Square Deal MacHine Co. v. Garrett Corp.

Appellant corporation appeals from an adverse judgment, after trial by jury in the court below, and maintains it should have prevailed as a matter of law under the attendant circumstances.

Respondent corporation, which we shall call Square Deal, operated a machine shop in South Gate, county of Los Angeles, for precision lathe and milling machine production. Appellant corporation, hereinafter referred to as Garrett, operated a plant and a retail sales and supply department in Vernon, also located in the county of Los Angeles. The companies were well known to each other through previous commercial intercourse.

Square Deal had received a $51,500 subcontract to perform machining operations on 500 elevating screws destined for the Army Ordnance Department. In order to meet specifications and to cut two threads to an inch on a lathe theretofore capable of cutting only as low as four threads, it became necessary to replace the standard gear assembly consisting of an 18-tooth gear with a 36-tooth gear.

On April 25, 1952, Philip Greathead, president of Square Deal, telephoned Garrett and ordered “one 36-tooth . . . 16-pitch gear” and a 72-tooth gear. He then wrote out a purchase order…