Orange County Machine Works v. Republic Heater Corp.

MUSSELL, J. This is an action to recover a balance of $886.91 due on an open book account for goods, wares, merchandise and labor furnished defendant corporation by plaintiff. Defendant filed an answer and cross-complaint in which it is alleged that plaintiff appropriated to its own use 100.85 tons of scrap steel which was the property of cross-complainant, to cross-complainant’s damage in the sum of $2,304.28; that cross-complainant purchased from plaintiff machine works certain dies, which, by the terms of a written contract, were to be “operable and complete”; that said dies when delivered were not as specified in the agreement and cross-complainant was damaged in the sums necessarily expended in making them “operable and complete.”

The trial court rendered judgment for plaintiff on the complaint for $886.91 and costs, judgment for the sum of $2,304.28 in favor of cross-complainant for the value of the scrap metal, and the sum of $1,601.76 expended by cross-complainant for making 12 and 14 inch dies operable. Plaintiff appeals from the judgment in favor of the cross-complainant.

In March, 1951, plaintiff Orange County Machine Works, which was engaged in the manufacture of tank heads and with [544]the processing of steel (hereinafter referred to as “Machine Works”) agreed to fabricate heater heads and bottoms for defendant Republic Heater Corporation (hereinafter referred to as “Republic”). Republic agreed to and did furnish the steel necessary for the fabrication of these products. Both parties to this agreement knew that there would be a certain amount of scrap steel or “clippings” resulting from the fabrication. However, there was no discussion as to the disposition of this scrap steel until a few months after the first purchase order was received, when Mr. Coombs, president of Machine Works, received a telephone call from Mr. Rountree, purchasing agent for Republic, informing him that Mr. Stevens, president of Republic, wanted the scrap from the tank heads. Mr. Coombs then stated that Stevens was not entitled to it; that it was not the general practice and “it wasn’t in the agreement at all that he should get the scrap.” Coombs refused to deliver the scrap to Republic and subsequently sold' it. There was testimony that the reasonable value of the scrap steel involved was $2,304.28 and there seems to be no dispute as to this valuation or as to the quantity of such steel being 100.85 tons.

Appellant argues that the trial court’s finding that plaintiff appropriated the steel to its own use and that it was at all times the property of Republic is not supported or established by the evidence. While it is true that after Republic’s first demand for the scrap, it made no further demand therefor for some time after the delivery of materials by Machine Works had ceased in 1952, there is nothing in the record indicating that Republic transferred title to this scrap and there was evidence given by a dealer in such scrap that customarily the scrap belonged to the person who furnished the sheet steel. It also appears from invoices furnished by Machine Works that the heater heads and bottoms were made from “customer” material. Appellant contends that the parties adopted a practical construction of the agreement and that by reason thereof any scrap metal belonged to Machine Works. The fact that Republic did nothing further about the scrap steel after the telephone conversation until the conclusion of their business arrangements in March, 1952, does not in our opinion amount to an estoppel or an agreement to transfer title to the scrap to the Machine Works. Estoppel was not alleged or proved and cannot be here considered. (Bruner v. Van's Markets, 103 Cal.App.2d 135, 143 [229 P.2d 56].)