Davies v. J. D. Wilson Co.

• Decision Date: 08 October 1957
• Citation: 85 N.W.2d 459,1 Wis.2d 443
• Parties: John J. DAVIES, Appellant and Respondent, v. J. D. WILSON CO., a corporation, Respondent and Appellant. (Two notices of appeal.)
• Court: Wisconsin Supreme Court

Page 459

85 N.W.2d 459

1 Wis.2d 443

John J. DAVIES, Appellant and Respondent, v. J. D. WILSON CO., a corporation, Respondent and Appellant (Two notices of appeal.)

Supreme Court of Wisconsin.

Oct. 8, 1957.

Shea & Hoyt, Milwaukee, for plaintiff-appellant.

Zillmer & Redford, Milwaukee, for respondent-defendant.

STEINLE, Justice.

Specifically we are called upon to determine (a) whether the trial court erred in directing the verdict with respect to additional commissions earned by plaintiff on the Globe furnace job, the jury having determined that the plaintiff was entitled to the same in amount of $1,139.25, and the court holding that the plaintiff had waived his right thereto as a matter of law; (b) whether sec. 270.28, Stats., controls, neither party having requested submission to the jury of the question of waiver as a fact; (c) whether the Statute of Limitations, sec. 330.14 (Stats., 1951), barred the plaintiff from recovering commissions on two Globe invoices rendered before January 6, 1952; (d) whether there is sufficient evidence to support the jury's verdict that plaintiff is entitled to a ten percent commission of gross receipts on the Bucyrus-Erie boiler setting job; (e) whether the plaintiff waived his right to receive a straight ten percent commission on the Bucyrus-Erie job; (f) whether the trial court erred in not having granted judgment in favor of the defendant on its cause of action as asserted in the counterclaim relating to damages resulting by reason of plaintiff's possession of certain of the defendant's documents and records; (g) whether the jury's verdict is to be set aside as being impossible, contradictory and perverse.

In determining whether the trial court erred in directing a verdict, this court must take that view of the evidence which is most favorable to the party against whom the verdict was directed. Mueller v. O'Leary, 1935, 216 Wis. 585, 587, 257 N.W. 161.

From evidence not disputed it appears that the defendant, J. D. Wilson Company is a corporation whose business consists of acting as a manufacturer's representative and selling largely refractories or heat resistant fire brick and plastics used in the lining of boilers and heat-treat and foundry furnaces. Besides others it represented the manufacturing firms of Babcock and Wilcox Company of New York and Laclede- Christy Company of St. Louis. The defendant company also dealt in a line of industrial valves, pumps and magnets. Altogether it engaged in the sale of about 90 products.

Robert S. Crichton was president and treasurer of the defendant company. His wife was the vice-president during the time in question. Crichton and his wife owned two thirds of the shares of stock of the company. Crichton was employed as a salesman for the company. Others who were stockholders and salesmen of the company were Messrs. Pfister, Webers, Knox and McCotter. In April 1948 the plaintiff, John J. Davies, was hired by Crichton as a salesman for the company at a salary of $300 per month. Davies did not become a stockholder of the company. In October 1949, Crichton on behalf of the company changed Davies' compensation arrangement from that of salary to a commission basis. The commission employment agreement was oral and at the trial of this action some of its terms were in dispute.

Credible evidence of record favorable to the plaintiff Davies with respect to his claims for commissions, is as follows: While Davies was still on a salary basis, there was no limitation as to accounts in the Milwaukee territory that he was entitled to solicit. When Crichton changed Davies' arrangement to a commission basis, he defined Davies' territory and told Davies that both Globe and Bucyrus-Erie would be Davies' accounts, and that there would be no limitation as to what he could sell at either of said plants. Certain other of the plants in the Milwaukee territory were served by Webers or Crichton. The defendant's bookkeeper had knowledge of the accounts that were assigned to particular salesmen. Before leaving the defendant's employ in 1952, said bookkeeper made a book record which contained alphabetically a list of the plants in the territory and the initials of the defendant's salesmen who served the same. Davies' initials appeared in said book in connection with the Globe and Bucyrus-Erie accounts. The initials of no other salesmen appeared in connection with the Bucyrus-Erie account, and said account as listed did not indicate two or more departments.

