Fenwal, Inc. v. Montgomery

This is an appeal from judgment in a suit brought by appellant, a Massachusetts corporation, hereafter called' Fenwal, for breach by non-payment of a written contract for the sale of certain thermostatic controls, manufactured by Fenwal and used as fire detectors in aircraft. These were sold 'and delivered by Fenwal to the appellees, citizens of California, hereafter called the Montgomerys. The controls were patented and could be obtained only from Fenwal.

The written agreement of the parties provided that the Montgomerys had the exclusive right to buy the controls and resell them to customers found in California, Washington and other western states. Fenwal fixed a price to be paid by the Montgomerys’ customers and sold the controls to the Montgomerys at less than the resale price. The agreement could be terminated by Fenwal on 60 days’ notice. Such a notice of termination was given on December 29, 1948, becoming effective February 28, 1949. The court awarded Fenwal damages in the amount of $46,-635.40 for the sale price of controls delivered to the Montgomerys in this 60-day period. It is not questioned that this award is valid.

The Montgomerys’ cross complaint alleged that…