Zweck v. D. P. Way Corp.

• Decision Date: 10 November 1975
• Docket Number: No. 55,55
• Parties: David L. ZWECK, Respondent, v. D P WAY CORPORATION, a Wisconsin Corp., Appellant. (1974).
• Court: Wisconsin Supreme Court

Page 921

234 N.W.2d 921

70 Wis.2d 426

David L. ZWECK, Respondent, v. D P WAY CORPORATION, a Wisconsin Corp., Appellant.

No. 55 (1974).

Supreme Court of Wisconsin.

Nov. 10, 1975.

Wimmer, Evans & Vollman, Waukesha, for appellant.

Weiss, Steuer, Berzowski & Kriger, Milwaukee, Robert K. Steuer, John P. Brady, Milwaukee, of counsel, for respondent.

WILKIE, Chief Justice.

This is an appeal in an action based upon a sales commission agreement between the plaintiff, David Sweck, and the defendant, D P Way Corporation. The defendant has appealed a judgment for the plaintiff in the sum of $3,751.90, and plaintiff seeks an increase in that judgment of $1,650. We affirm the judgment of the trial court.

Plaintiff and defendant entered into a representation agreement on October 21 1970. According to the terms of the agreement plaintiff was to act as the selling agent for the defendant on a commission basis in a specified region of the country. Defendant was in the business of marketing truck-mounted industrial vacuum loaders. Articles V and VI of the agreement provided as follows:

'COMPANY SHALL pay Representative Fifteen (15%) Percent of the gross selling price on Model 350 ULTRAVAC and Fifteen (15%) Percent of the gross selling price on all parts and accessories therefor, after receipt of payment from the purchaser.

'COMPANY SHALL pay Representative Thirteen point eight seven five (13.875%) Percent of the gross selling price on Model 800 ULTRAVAC and Thirteen point eight seven five (13.875%) of the gross selling price on all parts and accessories therefor, after receipt of payment from the purchaser.'

Article XI provided that Zweck was to be responsible 'for all sales and services' within his geographical area. Article XV stated:

'REPRESENTATIVE AND/OR COMPANY SHALL be free to terminate this agreement at will.

'HOWEVER, upon said termination, Company shall continue to pay said Representative all commissions resulting from all sales made by said Representative during the period of this agreement.'

The relationship between Zweck and D P Way continued smoothly for some time, with Zweck selling the machines and receiving his commissions. However, on January 16, 1973, Zweck exercised his right to terminate the agreement, apparently in order to join with others in a newly formed competitor company.

It is undisputed that Zweck obtained three orders for machines on which he had not collected his commissions when he terminated the agreement. These orders were from the Anaconda Company, Kennecott Copper Corporation, and FMC Corporation. The orders were accepted by D P Way, but delivery was not made until after January 16, 1973. Prior to termination, Zweck had also obtained a United States Navy lease for a machine for eighteen months.

Zweck brought suit to recover these commissions and other damages. D P Way paid Zweck his commissions on the three orders and the Navy lease. However, the company deducted from the regular percentage commissions a total of $2,672.80. This sum represented D P Way's accounting of expenses which it had incurred in starting up and servicing the machines which Zweck had sold or leased. It included labor costs, air fare, car rental, and out-of-pocket expenses. D P Way took the position that it was entitled to make these deductions because Zweck had failed to meet his start-up and service obligations in regard to the three orders and the Navy lease. After Zweck served an amended complaint which recognized these partial payments and made demand for the full commissions, trial was held to the court with the result that the court entered findings of fact and conclusions of law in which it concluded that Zweck was entitled to his regular commissions without deductions. It also determined that the Navy lease was terminated in May, 1973, thus cutting off Zweck's monthly commission at that point.

The first controversy involved in this appeal is whether plaintiff is entitled to full commissions without deductions on the three sales that were procured before the termination of Zweck's sales agent agreement, but which did not result in payment of the sales price until after the termination date. Defendant argues that plaintiff is not so entitled because (1) he had not earned the commissions before he terminated the agreement, and (2) if he had earned commissions, these commissions were subject to a deduction for recoupment by defendant for certain services not performed by plaintiff which defendant had to undertake although plaintiff had agreed to perform them as a condition precedent to receiving the commissions. We disagree.

