'On October 31st, Coldaire and Wilson were notified by the Trustees that the contracts of October 9th and October 14th, 1946, were invalid and of no effect.'
However, the record is not entirely clear. Coldaire has introduced into evidence paragraphs from the trustees' petition to reject the October contract, wherein it was set forth that operations had continued pursuant to an oral agreement between the trustees and Coldaire, pending determination by the trustees as to whether the October contract should be affirmed or rejected; and further, it was recited that pursuant to that oral agreement Coldaire should pay the trustees the sum of $ 1,000 as security for the amounts due the trustees on cabinets to be shipped. And it appears from the record that it was on October 31 that the oral agreement was made involving the $ 1,000 payment. Hence, it would seem from this part of the record that it was also on October 31 that the oral agreement was entered into which permitted operation pending the trustees' decision on rejection of the October contract, in contradiction to the master's finding that on that date notification of intention to reject was given.
However, the master's conclusion involved his consideration of all of the evidence and since there is substantial evidence to support his conclusion, I am not prepared to hold that it is clearly erroneous, despite the fact that some ambiguity apparently exists on the record. Rule 53(e)(2).
Consequently, although the $ 8,000 which Coldaire was to pay within thirty days was neither paid nor tendered within that time or at any other time, Coldaire has nevertheless established the legal basis for a claim. For, when the trustees notified Coldaire that they would not recognize any title, right or claim under the October contract, it became pointless for Coldaire to make a tender of the $ 8,000; the law does not require the performance of a vain act. Detwiler v. Capone, 357 Pa. 495, 55 A.2d 380; Ramsey v. Ramsey, 15 Pa.Super. 214; Restatement of Contracts, Sec. 306; Williston on Contracts, Sec. 875. Accordingly, Kellett's exception to the special master's recommendation to deny the motion to dismiss the claim based on the Exhibit 'A' items of the October contract will be over ruled.
The master's recommendation for a dismissal of the claim based on the Exhibit 'B' items in the October contract rests on the theory that the provision in that contract covering those items called not for a sale but for an option, to become effective only upon the payment of $ 7,200 by Coldaire; since the $ 7,200 was neither paid nor tendered, no option ever came into effect, despite the action of the trustees in repudiating the contract on October 31. But the master has misconstrued the contract. Paragraphs 2 and 3 of the October contract (finding of fact no. 2) may be interpreted as creating an immediately effective option, subject to the condition subsequent of a $ 7,200 payment within thirty days. And the action of the trustees on October 31, prior to the expiration of the thirty day period, rendered a tender unnecessary. The same result follows if the contract is construed as creating an offer good for thirty days, supported by independent consideration and therefore irrevocable during that period- or in other words, an option on an option. Upon the revocation of the offer by the trustees, Coldaire was not required to indulge in the vain attempt to accept. There is an adequate legal basis for a claim based on the Exhibit 'B' items in the October contract, and Coldaire's exception to the master's recommendation for dismissal of this claim will be sustained.
Coldaire's claim under paragraph (b) of the amended proof of claim of December, 1950, is in the alternative to the claim under paragraph (a), and is for the difference between the cost of manufacturing certain cabinets under the October contract and the value of such cabinets for purposes of sale by Coldaire. The Master has recommended dismissal on the ground that the basis of the claim is that Coldaire was unable to manufacture the specified cabinets because Kellett did not make available its factory premises, and Kellett, in the October contract, made no such undertaking. Coldaire points out that the special master has previously found that 'the primary purpose of the October 9th 1946, agreement was to enable petitioner to obtain the use of debtor's plant, machinery and equipment for the purpose of manufacturing cabinets of the type in controversy.' But the principal methods indicated in the contract for effecting this purpose were the continuation of the business on the basis of a lease agreement between Kellett and Wilson,
or, failing that, on the basis of a lease agreement between Kellett and Coldaire. The former lease was in fact executed, but before any extensive operation occurred, a compromise settlement of the lease was made between the parties. Coldaire can make no claim on that score. If Coldaire has any claim based on the frustration of the purpose of the October contract, it must be based on the breach of Kellett's agreement with Coldaire. And the significant part of that agreement, in relation to the claim under paragraph (b), is contained in paragraph 8 of the October contract (second finding of fact), wherein it was provided that if Wilson did not rent the specified premises, machinery and equipment, Coldaire should have the right to a lease 'on a basis to be determined by Kellett and Coldaire'. Assuming that the lease to Wilson did not destroy the basis for Coldaire's right to a lease, the question remains: what right to a lease did Coldaire acquire under the October contract? Coldaire acquired no right to a lease and Kellett incurred no obligation to grant one because the terms of the contract permitted either party to refuse to agree to any terms for a lease. McNeely v. Bookmyer, 292 Pa. 12, 140 A. 542; Pennsylvania Lubricating Co. v. Wilhelm, 255 Pa. 390, 100 A. 93; Zoebisch v. Rauch, 133 Pa. 532, 19 A 415; Restatement of Contracts, Sec. 32; Williston on Contracts, Sec. 45 There was no valid contract for the leasing of the premises, machinery and equipment to Coldaire, and Kellett is not in default.
But the debtor urges that the profit which it could have derived from the manufacture of the cabinets in question under the October contract, the basis of its claim under paragraph (b), was dependent upon the trustees' performance of other obligations in addition to the mere leasing of plant facilities. For example, the agreement contemplated that Coldaire would be permitted to have the use of tooling and drawings required for the manufacturing operations; that Coldaire was given the privilege of purchasing materials, parts and work in process at prices substantially below their cost on the open market. But it is apparent that the sine qua non of Coldaire's manufacturing operation was the use of the Kellett premises and equipment, an objective which has been found to have been the primary purpose of the October contract. Nor does Coldaire assert that the breach of the other provisions of the contract alone prevented it from completing its manufacturing operations. Accordingly, since Kellett breached no obligation to lease its premises to Coldaire, the basis for recovery under paragraph (b) disappears, and Coldaire's exception to the special master's recommendation that the claim be dismissed will be denied.
Conclusions of Law.
1. The exceptions of the Kellett Aircraft Corporation to the report and recommendation of the special master, dated February 23, 1951, are overruled.
2. The first and fifth exceptions of the Coldaire Corporation are sustained, and the remainder, overruled.
3. The motion of the Kellett Aircraft Corporation to dismiss the claims of the Coldaire Corporation is granted as to the claim set for in paragraph (b) of the stipulation of December 27, 1950, and denied as to the claims set forth in paragraph (a).
4. The matter is recommitted to the special master for the presentation of the debtor's evidence.