Bayliss Mach. & Welding Co. v. Huntsville Ice & Coal Co.

• Decision Date: 12 January 1956
• Docket Number: 8 Div. 775
• Citation: 265 Ala. 383,91 So.2d 483
• Court: Alabama Supreme Court
• Parties: BAYLISS MACHINE & WELDING COMPANY et al. v. HUNTSVILLE ICE & COAL COMPANY.

Page 483

91 So.2d 483

265 Ala. 383

BAYLISS MACHINE & WELDING COMPANY et al. v. HUNTSVILLE ICE & COAL COMPANY.

8 Div. 775.

Supreme Court of Alabama.

Jan. 12, 1956.

Rehearing Granted Dec. 21, 1956.

Smyer, Smyer, White & Reid and Geo. Peach Taylor, Birmingham, for appellants.

Watts & Salmon, Huntsville, for appellee.

MAYFIELD, Justice.

This is an appeal from a judgment in favor of the plaintiff-appellee rendered by the Circuit Court of Madison County.

The cause was tried without a jury. The plaintiff's claim for damages arose out of an alleged fraudulent misrepresentation made by appellants' agent in connection with the sale of a refrigeration unit by the defendants-appellants to the plaintiff-appellee. The appellee was engaged in the business of manufacturing and selling ice in the city of Huntsville, Alabama. Appellants are engaged in the business of selling refrigeration equipment. In April 1951, the appellee-plaintiff purchased an additional ice house in Huntsville, Alabama, known to this Court as the Mason-Brown Plant. Shortly after the appellee purchased the Mason-Brown Plant, they stopped the manufacture of ice at this plant and began using it as a storage outlet for ice manufactured at its main plant, which was some eight blocks distant. Ice was shipped from the appellee's main plant to the Brown-Mason Plant, where it was stored, cut into desired sizes and sold through coin operated vending machines.

The appellee decided that the refrigeration equipment at the Brown-Mason Plant could not be operated economically under its new system. Mr. James F. Watts, the Manager of the Huntsville Ice and Coal Company, discussed the matter with Mr. A. F. Feaster, the Manager of the refrigeration department of the Bayliss Machine and Welding Company. Mr. Watts told Mr. Feaster that he needed a new refrigeration unit and whatever else was necessary to maintain a constant temperature in the ice storage room. Mr. Feaster was a graduate engineer with thirty years' experience in refrigeration. In their respective capacities for their employees, Mr. Watts and Mr. Feaster had had numerous dealings with each other over a period of the last four years.

Thereafter, Mr. Feaster examined the ice storage room, took measurements of all surfaces, examined the insulation on the walls, and noted that the floor was made of wide boards and that the ceiling was of tongue and groove. However, he made no further examination of the floors and ceiling with respect to insulation.

Following their discussion, Mr. Watts received the following letter from Mr. Feaster, dated 5 July 1951:

'Dear Mr. Watts:

'We take pleasure in quoting on the following freon equipment for refrigerating the ice storage room at the Mason-Brown Plant, this room is 16'7"' wide by 30' long by 7'10"' high. It will require 15900 BTU per hour based on 18 hours per day operation when the outside temperature is 100~F. and the storage room temperature is 28~F.

'1 F-300FS Frick low pressure Freon-12 unit complete including a two cylinder, 2 1/2"' bore by 3"' stroke F-12 compressor v-belt driven by a 3 phase, 60 cycle, 220 volt, 3 H.P., motor with magnetic starter, air cooled condenser, receiver, automatic low pressure control, all mounted on a cast iron base, capacity when operating at 615 R.P.M. with 10~F. suction and 100~F. air 1700 BTU per hour.

'1 LT Larkin low temperature Frost-O-Trol, automatic hot gas defroster and hot gas solenoid valve capacity 16000 BTU per hour with 16~ F.T.D. Model No. LT 388.

'1 heat exchanger

'1 dryer 3/8"' connection refillable type

'1 3/8"' solenoid valve strainer 110 volts

'1 3/8"' thermal valve

'1 thermostat

'1 3/8"' two way valve

'20'3/8"' copper tubing

'20'1 1/8"' copper tubing

'2 3/8"' adapters and coupling

'2 1 1/8"' adapters and coupling

'4 3/8"' elbows sweat

'4 1 1/8"' elbows sweat

'3 3/8"' couplings

'3 1 1/8"' couplings

'Freight

'15 lbs Freon-12

'1 check valve for discharge line.

'Price of above equipment $932.00 f. o. b. Huntsville, Alabama.

'Thanking you for the opportunity of quoting on this equipment and hoping to be favored with your order, we are,

'Yours very truly,

'Bayliss Machine & Welding Company

'/s/ A. T. Feaster

'Manager

'Refrigeration Department'

The appellee purchased the equipment recommended by Mr. Feaster in his letter and installed the same in late October 1951. This equipment worked properly during the winter months and maintained the desired twenty-eight degree temperature.

