Oddo v. Interstate Bakeries, Inc.

• Decision Date: 29 December 1959
• Docket Number: No. 16235.,16235.
• Citation: 271 F.2d 417
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: Victor ODDO, d.b.a. Oddo's Food Center, Appellant, v. INTERSTATE BAKERIES, INC., Appellee.

271 F.2d 417 (1959)

Victor ODDO, d.b.a. Oddo's Food Center, Appellant, v. INTERSTATE BAKERIES, INC., Appellee.

No. 16235.

United States Court of Appeals Eighth Circuit.

November 19, 1959.

Opinion Modified On Rehearing December 29, 1959.

William Harrison Norton, North Kansas City, Mo., and S. Preston Williams, North Kansas City, Mo. (Wilbur L. Pollard, Kansas City, Mo., and Williams & Norton, North Kansas City, Mo., on the brief), for appellant.

John Murphy, Kansas City, Mo. (J. Gordon Siddens, and Tucker, Murphy, Wilson & Siddens, Kansas City, Mo., on the brief), for appellee.

Before WOODROUGH, VAN OOSTERHOUT and MATTHES, Circuit Judges.

Opinion Modified On Rehearing December 29, 1959. See 271 F.2d 959.

WOODROUGH, Circuit Judge.

This action was begun March 6, 1957 in the Circuit Court of Jackson County, Missouri, and removed to the federal court for diversity of citizenship. It was alleged in the complaint that:

The plaintiff owned and operated a grocery business at 1031 Burlington Avenue near the North end of the A.S.B. bridge in North Kansas City, Missouri, known as Oddo's Food Center, and was a customer purchasing bread from defendant Interstate Bakeries, Inc., for resale in the store from the time the store was opened in August, 1950. From that time until October, 1956, one Herbert W. Cooley (originally named a defendant but never served) was employed by the defendant bakery company as its route man who handled the sale and delivery of its bread and bakery products to the plaintiff and in the course of the business and while acting within the scope of his employment said Cooley made deliveries of bread and bakery products and left a carbon copy of the delivery tickets with plaintiff showing the quantity and price of the bread and bakery products so delivered to the plaintiff at the store and said Cooley took the original of said delivery tickets to the office of defendant and at the end of each month the defendant rendered a statement of account showing the total due from the plaintiff to the defendant based on the delivery tickets. Beginning on or about August 1, 1950, said Cooley began to falsify the delivery tickets delivered to the plaintiff and this course of conduct continued from August 1, 1950, through August 8, 1956. During all of the time Cooley falsified the delivery tickets in such a manner as to show greater quantities of defendant's goods delivered to plaintiff than were actually delivered and the defendant rendered an account and statement based on said falsified delivery tickets to the plaintiff at the end of each month and received payment from plaintiff for the amounts of the statement including the overcharges of bread and bakery products purportedly delivered.

The complaint then set forth the amount of the overcharge in each year, 1950 through 1956, totalling $79,840. Though demand was made on defendant for payment to plaintiff of the overcharges payment was refused.

It was alleged that knowledge that Cooley was falsifying the figures on the delivery tickets first came to plaintiff on or about October 8, 1956, although plaintiff had diligently and carefully checked the deliveries made by defendant. Judgment was prayed for the amounts of overcharges paid by plaintiff together with interest and costs.

Defendant joined issues by denials and special pleas and trial was had to the court without jury. Judgment was for defendant dismissing the action at plaintiff's costs in accord with a memorandum opinion (unpublished) which included the findings and conclusions of the court. The plaintiff appeals.

It appears without dispute that plaintiff was a customer of the defendant bakery company, buying its bread and bakery products over the period referred to in the complaint. Herbert W. Cooley was employed as the company's "driver-salesman" and before plaintiff opened his new store in 1950 the "driver-salesman" solicited plaintiff to buy defendant's bread and bakery products and to let them be placed in the new store for resale in the "favored position" on the bread and bakery racks. Three other bakeries, American Bakeries, Holsum Bakeries and General Bakeries, were also soliciting and plaintiff decided to buy from all four, but he was offered $22.40 a week in bread by defendant's agent Cooley to let defendant have the best position on the bread rack for resale of its product. He accepted that offer, allotted the favored position to defendant, and received the agreed payment in defendant's bread until well along towards the end of the period involved when the same amount was paid each week by Cooley's personal check to plaintiff, delivered to a clerk in the store. Defendant used the best position for the bread it sold to plaintiff throughout the relevant period and more of its bread was sold in the store than that of the other three bakeries combined.

