Sucher Packing Co. v. Manufacturers Casualty Ins. Co., 12815.

• Decision Date: 25 June 1957
• Docket Number: No. 12815.,12815.
• Citation: 245 F.2d 513
• Parties: The SUCHER PACKING CO., Appellant, v. MANUFACTURERS CASUALTY INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

245 F.2d 513 (1957)

The SUCHER PACKING CO., Appellant, v. MANUFACTURERS CASUALTY INSURANCE COMPANY, Appellee.

No. 12815.

United States Court of Appeals Sixth Circuit.

June 25, 1957.

Jerome Goldman, Cincinnati, Ohio, for appellant.

William G. Pickrel and William H. Selva, Dayton, Ohio. Pickrel, Schaeffer & Ebeling, Dayton, Ohio, of counsel, for appellee.

Before McALLISTER, MILLER and STEWART, Circuit Judges.

McALLISTER, Circuit Judge.

The Sucher Packing Company brought suit against appellee insurance company to recover on a policy, indemnifying against loss resulting from larceny and theft by employees and any inventory shortage which the assured should conclusively prove to have been caused by dishonesty or fraud on the part of any of its employees. The case was tried before a jury, which brought in a special verdict. Appellant had sought a judgment in the amount of $146,370.57; the jury awarded $83.00.

On appeal, The Sucher Packing Company makes numerous claims of error, contending that the trial judge erred in excluding from the consideration of the jury specified records of appellant company; in restricting recovery of damages to certain losses; in submitting a form of special verdict to the jury; in directing a reading to the jury by the court stenographer, of the entire testimony of appellee's principal witness, as embodying a substantial part of appellant's claim; and in various rulings upon the admission or exclusion of testimony.

It is submitted by appellant that when The Sucher Packing Company was acquired in 1945 by a group of investors headed by Arthur Beerman, it was a successful business, and continued its profitable operations during the first part of that year, but, thereafter, began to suffer large and unaccountable losses, which continued until 1950. Appellant claims that it used many methods of attempting to ascertain the reason for such losses, including the installation of modern business record machines; the checking on weights of meat as it was processed in one place in the plant, and moved to another; blocking of unnecessary openings within the plant, and from the plant to the exterior; hiring extra guards; and employing various squads of detectives. On certain occasions, employees were found pilfering meat and were immediately discharged, but these instances were not considered of any moment.

The great losses, however, according to appellant, still continued until, on September 11, 1950, Superintendent McConkey noticed a new barrel being used on the trash truck, which was backed up to the loading dock. As only old barrels were used for trash, this incident aroused Mr. McConkey's suspicions, with the result that he inspected the contents of the barrel, and, when he looked into it, found smoked hams under a layer of trash, and also discovered fresh shoulder butts concealed in papers on the floor of the truck. The trash truck driver, William Harris, was then held for investigation; and, upon questioning, he implicated four other employees, James Jackson, Robert Maiden, Helen Hurt and Willis Early. William Harris and James Jackson were arrested, pleaded guilty to grand larceny, and were sentenced to terms of imprisonment. As to Robert Maiden, Helen Hurt and Willie Early, the jury in the instant case absolved them from any acts of dishonesty, and found that no losses to appellant had resulted from any action on their part, acting either alone or in collusion with anyone else. The jury further found that William Harris and James Jackson, together, had been guilty of stealing hams, shoulders, and bacon from appellant. A most important finding by the jury in its special verdict was that there was insufficient evidence to determine any estimate of the number of pounds of hams, shoulders and bacon that had been stolen by Harris and Jackson. The method by which the jury arrived at a verdict of $83.00 in favor of appellant was as a result of finding, on the admission of the insurance company, that appellant had sustained a loss of $291.00 as a result of the thefts of Harris and Jackson, and that appellant had withheld wages owing in the amount of $208.00. Subtracting the wages withheld from the losses suffered by appellant, gave the amount of the verdict returned.

