Arkansas Fuel Oil Co. v. National Surety Corporation , 191 La. 115 ( 1938 )

On Rehearing.

FOURNET, Justice.

This is an action by the Arkansas Fuel Oil Company against Alfred Perry, Mel Dietlein, and the National Surety Corporation, in solido, to recover certain losses, aggregating the sum of $2,077.14, sustained by the defalcation of the defendant, Alfred Perry, in the operation of its bulk sales station located at Opelousas, Louisiana.

The matter is now before us for reconsideration of our original decree, wherein we affirmed the judgment of the lower court maintaining exceptions of no cause and no right of action filed by the defendants, Mel Dietlein and the National Surety Corporation, and dismissed plaintiff’s suit as to them. The rehearing granted by us is restricted to plaintiff’s claim against the defendant, Mel Dietlein, only.

The plaintiff’s losses, as disclosed by its allegations, were discovered on February 12, 1936, by an audit conducted by the employees of the Louisiana Oil Refining Corporation, its predecessor, which showed a shortage in the stock, accounts, and cash of its Opelousas bulk sales station. It is alleged “ * * * that said shortage was brought about by the said Perry’s systematically making sales for cash to various persons, unknown to petitioner, and reporting such sales to petitioner as having been made on credit to persons to whom said Perry was authorized by petitioner to make sales on credit. That upon petitioner’s insistence that the said Perry and Dietlein make collections of the false balances thus shown to be due by such authorized customers of petitioner, the said Perry would make remittances to petitioner in most cases, bijt the funds thus remitted were obtained by engaging again in the same practice of making false charges to authorized credit customers.”

It is further alleged that the said Perry continued this system of fraudulent transactions steadily until the time of its discovery; that “ * * * the entire amount of the shortage, hereinabove de scribed, accrued through false and fraudulent reports and invoices, and through misapplication of funds collected belonging to petitioner, and through embezzlement of monies and goods committed by petitioner to the care of said Dietlein and Perry, all said wrongful acts having taken place during the time between February 26th, 1934, and February 12th, 1936; that said shortage was discovered by the employer on February 12th, 1936, on which date said Alfred Perry confessed and acknowledged and assumed full and sole responsibility for the said shortage in the stock, accounts, and cash, and gave to the employees ' of the Louisiana Oil Refining Corporation his written statement sworn to before a Notary Public on said date.”

Plaintiff’s claim against Mel Dietlein is based on a certain contract entered into between them on November 12, 1935 for the operation of its said bulk sales station at. Opelousas, wherein Dietlein made himself “ * * * responsible for all stocks, equipment and funds coming into his possession, and shall carefully administer same. • Any shortage or shortages of stocks, equipment, supplies, or funds which may develop from, periodical audits as made by the Corporation shall be charged to the Branch Manager at the time such shortage or shortages appear or are developed by said audit or otherwise, it being mutually agreed that the decision of the Corporation shall be final in all matters of this nature. It is understood that if the Branch Manager can prove that any shortage or shortages of stock, equipment or funds'has been due to' theft or larceny by persons other than employees of the Corporation or Branch Manager, then and only then the Branch Manager will not be held accountable for such shortages.”

A careful examination of plaintiff’s petition as amended reveals that the actions of Perry began as early as February 28, 1934 and continued up to the date of their discovery on February 12, 1936, approximately three months after the execution of its said contract, but there is no allegation of any certain or definite article or goods 'or stocks misappropriated or stolen by Perry during the period of the existence of the contract. The allegations are too general, vague, indefinite, and uncertain to support a cause of action within the contemplation of -Section 4 of Article 172, Code of Practice.

But counsel for plaintiff argued in brief and orally that under the stipulation of the contract the branch manager (Mel Dietlein) can only escape the liability for the shortages of Perry by showing that the losses were due to theft or larceny by other persons than employees of the corporation or branch manager.

The clause referred to by counsel, in our opinion, when read in conjunction with the rest of the contract, means that Mel Dietlein agreed to and did make himself responsible for all stock, equipment, and funds coming into his possession, and those for whom he was responsible, such as his agents and employees, from the date he entered into said contract, and not prior thereto.

We therefore conclude that the trial judge properly sustained the exceptions of no cause or right of action filed by Mel Dietlein.

For the reasons assigned, our original decree is reinstated and made final.

LAND, J., absent.