The opinion of the court was delivered by: MCGRANERY
This case arises on a motion to dismiss two claims growing out of a reorganization proceeding involving Kellett Aircraft Corporation. Coldaire Corporation has filed a proof of claim for Kellett's breach of contract and has brought an amended reclamation proceeding, as well, which is, in effect, proof of another claim. Lengthy hearings were held before the special master, after which the trustees in operation of Kellett filed a motion to dismiss both claims. The master recommended in substance that their motion be granted as to the debtor's alleged breach of contract but denied as to the amended reclamation petition. Briefly, the facts as found by the special master, and hereby adopted, are these:
1. Coldaire is an Illinois corporation authorized and qualified to do business in Pennsylvania. Debtor is a corporation which, prior to April 2, 1946, was engaged in general commercial manufacturing operations, as well as in the engineering manufacture and assembly of helicopters for the United States Army Air Forces. Coldaire and Kellett entered into two basic agreements in April and October, 1946. There is a dispute over the effect and validity of the second one. By the terms of the first contract, Kellett was to manufacture 12,500 frozen food storage and display cabinets for Coldaire in named quantities at specified prices and in accordance with design and specification furnished by Coldaire. Kellett was also to fabricate the tools necessary to such manufacture. The exact terms of the contract on this point were:
'Article I Statement of the Work'
'Kellett shall fabricate the tools * * * specified in Appendix 'B' * * * at the prices indicated therein, which tools have been determined by Kellett to be necessary and sufficient for the proper fabrication of said units in the quantities indicated * * * '
'(b) Tools Coldaire shall make payment to Kellett for the tools as set forth in Appendix 'B' * * * upon completion thereof by Kellett and within thirty days after receipt of invoices from Kellett.'
'Appendix 'B' Tools, Dies, Jigs, and Fixtures'
For 3 cubic foot Frozen Foods Storage Cabinets . . . $ 19,320.00
For 12 cubic foot Frozen Food Display Cabinets . . . $ 20,940.00 'A detailed list of tools, dies, jigs, and fixtures and individual prices therefor will be furnished to Coldaire by Kellett at the time of invoicing as provided in Article II above.'
On May 3, 1946, and on June 27, 1946, the sums provided for in Appendix B were paid by Coldaire to Kellett. This basic contract was amended twice in respects that need not be detailed. On August 23, 1946, Kellett terminated operation of all its civilian commercial contracts with the exception of those contracts under which it was then in production. The contract with Coldaire fell into the second category. Kellett continued production of cabinets under this contract until the termination of its remaining civilian manufacturing operations on September 9, 1946. At that time it had on hand unfilled mail orders from Coldaire. On the same day, a meeting was held at the Girard Trust Company of Philadelphia, attended by the debtor's President and Vice-President, representatives of the Wilson Cabinet Company and Victor Products Company, for whom debtor had also contracted to manufacture storage cabinets, representatives of Coldaire, and representatives of the Girard Trust Company and the Reconstruction Finance Corporation, to whom debtor was heavily indebted.
2. After termination of debtor's manufacturing operations under its contract with Coldaire, negotiations took place between the attorneys for the respective parties, resulting in a new contract. The principal terms of this contract provided that upon execution of the agreement, Coldaire received (1) immediate Title to 'materials, parts and work in process' listed in Exhibit A for $ 8,000.00. (2) A one-year option to purchase the parts and raw materials in Exhibit B, parts to cost fifty per cent of their fair replacement cost at the time of purchase by Coldaire and raw materials to cost one hundred per cent of their replacement cost. This option was to be secured by a deposit of $ 7,200.00 to be applied to the purchases under the option. Exhibits A and B included all the raw materials, parts and work in process on hand on September 18, 1946, and acquired by Kellett for the purpose of producing Coldaire units. The total price to Coldaire of these items would be about $ 128,000.00 which was approximately $ 152,000.00 less than their approximate value. (3) The open purchase commitments of Kellett as set forth in Exhibit C. The master regarded this as an advantage to Coldaire in what was probably a rising market for parts and materials. (4) The right to lease that part of Kellett's North Wales plant previously used for production for Coldaire, if Wilson Cabinet Company or an affiliated company did not rent it. The ...