Works v. Ry. Express Agency, Inc.
| Decision Date | 09 February 1932 |
| Citation | 240 N.W. 840,207 Wis. 452 |
| Parties | RIPON KNITTING WORKS v. RAILWAY EXPRESS AGENCY, INC. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from a judgment of the Circuit Court for Fond du Lac County; Clayton F. Van Pelt, Circuit Judge.
Action by the Ripon Knitting Works against the Railway Express Agency, Incorporated. Judgment for plaintiff, and defendant appeals.--[By Editorial Staff.]
Affirmed.
Action begun October 9, 1929; judgment dated January 31, 1931. Misrepresentations of agent. The plaintiff is a corporation, engaged in the manufacture of goods at Ripon, Wis. The defendant corporation is a common carrier, conducting a general express business with an agency at Ripon, Wis. The plaintiff was accustomed to deliver to and receive from the defendant considerable amounts of goods, some of the goods consigned to it being delivered C. O. D. From November, 1921, to May 31, 1929, the defendant and its predecessor had in its employ one Peter Lambert, whose duty it was to deliver goods carried by the defendant, collect the charges thereon, and give receipts therefor, and for that purpose the defendant put into his possession blank receipts and authorized him to make out and sign the same on its behalf. The course of business was as follows: Lambert would go to the plant of the plaintiff, turn over to the receiving clerk the consignments of goods intrusted to him for delivery; he would then go from the room where the goods were delivered to the cashier's office in another room for the purpose of collecting the amounts due him. The receiving room was in charge of one Leo Radke, and Miss Solverson was in charge of payments. The distance between the two points was about ninety feet. The defendant used in its business certain documents in connection with shipments handled by it. These documents were composed of five attached parts. In each part is plainly written the waybill number, being the same in each. One part with round openings in it is pasted to the shipment; the remaining four parts are filled in at the office where the goods are received with one writing, there being carbons between them. These four parts are similar in form and with similar blank spaces. They are called the waybill, delivery sheet, abstract advice, and office copy. The abstract advice and office copy are detached at the receiving office and forwarded on the same day to the accounting department of the defendant for that district. The waybill and delivery sheet remain attached to the part pasted to the shipment and are forwarded with the shipment to the destination point. If the shipment is sent collect, when it arrives at office destination it is weighed, charges assessed, and weight and charges are entered on the delivery sheet and waybill. The waybill is kept at the office, and the delivery sheet accompanies the consignment to the place of delivery. When the consignment is delivered, if the consignee accepts the shipment, he signs the delivery sheet at the bottom, acknowledging thereby receipt from the express company of the shipment described thereon, and returns the delivery sheet so signed to the driver. In this case Lambert, the driver, was required to collect the charges shown on the delivery sheet when he left the shipment. At the close of the day's work, the driver is required to return all delivery sheets signed by the consignees and to account to the agent in charge of the office for the defendant, for all charges shown on delivery sheets of all shipments delivered by him. That part of the shipping document which remains pasted upon the consignment has upon it the waybill number, and is of course in the possession of the consignee who has received it. That part of the document does not disclose the nature of the consignmentnor the amount due. Each driver is furnished with a number of unidentifiable blank receipts; that is, they are not serially numbered. The driver is not required to deliver a receipt, but is authorized and directed to do so if requested by the customer. It was the uniform practice of the plaintiff to require such receipts.
