Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

RECONSTRUCTION FIN. CORP. v. COMMERCIAL UNION OF A

March 25, 1954

RECONSTRUCTION FINANCE CORP.
v.
COMMERCIAL UNION OF AMERICA CORP. COMMERCIAL UNION OF AMERICA CORP. v. RECONSTRUCTION FINANCE CORP



The opinion of the court was delivered by: GODDARD

Motion by Commercial Union on March 18th to reopen the case to take the testimony of O'Halloran, an employee of the Foreign Economic Administration and United States Commercial Company at the time of the transaction. He was not called at the trial.

The Reconstruction Finance Corporation filed its suit on April 13, 1949, and Commercial Union filed its action on June 26, 1952. Several pretrial conferences were held from December, 1952 to June, 1953, at which numerous documents were marked for identification, some of which were authored by O'Halloran. The trial began on January 12, 1954, and ran for four days, ending on January 15th, during which no application for an adjournment was made. Briefs were filed by both sides on February 15, and 17th. Now Commercial Union seeks to reopen the case. It has not been shown that O'Halloran was unavailable previously nor that any attempt to locate him was ever made until now.

 After a case has been closed, whether or not it should be reopened is within the sound discretion of the trial court. Philadelphia & Trenton R. R. Co. v. Stimpson, 14 Pet. 448, 39 U.S. 448, 10 L. Ed. 535. Though it may be permitted in a proper case, it has been called a 'pernicious practice'. Missouri Pac. Ry. Co. v. Oleson, 8 Cir., 213 F. 329. Where a party has not shown diligence in procuring a witness, the reopening of the case may be denied. Cincinnati, N. O. & T. Ry. Co. v. Cox, 6 Cir., 143 F. 110.

 I do not think that Commercial Union has been properly diligent in obtaining this witness, and I deny the motion to reopen the case.

 Settle order on notice.

 On the Merits.

 The Reconstruction Finance Corporation [hereinafter referred to as the R.F.C.] filed its suit for breach of contract against the Commercial Union of America Corporation [hereinafter referred to as Commercial Union] on April 13, 1949, to which Commercial Union filed its answer. Subsequently, on June 26, 1952, Commercial Union filed a complaint against the R.F.C. for failure to pay an alleged account stated. To this complaint R.F.C. filed an answer and counterclaimed in this suit for the same damages which were the subject of its own suit.

 Since both suits arise out of the same transaction, the purchase and sale of certain garbanzos [Mexican chickpeas], Commercial Union's claim should have been asserted as a counterclaim in the action by the R.F.C., not in an independent action. cf. Rule 13(a), Fed.Rules Civ.Proc. 28 U.S.C.A. However, both suits have been consolidated for trial, and I shall overlook this error in procedure.

 The R.F.C. sues for the increased amount agreed by Commercial Union to be paid over the original purchase price for the garbanzos, less certain credits to be allowed to Commercial Union. Commercial Union denies liability on the amended contract, charging duress in obtaining its acceptance. Commercial Union in its suit alleges an account stated between itself and the United States Commercial Company [hereinafter referred to as the U.S.C.C.] allegedly entered into on August 13, 1946, wherein it claims that the U.S.C.C. agreed to pay Commercial Union for certain expenses incurred by Commercial Union subsequent to the purchase of the garbanzos. The expenses involved therein are the same items for which the R.F.C. would allow credits against its claim, but the amounts are in dispute. The R.F.C. denies that there was an account stated.

 The R.F.C. sues, and is sued, as the statutory transferee of the capital stock, assets and liabilities of the U.S.C.C., pursuant to Executive Order No. 9630, 50 U.S.C.A.Appendix, ยง 601 note (10 F.R. 12245).

 On January 10, 1945, Commercial Union sent a telegram to J. A. O'Halloran of the Foreign Economic Administration [hereinafter referred to as the F.E.A.], of which the U.S.C.C. was a part, offering to buy garbanzos, stating:

 
'* * * We are anxious to secure 7,000 tons or part of same and we hereby offer your firm hundred and ten dollars per metric ton F.O.B., New Orleans stop for your information above material is intended for shipment to Spain.'

 On January 19, 1945, O'Halloran replied by telegram:

 
'Referring your telegram January 10. We accept your bid of $ 110 per metric ton for approximately 3900 tons Mexican Garbanzos * * *. We are confirming this with the understanding * * * that the Barbanzos [sic] are intended for shipment to Spain. * * *'

 This reply telegram also set forth additional terms of shipment and payment. By letter of January 25, 1945, on F.E.A. letterhead, C. N. Gibboney, Chief of the Food Production and Procurement Division, forwarded three copies of a confirmation of sale, S-11772, for signature by Commercial Union, two signed copies to be returned to the U.S.C.C., Food Production and Procurement Division. This confirmation of sale had the names of the U.S.C.C. and the Commercial Union typed in, and it stated in part:

 
'This will confirm our sale under the name and date shown above in accordance with the terms and conditions stated herein:'

 The number was S-11772 and the date was January 19, 1945. It listed the terms of shipment and payment but made no mention of export or shipment to Spain.

 By letter of January 26, 1945, addressed to the U.S.C.C., Commercial Union returned the two copies of S-11772 duly accepted. By letter of February 21, 1945, Commercial Union forwarded to O'Halloran a cheque for $ 5,000, drawn to the order of the U.S.C.C., on account of the purchase price. A draft, dated April 18, 1945, was drawn to the order of the U.S.C.C. for the balance of the purchase price, in the amount of $ 441,688.28, on the Chemical Bank & Trust Company, and payment was received by the U.S.C.C. on April 24th by cheque drawn to its order.

 Meanwhile, between March 28th and April 18th, Commercial Union sold the garbanzos to customers, not in Spain, but in Cuba. It then made application to the F.E.A., the agency in charge of export licensing [Act of Congress July 2, 1940, c. 508, 54 Stat. 714], for licenses to ship to Cuba. All were rejected, save five which were at first validated but then revoked.

 On May 7th, O'Halloran wrote to Commercial Union, stating in part:

 
'This sale was made to you for shipment to Spain. We are now informed by your Mr. Antoniades and Mr. Horgan that you desire to export this quantity of garbanzos to Cuba. It has been determined that an export license cannot be approved for Cuba, however, we recommend that you make immediate application for an export license to Spain. If you are unable to export this merchandise to Spain, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.