George J. Meyer Mfg. Co. v. Howard Brass & Copper Co.
| Decision Date | 15 June 1945 |
| Parties | GEORGE J. MEYER MFG. CO. v. HOWARD BRASS & COPPER CO. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from a judgment of the Circuit Court for Milwaukee County; Gustave G. Gehrz, Judge.
Reversed.
WICKHEM and FAIRCHILD, JJ., dissenting.This action was begun on the 21st day of December, 1938, by the plaintiff, George J. Meyer Manufacturing Company, against Howard Brass & Copper Company, defendant, to recover overpayments made by the plaintiff to the defendant for goods purchased during the years 1933 to 1938, inclusive. The plaintiff is a manufacturing corporation engaged in the manufacture of bottle washing equipment and allied lines and uses large amounts of brass and copper in the course of its operations. The defendant is a corporation and during the time above stated, was engaged in the sale of brass and copper products as a jobber. The materials which the defendant sold to the plaintiff, it bought from various mills throughout the country and assembled at its plant and of which it thereafter delivered considerable amounts to the plaintiff.
The total purchases of brass and copper goods by the plaintiff were as follows:
+--------------------+
¦In 1933¦$4,116. ¦
+-------+------------¦
¦In 1934¦3,005. ¦
+-------+------------¦
¦In 1935¦10,529. ¦
+-------+------------¦
¦In 1936¦73,341. ¦
+-------+------------¦
¦In 1937¦83,325. and ¦
+-------+------------¦
¦In 1938¦15,468. ¦
+--------------------+
Total purchases by the plaintiff from the defendant during 1936, 1937 and 1938 amounted to $225,000.
This controversy covered the period between March, 1936, and September, 1938. The method employed by the parties in the transaction of their business was as follows: the plaintiff sent to the defendant a so-called blanket order for specified quantities of brass or copper products. This order when accepted by the defendant was a contract on the part of the defendant to deliver brass and copper products to the amount indicated in the blanket order, which were to be ordered by the plaintiff within the time specified in the blanket order, generally ninety days. No money was paid or expected to be paid upon the blanket order. The blanket orders were issued and accepted for the purpose of protecting the plaintiff against rise in price on the brass and copper goods during the period stated.
From time to time the plaintiff would issue purchase orders for the goods which it wished the defendant to deliver to it. The amount of the material covered by the purchase order would then be charged against the material covered by the blanket order and that process would continue until the material specified in the blanket order had been exhausted in filling purchase orders.
During the period covered by this controversy there were issued eighteen blanket orders, sixty-five plus purchase orders covering over nine hundred items. No account of course is taken of blanket orders, purchase orders or items not involved in this controversy.
As deliveries were made by the defendant to the plaintiff of goods ordered, duplicate receipts were issued, one of which was retained by the defendant and one by the plaintiff and contemporaneously an invoice was mailed to the plaintiff which disclosed the amount of material delivered, the price per unit and the extension.
The witness Antholine, now comptroller of the plaintiff company since 1939 and for many years prior thereto an accountant in the employ of the company, described the method employed by the plaintiff in checking the invoices and statements. The bills were received by the mailing department of the plaintiff company and were given a blank stamp. The stamp is about 1 1/2?“ square and embraced the following matter:
‘GEO. J. MEYER MFG. CO.
Mat. for _____ Depart.
