On appeal from the Superior Court, Law Division.
For reversal -- Chief Justice Vanderbilt, and Justices Case, Oliphant, Wachenfeld, Burling and Ackerson. For affirmance -- None. The opinion of the court was delivered by Wachenfeld, J.
This case comes to us from the Superior Court, Law Division, by an appeal certified on our own motion. It concerns the sale by the plaintiffs to the defendant of a large quantity of drill jig bushings, and the conflicting claims and counterclaims growing out of that transaction.
The factual situation is complex and covers a period of several years. In 1946, one Einsiedler, now president of the Accurate Bushing Company, bought all of the plaintiffs' business, including machines, machine tools, trade names, raw materials and unfinished inventories, but excepting the real estate and the finished bushings. He agreed at the same time to create the defendant corporation which would buy the real estate and the finished inventory.
This subsequently was accomplished and by separate agreement, made on September 25, 1946, the plaintiffs agreed to sell to the defendant their entire finished inventory of bushings. It is from this contract the present controversy arises. Other phases of the transaction have previously been litigated. Massari v. Einsiedler, 6 N.J. 303 (1951).
The contract covered upwards of 218,000 bushings in 3,600 assorted sizes and recited:
"2. The Purchaser hereby agrees to purchase the aforesaid finished bushings, as set forth in the schedule annexed hereto and aforementioned, for the price set forth in said schedule, being the cost price to the Sellers of said bushings, and promises and agrees to purchase all of said bushings within the termination of two years from the date hereof, it being further agreed that the purchaser may purchase bushings in any quantities at any time during said period."
It contained no express warranty by the plaintiffs other than that of title and possession. The defendant suggests an express warranty might be spelled out by an examination of "Schedule A" which is referred to in the contract as a description of the inventory to be sold and which in turn refers, by symbol numbers, to the plaintiffs' catalog which contained dimensional standards and specifications established by the American Standards Association and adopted generally throughout the industry. Neither the plaintiffs' nor the defendant's appendix, however, contains "Schedule A" or pertinent excerpts from the catalog and they are not before us, although they were alluded to and apparently in the possession of counsel on oral argument.
The total purchase price to be paid over the two-year period, as detailed in Schedule B, attached to and incorporated by reference into the contract, was $45,404.50, representing the cost to the sellers, although the appraised price, as determined by an independent appraiser engaged by the plaintiffs was $172,368.09. Paragraph 5 of the contract, apparently in explanation of the price discrepancy, sets out:
"The Purchaser understands that the price offered by the Sellers for the bushings which are the subject of this agreement is made only by reason of the fact that a substantial part of the bushings are of not readily saleable and obsolete sizes, and that the purchase of all of the bushings, the subject of this agreement, is of the essence hereof."
The time for payment was set forth in paragraph 3 as follows:
"The Purchaser hereby agrees that upon the purchase of any such bushings during the aforesaid term of two years, it shall make
payment for such bushings as are delivered, within thirty days from the date of delivery, in the due course of business."
The defendant was to have the right to buy the bushings in any desired quantity at any time during the term and agreed, in all events, to complete the purchase of the entire inventory within two years from the date of the contract. Meanwhile, the plaintiffs had the right to continue the storage of the unsold portion, without cost, in the plant which had been purchased from them by the defendant.
The terms "purchase" and "delivery" as used in paragraphs 2 and 3 are not specifically defined in the contract, and the problem is further complicated by the fact there was no no physical act of delivery required since the entire stock of finished bushings remained in the plant taken over by the defendant. It is apparent from the record, however, that when the defendant resold bushings "in substantial quantities," it had the right to draw upon the inventory to fill those orders and such withdrawals constituted a "delivery" to and "purchase" by the defendant obligating it to pay the plaintiffs, within 30 days, for the quantities withdrawn according to the scale of prices set forth in Schedule B.
Between the date of the contract and September 25, 1948, the defendant resold, to its customers, approximately 144,000 of the bushings and paid the plaintiffs $26,124.85 of the purchase price. On the termination date, however, it refused to pay the balance of $19,279.65 but later sent its check for $10,099.40, saying:
"We do not feel that we are, at present, obligated to pay more owing to the fact that it is not possible for us to determine at this time, the total number of defective bushings involved in this transaction."
The plaintiffs rejected the check and, on the same day, October 5, 1948, instituted this action for the balance due on the contract. The defendant counterclaimed alleging many of the bushings were defective, to the knowledge of the plaintiffs and contrary to representations made by them, resulting
in a loss of sales and profits and necessitating an expensive inspection and checking of substantial quantities of bushings, wherefore it demanded in damages $150,000.
The trial consumed about two weeks. The plaintiffs' motions for judgment on the complaint and counterclaim were denied and the case went to the jury, which returned verdicts of $10,000 for the plaintiffs and $10,000 for the defendant. The trial court denied the plaintiffs' motion for a new trial and judgment was entered in these amounts. The plaintiffs appeal.
The verdicts returned by the jury are not supported by the evidence and their amounts bear no reasonable relation to the figures actually in controversy. The defendant's president conceded on the stand the plaintiffs were entitled to an additional $11,043.17 for the good bushings. He calculated the amount due on the counterclaim at $33,625.22. No arithmetical manipulation of the figures mentioned by either side during the course of the trial will produce the result reached by the jury in its $10,000 verdicts on the claim and counterclaim. Such an outcome could only be arrived at either by total failure to consider the evidence adduced or by a compromise based upon a mistaken recollection of the facts and figures elicited during the two weeks of the trial. In either event, the verdict is so far contrary to the weight of the evidence "as irresistibly to give rise to the inference of mistake, passion, prejudice or partiality." The judgment must therefore be set aside under Rule 1:2-20(a) as amended. Hager v. Weber, 7 N.J. 201 (1951); Bazinsky v. Conklin, 8 N.J. 40 (1951); Capone v. Norton, 8 N.J. 54 (1951); Leary v. Gledhill, 8 N.J. 260 (1950); Klein v. Millside Farms, Inc., 8 N.J. 240 (1951).
Since a retrial will probably ensue, it is appropriate to consider and dispose of the specifications for reversal advanced by the plaintiffs.
The first ground is that the court below erred in denying their motion for judgment in the amount of $19,279.65, the unpaid balance of the contract ...