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Ebaloy, Inc. v. Square Deal Plumbing & Heating

SEPTEMBER 30, 1960.




Appeal from the Circuit Court of Cook county; the Hon. HUBERT H. EDWARDS, Judge, presiding. Judgment for defendant reversed; judgment in favor of plaintiff for $30,000 with interest from the date of the verdict.


September 14, 1960. Rehearing denied September 28, 1960. Opinion Modified September 30, 1960. Memorandum on Petition for Rehearing,

This is an appeal from an order of the trial court setting aside a verdict for plaintiff in a contract action, and entering judgment for defendant notwithstanding the verdict.

Plaintiff sued as an assignee of Royal Metalcraft Corporation (hereinafter referred to as Royal), not a party to this proceeding. The subject matter of the alleged assignment was an order for the purchase of 50,000 aluminum toilet seats given by Square Deal Plumbing & Heating Supply House, Inc., (hereinafter sometimes referred to as defendant) to Royal. Plaintiff claimed damages for breach of that contract by reason of defendant's refusal to accept the toilet seats. Defendant admits the refusal, but relies on two defenses: (1) that the document purporting to be an assignment was not an assignment; and (2) that plaintiff failed to tender delivery of the merchandise within the time provided by the contract.

On the first point, both parties presented parol evidence to support their respective views as to proper construction of the purported assignment, although defendant now contends it is clear on the face of the document that it is not an assignment and therefore parol evidence was not proper. On the second point, plaintiff replied that the provision with respect to the date of delivery was waived, and introduced evidence to support its position.

On these issues the case was submitted to the jury which returned a verdict in favor of plaintiff. Defendant moved for judgment notwithstanding the verdict. It also made a motion for a new trial. The trial court overruled the motion for a new trial and for a directed verdict, but sustained the motion for judgment notwithstanding the verdict. The court did so not upon any grounds theretofore urged by defendant, but upon the ground that the assignment was only a partial assignment and that therefore in accordance with certain authorities cited by the trial court which we will hereinafter consider, Royal was a necessary party to any action on the contract brought by the assignee against defendant.

In this court defendant takes the position that while the trial court based its action on the ground that the assignment was a partial assignment only, the judgment should nevertheless be affirmed if it was proper for any reason, and it bases its principal argument on the ground that the purported assignment was no assignment at all.

In stating the facts of this case, it is to be borne in mind that if there is any evidence in the record favorable to plaintiff which with all reasonable inferences that might be drawn therefrom supports plaintiff's case, the court erred in rendering judgment notwithstanding the verdict. Lindroth v. Walgreen Co., 407 Ill. 121, 94 N.E.2d 847; People ex rel. Simpkins v. Village of Kincaid, 26 Ill. App.2d 68, 167 N.E.2d 698; James v. Checker Taxi Co., Inc., 22 Ill. App.2d 22, 159 N.E.2d 12; Romines v. Illinois Motor Freight, Inc., 21 Ill. App.2d 380, 158 N.E.2d 97; Parrucci v. Kruse, 12 Ill. App.2d 30, 138 N.E.2d 91. Therefore in stating the facts, we will accept that evidence which plaintiff relies on to support its case.

Plaintiff operated an aluminum foundry. Defendant was engaged in the manufacture and distribution of plastic coated aluminum toilet seats. Royal's business was that of manufacturing and selling aluminum toilet seats. On August 27, 1947, defendant and Royal entered into a contract termed a "purchase requisition," under which defendant agreed to buy and Royal agreed to sell 50,000 seats at $5.55 per unit.

Some time prior to the execution of the contract between defendant and Royal, Royal's president, desiring to get the company out of manufacturing and devote it to selling, attempted the sale of Royal's processes, patents, equipment and inventory to plaintiff. A representation was made by Royal's president to the chairman of plaintiff's board of directors that Royal would be in a position to obtain a firm order for 50,000 seats from defendant, and that Royal would assign that order to plaintiff as part of its assets. On August 27, the date of the purchase order, Royal's president and plaintiff's chairman visited defendant Square Deal's president in the latter's office. There the proposed sale from Royal to plaintiff was discussed, and the president of Square Deal expressed his interest in establishing a relationship with plaintiff which would give it the seats required by the order within the shortest time, because he feared that Royal's manufacturing facilities were inadequate to meet the demand. Then, Square Deal's president signed the purchase order, handed it to the chairman of plaintiff, and together, Royal's president and plaintiff's chairman went to the office of plaintiff's lawyer. There, other instruments were prepared under great stress and urgency, as testified to by the lawyer who drafted the documents. One of those instruments was Exhibit 8, the document purporting to be the assignment around which the principal controversy in this case revolves, which we will quote in full when we consider the effect of that instrument.

They also executed a contract, referred to as Exhibit 10, between Royal and plaintiff providing for the sale by Royal to plaintiff of the toilet seat manufacturing business. It was a lengthy document and among its recitals, which we will consider later, was one stating that "Royal has concurrently herewith assigned to Ebaloy its interest in a firm order for 50,000 toilet seats covered by this agreement. . . ." This statement with respect to assignment was repeated several times in the instrument. Exhibit 8, the assignment instrument, was physically stapled to the purchase order and has never been out of plaintiff's possession.

Plaintiff met with difficulties in the procurement of materials and manufacture of the seats and was unable to make the initial delivery of 2500 seats as required by the purchase order. However, delivery of some seats subsequently began and continued until some 2600 seats had been delivered by December 1947, the time within which under the terms of the purchase order over 7500 seats were to have been delivered. These delays, according to plaintiff's evidence which for this purpose we must accept, were acceded to by defendant's president on a visit to plaintiff's plant in October 1947, where he expressed satisfaction with the product. On that visit technical difficulties which caused the delay were explained to him, and he agreed to take the seats as soon as they were made available to him. On that date he also signed a sample seat bearing the legend that it was to be the standard which plaintiff would use in the manufacture of the 50,000 seats. Plaintiff delivered 2600 seats in the succeeding period of four or five weeks. Then early in December 1947, defendant refused to accept a delivery of 636 seats and never gave a reason therefor until after suit was brought, although asked to do so by plaintiff. There was evidence that at about this time wooden toilet seats were coming back on the market in quantity, making it difficult to sell metal seats. Plaintiff eventually disposed of the refused seats, of the seats in production at the time of defendant's rejection, and of the remaining inventory. It then brought this action in 1952 for damages resulting from defendant's alleged breach of contract.

We will first consider the propriety of the admission of oral evidence to explain the meaning of the assignment in question. Defendant contends that it is not ambiguous, and that its meaning is apparent from the face of the document. The document, Plaintiff's Exhibit No. 8, reads as follows:

"For and in consideration of the sum of One Dollar ($1.00) and other good and valuable considerations, the receipt and sufficiency of which is hereby acknowledged, Royal Metalcraft Corporation, an Illinois corporation, does hereby seal, assign, convey and deliver unto Ebaloy, Incorporated, an Illinois corporation, all of its rights, title and interest in and to the manufacture of 50,000 toilet seats from Square Deal Plumbing & Heating Supply House, Inc., Chicago, Illinois, at a price of $4.50 per unit, subject, however, to the right of the undersigned to collect the full amount of the purchase price set ...

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