Commercial Warehouse Co. v. Hyder Bros., Inc.

• Decision Date: 17 May 1965
• Docket Number: No. 7513,7513
• Citation: 411 P.2d 978,1965 NMSC 56,75 N.M. 792
• Parties: COMMERCIAL WAREHOUSE COMPANY, a corporation, Plaintiff-Appellant, v. HYDER BROTHERS, INC., a corporation, Defendant-Appellee. Ralston Purina Company, Intervenor-Appellant.
• Court: New Mexico Supreme Court

Page 978

411 P.2d 978

75 N.M. 792

COMMERCIAL WAREHOUSE COMPANY, a corporation, Plaintiff-Appellant, v. HYDER BROTHERS, INC., a corporation, Defendant-Appellee Ralston Purina Company, Intervenor-Appellant.

No. 7513.

Supreme Court of New Mexico.

May 17, 1965.

On Rehearing Feb. 7, 1966.

Rehearing Denied Feb. 25, 1966.

Beasley & Colberg, Albuquerque, for appellant Commercial Warehouse Co

Paul A. Phillips, Albuquerque, for intervenor-appellant Ralston Purina Co.

Marron & Houk, Threet, Threet, Glass & King, Albuquerque, for appellee.

ON MOTION FOR REHEARING

PER CURIAM.

Upon consideration of motion for rehearing the opinion heretofore filed is withdrawn and the following substituted therefor:

MOISE, Justice.

In a case filed in the Small Claims Court of Bernalillo County, plaintiff-appellant sought damages for defendant-appellee's alleged negligence whereby plaintiff suffered loss through water entering premises leased by plaintiff from defendant. Intervenor-appellant likewise sought damages suffered to its property stored in the premises by arrangement with plaintiff. From a judgment for plaintiff and for intervenor, the defendant appealed to the district court where the small claims court decision was reversed. Plaintiff and intervenor appeal from this action of the district court.

The record discloses that no transcript of the testimony in the small claims court was available in the district court because the reporter's notes had been inadvertently destroyed and the whereabouts of the reporter were unknown. Plaintiff and intervenor moved for dismissal of the appeal, or affirmance. However, the district court ordered the case remanded to the small claims court for retrial unless the attorneys would stipulate the substance of the testimony upon which the small claims court decision was based, in which event the appeal would be considered. Counsel did stipulate to a 'summary of the evidence adduced at the trial and not controverted,' while at the same time it was agreed that plaintiff and intervenor did not thereby waive 'their exceptions to the District Court's ruling that it could not decide the appeal on the record as it existed at the time of said ruling.'

We must first determine if the district court was correct in its holding that the case would be remanded for retrial because no transcript was available, or if it should have affirmed the small claims court judgment.

We dispose of this issue by simply pointing out that the transcript covering the trial in the small claims court was unavailable without any fault of defendant. Sec. 16-5-12, N.M.S.A.1953, is a clear legislative expression that small claims court decisions shall be subject to review on appeal to the district court. Although this is the first time we have been called upon to pass on the effects of a failure to supply a record required for review, we are impressed that we have here a proper case for application of a general rule followed in most jurisdictions, that where without fault of an appellant a nonjurisdictional defect such as that here present prevents review in the appellate court, a new trial will be granted. Reynolds v. Romano, 96 Vt. 222, 118 A. 810; Harper v. Harper, 236 La. 458, 107 So.2d 704. See notes in 19 A.L.R.2d 1098; 107 A.L.R. 603; 16 A.L.R. 1158, and 13 A.L.R. 102. We are not unaware that some states hold otherwise. Neither do we overlook decisions such as Norment v. Mardorf, 26 N.M. 210, 190 P. 733; Buchanan v. Carpenter, 65 N.M. 389, 338 P.2d 292, and Flores v. Duran, 68 N.M. 42, 357 P.2d 1091, holding that on appeal to this court the appellant is responsible to see that the record is properly prepared and filed. In the instant case, however, without considering if the same rules as apply on appeals from district court to this court are applicable in appeals from the small claims court to the district court, we have no difficulty in concluding that the district court ruled correctly when it ordered the case remanded for a new trial.

