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Alco Standard Corp. v. F & B Manufacturing Co.
Citations: 281 N.E.2d 652; 51 Ill. 2d 186; 1972 Ill. LEXIS 411Docket: 44098
Court: Illinois Supreme Court; March 30, 1972; Illinois; State Supreme Court
In 1968, F. B Manufacturing Co. (defendant) contracted to purchase an industrial heat treating furnace from Ipsen Industries, a division of Alco Standard Corporation (plaintiff), for $66,595. Upon delivery on July 6, 1968, F. B rejected the furnace due to insufficient size. Following mutual agreement, F. B covered the shipping costs to a California warehouse, where Alco resold the furnace for $57,500. Alco sued to recover the difference of $9,095, along with $505 in interest for "unreasonable and vexatious delay" in payment. The Appellate Court affirmed the $9,095 judgment but reversed the interest award. F. B argued that Alco failed to provide reasonable notification of the resale as required by section 2-706(3) of the Uniform Commercial Code, asserting this was necessary for Alco to recover damages. The appellate court incorrectly interpreted this section as establishing an affirmative defense requiring pleading and proof by the buyer. However, the court noted that F. B's plant manager was informed of a potential buyer, which constituted reasonable notification under the Code. The sales contract allowed Alco to resell after F. B's default, and it was confirmed that the resale was private. The court found no error in the initial judgment for the deficiency claimed by Alco. The contract stipulates that recovery for 'any balance' is only applicable in cases of public resale. The interpretation hinges on punctuation, specifically the absence of a comma after the phrase allowing Ipsen or another person to purchase at public sale, which undermines the argument for recovery at private resale. The provision is interpreted to permit recovery of the difference between the contract price and resale price at both public and private sales. The appellate court found that the trial court incorrectly denied interest for 'vexatious and unreasonable delay,' but the seller's argument for interest under section 2 of the Interest Act is valid. Written contracts for the sale of goods qualify as 'written instruments' under this statute, and precedents support this interpretation. The buyer did not experience prejudice from the trial court's erroneous reasoning regarding interest, leading to the reversal of the appellate court's judgment on interest while affirming other aspects of the decision. Justice Davis abstained from participating in the case.