APPEAL from the Appellate Court for the First District; heard
in that court on appeal from the Circuit Court of Cook County;
the Hon. B. FAIN TUCKER, and EDWARD J. EGAN, presiding.
MR. JUSTICE HOUSE DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 26, 1970.
This case has a long and complicated history. In August, 1956, Weiland Tool and Manufacturing Co. filed a complaint to foreclose a common-law lien upon certain machinery and property of Emerson C. Whitney in the possession of Weiland. Whitney filed an answer and a counterclaim by which he claimed damages for fraud in inducing him to enter into a contract, breach of the contract, and conversion of the property. The circuit court of Cook County entered a decree in favor of Weiland for $12,661.62 plus additional amounts for loading and moving expenses and other items. Upon appeal the Appellate Court, First District, reversed and remanded for disposition of the counterclaim. (40 Ill. App.2d 70.) A petition for leave to appeal to this court was dismissed (26 Ill.2d 628), upon Whitney's motion because of non-finality under then section 75(2)(C) of the Practice Act. (Ill. Rev. Stat. 1963, ch. 110, par. 75.) Upon remand, the trial court entered judgment for Whitney for a total of $19,935. The Appellate Court affirmed, with modifications. (100 Ill. App.2d 116.) We granted leave to appeal.
While the facts are adequately set forth in the original Appellate Court opinion as supplemented in its second opinion, we think it advisable for a better understanding of the lengthy and complicated facts and actions of the several courts to outline the facts and holdings in this opinion.
In June of 1954, Weiland was operating a job manufacturing plant in Chicago. Vincent P. Weiland was the owner and represented that company in all matters material to this case. Whitney owned unassembled machinery and dies for making a product called Hexarmour, a fabricated steel product made of mats 4 feet by 10 feet, which, joined together, are used to reinforce concrete floors. It is made up of cells several inches in diameter, approximately an inch in depth and hexagonal in shape.
Whitney, although a lawyer, had been active in the manufacture of steel products. He planned to market Hexarmour, but he wanted it made by another manufacturer on equipment he, Whitney, owned. He had made such an arrangement with Carl Carlson of Batavia and had delivered his equipment and 300,000 pounds of steel to Carlson. Whitney and Carlson disagreed as to the production capabilities of the machinery and their arrangement was abandoned. Whitney then sought another manufacturer. Through an advertisement and after an initial meeting between Weiland and an employee of Whitney, Whitney and Weiland met on June 29, 1954, to discuss an arrangement under which Weiland's company would manufacture and Whitney would sell Hexarmour. Whitney's steel and his machinery, disassembled and partly in barrels, was in Carlson's plant at that time. This discussion of June 29 and several letters which followed it resulted in such an arrangement.
Immediately following the meeting, Whitney went to Florida, Weiland looked at the machinery and the steel at Carlson's plant, and several letters were exchanged. After the conclusion of this correspondence, on July 14, 1954, Weiland moved Whitney's steel and equipment to its own plant. Weiland found that it could not manufacture in satisfactory quantities with the equipment and could not manufacture at all the product Whitney contends he was required to produce. Whitney claimed the ends of Hexarmour mats were to be straight so that they could be used interchangeably with a similar product, Hexsteel. The Hexarmour mats which could be produced on Whitney's equipment were joined by prongs designed to fit into holes on a companion mat. Whitney claims, in effect, Weiland should have altered the equipment to produce straight edged Hexarmour. Apparently due to this controversy over product design and the fact that Whitney produced no orders the project failed, but not until each party had incurred expense in connection with it. Each accuses the other of breaching the agreement between them.
The parties disagree upon the terms of the agreement and the evidence which may properly be considered in proving and interpreting the agreement. Weiland contends that Whitney represented and warranted his equipment would produce Hexarmour to Whitney's requirements, and that the agreement consists of an oral understanding reached at the June 29th meeting and the four letters that followed it. Whitney contends that the agreement is in writing, is evidenced by only three of the letters, is unambiguous and that extrinsic evidence may not be considered. He urges that this written agreement obligated Weiland to accept the machinery on an "as is" basis and at its own cost to cause it to produce Hexarmour to Whitney's specifications in quantity production.
The evidence relating to what occurred at the meeting of June 29th, as well as to other material matters, is in conflict. The entire project was, of course, discussed at this meeting and after consideration of the record, including the master's report, we are satisfied that Whitney gave definite assurance to Weiland that his equipment, when assembled and with power applied, would produce Hexarmour of the kind Whitney wanted. Although Weiland had viewed the machinery and steel in Carlson's plant prior to the exchange of letters, the condition of the machinery in its disassembled state was such that an inspection at that time would not have disclosed its capacity to produce. After Whitney and Weiland met, they exchanged four letters. The material portions of the first two of these letters read:
Weiland to Whitney, July 2, 1954.
"Weiland will fabricate mats as required by you, using your special hydraulic clinching unit and your Rockford Press, also your dies. * * * You, at your own expense, will move the machinery and steel from Batavia to our plant and set up same for production, including electrical wiring. * * * Apparently some work has to be done on your die, to which we would assign our skilled tool-makers again under Mr. Bedner's instructions.
"Therefore we could come to terms by quoting a cost plus basis using twenty cents as a floor and twenty-four cents [per square foot] as a ceiling. Or if acceptable to you we could go along on a flat twenty-two cent price until more experience can be gained, at which time we could then renegotiate the price.
"It is also understood that you are to furnish all steel for this product and that we are to ...