Sears, Roebuck & Co. v. Metropolitan Engravers

In an action in the District Court, plaintiff Sears, Roebuck 1 alleged that all of the defendants conspired to defraud plaintiff in the following manner: Blade was employed by plaintiff in its Los Angeles group of stores as Advertising Manager and as such entered into many contracts with Metropolitan Engravers, Ltd., 2 which manufactured engravings which were sold to and used by plaintiff in newspaper advertising.

According to the allegations, it was agreed between Blade and Engravers, without knowledge or consent of Sears, that Blade personally would receive rebates, profits and commissions from Engravers. It is alleged that, in return for such payments, Blade, as Advertising Manager of the Sears group of stores in Los Angeles, would contract for all engraving for that group with Engravers and no one else, and as a result Sears unwittingly would pay to Engravers, for the identical engraving, sums of money greatly in excess of the then going price therefor current on the Los Angeles market. It is further set up in the complaint that in 1949 plaintiff instructed Blade to contract for part of this engraving with other concerns than Engravers, and all defendants agreed that the…