On appeal from the Superior Court, Law Division.
For affirmance -- Chief Justice Vanderbilt, and Justices Case, Heher, Oliphant, Wachenfeld, Burling and Ackerson. For reversal -- None. The opinion of the court was delivered by Wachenfeld, J.
[3 NJ Page 150] The appellant sued for the purchase price of certain merchandise delivered, to wit, waste paper.
Delivery was admitted but the respondent disputed the quantity received and the amount due. The issue so framed was decided by the jury and is not before us at this time.
The appeal concerns the issues arising out of a counterclaim filed by the respondent in which it alleges it purchased and paid for shipments of waste paper for a long time, from December, 1940, to July, 1945, and during this period was cheated and defrauded by the appellant because the weights of the shipments so made were overstated, resulting in payments over and above the reasonable value of the merchandise received to the extent of approximately $15,000. The jury returned a verdict of $9,449.62, for which judgment was accordingly entered and is presently under consideration.
The case involves a somewhat complicated state of facts in reference to the proof submitted by the respondent on its counterclaim endeavoring to show it had been defrauded by paying for merchandise never actually received.
The counterclaim alleges there was a scarcity of the commodity at the time and the appellant refused to sell and deliver any waste paper unless the weighing thereof was waived and the appellant's representation as to the true weight accepted and payment made at the prevailing market price. It further alleges that between December, 1940, and July, 1945, various quantities of waste paper were delivered to the Old Bridge plant which were represented by the appellant to weigh 4,774,724 pounds and the respondent, relying upon said representation, paid therefor, including the cost of truckage, the sum of $38,555.07. It then charges that in truth only 2,589,791 pounds of waste paper were actually delivered and the appellant had thus cheated and defrauded the respondent to the extent of $15,365.25.
Fischetto Paper Mill Supply, Inc., is a closely held family corporation and has been supplying waste paper to the respondent for many years. Quigley Company has factories in South River and Old Bridge, New Jersey. It manufactures, amongst other products, high temperature insulated fire brick, of which burnt waste paper is a component part. The paper is chopped up and added to other ingredients in precise proportions
ascertained by weighing, after which the whole mixture is put in kilns where the paper and other inflammable materials are burned out, leaving a porous and insulated brick.
The war caused a scarcity of paper supply and the appellant suggested the weighing be discontinued and in lieu thereof it would furnish weighmaster's certificates to certify the net weight of the deliveries.
Sometime in 1943 the respondent discovered at the Old Bridge plant a shortage in the book inventory of materials in relation to all of the products used in production. They were operating at full capacity but their auditors were unsuccessful in ascertaining the cause of the shortage. As a result of an anonymous telephone call in May, 1945, the respondent's plant manager became suspicious of the correctness of the certificates showing the quantity of paper delivered. The next load was therefore weighed and was found to total only 28,195 pounds instead of 41,955 pounds, the amount stated in the receipt. On the following delivery the total load was found to weigh only 19,516 pounds instead of the 29,635 pounds represented.
A complete investigation and audit were made by the respondent. Adding together the quantity of paper on hand on December 31, 1942, as determined by an inventory made on that day, the amount allegedly delivered by appellant from January 1, 1943, to July 9, 1945, and the small amounts of paper obtained through other sources and subtracting the quantity then on hand plus the amount determined from its records ...