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Croy Mfg. Co. v. Marks

SEPTEMBER 13, 1965.




Appeal from the Circuit Court of Cook County, Municipal Division; the Hon. ROBERT E. McAULIFFE, Judge, presiding. Reversed and remanded with directions.


Plaintiff, Croy Manufacturing Company brought suit against Frank Marks, d/b/a Champion Products Company, to recover the price of merchandise allegedly sold and delivered to defendant.

The cause was heard by the court and judgment rendered for defendant. On appeal by plaintiff questions are raised as to the pleadings, the evidence, and the court's rulings in the course of the proceedings.

The pleadings consisted of the complaint and an amended answer to which no reply was filed. The complaint alleged that plaintiff is engaged in the sale and distribution of automotive parts, and that on December 13, 1962 defendant purchased from it certain merchandise. Attached to the complaint as Exhibit A is a purchase order, on defendant's stationery, and signed by the defendant. The document, addressed to plaintiff, requested the entry of an order for "1" quantity of "Lot Surplus as submitted" without specification as to price, unit or amount.

Plaintiff further alleged that under the terms of the agreement, defendant was to pay the account by the 10th of the month and if so paid a 5% discount would be allowed; upon failure to pay within the aforementioned period, a 5% interest charge would be assessed for vexatious delay. Plaintiff charged that there was an account stated between the parties pursuant to the contract, and that there is a balance due of $16,463.47, plus interest from April 10, 1963.

The amended answer, after denying the allegations of the complaint, charged that the attached Exhibit A was not an exhibit because it stated that there was purchased a "lot surplus as submitted" and no list of the items purchased had been submitted to the defendant. Defendant stated that he received and accepted some merchandise for which he paid plaintiff in full, and that there were other items delivered to him which were returned to plaintiff, and that there were still other items not saleable or acceptable to him which he requested plaintiff to pick up on numerous occasions, but which plaintiff has failed to do.

The amended answer further charged that any business dealings referred to were based upon an agreement between the parties that defendant would pay for merchandise he sold, and that plaintiff would pick up and accept all other merchandise not sold by him. Defendant, answering further, stated that he did not purchase outright the merchandise claimed to have been sold to him, but that he was to pay by financing one Maurice Polakoff for any merchandise sold; that plaintiff was to accept the return of any merchandise not sold; that defendant did pay for the merchandise he disposed of.

After denial of plaintiff's motion for summary judgment the case proceeded to trial and the evidence disclosed the following facts.

In 1962 Maurice Polakoff, a former employee of plaintiff, who on prior occasions had business relationships with defendant, was employed by D & D Machine Works and also operated from his home an independent business as sales agent, approached Glenn Stein of Croy with the suggestion that plaintiff might be willing to sell him certain surplus parts. This initial suggestion was turned down primarily because of Polakoff's financial condition. Polakoff then made contact with the defendant and told him of the available automobile parts, informed him that they could be sold, and that he would undertake to sell them if defendant would purchase the same.

When called by plaintiff under section 60 of the Practice Act (Ill. Rev Stats 1963, c 110, § 60) Polakoff related the following conversation with the defendant: ". . . that there was an opportunity to buy some obsolete closeout merchandise that Croy Manufacturing Co. was — would sell, and I would bring a listing of that merchandise to him [defendant], and if he would want that merchandise I could buy it from him, and then I could also try to sell it, and if I would sell it, we would split the commission, or half of the expenses, or anyway we want to work it out . . . And he told me if I feel that you could sell that merchandise that you saw which Mr. Marks knew very little about that type of goods — he can't handle it regularly — he would permit me to buy it and he did."

Polakoff again made contact with Stein, who agreed to the transaction now that defendant was involved. Stein gave Polakoff a listing of the merchandise plaintiff would sell, which Polakoff took to the defendant who, in turn, gave Polakoff the purchase order for the particular goods described in the listing. Defendant issued the December 13, 1962 purchase order directed to plaintiff for "1" quantity of "Lot Surplus as submitted." In his testimony, Polakoff valued the merchandise on this list as between three and four thousand dollars.

After issuance of the purchase order, Polakoff visited plaintiff's warehouse, and continued doing so once or twice each week, selecting merchandise from the listing and picking up a copy of the invoice for the items shipped a day or two previously. This procedure continued for several months, defendant sending his truck over to pick up parts so selected by Polakoff which were then delivered to and stored at defendant's place of business. Polakoff promoted their sale, and the profits were divided between them after deduction of expenses and payments to plaintiff.

Defendant gave testimony which was substantially in accord with that given by Polakoff. Defendant testified that he and Polakoff agreed to purchase surplus parts from plaintiff based on the list of goods Stein had given to Polakoff, and for which he had given the purchase order referred to. He further stated, "I was going to finance the purchase of these parts. . . . We agreed to purchase what is on that list. I gave Croy a purchase order. . . . They billed me. We picked it up. Our employee picked up the parts. Our truck driver picked up the goods at plaintiff's warehouse." Invoices for the goods were sent to defendant a day or two after delivery of the goods, which defendant testified to as being customary procedure and the usual method of dealing with plaintiff.

Defendant stated that Polakoff received 50% of the profits derived from the merchandise sold. Defendant stated that sometime after deliveries began he complained to Polakoff about the amount and quality of goods being shipped, and that some of the parts did not fit what they were marked for. ...

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