Aero Motive Sales Corp. v. Wausau Motor Parts Co.

• Decision Date: 05 April 1950
• Citation: 42 N.W.2d 141,256 Wis. 586
• Parties: AERO MOTIVE SALES CORPORATION v. WAUSAU MOTOR PARTS CO.
• Court: Wisconsin Supreme Court

256 Wis. 586

42 N.W.2d 141

AERO MOTIVE SALES CORPORATION

v.WAUSAU MOTOR PARTS CO.

Supreme Court of Wisconsin.

April 5, 1950.

The Aero Motive Sales Corporation brought action against the Wausau Motor Parts Company to recover commissions on sales made by plaintiff as jobber and distributor of defendant's merchandise. The Circuit Court for Marathon County, Gerald J. Boileau, Circuit, Judge, rendered a judgment for the defendant, and the plaintiff appealed. The Supreme Court, Fairchild, J., held that plaintiff was entitled to cash under the contracts, if he so elected, rather than merchandise credit, and that plaintiff by using merchandise credit and by failing to demand cash prior to end of year, was not estopped by practical construction of the contract from claiming cash.

Judgment reversed and cause remanded.

The action was begun October 1, 1948, by Aero Motive Sales Corp. against the Wausau Motor Parts Co. to recover commissions on sales made by the plaintiff. From a judgment in favor of the defendant, plaintiff appeals.

The plaintiff alleges that from March 18, 1946 to December 31, 1946 plaintiff was a distributor of defendant's products; and further alleges that by virtue of the services performed under the terms of the contract plaintiff earned and was entitled to payment by defendant on December 31, 1946 the sum of $3,311.42; that thereafter certain credits were to be allowed, reducing the amount to $2,674.67; that plaintiff on November 14, 1947 made written demand upon the defendant for payment in cash of the balance due; that defendant has refused to make the payment; and judgment is demanded for the amount claimed to be due. The defendant's answer places in issue the terms of the payment, alleging that the plaintiff at no time had any right to a cash refund but was bound to take his payment in merchandise.

The terms of the contract are set forth in the following letter:

‘After I left Pittsburgh, I went to Washington and while there, discussed the subject I told you I would discuss, and also have taken it up with your own auditor. And, under the circumstances, there seems reasonable justification for quarterly payment of volume compensation.

‘We will therefore credit your account quarterly on the basis of volume compensation earned for the quarter, pro rated and extended to determine the proper rebate bracket and it's understood that an adjustment will be made at the end of each year, either way. If an over-payment has been made there will be a charge back to you; if an under-payment has been made, there will be additional credit issued to cover.

‘Below are listed the volume compensation classifications as they are paid: ‘Percentage of credit for volume compensation shall be paid to jobber stocking Wausau rings in one store on the following schedule; and shall be based on existing net jobber published price arrangements, and shall not prejudice or be prejudiced by any future price alterations. Marathon ring sales shall be computed and included for volume compensation. However, the volume bracket is established only on sales of Wausau brand piston rings, and volume bracket may not be advanced by sales of Marathon brand piston rings. It is understood that only the months' sales which are paid for within the thirty day period shall be counted in volume computations. That is, any month's billing that falls past due will not be included in volume computations.

$1,200 net piston ring billing to jobber per 12 month period 2%

1,500 net piston ring billing to jobber per 12 month period 3%

1,800 net piston ring billing to jobber per 12 month period 4%

2,500 net piston ring billing to jobber per 12 month period 5%

3,500 net piston ring billing to jobber per 12 month period 7%

4,500 net piston ring billing to jobber per 12 month period 9%

6,000 net piston ring billing to jobber per 12 month period 11%

8,000 net piston ring billing to jobber per 12 month period 13%

10,000 net piston ring billing to jobber per 12 month period 15%

12,000 net piston ring billing to jobber per 12 month period 17%

15,000 net piston ring billing to jobber per 12 month period 19%

20,000 net piston ring billing to jobber per 12 month period 21%

25,000 net piston ring billing to jobber per 12 month period 23%

40,000 net piston ring billing to jobber per 12 month period 25%

2% 10 Prox. is the cash discount. Shipments going forward in 100# lots or more will be shipped prepaid from the factory.'

On motion for summary judgment, the trial court in its memorandum opinion said:

‘The contract in question was made through correspondence, the agreement having been set forth in defendant's letter of March 4, 1946, and accepted by plaintiff's letter dated March 18, 1946. These letters provided an effective contract for the year 1946, the parties having entered into another written contract, using the printed form of the defendants, for the year 1947.

‘The contracts provided that plaintiff should become sales distributor for the defendant's products in the Pittsburgh, Pa., area.

‘The question presented is whether or not plaintiff is entitled to be paid in cash or merchandise credits.

‘The 1946 agreement provided for volume compensation on a quarterly basis. At no time, however, while the 1946 contract was in effect, did the plaintiff demand cash payment. It is reasonable to assume that in March, 1946, the parties contemplated that their business relations would continue over an extended period, and the plaintiff was content, therefore, to be given credit for its commissions against future purchases.

‘On the first of the nest year, however, a different form of contract was entered into which provided for payments either in cash or credit under certain circumstances. This was more in line with accepted business practices and undoubtedly was upon the theory that so long as contracts were to be renewed annually same provisions should be made for a time when business relations would ultimately be broken off. Such breaking off of business relations was not contemplated in the negotiations and correspondence that resulted in the 1946 contract, and that is, undoubtedly, the reason why no provision was made for payment of commissions in cash; and this also, undoubtedly, accounts for...