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Cutler-Hammer, Inc. v. Troy

Supreme Court of New York, Appellate Division

December 15, 1953

CUTLER-HAMMER, INC., Appellant,
v.
ARNOLD I. TROY et al., Doing Business as EASTERN METAL PRODUCTS CO., Respondents.

APPEAL from a judgment of the Supreme Court in favor of defendants, entered March 27, 1953, in New York County, (1) upon a dismissal of the complaint by the court at a Trial Term (NEWMAN, J.), at the close of plaintiff's case, and (2) upon the verdict rendered on the counterclaim.

COUNSEL

Page 124

Sidney Holzer of counsel (Reich, Peller, Guadagno & Caine, attorneys), for appellant.

Alvin Miller for respondents.

BREITEL, J.

The court is in unanimous agreement that the determination on the complaint may not be disturbed. Disagreement exists only as to the finding in favor of defendants on the counterclaim. Consequently, attention will be directed to that phase of the case.

Defendants, the Troys, are manufacturers of electrical appliances requiring plastic handles and knobs. Plaintiff, Cutler-Hammer, manufactured these plastic parts for the Troys from dies and molds specially designed and manufactured by Cutler-Hammer in order to fabricate the parts. The dies and molds were billed to the Troys and paid for. On the other hand, Cutler-Hammer relied on documents which supported their claim to title to the dies and molds, but they were unsuccessful in fixing these documents as binding on the Troys. The counterclaim was based on the alleged conversion of the dies and molds by plaintiff, Cutler-Hammer. Each side has continuously claimed title to the dies and molds. Concededly Cutler-Hammer had possession properly of the dies and molds in order to make the parts for the Troys. It has been determined in this case that the Troys are the owners of the dies and molds. The remaining questions under the counterclaim are two, namely, whether the Troys established a conversion by Cutler-Hammer and whether the value of the dies and molds was properly established.

While Cutler-Hammer was manufacturing and selling the plastic parts to the Troys it raised its prices for the parts. The parties disagreed as to the right to do this. During the conversations the Troys asked for the return of the dies and molds in order that they might have the parts fabricated by other manufacturers. Cutler-Hammer refused to deliver the dies and molds. This was on September 22, 1948. It is undisputed that the Troys continued to order and buy the plastic parts made from these dies and molds from Cutler-Hammer. They did this, they say, because otherwise their production of completed electrical appliances would have been frustrated and their business irreparably impaired. As soon as they could, they say, the Troys ordered new dies and molds from another source and transferred their purchases of plastic parts to other manufacturers. This was in November, 1948.

Page 125

The question is whether the September, 1948, demand and refusal are sufficient to ground a claim for conversion of the dies and molds.

The necessity for a demand and refusal to ground a claim for conversion arises when the one upon whom the demand must be made is in lawful possession of the property. Only thus can the continued possession be turned into an unlawful one. Once it is brought home to a possessor of property that another asserts a right to possession, and such possession is refused, there is no further office to be performed by a demand and refusal ( Employers' Fire Ins. Co. v. Cotten, 245 N.Y. 102).

In this case the demand of September, 1948, was met with a refusal, not a conditional one, but an absolute one, presumably based on Cutler-Hammer's claim of title to the dies and molds which claim continued to the time of judgment. (See, e.g., Bradley v. Roe, 282 N.Y. 525, 532-533, as to the effect of a conditional refusal.) Consequently, there could be no valid need for any renewed demand. As stated in a different context of facts but with reference to the applicable principle: 'No precedent imposes such a useless procedure'. (Employers' Fire Ins. Co. v. Cotten, supra, p. 104.)

Did then the Troys waive the conversion of the dies and molds retained by Cutler-Hammer by continuing to purchase plastic parts from Cutler-Hammer? Waiver is always a matter of intention. They did not intend to waive and only did what they could to avoid destruction of their appliance sales. They continued to order parts from Cutler-Hammer until they obtained a substitute set of dies and molds which they ordered in November, 1948. So the witness for the Troys testified:

'I asked him to return the molds so I can give them to another factory. If he had returned my dies I would have given them to another factory and they would have been clear of me and I would have been clear of them. But he refused. He said ...


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