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STADHAM CO. v. CENTURY INDEMNITY CO. (07/20/50)

July 20, 1950

STADHAM CO.
v.
CENTURY INDEMNITY CO.



COUNSEL

Rawle and Henderson, Robert E. Jones, Thomas F. Mount and Joseph W. Henderson, Philadelphia, for appellant.

Isadore Penn and Thomas I. Guerin, Philadelphia, for appellee.

Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross and Arnold, JJ.

Author: Ross

[ 167 Pa. Super. Page 270]

ROSS, Judge.

This is an action of assumpsit brought by the Stadham Company, a corporation, upon an employees' fidelity bond -- called a 'Blanket Position Bond' -- issued to it by the defendant. The jury rendered a verdict for the plaintiff in the sum of $1,366.40 (representing the amount of the alleged loss with interest from the date of demand), whereupon the defendant filed motions for judgment n.o.v. and for a new trial, both of which were refused, judgment entered on the verdict and this appeal followed.

Reading the evidence in the light most favorable to the plaintiff and giving it the benefit of all inferences reasonably deducible therefrom, as we are required to do in view of the verdict of the jury, the facts are as follows:

During the period in which the bond in suit was in force, the plaintiff was engaged in the business of selling supplies to the laundry and dry cleaning trade. Its warehouse consisted of two adjoining buildings in which approximately one thousand items were kept in stock. These buildings were protected by a system of burglar alarms, and when no employees were about, the rooms in which the stock was kept were locked. It was the practice of the plaintiff to make physical inventories of its stock semi-annually on April 30 and October 31. The physical counts of each item of stock were at these times compared with corresponding inventory cards which were kept current by adding incoming shipments as debits and subtracting sales as credits. These inventory cards were kept with care and accuracy. A physical inventory made in the normal course of business April 30, 1947 disclosed no shortages in stock.

In October of 1947, the plaintiff received an order for a number of laundry nets, an item regularly stocked by it for the purpose of resale, and discovered that,

[ 167 Pa. Super. Page 271]

    although the inventory card showed an ample supply on hand to fill the order, the number of nets actually in stock as determined by a physical count was insufficient for the purpose. On Saturday morning, October 18, 1947, James Taylor, driver of the only truck used by the plaintiff in its business, arrived at the warehouse while the warehouse manager and other employees were away and prepared to drive the truck from the warehouse. Michael W. Steinig, president of the plaintiff, asked Taylor what he intended to do with the truck and Taylor represented that James L. Steinig, vice president of the plaintiff, had told him to take the truck out for the purpose of having it greased and the battery checked, which was an untrue statement.

The discovery of the shortage in the supply of laundry nets, coupled with the unauthorized use of the company truck by Taylor on a day when he was not supposed to be at work, aroused the suspicions of the plaintiff's officers and caused them, on Tuesday, October 21, 1947, to have made spot checks of stock on hand as compared with inventory records. This spot check disclosed a shortage of approximately $1,200. On that same day Taylor was called into the office of Michael W. Steinig and told by Steinig that he was suspected of having caused the shortage. Taylor did not deny the theft but rather said, 'How much is it? I will pay if you don't do anything about it.' And, when informed of the amount of the shortage, said, 'Oh, it can't be that much.' It was in evidence that Taylor had, on October 17, 1947, asked James Belton, another of plaintiff's employees, if he wanted to make some easy money selling laundry nets belonging to the plaintiff.

Taylor did no further work for the plaintiff after October 21, 1947, returning only to collect his pay on Friday, October 24, 1947. A regular semi-annual inventory was ...


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