The peculations of Lambert began in a small way. He apparently observed the plaintiff's method of doing business and noticed that there was no communication between Radke, the receiving clerk, and Miss Solverson, the cashier, between the time he delivered the packages and the time he called for payments, nor was Miss Solverson accustomed to check the receipts with the delivery sheets which were in his possession. He commenced by making slight additions to the amount of charges actually due and gradually increased these in number and amount and finally made out wholly fictitious receipts, being careful always to use the name of some consignor from whom the plaintiff was receiving goods in the ordinary course of its business. When more than one consignee's receipt was handed to Miss Solverson, she would total the amounts and pay Lambert according to the total. It appears from Lambert's testimony that he never went in to make collections when he was not delivering or receiving bona fide shipments. Payments were made by Miss Solverson in cash and by check. The plaintiff paid over to Lambert as agent of the defendant excessive express charges as follows:
+-----------------------------------------------------------------------------+
¦ ¦Amounts of express charges paid ¦Amounts of over charges¦ ¦
¦ ¦for shipments not in fact ¦for shipments carried ¦Total ¦
¦ ¦carried ¦ ¦ ¦
+----------+--------------------------------+-----------------------+---------¦
¦1925 ¦$ 255.24 ¦$ 11.80 ¦$ 267.04 ¦
+----------+--------------------------------+-----------------------+---------¦
¦1926 ¦640.87 ¦23.54 ¦664.41 ¦
+----------+--------------------------------+-----------------------+---------¦
¦1927 ¦1,489.25 ¦114.54 ¦1,603.79 ¦
+----------+--------------------------------+-----------------------+---------¦
¦1928 ¦3,203.14 ¦139.52 ¦3,342.66 ¦
+----------+--------------------------------+-----------------------+---------¦
¦1929 to 3/¦589.97) ¦13.42) ¦ ¦
¦1 ¦ ¦ ¦ ¦
+----------+--------------------------------+-----------------------+---------¦
¦1929 from ¦ ¦ ¦ ¦
¦3/1 to 5/ ¦954.62) ¦28.10) ¦1,586.11 ¦
¦30 ¦ ¦ ¦ ¦
+----------+--------------------------------+-----------------------+---------¦
¦ ¦7,133.09 ¦$330.92 ¦$7,464.01¦
+-----------------------------------------------------------------------------+
That of such excessive charges, the following amounts were paid by check, payable to the express companies:
+---------------+
¦1925,¦$ 20.32. ¦
+-----+---------¦
¦1926,¦$111.49. ¦
+-----+---------¦
¦1927,¦$296.24. ¦
+-----+---------¦
¦1928,¦$831.76. ¦
+-----+---------¦
¦1929,¦$620.44. ¦
+---------------+
Lambert surreptitiously used the defendant's stamp to indorse the checks which he received, cashed them at a local bank, and accounted for the amounts which he should have collected, retaining the excess and converting it to his own use. Lambert apparently became more and more bold and finally substituted a check which he had received from the plaintiff for cash turned in by another employee. Mr. Currier, the agent, observed this fact, became suspicious, and an investigation followed which disclosed the true state of affairs. This action was begun to recover the excess payments.
In addition to the facts already stated, the court found that neither of the parties to this action knew of any of the fraudulent acts of Lambert until about May 28, 1929; that Lambert knowingly made to the plaintiff material misrepresentations of the fact as to charges due from the plaintiff; that the plaintiff, its officers, agents, and employees, having reasonable grounds so to do, relied thereon in good faith and without knowledge of the true facts, and that plaintiff was induced thereby to pay and did pay the sums of money hereinbefore set forth; that in making such fraudulent misrepresentations and conducting all of the fraudulent transactions Lambert was acting as agent of the defendant within the scope of its employment and within his apparent authority; that the plaintiff was not negligent in the method of conducting its business; and that no negligence on plaintiff's part contributed to plaintiff's damage herein. Plaintiff had judgment, from which the defendant appeals.
T. L. Doyle, of Fond du Lac (Cecilia Doyle and Allan L. Edgarton, both of Fond du Lac, of counsel), for appellant.
Thompsons, Gruenewald & Frye, of Oshkosh, for respondent.
[1] The facts in this case disclose a situation with which courts are often obliged to deal, where one or the other of two innocent parties must suffer by reason of the wrongful acts of a third. The defendant believed, not without reason, that Lambert was an honest and faithful employee and worthy of its trust and confidence. The plaintiff dealt with the defendant through Lambert upon the same assumption. Both parties trusted him, each relied upon his honesty and probity, and each has been deceived and wronged. As to the factual situation there is practically no dispute. The plaintiff in effect accepted the statement of the amount of the defalcation as made by defendant's auditor. It is not denied that Lambert was the agent of the defendant authorized to deliver goods, to collect the charges thereon, and receipt therefor. The defendant argues that the fraudulent...
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