Comstock v. Coronet Heating Supply Co.

Citations: 111 Cal. App. 2d 600; 245 P.2d 357; 1952 Cal. App. LEXIS 1267Docket: Civ. No. 19053

Court: California Court of Appeal; June 13, 1952; California; State Appellate Court

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Defendant appeals an order dismissing its second amended cross-complaint after the court sustained a demurrer with leave to amend, which the defendant did not utilize. The cross-complaint contains two causes of action: the first alleging breach of contract for exclusive sales rights of plaintiff's products, and the second alleging breach of warranty regarding the merchandise's condition. Plaintiff's demurrer claimed both causes were uncertain and unintelligible, failing to specify how the defendant was damaged. The court agreed, affirming that the second amended cross-complaint lacked factual allegations necessary to demonstrate damages resulting from the alleged breaches. A general allegation of damages was deemed insufficient against a special demurrer. Consequently, the order of dismissal was upheld. The document also includes details about the parties involved and the specifics of the sales agreement made in July 1949, which granted the defendant exclusive sales rights for certain heating panels in specified territories.

The Cross-Plaintiff ordered 1,000 heaters on July 28, 1949, based on an agreement and subsequently arranged for several jobbers in Northern California to distribute these heaters. From June 1949 to July 1950, the Cross-Plaintiff sold various quantities of heaters to these jobbers, who installed them in local homes. Despite warranties from the Cross-Defendants that the heaters would be in good condition, all units were defective, with issues related to the paint burning off the grills. In July 1950, the grills were replaced with a baked enamel version, resolving the defects. 

During this period, the Cross-Plaintiff invested $5,000 in marketing, advertising, and plant expansion, ultimately establishing a profitable market in Northern California that earned approximately $10,000 between July 1950 and July 1951. On July 5, 1950, the Cross-Defendant, Modern Metal Products Company, informed the Cross-Plaintiff that Jordan Supply Company was appointed as their exclusive jobber in the region; previously, the Cross-Plaintiff had received orders from Jordan Supply as early as June 1949.

In February 1950, without consent, Modern Metal Products Company employed Charles H. White to circulate a price list undercutting the agreed prices and to solicit the Cross-Plaintiff’s customers in the designated territory. This led to the Oakland Sheet Metal Supply Company selling heaters at a loss, which ultimately caused them to cease acting as a jobber for the Cross-Plaintiff.

In March 1950, Jordan Supply Company offered 45,000 B.T.U. Natural Gas heaters at $56.00 each, delivered to the customer's location, within the territory of Oakland Sheet Metal Supply Company. In February 1950, Cross-defendants permitted Charles H. White to sell the same heaters for $52.00 each, with a 10% discount for single units. The market price set by Cross-Plaintiff for a single unit was $118.00, yielding an $8.00 profit per heater sold. Cross-Plaintiff alleges that due to the breach of agreement by the Cross-defendants, they suffered damages amounting to $15,000, plus $8.00 for each heater sold in Northern California (north of Bakersfield) and in Oregon and Washington. Cross-Plaintiff seeks a judgment for these amounts, along with costs and further relief deemed appropriate by the court.

For a second cause of action, Cross-Plaintiff incorporates prior allegations and states that on July 28, 1949, Cross-defendants sold 1,000 Modern Heat Panels at $51.85 each, guaranteed to be in good order. However, the panels were defective, causing damages of $5,000. Cross-Plaintiff requests a judgment of $15,000, an accounting for $8.00 on each heater sold in the specified district, and any profits made by Cross-defendants from those sales, plus costs and additional relief as warranted.