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.

MICA CORP. v. DELTA TRANSNATIONAL

March 8, 1979

The MICA CORPORATION, Plaintiff,
v.
DELTA TRANSNATIONAL, INC., Defendant



The opinion of the court was delivered by: SWEET

Plaintiff Mica Corporation ("Mica"), a California manufacturer of electronic components, commenced this action to recover $ 30,009.26 from defendant Delta Transnational, Inc. ("Delta"), a New York corporation and a financial subsidiary of the Mitsubishi Corporation, under a written guaranty of certain obligations of Optel Corporation ("Optel"), a New Jersey corporation. The complaint alleges four causes of action arising out of: a breach of a guarantee contract, equitable estoppel, and fraudulent misrepresentation. The court is vested with diversity jurisdiction pursuant to 28 U.S.C.A. ยง 1332(a)(1). New York law applies because the alleged guarantee upon which this action is based arose in New York.

Mica is a manufacturer of watch components. Optel was an assembler of digital watches. Delta is an investment company.

Mica sold watch components to Optel initially in early 1975. The orders were generally small, and Mica originally sold to Optel only on a cash-in-advance basis. Subsequently, however, Mica's credit policy changed, and Optel was granted a $ 5,000 credit line.

 In August of 1975 Arthur Diamond, Mica's comptroller, received a telephone call from Richard Corbin, Vice President and Treasurer of Optel, who requested a higher credit line. When Diamond indicated that a higher credit line was not feasible because of Optel's financial condition, Corbin replied that Delta had entered into a financing agreement with Optel and that Delta would guarantee purchases by Optel from Mica through an "Inventory Money Purchase Program" ("IMPP"). In relevant part, the agreement between Optel and Delta with respect to the IMPP provided:

 
"1. Optel may from time to time request in writing to (defendant) that it obligate itself to pay Optel's supplier (the "Supplier') the purchase price of certain supplies or materials which Optel wishes to acquire (the "Materials') from the Supplier and that (defendant) make the financing by paying the Supplier for the Materials.
 
"2. Accompanying each such request for a financing, Optel shall deliver to (defendant):
 
(a) a copy of the proposed purchase order which Optel wishes to issue for the Materials . . .
 
"3. With respect to each such request for a financing, (defendant) may, in its sole discretion, either:
 
(a) elect to provide the requested financing, in which case it shall in writing notify Optel and the Supplier of (defendant's) undertaking to pay the Supplier for the Materials in accordance with the terms and conditions of the signed purchase order issued by Optel.

 or

 
(b) elect not to provide the requested financing, in which case it shall promptly return to Optel all the documents delivered with respect to the requested financing. . . ."

 On September 7, 1975 Corbin called Diamond to tell him that the IMPP arrangement could apply to Optel's purchases from Mica. Diamond testified that at this time he did not ask Corbin about the terms of the IMPP. On September 8, 1975 Diamond called Dr. Ishizuka, President of Delta. Diamond testified that during this conversation Ishizuka stated that arrangements had been made to guarantee Optel's purchases from Mica and that based on this conversation Diamond thought that this guarantee was to be continuing in scope. Dr. Ishizuka's deposition testimony states: "I told Mr. Diamond . . . that Delta would undertake to guarantee certain transactions . . . which Optel is to request in writing . . . and then Delta . . . might decide to enter into such guarantee in accordance with the stipulation on the purchase order, and if Delta elects to do that at that time we are supposed to notify both Optel and the supplier directly, generally by telex, sometimes by cable, specifically identifying which purchase order . . . we are making ourselves obligated to pay." *fn1" Although Ishizuka testified that his remarks to Diamond were cast "in general terms," *fn2" and that Mr. Corbin would fill in the details, *fn3" he did state that he told Diamond that if Delta approved a purchase order Delta would confirm this "in a writing directly to (Mica)." *fn4" At any rate, Diamond told Ishizuka that he would need a letter memorializing their conversation. Ishizuka sent a letter that day indicating in part:

 
In accordance with our telephone conversation, I am confirming in writing that Delta Transnational, Inc. will be guaranteeing payment for goods delivered to Optel Corporation under an inventory money purchase program as Richard Corbin of Optel explained to you.
 
Delta Transnational will be paying you directly under the terms and conditions stipulated in purchase orders from Optel to you as shipments are received and accepted by Optel. ...

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.