It also appeared and the court found that:

"Sometime during this period from 1950 on, Cooley devised a scheme by which he showed on the duplicate delivery slip the delivery of bakery products to plaintiff greatly in excess of the amount and quantity actually delivered. Apparently this was accomplished by making out the duplicate delivery slip for excessive amounts, complete with extensions of prices, before the deliveries were made. The original delivery slips were not made out until the deliveries were actually made, and were then made out in the correct amounts.

"At the time of the delivery the bread was checked in by Oddo\'s checker against the original delivery slip only, and after having done so, he signed the original and Cooley tore out the carbon copy which did not conform to the original, and placed it in a box which had been provided in the store for that purpose. After the checking, the evidence reveals that the originals were then changed to conform to the carbon copies.

"For example, if Cooley had made out a carbon copy indicating that 54 loaves of a certain type of bread were to be delivered, the original would show 4 loaves and later he changed the original by inserting a `5\' in front of the 4, so that it conformed to the exact amount shown on the carbon copy. Seemingly, the extensions were not made on the original at the time of the delivery, but were made at the time the changes were made in the original. The original slips were then returned to the company and it was from these slips that the defendant made its charges and rendered its invoices and statements to Oddo each month.

"As the amount of the original delivery slips showing the delivery of products to Oddo was, after their change to correspond to the carbons, greatly in excess of the amount actually delivered, Cooley had to account to the bakery in some way for the amount of products he had been charged with. He did this by showing the difference as sales to cash customers. The amount of the difference between the values actually delivered to Oddo and the value as shown by the delivery ticket he retained for himself out of cash sales, thus balancing his daily account with the bakery.

"Plaintiff contends that although this practice continued for more than six years, neither party ever suspected any discrepancy until the Summer of 1956. Until that time Oddo gave very little attention to the details of his business. He states that he was about the store doing various things, but worked mostly on the night shift, the store being kept open until a late hour; that he had a young woman bookkeeper whose duty it was to check invoices and draw checks for the payment of bills, which checks were presented to him by her and he signed the checks without particular knowledge as to whether they were correct or not. The last few years of the period he employed a firm of accountants who picked up the information once a week, took care of his accounts and made out checks and presented them to him for his approval and signature.

"Oddo says he had a boy in the back of the store in the receiving department checking the products that were delivered; that he personally never checked any bakery products, nor did he know anything about it. The evidence does not indicate that Oddo or any person in the store ever checked the bakery products received against the duplicate delivery slip; they only saw the originals. After the transaction was over and the bakery products had been sold, it was not possible to determine from the slip whether or not the amount delivered and the delivery slip conformed.

"During the Summer of 1956, the A.S.B. bridge was resurfaced, and it became necessary to re-route traffic from Burlington Avenue, the street on which plaintiff\'s store is located. This situation continued for a considerable period of time, and Oddo says his business fell off about 25%, causing him some concern; that it is a well known fact in the grocery business that the sale of bread and bakery products follow very closely the trend in the sale of other types of groceries; that he discovered upon examination of the books, that the purchases of bakery goods from the other three major bakeries followed almost exactly the downward trend of his business; whereas the purchases from Interstate remained practically the same.

"Even at that he did not suspect Cooley, for whom he expressed friendship. However, he did contact the defendant\'s manager and explained to him that he thought there was something wrong with the billing, and in response to that conversation, defendant\'s manager went to the Oddo store and an investigation followed. Cooley was questioned, and, as a result of it, was discharged for misconduct. Cooley left the state shortly thereafter, and never returned. * * *

"While plaintiff did a very large business, his books and records were largely confined to invoices and check books and a bank book. He did, however, have all of his delivery slips for the entire period beginning with the opening of his present store in 1950, but the defendant had its originals only for a period back to

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