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BEACON PLASTIC & METAL PRODUCTS v. CORN PRODUCTS COMPANY (05/16/68)

NEW YORK SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT 1968.NY.41637 <http://www.versuslaw.com>; 293 N.Y.S.2d 429; 57 Misc. 2d 634 May 16, 1968 BEACON PLASTIC & METAL PRODUCTS, INC., RESPONDENT-APPELLANT,v.CORN PRODUCTS COMPANY, APPELLANT-RESPONDENT, AND I. MARTIN SPIER, RESPONDENT-APPELLANT Cross appeals from an order of the Civil Court of the City of New York, County of New York (Robert V. Sabatini, J.), entered on July 26, 1967, which denied motions of all parties for summary judgment. Lord, Day & Lord (William E. McCurdy of counsel), for appellant-respondent. Foley, Hickey, Gilbert & Currie (John M. Foley of counsel), for respondents-appellants. William C. Hecht, Jr., J. Hofstadter and Markowitz, JJ., concur. Author: Hecht


Cross appeals from an order of the Civil Court of the City of New York, County of New York (Robert V. Sabatini, J.), entered on July 26, 1967, which denied motions of all parties for summary judgment.

William C. Hecht, Jr., J. Hofstadter and Markowitz, JJ., concur.

Author: Hecht

 This controversy has its genesis in a written contract between defendant Corn Products and plaintiff Beacon Plastic & Metal Products, dated December 31, 1963, by which Beacon agreed to manufacture 750,000 Bosconaught figurines for Corn Products, at a price of $45 per thousand, or a total amounting to $33,750. Corn Products agreed to deposit $8,437.50 with Beacon, to be applied against delivery of figurines aggregating that purchase price. The balance of the order was to be invoiced as it was delivered.

The pertinent provisions of the contract follow (pars. 8, 9, 11):

"8. Delivery of the figurines shall be made to us at your plant, at the rate of approximately 36,000 figurines per day. Title to the figurines shall pass to us immediately upon the manufacture, and we will arrange for their pick-up at approximately the same rate. Delivery shall commence on February 5, 1964.

"9. You have been informed of the circumstances and timetable of our Bosco promotional program of which your work under this contract will form an essential part. Inasmuch as your breach of this contract by reason of any late delivery will cause serious and substantial damage to us, the amount of which may be difficult or impossible of measurement, it is agreed that in lieu of liquidated damages for lateness on your part in making deliveries as required by the contract, the purchase price for each thousand figurines of the first 144,000 delivered shall be reduced by $2.25 for each day elapsing between February 10, 1964 and date of delivery; the purchase price for each thousand figurines of the next 360,000 delivered shall be reduced by $2.25 for each day elapsing between February 26, 1964 and date of delivery; and the purchase price for each thousand figurines of the last 246,000 delivered shall be reduced by $2.25 for each day elapsing between March 5, 1964, and date of delivery.

"11. In the event that deliveries of any one of the three groups referred to in paragraph 9 are not completed within ten days after the deadline specified in paragraph 9 for delivery of that group, we shall be entitled to terminate the contract, in which event no further deliveries of figurines will be accepted, and title to the complete production molds shall in such event vest in us."

Third-party defendant Spier, Beacon's president, guaranteed in writing, "unconditionally and absolutely that Beacon will well and faithfully perform and fulfill all of the terms and conditions therein required of Beacon, at the time and in the manner therein specified; provided, however, that my liability under this Guarantee shall in no event exceed in the aggregate the sum of $8,437.50 together with interest thereon."

Beacon was consistently late in making deliveries. Delivery of the first 144,000 figurines, scheduled to be completed prior to February 10, was made in installments but not completed until March 9. The same was true of the second 360,000 units, scheduled to be completed prior to February 26, which was not completed until March 24; and the third 246,000 units, scheduled to be completed prior to March 5, which was not completed until April 6. Applying the "liquidated damage" figure of $2.25 per day for each day of lateness of each installment provides the substantial portion of the damages of $33,836.43 alleged in the counterclaim.

On March 13 and 24, Corn Products wrote Beacon complaining of late deliveries and of defects in the figurines. It made "additional deposit * * * without prejudice to the rights of either party" under paragraphs 8 and 9 of the contract and provided that Corn Products should not be considered in default under the provision requiring payment to be made within one week after invoice "by reason of the fact that we have made no payments on your invoices." Beacon agreed to the foregoing recitals and stipulations.

On April 3, the parties entered into a supplemental agreement. This increased the quantity of figurines from 750,000 to 975,000, the additional quantity to be billed at $42.50 per thousand. They were to be delivered no later than April 24. "For the reasons specified in Paragraph 9 of the Contract, it is agreed that in lieu of liquidated damages for any lateness on your part on making deliveries of said additional 225,000 figurines, the purchase price for each 1,000 thereof shall be reduced by $2.25 for each day elapsed between April 24, 1964 and date of delivery." Spier did not guarantee this supplemental contract.

On April 6, 14, 24 and 30, Corn Products wrote Beacon letters similar to those of March 13 and 24, and Beacon similarly agreed to the stipulations. The supplemental 225,000 figurines were delivered late.

Defendant is entitled to summary judgment on its counterclaim on the issue of liability. In fact, plaintiff does not seriously contest its breach but takes issue with defendant's claim for liquidated damages. Plaintiff's excuses for late deliveries have no merit. First, it urges that the initial deposit of $8,437.50 was not mailed by defendant until January 3, 1964. But the contract was made after the close of business on December 31, 1963 and plaintiff did not insist on a check at that time. In any event, a delay of one or two days in mailing the deposit check would not excuse delays in delivery extending from 30 to 60 days.

Secondly, plaintiff wrote defendant on February 4 agreeing to make certain corrections in the ears, mouth area and buttons of the figurines in accordance with ...


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