Johnson Hill's Press, Inc. v. Nasco Industries, Inc.

• Citation: 33 Wis.2d 545,148 N.W.2d 9
• Parties: JOHNSON HILL'S PRESS, INC., a Wis. corporation, Respondent, v. NASCO INDUSTRIES, INC., a Wis. corporation, Appellant.
• Decision Date: 31 January 1967
• Court: United States State Supreme Court of Wisconsin

Page 9

148 N.W.2d 9

33 Wis.2d 545

JOHNSON HILL'S PRESS, INC., a Wis. corporation, Respondent, v. NASCO INDUSTRIES, INC., a Wis. corporation, Appellant.

Supreme Court of Wisconsin.

Jan. 31, 1967.

Hoebreckx, Davis & Vergeront, Milwaukee, Walter S. Davis, David E. Leichtfuss, Milwaukee, of counsel, for appellant.

Foley, Sammond & Lardner, John R. Collins, Milwaukee, for respondent.

CURRIE, Chief Justice.

The evidence clearly established that plaintiff's predecessor Farm Credit Services, Inc. (hereinafter 'Farm Credit'), was the owner of the addressograph plates when the 1963 agreement between it and Nasco, Inc. (hereinafter 'Nasco') was entered into. Therefore, the crucial issue before the trial court was whether by reason of the agreement title to the plates was transferred to Nasco. Defendant-appellant contends the trial court's finding that title was not transferred is against the great weight and clear preponderance of the evidence because the finding was grounded on parol testimony which was inadmissible under the parol evidence rule.

While the original agreement was oral it is defendant's position that it was subsequently integrated into a written invoice, and that because of such integration the trial court was required to rule out all testimony of the prior verbal agreement and of subsequent conduct establishing a practical construction of the agreement by the parties which was at variance with the terms of the invoice. Thus the narrowly defined issue to be decided on this appeal is whether the trial court violated the parol evidence rule in arriving at its finding that the 1963 agreement did not encompass a transfer of title to the plates.

At the time of the 1963 agreement, Chester O. Bell was president and managing agent of Johnson Hill's, Inc., and was vested with authority to make binding agreements for the two subsidiaries, Farm Credit and Nasco. The verbal agreement was negotiated in preliminary form between Bell and Allan S. Haukom, then executive vice-president of Nasco and involved a transfer of $80,000 from Nasco to Farm Credit. In return for the $80,000 Nasco was to receive the use of names inscribed on Farm Credit's addressograph plates. However, before any of the names could legally be used by Nasco it was necessary to obtain the permission of the particular PCA of which the named person was a member. Income tax considerations apparently motivated the agreement. Subsequently other executives of Farm Credit and Nasco participated in formulating the details. As a result of these further negotiations the amount of the payment was changed from $80,000 to $79,800. Seventy-five thousand dollars of the $79,800 was to be apportioned to the purchase price of the names. The remaining $4,800 was payment for advertising by Nasco to be run in four issues of Farm Credit's publication, PCA Farming Magazine, at $1,200 per insertion.

The exact dates when the foregoing transfer was negotiated is not pinpointed. Farm Credit's fiscal year ended June 30, 1963. The transfer was reflected in the income tax returns for that fiscal year which were required to be filed by September 30, 1963. Bell testified that the charge made against Nasco for the $79,800 'was made as of June 30, 1963.' This is subject to the inference that it may have been made after that date and dated back.

The books of account such as the ledgers and journals of the two subsidiary corporations were kept at the office of Johnson Hill's, Inc., at Wisconsin Rapids. Intercompany transactions such as the instant one were handled by the use of debit and credit entries in these books so that no check was issued by Nasco to Farm Credit for the $79,800. The journal entries as of June 30, 1963, showed a charge to Nasco for advertising in four issues of PCA Farming Magazine of $1,200 per insertion or $4,800 and for sale by Farm Credit to Nasco of '500 M names @ 15cents' each amounting to $75,000. The word 'plates' does not appear in these entries.

After commencement of the instant action in 1965 there was discovered in the files of Johnson Hill's, Inc., at Wisconsin Rapids, a printed form invoice of Farm Credit dated June 28, 1963, addressed to Nasco whereby Farm Credit purported to bill Nasco for '500,000 names and plates @ .15 each $75,000.00.' Stamped on the invoice in black letters are the words 'INTER-COMPANY.' Below that is the imprint of a red stamp with the name 'NASCO' at the top followed by ten subheadings, one of which is 'COST' and another 'PASS FOR PAYMENT.' Under the subheading 'COST' the figure $75,000.00 is written in ink. Under the subheading 'PASS FOR PAYMENT' are the initials 'G T' also written in ink. Gust L. Tekeley, in 1963, was vice-president and controller of Nasco. Tekeley identified the initials 'G T' as being his handwriting. The invoice was marked and received in evidence as Exhibit 12, and is the invoice exclusively relied upon by defendant as establishing the integrated agreement between Farm Credit and Nasco which defendant contends cannot be varied by parol evidence which negates the words 'and plates' appearing on its face.

No witness produced at the trial testified as to who had prepared Exhibit 12. In 1963 Arnold Offerdahl was treasurer of Johnson Hill's Inc., and of its two subsidiaries. He was called to testify as a witness for defendant but nevertheless stated that to the best of his knowledge the journal entry with respect to the $75,000 charge to Nasco was made...