

The District Court in a memorandum of decision, in which were embodied its findings of fact and conclusions of law, found that the plaintiffs failed to prove a contract between the defendant and the partnership; that the plaintiffs failed to prove the allegations of their complaint; that the record did not support defendant's counterclaim; and ordered judgment entered for the defendant, including costs and attorney's fees, and dismissing plaintiffs' amended complaint and defendant's counterclaim. Judgment was entered conformably and this appeal followed.

Whether plaintiffs may prosecute their case in the district court upon one premise and, on appeal from an adverse judgment, adopt a completely new and different theory is a question we need not here decide. Adopting the theory of the action, as stated by plaintiffs here, it is axiomatic that before there can be a breach of a contract there must be a contract.

In 1953 the plaintiffs and their uncle, one Daniel Subarsky, formed a partnership, under the name of Automatic Dispensers Company, for the purpose of "operating and otherwise dealing in vending machines", with its place of business in Springfield, Massachusetts. The defendant Cole Products Corporation is an Illinois corporation engaged in the manufacture and sale of vending machines with its principal place of business in Chicago, Illinois.

On March 20, 1954 the three partners met Richard Cole, executive vice-president of the defendant, at the Statler Hotel in New York. The purpose of the meeting was to discuss the possibility of the partnership representing the defendant in the distribution, servicing and sale of defendant's vending machines in the New England states. It was agreed that the defendant would send written contracts to the partnership for approval and signature.

Thereafter Subarsky, whom Cole had known for some time, asked Cole what he thought about the possibility of developing a small vending machine and Cole testified that "Subarsky said he had spare time to devote to this project on his own. I told him that we would be willing to furnish the parts and material if he wanted to furnish his spare time toward the development program."

There is conflict in the testimony as to exactly what part the Weissmans took in this conversation. Gustave testified that "Dan [Subarsky] asked Cole what he would think of a small vending machine which would sell for approximately about half the price of the vending machines then on the market, and Dick Cole was very enthusiastic about it. * * * and when he got back to Chicago he would speak to Albert Cole about it", and that was all that was said. Paul, after aemitting that Dan Subarsky opened up the conversation as to the small dispenser, testified that Dan Subarsky was talking to "Richard Cole and Gustave Weissman and Paul Weissman" when he discussed the subject. He further stated that he told Cole that "the Automatic Dispensers Company, Dan Subarsky, Gus Weissman and [he], had a few ideas along the line of making a small soda vending machine."

Richard Cole testified that Gustave and Paul Weissman said nothing in that discussion; that both plaintiffs just stood mute and had not entered into the conversation concerning the small vending machine in any way.He stated that Dan Subarsky was to devote his spare time and defendant was to furnish the parts and material to Subarsky for the development of the machine. He further testified that the defendant had no dealings with the partnership and did not engage the partnership to develope a vending machine for it, and that the defendant never offered to pay any royalty to the partnership at any time. Subarsky was not called as a witness by either party.

On March 25, 1954 the defendant sent to the partnership a proposed distributor's contract. It was refused by letter of April 17, 1954 signed by Gustave l. Weissman "because our operation takes all of our time." The letter further stated: "We are sorry for any inconvence [sic ] we have caused you. Perhaps at some future date we will be in a better position to work with your oranisation [sic ]." When it was offered in evidence counsel for the plaintiffs stated that "this letter is for the purpose of advising Cole Products Corporation that the partnership could not enter into those contracts because they were so busy with their own business."

On April 23, 1954 Subarsky wrote to Cole in regard to the distributor contract that "no one seemed to be able to take care of it", and concluded by saying:

"About the small machine, I can go ahead with it just as soon as I get the parts. This, of course, will have to be done in my spare time at night and on Sundays." To this Cole replied on May 10, 1954:

"Although you cannot take on our regular proposition, I feel that there is no reason why we cannot go ahead on ...

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