Sell v. Gen. Elec. Supply Corp.

• Decision Date: 15 March 1938
• Parties: SELL et al. v. GENERAL ELECTRIC SUPPLY CORPORATION.
• Court: Wisconsin Supreme Court

227 Wis. 242

278 N.W. 442

SELL et al.

v.GENERAL ELECTRIC SUPPLY CORPORATION.

Supreme Court of Wisconsin.

March 15, 1938.

Appeal from a judgment of the Circuit Court for Marathon County; A. H. Reid, Judge.

Action by John L. Sell and others, co-partners doing business as the Sell Brothers Hardware Company, against the General Electric Supply Corporation to recover damages for failure to deliver five refrigerators which plaintiffs claimed were sold to them by defendant. From a judgment for the plaintiffs, defendant appeals.-[By Editorial Staff.]

Reversed, with directions.

Action commenced May 1, 1937, to recover damages for failure to deliver five refrigerators which respondents claim defendanthad sold them. Case was tried to the court and jury. The following special verdict was rendered:

“First Question: Did the plaintiffs, in good faith believe at the time when they gave the order which is set forth in ‘Exhibit 1,’ that the agent of the defendant, Mr. Cooke, had authority to make sales to the plaintiffs of the refrigerators named in the order? Answer: Yes.

“Second Question: If you answer the First Question ‘Yes,’ then answer this: Were the plaintiffs justified in so believing, by appearances presented by the agent, for which the defendant was responsible? Answer: Yes.

“Third Question: If you answer the Second Question ‘Yes,’ then answer this: Was the order for the said refrigerators taken by the agent Cooke without any condition that the same should be subject to acceptance by his principal, other than an approval of credit? Answer: Yes.

“Fourth Question: In case you answer ‘Yes' to each of the three foregoing questions, then answer this: What amount of damages did the plaintiffs suffer by refusal of the defendants to ship and deliver the refrigerators? Answer: $294.72.”

The usual motions were made after verdict. Upon the verdict, judgment was entered in favor of the plaintiffs, against the defendant, for the sum of $294.72 damages, with costs, from which defendant appeals. The material facts will be stated in the opinion.

Genrich & Genrich, of Wausau (Miles Lambert, of Wausau, of counsel), for appellant.

Bird, Smith, Okoneski & Puchner, of Wausau, for respondents.

MARTIN, Justice.

Respondents are retail hardware dealers, in the City of Wausau. Defendant-appellant is a wholesale distributor of electrical household appliances, including a refrigerator sold under the trade-name of “Hotpoint.” On March 17, 1937, R. W. Cooke, a salesman representative of the defendant, called upon the plaintiffs, who at that time were without a line of electric refrigerators in their store. After some negotiations, plaintiffs gave Cooke an order for five refrigerators at specified prices. This order was signed by Cooke. He testified the order was taken subject to approval by his superiors at their Milwaukee office. Plaintiffs claim an outright agreement of sale was made. At the time the order was taken, plaintiffs executed, in blank, a note, attached to a form of trust receipt used by the General Electric Contracts Corporation, and at the same time delivered to Cooke a check for 10 per cent. of the purchase price of said refrigerators, payable to the General Electric Contracts Corporation. General Electric Contracts Corporation is an independent sales financing corporation, affiliated with the General Electric Supply Corporation and the General Electric Company; that is, defendant General Electric Supply Corporation is the sales corporation of General Electric Company, and General Electric Contracts Corporation is the finance company. The General Electric Contracts Corporation purchases customers time sales contracts from dealers; also extends credit to dealers on their purchases.

On April 2, 1937, the General Electric Contracts Corporation notified the plaintiffs that they would extend credit to them and would purchase their customers contracts. No definite date of delivery was stated in the order or agreed upon. On April 5, 1937, the defendant wired plaintiffs as follows: “Extremely sorry we are unable to ship refrigerators as requested Stop Therefore check for ten percent of initial order is being returned.”

And on April 6, 1937, defendant wrote plaintiffs as follows:

“Supplementing our telegram of April 5th in reference to your order for Hotpoint refrigerators, we are extremely sorry that we are unable to ship this merchandise to you as originally intended.

“The delay in securing refrigerators from our factory has seriously handicapped us in securing enough refrigerators for our established dealers and rather than disappoint you after shipping a few refrigerators, we believe it will be for the best if we do not attempt to establish another dealer outlet.

