Crest Corp. v. Coffee Products of America, Inc.

FRICKE, J., pro tem. Appellant was the producer of a device to make coffee by the drip method. Joannes Corporation, a predecessor in interest of respondent and who took part in some of the transactions here involved, was engaged in the preparation and sale of coffee and had worked out a plan to stimulate sales whereby the retail purchasers of its product could secure drip coffee makers without cost. For simplicity Joannes Corporation and its successors- will be referred to hereinafter as the respondent. Negotiations between the parties resulted in appellant, by letter dated August 15, 1928, summarizing the previous oral and written communications and reciting that respondent was to purchase within one year from the receipt of the first shipment a minimum of 30,000 coffee machines, each machine to have inclosed in its carton certain filter sheets for use in the machines. The letter further recites that the net price for each machine is to be 86 cents and that the terms on the first order “are 30 days net from date of withdrawal and any balance on hand January 2, 1929, will be billed to you at that time. On future orders terms will be ten days net from date of withdrawal”, deliveries to be in lots of not less than 2,500 each. The letter also referred to the agreement that the covers of the coffee makers were to be embossed with a special inscription including the name of respondent’s brand of coffee, and the carton containers and other included printed [169]matter were to specially refer to respondent and its product. There was also included, along with other matters not necessary for consideration here, a statement of the agreement that within certain territory respondent was to be the only coffee roaster' company with whom appellant would contract. In its reply to this letter the sales manager of respondent wrote that they did not remember having agreed to purchase any specific number of the machines or any further quantity than the order given, but otherwise took no exception to the statements in the letter to which it was an answer.

There seems to be no controversy as to the nature of the transactions in which respondent bought coffee makers from appellant under the above agreement, under which the parties dealt for several years. However, early in 1930 appellant of its own initiative advised respondent that there was on hand at the manufacturing plant a quantity of the coffee makers not completely assembled, and offered these machines at a price substantially less than that charged for previous deliveries; and by its written order of March 28, 1930, respondent ordered 1464 dozen of such articles at 56 cents each, “to be paid for monthly for quantity used each month”, and by written order of June 27, 1930, ordered 60 coffee makers “to be paid for 30 days after disposal”.