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U.S. Wire & Cable Corp. v. Ascher Corp.

Decided: January 23, 1961.

U.S. WIRE & CABLE CORP., PLAINTIFF-APPELLANT,
v.
THE ASCHER CORPORATION, A NEW JERSEY CORPORATION, DEFENDANT-RESPONDENT



For reversal and remandment -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall and Haneman. For affirmance -- None. The opinion of the court was delivered by Haneman, J.

Haneman

U.S. Wire & Cable Corp. (U.S. Wire) appeals from a summary judgment granted upon the counterclaim of The Ascher Corporation (Ascher).

On January 20, 1956 U.S. Wire, a New Jersey corporation, with its plant located at Union, New Jersey, quoted prices to Ascher, also a New Jersey corporation, with its principal office in Newark, New Jersey, for the sale of wire to be manufactured under certain military specifications. Ascher was purchasing said wire for resale and delivery to L.H. Chant Electric Company (Chant), a New Mexico corporation, which latter corporation, in turn, had contracted with the Atomic Energy Commission for the installation thereof in a test track at Sandia, New Mexico. On February 14, 1956 Ascher confirmed the purchase. The wire was delivered by U.S. Wire directly to Chant. It allegedly failed

to function to the requirements of the Atomic Energy Commission and, having been condemned and rejected, payment therefor to Chant was refused by said Commission. Chant filed suit in the New Mexico courts against Ascher on February 28, 1958, alleging that Ascher had breached an express warranty in that the wire was not manufactured according to specifications and an implied warranty of fitness for the purpose for which said wire was to be used.

By letter dated March 11, 1958 Ascher advised U.S. Wire of the institution of suit by Chant. This communication suggested the necessity of cooperation between Ascher and U.S. Wire in the defense thereof, and advised:

"* * * In the event that the Chant Company is successful in the Albuquerque action, Ascher Corporation will hold your company responsible for any sums that they have to pay to the Chant Company based upon your warranty, as well as all of its costs and expenses that it may incur in defending the New Mexico action."

The concluding paragraph reads:

"We are giving you timely notice of the institution of this law suit and we would like an early indication on your part as to what part you will play in defending the suit."

David N. Ravin, Esq., counsel for U.S. Wire, replied by letter dated April 7, 1958, a portion of which reads:

"In other words, this letter and the proposals contained therein would have to be the basis for an agreement between Ascher and United States Wire and Cable Corp., which would provide that the assistance rendered by United States Wire and Cable would be without prejudice. Frankly, that is the only basis upon which our client would become involved to any extent whatsoever."

On April 10, 1958, on motion of counsel for Ascher, the suit was removed from the New Mexico court to the United States District Court for the District of New Mexico. Ascher, through counsel of its own selection, proceeded to file the ...


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