Locke Distributing Co. v. Hartford Acc. & Indem. Co., 32260
| Citation | 407 S.W.2d 658 |
| Decision Date | 20 September 1966 |
| Docket Number | No. 32260,32260 |
| Parties | LOCKE DISTRIBUTING COMPANY, a Corporation, Plaintiff-Respondent, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, a Corporation, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Rader & Grimm, William S. Rader, Stanley A. Grimm, Cape Girardeau, for defendant-appellant.
Finch, Finch, Knehans & Cochrane, Jack O. Knehans, Marvin E. Wright, Cape Girardau, for plaintiff-respondent.
This is a suit on a bond issued by defendant, Hartford Accident and Indemnity Company, to plaintiff, Locke Distributing Company. By its terms, defendant agreed to indemnify plaintiff subject to certain conditions and limitations against loss of money or other property through any fraudulent or dishonest acts of any of plaintiff's employees to an amount not to exceed $10,000.00. Recovery was sought for a loss alleged to have been sustained by plaintiff through the dishonest acts of two of its employees, namely, Helen Baker and her husband, Gene Baker. The prayer of the petition was for $10,000.00 with interest from March 1, 1963, together with a ten percent penalty and an attorney's fee of $2500.00 for vexatious refusal to pay under Section 375.420, RSMo 1959, V.A.M.S. The trial resulted in a verdict for the principal sum of $10,000.00, interest of $900.00 and an attorney's fee in the amount of $1,500.00. No penalty was assessed. From the judgment on this verdict, defendant has appealed.
The insuring clause of the bond reads as follows:
'The Underwriter, in consideration of the payment of the premium, and subject to the Declarations made a part hereof, the General Agreements, Conditions and Limitations, and other terms of this Bond, agrees to indemnify the Insured against any loss of money or other property which the Insured shall sustain through any fraudulent or dishonest act or acts committed by any of the Employees, acting alone or in collusion with others, to an amount not exceeding in the aggregate the amount stated in Item 3 of the Declarations.'
The limits of liability stated in Item 3 of the Declarations was $10,000.00.
The only condition and limitation material on this appeal appears under the heading 'Exclusion' and is as follows:
The bond was obtained through Fred Springer of Popp and Springer Insurance Brokers in Cape Girardeau. This firm represents five or six insurance companies, including Hartford Accident and Indemnity Company, defendant herin. It is also engaged in the real estate business. The bond sued on was not signed by this firm or any of its members. It was in full force and effect during the time plaintiff suffered the alleged losses for which plaintiff seeks recovery in this action.
Locke Distributing Company is a wholesale distributor of Falstaff Beer in eleven counties in southeast Missouri. Its main office and warehouse is located in Cape Girardeau. Branch offices and warehouses are maintained in Miner, in Kennett and in Poplar Bluff. Harold W. Locke is president of the Company and his son, Harold W. Locke, Jr., is its vice-president. Harold W. Locke is primarily the general manager of the Company's various offices and warehouses.
Helen Baker and her husband, Charles E. (Gene) Baker were employed to operate the business at the Poplar Bluff office and warehouse from 1959 to February 12, 1963. Helen was employed as a bookkeeper in the Company's office and her husband, Gene, performed duties as a salesman operating out of the Poplar Bluff warehouse. His duties were to load a truck each day with cases and packages of beer and call on licensed retailers of beer such as owners of taverns and package stores. Each day he had a separate run or territory. Before starting on his route, he would fill out a 'daily truck sheet,' showing the number of export cases, quarts, seven ounce and cans loaded onto the truck. When making a sale, a sales ticket was filled in, showing the name of the person to whom the beer was delivered, the customer's license number, the date of the sale, the amount of beer delivered, and whether it was a cash or charge sale. If the sale was for cash, the ticket was marked 'paid,' but if credit was extended, the customer was supposed to sign the ticket. These tickets were contained in a book and were in triplicate, i. e. an original and two carbon copies. The practice was to send the first copy to plaintiff's Cape Girardeau office, the second copy was left with the purchaser; the third copy remained in the Poplar Bluff office. Each book contained fifty sets of tickets numbered serially. The salesman, at the end of his day's run, would turn in the used tickets together with the checks received and cash collected from customers to the bookkeeper at the Poplar Bluff plant.
Helen Baker was office manager and bookkeeper at Poplar Bluff. Her duties consisted in making a daily report, an original and carbon copy, showing the number of cases or packages of beer sold the previous day, whether for cash or on credit, the number of empties picked up, and the amount of money collected and deposited in the bank as a result of the day's operation. She made deposits in the bank of Poplar Bluff of the money and checks received, filling out at that time deposit slips in duplicate. All deposits were in the account of Locke Distributing Company. A copy of the deposit slip was sent to the Cape Girardeau office each day. The original daily report was also sent to the Cape Girardeau office and the carbon copy remained in the Poplar Bluff office. Each month, statements were sent direct from the bank to the Cape Girardeau office. Mrs. Baker would enter the charges and credits in an accounts receivable ledger, showing the name of the purchaser, the name of the town where purchaser operated, the date of sale, the serial number of the sale ticket, and the total charge. Any empties which were picked up would be credited and the balance extended in the usual way.