Mat. Rec'd _____ By ________
Inv.:
Rec'd: ---
Quantity _____ By ________
Quality _____ By ________
Price _____ By ________
Last Price ________'
The invoice was then turned over to the purchasing department. It was the duty and responsibility of the head of the purchasing department to compare the price at which he bought the material with the prices indicated on the invoice. Full responsibility for the price was placed on the head of the purchasing department, whose duty it was to verify the unit prices on invoices to determine whether the prices were those called for by the contract. The invoice was then passed to the senior clerk. It was her duty to verify the extension and computations on the invoices. After that was done, the invoice passed to another clerk whose duty it was to check the quantity shown on the invoice by comparing it with the receipt for the material which was sent in by the receiving clerk to the purchasing department from time to time. The report from the receiving clerk would show the quantity received at the time delivery was made to the factory. This would be compared with the quantity shown on the invoice an if they agreed, the clerk recorded the date that the material was received in the space provided on the stamp. If the matter of quality was involved, that was also checked. When the check was completed, there would be indicated upon the invoice the approval as to price by the head of the purchasing department and of the other clerks who checked it for the various matters indicated. After the invoice was checked, it was sent by messenger to the factory foreman who would use the material and who would be responsible for its custody. He would place his initials on the invoice to verify the fact that he had received the material. The invoice was then returned to the purchasing department which sent it to the cost department. In the cost department a clerk ascertained the last price paid for the material and recorded it on the invoice. The invoice was then turned over to the bookkeeping department which entered the invoice to the credit of the seller. The invoice was then returned to the purchasing department where it was retained until it was attached to the proper statement which was then passed through for payment. Presentation of the statement for payment was done by the head of the purchasing department. The defendant sent bi-monthly statements to the plaintiff. When these statements were received, the invoices from the defendant were assembled and attached to the defendant's statement of account. The purchasing department would make a verification of the statement received from the defendant against its records. When a statement was submitted for approval of the general manager, it had all of the invoices covering the items included in the statement attached to the statement in the order in which they appeared upon the statement. The statement and attached invoices were then sent to the bookkeeping department which made out a check for the amount shown to be due to the defendant. After the check was made out, the statement, invoices and check would go to Mr. Meyer, Jr., who if he approved, would then sign the check. After payment, the statements with invoices were returned to the purchasing department which had custody of the records.
During the period covered by this controversy, the matter of verification of prices was dependent very largely upon one man, the plaintiff's purchasing agent, Mr. Edward Kasch. The plaintiff had used this system for many years prior to 1936 and prior to his discharge in 1938, Mr. Kasch had been in charge of the purchasing department of the plaintiff for something more than fifteen years. No claim is made that he did not understand the plaintiff's system and his duties and responsibilities thereunder.
To illustrate how this controversy arose on March 5, 1938, the plaintiff sent to the defendant its purchase order No. 78081, dated April 7, 1937, for 4000 feet of copper pipe. Upon this order the defendant made six deliveries, for which the defendant sent plaintiff six invoices as follows:
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¦ ¦ ¦ ¦ ¦ ¦Quantity ¦
+--------------+--------+--------+------------+---------+----------¦
¦ ¦Item No.¦Inv. No.¦Billing Date¦Size ¦Lbs. ¦Feet¦
+--------------+--------+--------+------------+---------+-----+----¦
¦Our Purchase ¦132 ¦38229 ¦4-12-37 ¦1 1/4x20'¦1785 ¦700 ¦
+--------------+--------+--------+------------+---------+-----+----¦
¦Order No. ¦133 ¦38331 ¦4-14-37 ¦1 1/4x20'¦1683 ¦660 ¦
+--------------+--------+--------+------------+---------+-----+----¦
¦78081 Dated ¦134 ¦38438 ¦4-16-37 ¦1 1/4x20'¦1785 ¦700 ¦
+--------------+--------+--------+------------+---------+-----+----¦
¦Apr. 7, 1937 ¦135 ¦38543 ¦4-20-37 ¦1 1/4x20'¦1736 ¦680 ¦
+--------------+--------+--------+------------+---------+-----+----¦
¦* ¦136 ¦38756 ¦4-26-37 ¦1 1/4x20'¦1535 ¦600 ¦
+--------------+--------+--------+------------+---------+-----+----¦
¦Notation Below¦137 ¦38986 ¦5-3-37 ¦1 1/4x20'¦1685 ¦660 ¦
+--------------+--------+--------+------------+---------+-----+----¦
¦ ¦ ¦ ¦ ¦ ¦10209¦4000¦
+------------------------------------------------------------------+
Upon each invoice there was indicated the quantity of material delivered, the unit price and extension as to each item. For example, on invoice No. 38229, 35 lengths of pipe were delivered weighing 1785 pounds, price $.92 3/4, total amount $551.86. This invoice was stamped, checked for quantity, quality and price in accordance with the usual practice which has already been described.
In accordance with the understanding of the parties and the usages of the business, the price was to be determined by the schedule of prices published by the American Brass Company. Brass and copper are sold on the basis of a unit price either per foot or per pound. This price is determined by the application of the price...
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