Cutler v. Kuster

THOMPSON (R. L.), J.

This is an appeal from a judgment for the defendants in an action for damages in an assigned cause of action for breach of a contract.

The complaint contains three counts. The defendants were copartners doing business under the firm name of American Grease Company. The American Refining and Manufacturing Company was a corporation engaged in manufacturing and selling “Jazz grease” and “Jazz grease .tanks.” The grease was used for lubricating differentials and transmissions of motor vehicles. The first cause of action alleges that on July 7, 1924, the parties to this action executed, the written contract which is set forth in the pleading, by the terms of which the defendants were granted exclusive sales right to handle the American Jazz Grease Machine in Los Angeles County for a term of ten years; .that 193 of said grease machines, together with a truck and certain accessories, were sold and delivered to the defendants for a total consideration of $6,431.15, to be paid in

[116]

specified installments; that the stipulated value of the grease machines was $30 apiece. The contract further provides that the corporation “agrees to furnish distributors [defendants] grease” of “standard quality” in drums at four cents a pound and to supply it in bulk at three and a half cents a pound; that “as an essential and indispensable part of said grease machine, a measuring device attached thereto,” would be loaned to the distributor free of charge, .“provided, however, that said distributor agrees not to use said measuring device for the dispensing of any grease other than that furnished by said company.” Except the foregoing provision, there is no covenant contained in the contract with relation to the defendants’ obligation to buy or use the vendor’s “Jazz grease.” The complaint further alleges that the corporation subsequently leased to the defendants 208 additional “Jazz grease machines,” together with accompanying measuring devices; that pursuant to said contract the corporation sold and delivered grease to the defendants until about November 1, 1924, after which time the defendants refused to accept or purchase grease from the corporation. It was then alleged the American Refining and Manufacturing Company became bankrupt. A referee was duly appointed. May 1, 1925, upon proceedings duly had in the matter of the estate of said bankrupt corporation, the entire assets of its estate were sold to C. E. Spencer for a valuable consideration; that said order of sale contained the following provision, “the sale of all of the remaining assets of the estate, including accounts receivable, ehoses in action, ... be and the same is hereby confirmed and said trustee is authorized ... to deliver . . . on receipt of the purchase price the necessary assignments . . . ”; that pursuant to said order the title to the chose in action, represented by the present action, was assigned and transferred to the said Spencer, who subsequently assigned his interest in this cause of action to the plaintiff. Finally it is alleged that after the defendants refused to accept delivery of grease from the corporation, it made a contract with the Union Oil Company to deliver to the defendants “all the grease to be used in said ‘Jazz machines' ” for the balance of the ten-year term covered by the first mentioned contract for a consideration which would “make a profit [for the corporation] of one dollar per month for