Crichton told Davies that the amount of his commission would depend upon the product sold unless there was a contract with the customer for not only the materials but the installation of the materials by the defendant as well, carrying one lump sum contract price. Such material and installation agreement was called a turnkey contract, and the commission to Davies was to be 10 percent of the entire contract price. When material alone was sold, Davies would be entitled to commission from 10 percent to 16 percent unless the same was shipped in carload lots, when the commission would be five percent. With regard to a turnkey contract, the commission was to be 10 percent notwithstanding that some of the materials were sold in carload lots. When the contract provided for the sale of material and the furnishing to the customer of labor at an hourly rate, the arrangement was not considered a turnkey contract but a time and material contract, and commissions would be paid only on basis of the material sold, but not on the price of the labor.

It was agreed that as to Davies' accounts he would receive full commission regardless of whether he had done any work on the order. The only time that a commission would be split between two salesmen was when an order was sold in one salesman's territory and was used in a plant in another salesman's territory. In the event that a salesman assisted another with reference to an account, he would not be entitled to a portion of the commission notwithstanding that his assistance was requested by the salesman to whom the account had been allocated. There was no agreement that Davies' commissions were in any way to be limited or affected by the amount of profit of the defendant on the job. In the event that Davies made a sale and the defendant realized no profit, he would still be entitled to a full commission on the basis of the contract price.

Davies commenced selling items to Globe in the early part of 1949. Shortly after Davies' first contract with Globe, Crichton told him that Globe was expecting to rebuild its reheat and rotary furnaces. Crichton urged Davies to endeavor to procure that business for the defendant. In 1951 Davies obtained an order from Globe for fire brick for the east rotary furnace which was to be completely rebuilt. Globe actually installed two furnaces, one designated as the east rotary furnace, and the other the reheat furnace, both of which functioned as one unit.

Babcock and Wilcox Co., had built some furnaces in New York which the Globe chief engineer wished to copy. Globe engaged the same engineers to design its new east rotary and reheat furnace unit. Since Bacbcock and Wilcox Co., materials were specified in the New York furnaces, the specifications for the Globe furnace also called for Babcock and Wilcox Co. materials. A Milwaukee territory representative of Babcock and Wilcox Co., Robert Onan, was entitled to sell the materials directly to Globe and bypass the defendant company. Onan and Davies together had called on Globe for several years previously. Onan decided to place the order through the defendant and permit it to make a profit on the transaction. Crichton did not influence Onan in his decision to give the business to the defendant.

Globe ordered the materials from the defendant. Most of the quotations for the same were made by Babcock and Wilcox Co., and furnished to the defendant. The materials for both furnaces were ordered at the same time in 1951, but on separate order numbers. The defendant furnished some, but not all, of the labor for the installation of these materials. The labor was not ordered until October, 1951, after a priority had been obtained by Globe from the Federal Government for the shipment of the materials. (This took place in the Korean War period.) The first materials for both furnaces were shipped to Globe in November, 1951, and were billed by the defendant at the same time. The bulk of the materials for the east rotary furnace were shipped and billed on January 10, 1952. The last materials were shipped in August 1952. The final payment on this furnace unit rebuilding job was made by Globe to the defendant in September, 1952.

Because the Globe job was an order for materials and a lump sum order for labor to install all of the materials, Davies considered it to be a turnkey contract for which he was entitled to a commisssion of 10 percent. He believed that it could not be classified as a time and material job for reason that the price for labor had been quoted prior to the performance of the installation.

Davies received his first commission on the Globe job in December, 1951. He was shocked to discover that with respect to the two billings to Globe, he received no commission on the smaller one for the east rotary furnace, and received only a two and one half percent commission on the larger one involving the reheat furnace. Davies immediately went to see Crichton and inquired as to why the commission was 'so much lower than what it would have been normally.' Crichton became flustered and gave no reason at all. He did not say that he was taking a part of the commission for himself, nor did he tell Davies that he had not put in enough time on the job to warrant payment of full commissions. Actually Crichton had taken five percent on the smaller invoice for himself, and had also taken for himself a commission of two and one half percent on the larger invoice. Davies did not ascertain that...