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Vulcan Metals Co. v. Simmons Manufacturing Co.

248 F. 853 (1918)

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Vulcan Metals Co. v. Simmons Manufacturing Co.

United States Court of Appeals for the Second Circuit

248 F. 853 (1918)

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Facts

Simmons Manufacturing Co. (Simmons) (defendant) sold to Vulcan Metals Co. (Vulcan) (plaintiff) all of its patents, tools, and equipment for manufacturing vacuum cleaners, as well as all the parts it had on hand for this purpose. In negotiating the sale, Simmons represented to Albert Freeman, a Vulcan promoter, that the vacuum cleaners were superior to others in terms of their cleanliness, affordability, efficiency, and ease of use. Additionally, Simmons represented that it had not previously tried to sell the vacuum cleaners, that it had not shown the technology to anyone, and that no one else knew about it and it had never been on the market. At the time, Simmons had 15,000 vacuum units on hand. Vulcan purchased the materials from Simmons based on these recommendations. However, Vulcan later brought suit against Simmons on the ground that its statements were false. Vulcan claimed the machines and patents were “totally inefficient and unmarketable.” Additionally, at trial, Vulcan presented evidence that Simmons had previously unsuccessfully attempted to sell the machines on several occasions. The trial court directed a verdict for Simmons after finding the company’s representations contained no actionable fraud. Vulcan appealed.

Rule of Law

Issue

Holding and Reasoning (L. Hand, J.)

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