It follows that, having stipulated to the facts in order to avoid a remand and the consequent trouble and delay, plaintiff and intervenor should not now be heard to question the right of the district court to consider the stipulation in lieu of a transcript of the evidence. Sec. 16-5-12, supra, provides that upon an appeal being taken, the clerk shall prepare and transmit to the district court, among other things, a transcript of the evidence. There is no provision for settling the same as a bill of exceptions as required under our Rule 13(4), (5) (Sec. 21-2-1(13)(4), (5), N.M.S.A.1953) in appeals from the district court to this court. Neither is there any limitation such as applies in appeals to this court contained in Rule 13(8) (Sec. 21-2-1(13)(8), N.M.S.A.1953) requiring approval and certification by the trial judge before an agreed statement of facts and proceedings stipulated by the parties may be filed as a bill of exceptions. See Quintana v. Quintana, 45 N.M. 429, 115 P.2d 1011; In re Guardianship of Caffo, 69 N.M. 320, 366 P.2d 848. Under the circumstances, we see no reason for not holding the parties bound by stipulations freely and voluntarily entered into. In Southern Union Gas Co. v. Cantrell, 57 N.M. 612, 615, 261 P.2d 645, 647, we stated 'The stipulation certainly tended to prevent another trial and a multiplication of expenses of attending the same and of court costs. Courts look with favor upon stipulations designed to simplify, shorten, or settle litigation and save time and costs to the parties, and such stipulations will be encouraged by the courts, and enforced by them, unless good cause is shown to the contrary. * * *'

The instant case presents a situation for application of the quoted language.

Intervenor suggests that it was coerced into stipulating. However, we are not convinced by this assertion. By refusing to stipulate, a retrial, and nothing more, would have resulted. Evidently it was considered preferable to let the district court rule on the merits as disclosed by the stipulation, if plaintiff and intervenor were wrong in their contention that the district court should affirm the case or dismiss the appeal because of the absence of a transcript. The court having ruled correctly in ordering a remand and a new trial because of the absence of a transcript of the evidence, the parties should not now be heard to withdraw their concurrence in the stipulation, or to question the facts to which they were agreed. Compare Wilson v. Rowan Drilling Co., 55 N.M. 81, 227 P.2d 365.

From the stipulation we glean the following facts: Plaintiff leased the warehouse premises known as 516 First Street, N.W. from defendant. The written lease signed by them contained the following provision:

'That the lessor shall not be liable for any damage to said leased premises, or to any part thereof, or to any property or effects therein, caused by leakage from the roof of said premises or by bursting, leakage or overflowing of any waste pipes, water pipes, tanks, drains, or stationary washstands, or by reason of any damage whatsoever caused by water from any sources whatsoever.'

The defendant owned another warehouse known as 510 First Street, N.W., immediately adjacent to the leased premises, and part of the same building. Some time prior to plaintiff's entering into occupancy of 516 First Street, N.W., defendant had leased both warehouses to one tenant, who had employed a plumbing contractor who made certain water connections in the two buildings and was paid for his work by defendant. When 510 First Street, N.W. was vacated, defendant had the water in that part of the building shut off at the meter. However, without knowledge of either plaintiff or defendant, a lavatory in the front of the vacant warehouse was connected on the meter serving the warehouse occupied by plaintiff and was not shut off. Prior to January 3, 1959, the vacant warehouse had been broken into through a rear door several times, and plaintiff had notified defendant, but defendant did not secure the door and on January 3, 1959 it was ajar. On that date, during an extremely cold spell, the water pipe connected to the lavatory in the vacant southerly building froze and burst, causing water damage in an agreed amount to plaintiff and also to property or goods of intervenor stored with plaintiff.

The district court entered an order which recited that it concluded 'as a matter of law that the uncontradicted facts stipulated by the parties will not support a judgment against defendant for negligence,' reversed the small claims court judgment and ordered the complaint and complaint in intervention dismissed with prejudice.

Under Sec. 16-5-12, supra, 'the findings of fact made by the small claims court, within its powers, shall be conclusive and binding,' and the only question before the district court here would be whether the facts as shown by the stipulation as a matter of law would 'not justify the entering' of the judgment for plaintiff and intervenor. Stated differently, did the stipulation disclose substantial proof from which the small claims court could find defendant negligent and liable for damages as a result thereof?

We must first consider if the lease provision quoted, supra, wherein plaintifftenant and defendant-landlord agreed that defendant should not be liable to plaintiff for damages to the leased premises or property therein caused by leakage from bursting water pipes or 'caused by water from any source whatsoever,' absolved the defendant of liability. Such a provision is known in the law as an 'exculpatory clause.'

It is the prevailing rule that exculpatory clauses in leases must be strictly construed against the landlord. See Strothman v. Houggy, 186 Pa.Super. 638, 142 A.2d 769; Bauer v. 141-149 Cedar Lane Holding Co., 42 N.J.Super. 110, 125 A.2d 884, and annotation appearing in 84 A.L.R. 654, and 26 A.L.R.2d 1044, 1054. Where an exculpatory clause does not clearly exonerate a...