“This order was greatly appreciated. We are notifying our representative, Mr. R. W. Cooke, of this decision by copy of this letter, and we are asking him to stop in and see you the next time he is in Wausau to explain this further. We will be pleased to supply you with other merchandise and will continue to send you literature, etc., on other products.”

Mr. Cooke testified, in part, as follows:

“My duties were to call on the established dealers of the Supply Corporation. I would assist their salesmen in closing some of the sales of their customers and going out to see the customer, and so on. I arranged their advertisements in the newspapers and assisted their servicemen in the servicing of merchandise that they had. *** In respect to refrigerators, I called on dealers. On the morning of March 17th, I heard from another dealer that Kelvinator had changed their outlet in Wausau and was told that the old Kelvinator dealer was Sell Brothers. At that time we did not have any outlet here for refrigerators. Prior to this time I had investigated other places and called the attention of the company to a dealer outlet. *** I talked to Mr. Arnold Sell and also several other men and introduced myself as being the representative of the General Electric Supply Corporation. I told them what lines our organization was selling, that I understood that they had just lost the Kelvinator agency and asked them if they were interested in a line of refrigerators, and I proceeded to tell them the outstanding features of the Hotpoint line. *** We discussed the proposition of having them appointed dealer. *** We went into quite a little detail in the methods we followed and the policy of the refrigerator business. *** I brought out the point that all orders and new accounts in our organization were subject to the approval of Mr. Winters, our operating manager, in Milwaukee. I explained that the policy in the refrigerator business was to sell to the dealer on a c. o. d. basis. But in order to give our dealers a little added financing, we had made arrangements through an independent finance company, the General Electric Contracts Corporation, whereby the dealer could purchase these refrigerators with ten percent down payment and pay the balance as they sold them, with the limit of 60 days. *** I was only authorized to call on authorized dealers. I discussed with Sells having them appointed dealers. *** I told Sell Brothers than the right to the completion of that offer was based upon the decision of our operating department. I told Mr. Arnold Sell that. *** I told Arnold Sell what my duties were. I told him that I called on dealers to give them sales help, service help, advertising assistance and take care of the immediate problems that they had, after they were established dealers. *** I explained how the dealer was to get credit from the finance corporation. That was the time John L. Sell signed Exhibit C. (Exhibit C. is the trust receipt with attached promissory note signed in blank by Sell Brothers Hardware Company, with blank form bill of sale attached unsigned.) Exhibit C. was taken for the purpose of being turned over to the Contracts Corporation. The Supply Corporation was to be paid by the Contracts Corporation. Exhibit C. was given for that purpose. I also took Exhibit 3, payable to the Contracts Corporation. (Exhibit 3 is a check of Sell Brothers Hardware Company to General Electric Contracts Corporation for $63.10 covering the ten percent down payment on the refrigerators.) *** The General Electric Supply Corporation is the one that makes the sales and ships the goods. The Contracts Corporation does the financing and discounts contracts by customers; so far as the Supply Corporation is concerned, by virtue of the contracts company discounting the sales contracts, they get their money in full.”

Mr. L. D. Morgridge testified on behalf of the defendant, in part, as follows: “I am District Sales Manager for the General Electric Supply Corporation for the district known as the Milwaukee District, which includes Wausau. *** In the sale of refrigerators it is customary to establish dealers and sell refrigerators to them only. The managing department at Milwaukee selects the dealers for the company within the state of Wisconsin. The only think a salesman would have to do with it is to recommend an account as a possible dealer. We, in the executive end, look over the territory; determine whether we want the dealer; what we think he could do for us over a period of time; *** An investigation is made of his reputation, credit facilities, etc. When a dealer is established, he pays for the merchandise on a cash basis or financed on what we term a floor plan of some finance company. *** We get the cash direct from the dealer or from the finance corporation. *** Mr. Cooke was authorized to call on authorized dealers for Hotpoint refrigerators. He had no authority to call on Sells. He had authority to go to authorized dealers and take an order from them. *** I was a superior of Mr. Cooke as a salesman. I gave him no written instructions. His instructions were verbal. *** We equip him with these forms, catalogs and folders.”

At the conclusion of the evidence, in ruling upon defendant's ...