Harris, who confessed to the theft testified as appellant's witness and stated that he had been stealing from appellant for two years. It was appellee's contention that appellant suffered no large losses as a result of thefts by employees, and that Harris had been employed for only a comparatively brief period. Accordingly, on cross-examination, Harris was confronted with a statement that he had made to a detective at the time of his arrest, in which he had confessed that James Jackson "had got him to stealing hams" about three weeks before his arrest. To explain the conflict in his testimony that he had been stealing from appellant for two years, with the prior statement made to the detective that he had been stealing for three weeks, Harris stated that he meant that he had been hauling for only three weeks, instead of having been stealing for only that length of time. It was for the jury, however, to determine from the evidence whether Harris had been stealing from appellant for two years or for only three weeks. In this regard it is to be noted that Harris had testified that Helen Hurt, Willie Early and Robert Maiden were "involved" in the stealing. The jury, as mentioned, found these three to be innocent of any dishonest action; and the conclusion is inescapable that the jury attached no value to the testimony of Harris and disbelieved practically all of his testimony with regard to the time during which he had been engaged in stealing from appellant, the amount of meat that had been taken by him, and the persons he testified were involved with him.

The complaint filed by appellant, and the numerous amended complaints subsequently filed, embodying its changing contentions during the trial of the case, foreshadow the uncertainties of appellant's claims and proofs. On September 2, 1952, the complaint was filed; thereafter, an amended complaint, and a second amended complaint were filed. The second amended complaint was amended during the trial, and thereafter, again amended during the last day of the trial. The amended complaints withdrew claims of losses by theft of beef and veal from $9,620.91 to no loss whatever; of loss by theft of sausage from $12,546.74 to $10,392.74 — and subsequently the claim for loss from sausage, was entirely withdrawn; and, finally, complainant made an allowance for meat consumed by its employees in its cafeteria, which had previously been claimed as a loss by theft. Copies of the same exhibits, twelve in number, were given by appellant to the members of the jury, in order that they could follow the testimony. These exhibits were found to contain such errors that the copies were withdrawn and collected from the jury, and replaced by other exhibits in the hands of the jury, which were subsequently found to contain such errors, while the items were being explained to the jury, that they were also withdrawn and collected from the jury, and others submitted in their place. We refer to the foregoing as characteristic of errors and uncertainties in appellant's changing claims and proofs that took place during the trial.

It may here be remarked that appellant could not prove what part of its claimed loss took place in 1948, or what part, in 1949. While it claimed that a loss amounting to $146,370.57 was due to theft, it could give no idea when, during this entire period, the alleged thefts occurred.

Appellant had first claimed in its complaint damages as a result of thefts of beef, veal, sausage, smoked pork and fresh pork. As to beef and veal, counsel admitted in open court that appellant could not prove such losses by theft. So beef and veal were withdrawn from the claim.

Harris testified that pork loins and sausage had been stolen by others without any certainty in amount or specification of names, but he stated that he never took anything but hams, shoulders and bacon. As a result of his testimony, counsel for appellant stated to the court: "Sausage may be eliminated as the testimony of Harris with respect to sausage is too indefinite. So the case is now restricted and confined to fresh pork and smoked pork."

Moreover, appellant, in addition to claiming that the insurance company should, according to the terms of the policy, indemnify it against loss "through theft, larceny, embezzlement, misappropriation, wrongful abstraction or fraudulent act or acts committed anywhere, by any of the employees, acting alone or in collusion with others," also claimed indemnity for "that part of any inventory shortage which the assured shall conclusively prove to have been caused by dishonesty or fraud on the part of any of its employees."

However, the proof of inventory shortage, although it appears to have been the principal part of appellant's case, was so deficient, contradictory, and worthless from the standpoint of evidence of conclusive proof of "inventory shortages caused by dishonesty of employees," that appellant, in its requested instructions to charge the jury, stated that "plaintiff is not claiming an inventory shortage. * * * Under such circumstances, the portions of the policy with respect to the proof required of inventory shortages are not applicable."

The policy of indemnity insurance, as heretofore remarked, limited the insurance company's liability to $20,000 for each employee and to $20,000 for losses caused by unidentifiable employees, as well as inventory shortage conclusively proved to have been caused by dishonesty on the part of any of the employees. Appellant asked a judgment of $146,370.57, claiming, apparently, $20,000 for thefts of five employees, and the balance for thefts of unidentifiable employees and inventory shortage, caused by theft. However, at the close of the...