Simco Automotive Pump Co., Inc. - Page 5




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          store scrap metal.2  The sales of scrap metal continued into                
          1992.                                                                       
               John sold the scrap metal to Dix Scrap Iron & Metal Co. (Dix           
          Scrap).  John contacted the president of Dix Scrap, John Brooks,            
          to arrange the sales of the scrap metal.  In general, when Dix              
          Scrap bought scrap metal, it would pay by either cash or check,             
          although use of a check was more convenient for Mr. Brooks.  When           
          John arranged the sales of scrap metal to Dix Scrap, he                     
          specifically asked Mr. Brooks to pay in cash, and Mr. Brooks did            
          so.  John was the only individual associated with Simco with whom           
          Mr. Brooks dealt.                                                           
               Dix Scrap hauled the scrap metal from the Simco plant,                 
          weighed it, and wrote out a weight ticket for each load.  Each              
          weight ticket indicated the date, the type of scrap metal, the              
          weight, the unit price, and total price.  Every week or two, John           
          would go to Dix Scrap to collect payment for the scrap metal.  He           
          would sign the accumulated weight tickets and take the tickets              
          and the cash.  Dix Scrap did not send copies of weight tickets,             
          or a statement of the sales, to Simco.  Further, John did not               
          request such documentation to be sent to Simco, and Mr. Brooks              
          did not think he was supposed to supply any such documentation.             

               2 Simco’s main building, which was known as the Buchanan               
          building, contained the main offices and the production                     
          facilities.  John worked in the Prospect building.  The Prospect            
          building contained the purchasing and shipping facilities.                  





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