Julius Kayser & Co. v. Textron, Incorporated

228 F.2d 783, 1956 U.S. App. LEXIS 3514
CourtCourt of Appeals for the Fourth Circuit
DecidedJanuary 5, 1956
Docket19-4332
StatusPublished
Cited by14 cases

This text of 228 F.2d 783 (Julius Kayser & Co. v. Textron, Incorporated) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Julius Kayser & Co. v. Textron, Incorporated, 228 F.2d 783, 1956 U.S. App. LEXIS 3514 (4th Cir. 1956).

Opinion

R. DORSEY WATKINS, District Judge.

Julius Kayser & Co., (Kayser), a New York corporation, sued Textron, Incorporated (Textron), a New Jersey corporation, for damages for alleged breach of agreement by Textron to accept an assignment of a lease from Kayser. The District Court at Anderson, S. C., sitting without a jury, found that there was a misunderstanding and mutual disagreement of Kayser and Textron upon the terms of the alleged assignment, and that the parties did not intend to be bound by any agreement until it had been reduced to writing and signed. 132 F.Supp. 49. The Court therefore entered judgment against Kayser, finding it unnecessary to pass upon the additional defense of Textron that the South Carolina Statute of Frauds, (Code of Laws of South Carolina, 1952, Section 11-101) was applicable but that there had been no compliance with its provisions.

Kayser has appealed. In our opinion, there is substantial evidence to support the judgment of the District Court, which will be affirmed.

As one of the principal contentions of Textron, with which the District *785 Judge agreed, is that the language of the alleged agreement is susceptible of more than one interpretation and that the parties were in disagreement as to the proper interpretation, this court, may consider and construe the negotiations in the light of the situation and relation of the parties and the circumstances surrounding them, the nature of the subject matter, and the apparent purpose of the proposed agreement. City of Greenville v. Washington, American League, 205 S.C. 495, 32 S.E.2d 777; Breedin v. Smith, 126 S.C. 346, 120 S.E. 64; Holliday v. Pegram, 89 S.C. 73, 71 S.E. 367.

Since much of the evidence dealing with what the parties had in mind as to the terms of the proposed agreement likewise relate to, or bear upon, whether an agreement, if reached, was to become binding until reduced to writing and signed, no separate statement of facts on these two points will be made.

Kayser had about the middle of 1952 completed in Liberty, S. C., at a cost of -approximately $630,000, a 50,000 square foot plant designed for finishing and dyeing women’s full-fashioned hosiery. On or about July 25, 1952, Kayser sold the land and improvements to Lincoln National Life Insurance Company (Lincoln), an Indiana corporation, for $665,-000. On the same day Lincoln leased the premises to Kayser for 15 years at a rental of approximately $61,000 a year, which would amortize Lincoln’s purchase price, with interest at 4 y2% per annum, over the original term of the lease. Kay-ser was given the option of five 5-year extensions at a rental of approximately $13,300 per year. The lease further provided that without written consent of Lincoln, Kayser or a subsidiary thereof might make alterations, additions, improvements, remove walls and extend the basement, but such rights expressly did not pass to an assignee. The lease otherwise permitted assignment by Kayser, such assignment not, however, releasing Kayser from liability for full performance of the lease.

Kayser installed some machinery and began some very small scale operations. In December 1952, or early 1953, Kay-ser decided to abandon all operations at the Liberty plant, and this was done shortly thereafter.

Textron in 1952 had decided to move, over a two-year period, its operations, including tricot operations in Connecticut, to the South. By July 8, 1953, it had a building well under way at Wil-liamston, S. C., to house its throwing machinery for twisting rayon yarn, and also its tricot operations. There developed a serious question whether adequate water was available for tricot dyeing, and a member of the Textron Board of Directors, whose engineering company had built the Kayser plant at Liberty, suggested that plant might be available. The situation was investigated through Alester Furman, a South Carolina broker, by Royal Little (Little), then Chairman of the Board of Textron. Little concluded that the building area was satisfactory but that the office was too elaborate; tiled walls had been installed unnecessarily, and the plant had twice the boiler capacity Textron would need.

On July 8, 1953, Little met with Raymond C. Kramer (Kramer), Chairman of Kayser’s Board, in Kramer’s office in New York. Little knew in general of the Kayser lease, but at that time had not seen it, and assumed it was on the basis of Kayser’s cost, or $630,000. Little agreed that Textron could use the Liberty plant, but thought Kayser had paid too much for its construction. Little insisted Textron could build an adequate plant of the same size for $500,000 or $10 a square foot, and that he was in no hurry to install the tricot machinery On the theory that the plant had cost Kayser $630,000, Little insisted that any assignment not be effective until September 1, 1954, by which time Kayser would have paid enough rent to reduce the balance on the original lease to approximately $500,000. Kramer wanted the assignment effective January 1, 1954. When Kramer pointed out that the interest rate in effect incorporated in the lease was 4%%, Little agreed that this *786 was a lower rate than Textron would have to pay if it financed the construction of a new plant, and the parties compromised on April 1, 1954. Little also agreed that Textron would pay Furman a commission of $10,000.

The foregoing facts are either agreed upon or not in dispute.

Kramer testified that although Little was insistent that Textron would not “occupy” the plant until September, 1954, Kramer insisted that provision should be made with respect to “earlier occupancy” by which he meant occupancy for rewiring, installation of machinery, storage, office space or any purpose; and that it was agreed that Textron would pay rent, insurance and taxes on a pro rata basis for any time the plant was “occupied” prior to April 1, 1954. Little testified that it would require three to four months to reverse the lighting, change the dye house, rewire, and install machinery; that he knew Textron would not get “manufacturing” operations going before April 1, 1954, and he was willing to pay advance rent if Textron had “manufacturing operations going prior to that date.” In response to questions designed to elicit the exact language used, Little said he believed Kramer used the word “use”; he did not think Kramer used the word “operations”. Little used the word “operations”, by which he meant “manufacturing operations.”

Under date of July 8, 1953, Kramer sent to T. Frank Watkins of Anderson, S. C., a memorandum of purported agreement of Little and Kramer, under the impression Watkins would represent both parties. Included were the following provisions:

“2. Textron will assume all obligations under the lease beginning April 1, 1954.
“5. Textron is to have the right to earlier occupancy than April 1st by paying Kayser a pro rata part of the total annual lease and taxes for any month or fraction thereof.”

Little, who was going to Europe, turned matters over to W. D. Mewhort, Textron’s, treasurer, and so advised Kramer on July 14, 1953.

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Bluebook (online)
228 F.2d 783, 1956 U.S. App. LEXIS 3514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/julius-kayser-co-v-textron-incorporated-ca4-1956.