American Aeronautics Corp. v. Grand Central Aircraft Co.

317 P.2d 694, 155 Cal. App. 2d 69, 1957 Cal. App. LEXIS 1250
California Court of Appeal·Decided November 8, 1957·No. Civ. 22170·Published·Cited by 26 cases

Opinion

VALLÉE, J.

Appeal from a judgment rendered in two consolidated actions. There was one set of findings and one judgment applicable to the two actions. American Aeronautics Corporation is plaintiff and cross-defendant in action 634602 and defendant and cross-complainant in action 637534. Grand Central Aircraft Company is defendant and cross-complainant in action 634602 and plaintiff and cross-defendant in action 637534. The judgment was adverse to American in both actions and it appeals.

Action 634602

The complaint is in two counts: the first seeks recovery of an F-51D type aircraft; the second is for damages for detention of the aircraft. Grand Central answered, alleging a possessory right to the aircraft based on a lien for labor performed and materials furnished under the terms of an oral agreement with American embodied in a written contract. Grand Central cross-complained, alleging an oral agreement with American for reconstruction and assembly of two F-51D aircraft on a time and material basis; that the agreement was later reduced to writing; and that delayed completion of work on one of the aircraft and prevention of completion of work on the other was due to failure of American to deliver necessary parts and notice from American to cease work. Grand Central prayed for a declaration of its right to possession of *72 both aircraft, pending payment for labor performed and materials furnished, and also for damages. American answered the cross-complaint, admitted the making of an oral agreement, alleging it was for the reconstruction and assembly of two aircraft at an estimated contract price with an agreed maximum and a fixed delivery date, and that it refused to execute , the written contract on the ground it did not conform to the oral agreement.

About July 12, 1954, Major Cerruto, representing the Republic of Bolivia, contacted Strube, president of American, with respect to the purchase by Bolivia of one F-51D fighter plane and one F-51D dual trainer. About a week later Cerruto and Strube agreed on prices. On July 26 Strube contacted Keithley, manager of operations of Grand Central, and told him American wanted Grand Central to build the planes by overhauling miscellaneous components and materials in the possession of American, and that he wanted a firm price on the job. Keithley told Strube he would take it up with Grand Central’s management and contact him.

On July 27 Keithley met with Strube and Cunha of American. Keithley made a tour of American’s shop and inspected parts to be used in construction of the planes. The engines were not there. Keithley told Strube he would not give him any fixed or ceiling price on the job; and that Grand Central would take the job on a time and material basis at $4.15 an hour for labor, and at cost plus 10 per cent for materials furnished by Grand Central. Strube stated the engines he had were new and would require only a top overhaul. Keithley told Strube that about 35 working days would be required to construct the fighter. There was no talk about a delivery schedule on the trainer.

On July 28 Keithley met with officials of American and checked various parts proposed to be used in construction of the planes. On July 29 Keithley wrote American “that on the basis of our investigation of July 28, 1954 we have found you to be in possession of the components and assemblies which will allow the complete build-up of two (2) F-51D type aircraft.”

On July 29 Strube, Frankel, and Cunha of American met with Johnson, general manager of Grand Central, Keithley, and Carpenter, secretary-treasurer of Grand Central. Strube said he was going to put the job in Grand Central’s hands. Johnson said Grand Central would take the job on a time and material basis at $4.15 an hour for labor, and it would *73 furnish materials at cost plus 10 per cent. Strube said that was satisfactory. Keithley said Grand Central would be able to construct the fighter in 35 working days provided it was given the materials and the trainer would be delivered on receipt of the parts and a conversion kit as soon as possible after completion of the fighter.

Prankel and Carpenter left the July 29 meeting and went to Carpenter’s office “to arrange a contract.” Carpenter told Prankel Grand Central’s regular contracts were time and material contracts and the rate would be $4.15 an hour with premium time for overtime, and materials furnished would be at cost plus 10 per cent, and Grand Central would require a deposit before starting work. Prankel said that would be satisfactory, and a deposit of $4,000 was agreed to. Carpenter told Prankel he would give him a memorandum and prepare a contract.

On July 30. Carpenter wrote Strube the $4,000 deposit would be made on delivery of the parts; further payments of $4,000 would be made each week starting August 9, 1954, until completion of the work; and “As soon as the specifications have been received by our Mr. Keithley, a contract will be prepared and the above schedule of payments incorporated therein. It is understood that the job is for time and material. The direct labor rate for straight time will be $4.15 per hour and an additional premium for overtime and double time will be charged. This will be detailed in the contract to. perform the work. ’ ’ Strube did not reply.

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American Aeronautics Corp. v. Grand Central Aircraft Co., 317 P.2d 694, 155 Cal. App. 2d 69, 1957 Cal. App. LEXIS 1250 (Cal. Ct. App. 1957).

317 P.2d 694 (American Aeronautics Corp. v. Grand Central Aircraft Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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