Source: https://law.justia.com/cases/federal/appellate-courts/F2/388/5/160619/
Timestamp: 2019-10-18 15:46:08
Document Index: 24348617

Matched Legal Cases: ['§ 992', '§ 329', '§ 992', '§ 1023', '§ 1', '§ 1']

Interstate United Corporation, an Illinois Corporation, Appellant, v. Thomas C. White, Appellee, 388 F.2d 5 (10th Cir. 1968) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Tenth Circuit › 1968 › Interstate United Corporation, an Illinois Corporation, Appellant, v. Thomas C. White, Appellee
Interstate United Corporation, an Illinois Corporation, Appellant, v. Thomas C. White, Appellee, 388 F.2d 5 (10th Cir. 1968)
US Court of Appeals for the Tenth Circuit - 388 F.2d 5 (10th Cir. 1968) November 22, 1967
Rehearing Denied En Banc February 12, 1968
On March 25, 1965, Interstate United prepared and forwarded to White a writing which contained all the matters upon which agreement had been reached. The exhibit "A" attached thereto purported to be a list of the vending machines to be sold and delivered, subject, however, to the provision contained in the agreement authorizing an adjustment of price for machines not available at the time of delivery. This exhibit "A" is identified in the record as a February 5, 1965 IBM-run inventory.
The exhibit "A" attached by Interstate United to the final draft submitted to White, identified as the February 5, 1965 IBM-run inventory, was questioned by White. White testified that upon receipt of the final draft he contacted Interstate United's officer with whom he had been negotiating and called attention to the attached exhibit "A". White further testified that in this conversation Interstate United's officer acknowledged that the attached exhibit "A" was a mistake. With this understanding White executed the agreement, substituted the inventory list which had been transmitted with the original offer, and forwarded the documents to his lawyer in Chicago. Thereafter, on April 2, 1965, letters were written by Interstate United to suppliers manifesting the intention to transfer the business as of that date. Other manifestations of transfer as of April 2, 1965, were also offered in evidence by the buyer and denied by the seller.
On April 9, 1965, the parties, with their lawyers and accountants, met at a designated bank in Oklahoma City to conclude the transaction. A disagreement arose as to what should be contained in exhibit "A" and the failure of the parties to agree terminated the entire transaction. White then sued Interstate United for breach of contract.
In its verdict instruction the court determined, "as a matter of law there is ample evidence in this case to establish a valid and enforceable contract between the parties herein if there was in fact a meeting of the minds or agreement of both plaintiff [appellee] and defendant [appellant] that the Tom White Exhibit A should be attached to the contract." Joseph E. Seagram & Sons, Inc. v. Shaffer, 310 F.2d 668, 675 (10th Cir. 1962). Thus, the only issue upon which there was disagreement was submitted to the jury. On conflicting evidence the jury found the "Tom White Exhibit A" was the one on which there was agreement and the minds had met. This finding completed the contract for the sale of a going business and sealed the bargain of the parties thereto.
The manifestations of authentication include the seller's preparing of the final draft, requiring a consent for assignment of the lease transferred under the contract releasing the seller from its obligations, and directing letters to suppliers advising them the Oklahoma business was being sold to White, "effective close of business, Friday, April 2, 1965." The record also indicates Interstate United attended the April 9 closing with all documents necessary to effectuate finality of the transaction. Such documents included " [c]ertified resolutions of the board of directors and stockholders of the two selling corporations and of the board of directors and executive committee of Interstate United corporation."
The rule on measure of damages is easily stated but difficult of application. All authorities agree that the person aggrieved by a breach is entitled to be put where he would have been had the contract been performed, the status to be determined by the net amount of loss caused and gains prevented by the defendant's breach, in excess of savings made possible. 5 Corbin on Contracts §§ 992, 1002 (1964); Restatement of Contracts § 329 (1932); Liberty Navigation and T. Co. v. Kinoshita & Co., Ltd., Tokyo, 285 F.2d 343, 350 (2nd Cir. 1960). These working rules "are never capable of exact and perfect application." 5 Corbin on Contracts § 992 (1964).
The business to be sold was an automatic vending machine business with vending machines located in strategic places where people were apt to patronize them. Since it was an established business a "reasonable prediction" could be "made as to its future on the basis of its past history." 5 Corbin on Contracts § 1023 (1964). In this regard a determination of the business value was made on the basis of the estimated gross income which was determined by past and projected sales multiplied by estimated earnings of 7%, multiplied again by a rule of thumb multiplier of between 5 and 15 which was supplied by expert opinion. White, as well as other qualified witnesses, applied this formula.
The two exhibit "A"s are the only inventory lists which were prepared or attached to any offers or drafts during the entire negotiations
The agreement contained a provision that the law of Illinois would be the applicable law of the contract: 1965 Ill.Rev., Stat., Ch. 26, §§ 1-206, 2-201; Ch. 59, § 1, 2