There is no question that the commissions were earned prior to termination of the sales agent agreement. True, deliveries were not made nor payments received until after the termination date. However, Zweck earned his commissions when he procured a ready, willing, and able buyer who had filled out a purchase order for the machines which was received by the company. It is undisputed that these events occurred prior to termination of the contract, and so, according to Article XV, Zweck was entitled to his full commission on these sales. Articles V and VI of the contract do not alter this result because they do not establish the time when Zweck became entitled to his commissions. They merely fix the time of payment of the commissions as 'after receipt of payment from the purchaser.'

This holding is in accord with a long line of cases in which this court has adhered to the general rule that a selling agent earns his commission when he procures an order from a ready, willing, and able purchaser, and this order is received by the company. ¹

On the question presented of whether the defendant could charge as deductions against the commissions earned by the plaintiff those expenses incurred to cover services rendered after the agreement was terminated, the trial court here took testimony to determine whether an ambiguity existed in the language of the contract. The contract specifically provided that the plaintiff was to be 'responsible for all sales and services.' The contract did not detail what was meant by 'services' and thus the trial court followed the procedure approved in Hanz Trucking, Inc. v. Harris Brothers Co., ² and heard relevant parol testimony on that ambiguity. ³

Presley, a similarly situated selling agent, testified that his duties were to be present at the installation of the machines and to instruct the customer's personnel in the proper operation and maintenance of the machine. Kamber, also a salesman like Zweck, agreed that set-up and instruction were his service duties. Moore, former sales manager and superior to Zweck, but now his colleague in the newly formed competitor company, offered conflicting testimony about the duties of selling agents. On the one hand, he stated that start-up and instruction were strictly voluntary options on the part of salesmen, which they might undertake in order to solidify their contacts and enhance their good will. On the other hand, he admitted that he had previously under oath described these activities as duties. Zweck himself declined to characterize these activities as duties, and stated only that he undertook to provide the best service for his customers. An exhibit was introduced which showed that Moore had once informed Presley that he would have to bear the expense if another individual performed service activities for him. Another exhibit indicated that Zweck had described himself as a factory service technician in a letter to a purchaser. Still another document showed that it was company policy that salesmen were not to provide factory service unless they had received permission to do so from the general sales manager.

None of this evidence affects the very evident meaning of the written contract between Zweck and D P Way. Articles V and VI do not in any way make the rendering of services a condition precedent to receiving a commission. They state only that Zweck will receive a specified commission upon sale of certain machines, and fix the time for payment of the commission as the time when payment is received from the purchaser. Similarly, Article XI states only that Zweck 'shall be responsible for all sales and services within said geographical area . . ..' It does not make the rendering of such services a condition precedent to receiving commissions. Thus, no matter what Zweck's service obligations were under the contract, they were not a necessary prerequisite to reception of a commission.

Defendant cites Merriman v. McCormick Harvesting Machine Co. ⁴ in support of his contention that performance of services by Zweck was a necessary prerequisite to earning the commissions. In Merriman the court held that selling agents for a company were not entitled to full commissions for sale of farm machinery because they had not first fulfilled their service obligations. However, in Merriman the contract specified with great particularity a number of services to be performed by the agents, and provided that performance of these services was a condition precedent to earning the commissions:

'. . . The contract provides for a certain commission upon the sale of each machine, which is to be earned, not by obtaining the order alone, but by receiving and housing the machine, setting it up, and running it, instructing the purchaser, receiving and transmitting the money or notes therefor, and by rendering other services connected with the sale. Manifestly the contract is entire as to each commission, and is not earned except by the performance of all the requirements.' ⁵

Merriman is thus inapposite to the facts of the instant case, where the contract only provides in general terms that Zweck is responsible for 'services,' and nowhere makes the provision of such services a condition precedent to receiving his commissions.

Defendant contends that, even assuming that service duties were separate obligations, they were...