In June 1960, Walter Buchheit, advertising and contact man for plaintiff in the Poplar Bluff territory, called Mr. Locke by telephone from Poplar Bluff and informed him there was not enough beer in the warehouse to operate the next day's run. The last warehouse stock report showed there was enough beer on hand there to operate several days. Nevertheless, Locke sent more beer to Poplar Bluff that day. Locke later received a stock report dated June 6, 1960, which indicated a shortage of a thousand and some packages, which according to Locke's testimony, would amount to a loss between three and five thousand dollars. This was not reported to the bonding company. After receiving the stock report, it was checked for clerical mistakes. Harold Locke, Jr., and Bob Harper then went to Poplar Bluff to make an inventory of the contents of the warehouse, and to check the reports. Locke testified that his reaction to the report of June 6, 1960, was that '' Mr. Locke further stated that at that time he tried to find whether there was a mistake by checking the stock reports, but was unable to locate a shortage. Thereafter Bob Harper, defendant's office manager at Cape Girardeau checked the inventory a number of times.
In August 1962, Fred Carr, of the C.P.A. firm of Hoche & Barklage, and Bob Harper made a physical inventory of the contents of the Poplar Bluff warehouse. Over objection, Mr. Carr testified that he found approximately 190 cases of empty beer bottles surrounded by cases of full bottles. When Locke received this report, he again talked to the Bakers and tried to check the reports.
In January 1963, the deposit slips and reports from the Poplar Bluff office began arriving three or four days late. When this situation developed, Mr. Locke sent Bob Harper to Poplar Bluff to make a complete audit and to remain there until Mrs. Baker completed three delinquent reports. Harper was also sent back in February 1963, to do the same thing. His report to Mr. Locke on these two occasions was that there was an inventory shortage.
On February 12, 1963, Cecil Compton, Walter Buchheit, Harold Locke, Jr., and Harold Locke, Sr., met at Poplar Bluff. Compton was an advertising man and auditor employed by plaintiff. Buchheit was an advertising man employed by plaintiff. He was also referred to in the testimony as a contact man. They went to the plaintiff's warehouse, arriving there five or ten minutes before the Bakers. When the Bakers arrived, Mr. Locke told them to take a two weeks vacation, during which time Compton would take over the office, and Buchheit would assume Gene Baker's duties as route salesman. Locke asked for and the Bakers surrendered their keys to the warehouse and office.
Locke and his men then attempted to prepare a statement of the accounts and in doing so discovered that the accounts receivable ledger showed $132.00 owing from Raymond Eastwood. Eastwood had been out of business for three or four weeks, and Locke sent his...
To continue reading
Request your trial
-
Hca, Inc. v. American Protection Ins. Co.
...was allowed to establish the amount of loss even though employees had confessed to dishonesty in Locke Distributing Co. v. Hartford Acc. & Indem. Co., (Mo.App.1966) 407 S.W.2d 658. . . More recent decisions tend to allow an inference of employee dishonesty to be drawn from relatively thin c......
-
Macalco, Inc. v. Gulf Ins. Co.
...or rights not found in the contract. Blew v. Conner, 328 S.W.2d 626, 631(9) (Mo. banc 1959); Locke Distrib. Co. v. Hartford Accident & Indem. Co., 407 S.W.2d 658, 671(6) (Mo.App.1966); Weber v. Union Life Ins. Co., 394 S.W.2d 565, 569-570(5) (Mo.App.1965); Fernan v. Prudential Ins. Co. of A......
-
Justin Time Transp., LLC v. Harco Nat'l Ins. Co.
...¶ 45 Under Missouri law, courts cannot create insurance coverage by waiver or estoppel. See Locke Distributing Co. v. Hartford Accident & Indemnity Co., 407 S.W.2d 658, 671 (Mo.Ct.App.1966); Hussman v. Government Employees Insurance Co. (GEICO), 768 S.W.2d 585, 587 (Mo.Ct.App.1989); State F......
-
Cambridge Trust Co. v. Commercial Union Ins. Co.
...340; Gotcher Engr. & Mfg. Co. v. United States Fid. & Guar. Co., 193 So.2d 115, 116 (Miss.1966); Locke Distrib. Co. v. Hartford Acc. & Indem. Co., 407 S.W.2d 658, 660 (Mo.App.1966); Teviro Casuals, Inc. v. American Home Assur. Co., 81 A.D.2d 814, 439 N.Y.S.2d 145 (1981); Jones v. Employers ......