Townsend Pierson, Inc. v. Holly-Coleman Co.

KINCAID, J., pro tem.

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This appeal is taken by defendants, hereinafter referred to as “Holly,” from a judgment in favor of plaintiff, who will be called “Pierson,” in the sum of $5,758.01, with interest of $2,153.30, or a total judgment of $7,911.31, plus costs of suit.

The complaint contains several causes of action and is for claimed breach of contract and for damages. A cross-complaint for damages was filed by defendants, the findings as to which are adverse to them.

Holly had a prime contract with the United States Government, Navy Department, to make airplane starters. What defendants call a tentative target price of $358.60 per starter was agreed upon until some 339 starters were built. Then Holly and the Navy agreed to what is termed a firm target price of $687.10 per starter, subject to final renegotiation. Holly was to receive 10 per cent on any savings under such renegotiation.

As a part of the firm target price figure, the sum of $30 per armature was allocated. This armature was a small but essential part of the starter.

The court found on substantial evidence that on January 30, 1952, Pierson agreed through a written purchase order to fabricate for Holly 1869 armatures, predicated upon a tentatively expressed unit price of $24.67. By terms of the agreement Holly was required to furnish certain essential parts and materials. These items were not provided by defendants on schedule thus causing production delays and consequent monetary loss to Pierson. In recognition of these facts and in consideration of plaintiff continuing to furnish the armatures at the agreed price when and as such parts and materials were provided, Holly agreed to make available to the plaintiff such additional sums relating to the subject matter of their agreement as they might procure upon price re-negotiations of defendants’ own prime contract with the

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United States Navy. In reliance thereon plaintiff continued the fabrication and delivery of the armatures and, but for this oral modification of the written purchase order agreement, would not have done so.

The court further found that thereafter and on or before July 26, 1953, Holly secured from the Navy upon such renegotiation an increase in excess of $5.33 per unit for each of said armatures and that by virtue thereof there was made available to Holly a sum in excess of $5.33 per unit over and above the original unit price of $24.67; that by reason of said executed oral agreement of modification and of the collection of these additional amounts on renegotiation of the prime contract Pierson is entitled to an additional $5.33 for each of the 1869 armatures delivered to defendants under the completed purchase order.