On 5 May 1952 when the outside temperature had risen to eighty-five degrees or higher, Mr. Watts noticed that the ice in the storage room was melting. Mr. Watts then checked the floor in the storage room and found that it was not insulated and ordered and installed cork insulation. No appreciable improvement resulted.

On 5 June 1952, defendants-appellants were notified of the plaintiff-appellee's inability to maintain a sub-freezing temperature in its storage room. Mr. Feaster investigated and suggested that additional insulation be installed on the walls and ceilings. This the appellee did. Mr. Feaster and other employees of the Bayliss Company made various adjustments in the refrigeration equipment. Still no appreciable improvement resulted and the ice in the storage room continued to melt. It then became apparent that the refrigeration equipment lacked the necessary capacity to keep the storage room at the desired temperature. After defendants-appellants were given the opportunity to supply an auxiliary refrigeration unit at its expense, the appellee purchased and installed such a unit from another source. After this auxiliary unit was installed, the ice company was able to maintain the desired temperature in the ice storage room.

Appellee's complaint was in three counts. The misrepresentation charged in each count was based on the letter from Mr. Feaster to Mr. Watts on 5 July 1951. Count 1 alleges that the misrepresentations were wilfully made; count 2 alleges that the misrepresentations were recklessly made without knowledge of their falsity; and count 3 that the misrepresentations were made innocently and by mistake. Judgment was for the appellee ice company in the amount of $2,214.33. It is obvious that this amount included damages for the expense involved in the purchase and installation of the auxiliary refrigeration unit, insulation and service charges, loss of ice, and interest on these items from the date of the filing of the complaint.

Appellants' first contention is that the verdict was contrary to the weight of the evidence. It is alleged that the evidence fails to show any misrepresentation, in that appellants' representation was that this specific refrigeration unit would produce 14,900 BTU per hour, and that there is no evidence that this unit did not produce 15,900 BTU per hour, as represented. It is further contended that the evidence shows that the manager of the appellee company requested a refrigeration unit for an 'ice storage room' and that this term has a well defined meaning in the trade denoting certain minimum cork insulation. Further, that the evidence was insufficient to show that the unit in question would not adequately refrigerate an 'ice storage room' of the same dimensions as appellee's storage room.

It is our opinion that appellants' conclusions are not supported by the evidence. It is clear to us that the appellee called appellants' refrigeration expert and made known to him its desire to purchase a refrigeration unit which would cool this particular room to a temperature of twenty-eight degrees when the outside temperature was one hundred degrees Fahrenheit. Appellants' refrigeration expert examined this particular room, and it is clear that the representation that he made to the appellee was that the specific unit described in his letter would serve the needs of appellants with reference to this particular storage room. The evidence is clear that appellants relied on the representations made by the appellee's refrigeration expert and purchased the specific unit from appellants in reliance on these representations. It is undisputed that the unit specified in the letter failed to cool this storage room in the manner represented.

Appellants concede that under the law of this State in order to prove an action of fraud, it is not necessary that the misrepresentations relied upon should have been wilfully made to deceive or even recklessly made. Code of Alabama 1940, Title 7, § 108; Rudman v. Hooks, 252 Ala. 280, 40 So.2d 866; Standard Oil Co. v. Myers, 232 Ala. 662, 169 So. 312; Cartwright v. Braly, 218 Ala. 49, 117 So. 477. Therefore, we conclude that the trial Court's finding is not contrary to the weight of the evidence.

Appellants also contend that the damages adjudged by the trial Court were excessive. Appellants correctly stated the general rule that in fraud cases the measure of damages is the difference between the value of the article purchased and its value as represented. Phillips v. Malone, 223 Ala. 381, 136 So. 793; Preston Motors Corporation v. Wood, 208 Ala. 172, 94 So. 70. This rule does not, however, preclude recovery of the damages claimed in this case. One injured by a fraudulent misrepresentation is entitled to recovery of all the damages within the contemplation of the parties which were the natural and proximate consequences of the fraudulent misrepresentation. Fidelity & Casualty Co. of New York v. J. D. Pittman Tractor Co., 244 Ala. 354, 13 So.2d 669; Caffey v. Alabama Machinery & Supply Co., 19 Ala.App. 189, 96 So. 454, certiorari denied Ex parte Alabama Machinery & Supply Co., 209 Ala. 466, 96 So. 459. The rule is expressed in 37 C.J.S., Fraud, § 143 b(8)(e), p. 488, as follows:

'Where property is sold for a particular purpose and the seller misrepresents its fitness for such purpose, he is liable for all damages proximately caused by its unfitness for the purpose for which it is purchased, * * *.'

The damages suffered by appellee in attempting to minimize his...