Conditioned Air Corp. v. Rock Island Motor Transit Co.

• Decision Date: 03 April 1962
• Docket Number: No. 50443,50443
• Citation: 253 Iowa 961,3 A.L.R.3d 679,114 N.W.2d 304
• Parties: , 3 A.L.R.3d 679 CONDITIONED AIR CORPORATION, Appellee, v. ROCK ISLAND MOTOR TRANSIT CO., Appellant.
• Court: Iowa Supreme Court

Page 304

114 N.W.2d 304

253 Iowa 961, 3 A.L.R.3d 679

CONDITIONED AIR CORPORATION, Appellee, v. ROCK ISLAND MOTOR TRANSIT CO., Appellant.

No. 50443.

Supreme Court of Iowa.

April 3, 1962.

Rehearing Denied May 8, 1962.

A. B. Howland, Des Moines, for appellant.

Bradshaw, Fowler, Proctor & Fairgrave, and Harris Coggeshall, Des Moines, for appellee.

GARFIELD, Chief Justice.

This appeal involves the measure of recovery from defendant Rock Island Motor Transit Co. for damage to a shipment of aluminum panels. Trial was to the court without a jury. Defendant has appealed from judgment allowing most, but not all, of plaintiff's claim. Errors are assigned in receiving evidence of, and allowing for, two items of damage defendant contends are improper.

Plaintiff's place of business is in Des Moines. It had a contract with Bowers Construction Co., herein called Bowers, to furnish 206 anodized aluminum panels, about 10 feet long and 28 inches wide, for use in constructing a new school building at Montezuma for which Bowers was principal contractor. Plaintiff formed and bent the panels and shipped them by defendant's truck and semi-trailer to Colors, Inc. in Indianapolis to be anodized, i. e., to have a thin protective coating of pure aluminum applied to prolong their life. After the anodizing was done, the return shipment was damaged in transit. The trial court found 153 panels were damaged so they were unfit for use on the job.

As soon as the damaged panels were inspected and counted plaintiff ordered new material to replace them, formed and bent 153 new panels and shipped them to Colors, Inc. to be anodized. When these new panels were received back by plaintiff they did not match in color the panels not damaged in the first shipment. The trial court found it was impossible to match the color of the first panels. Substantial evidence supports this finding. The first panels were anodized in March, the second shipment in July. A different 'batch' of aluminum was used in anodizing the replacement panels. There is undisputed testimony that the only way in which identical color could have been obtained on all the panels was to replace all 206 and that would be more expensive.

The Montezuma school board and Bowers were unwilling to accept the 153 new panels because the color did not match those in the first shipment. However, negotiations between plaintiff, Bowers and the school board resulted in their acceptance at a reduction in cost to the school district of $1250 which was charged to plaintiff. Bowers also charged plaintiff $500 for its extra work in sorting and placing the panels. The trial court allowed plaintiff the cost of replacing the damaged panels, including cost of material, labor, anodizing and freight to and from Indianapolis, and also the $1250 it was compelled to deduct from the contract price. The $500 deduction in favor of Bowers was disallowed. Defendant took and retained possession of the 153 damaged panels from the first shipment. They have a salvage value to defendant of about 13 cents a pound.

Defendant's first two assigned errors complain of the admission of evidence, over its objections, of the reduction in cost to the school district of the $1250 and allowance of this amount to plaintiff.

The court also received evidence, over defendant's objections, of plaintiff's overhead and operating expenses for 1959, the year the panels were furnished. They totaled about 22 1/2 per cent of its direct expense for labor and material. The court allowed plaintiff $928.56, 17 per cent of its direct expense for labor and material in furnishing the replacement panels. Defendant's third and fourth assigned errors are directed to the receipt of this evidence and allowance to plaintiff of this item. Defendant concedes it is liable for the actual cost of replacing the damaged panels.

I. As the parties agree, defendant's liability for damage to this interstate shipment is governed by subparagraph (11), section 20, 49 U.S.C.A. Defendant is liable, according to the statute, 'for the full actual loss, damage, or injury to such property caused by it.' See Adams Express Co. v. Croninger, 226 U.S. 491, 506, 33 S.Ct. 148, 57 L.Ed. 314, 320, 44 L.R.A.,N.S., 257; 13 C.J.S. Carriers §§ 263-264; 9 Am.Jur., Carriers, section 778.

The most commonly applied measure of a shipper's loss for injury to the shipment is the difference between its market value at destination if it had not been injured and such value in its injured condition. Gulf, C. & S. F. R. Co. v. Texas Packing Co., 244 U.S. 31, 37, 37 S.Ct. 487, 61 L.Ed. 970, 973; 13 C.J.S. Carriers § 264a; 9 Am.Jur., Carriers, section 780. See also Parsons v. United States Express Co., 144 Iowa 745, 752, 123 N.W. 76, 25 L.R.A.,N.S., 842.

'The test of market value is at best but a convenient means of getting at the loss suffered. It may be discarded and other more accurate means resorted to, if, for special reasons, it is not exact or otherwise not applicable.' Illinois Cent. R. Co. v. Crail, 281 U.S. 57, 64-65, 50 S.Ct. 180, 181, 74 L.Ed. 699, 703, 67 A.L.R. 1423, 1426; 9 Am.Jur. Carriers, section 780.

It is not unusual to allow recovery for the reasonable cost of repairing or restoring injured property, especially where the expense of so doing is less than the diminution in value because of the injury. And if the value of the repaired or restored property is less than the value of the property before the injury, such difference in value is also allowed, in addition to the reasonable cost of repair or restoration. 25 C.J.S. Damages § 83b, page 599; 15 Am.Jur., Damages, section 124, page 534.

Restatement Torts, section 928, sets forth this rule:

'Where a person is entitled to a judgment for harm to chattels not amounting to a total destruction in value, the damages include compensation for (a) the difference between the value of the chattel before the harm and the value after the harm or, at the plaintiff's election, the reasonable cost of repair or restoration where feasible, with due allowance for any difference between the original value and the value after repairs, * * *.' As noted in comment a to this section, if it does not reasonably appear economical to repair or replace the damaged chattel, 'the damages are the full value of the subject matter at the time of the tort, less the junk value of the remains.'

The rule just stated is approved in Bartl v. City of New Ulm, 245 Minn. 148, 72 N.W.2d 303, 305, and citations; Hermes v. Markham, (N.D.), 60 N.W.2d 267, 273. Plaintiff cites this rule in support of the trial court's allowance of the $1250 item. Defendant contends its liability is limited to the cost of replacing the damaged panels and that the item just mentioned is not included therein.

II. We think the rule from the Restatement may properly be applied here and that it supports allowance to plaintiff of the $1250. Unless this sum is included in the award to plaintiff it will not be reimbursed for its 'full actual loss' as the statute contemplates. Expenditure of the remaining amounts included in the judgment was insufficient to replace the damaged panels in their original condition or value. It is not contended this was through any fault of plaintiff. As previously stated, there is evidence it was impossible to match the color of the first shipment. Thus the court could properly find the difference in color was also not chargeable to any fault of Colors, Inc. The court found, we think justifiably, the plan plaintiff followed in replacing the damaged panels was the only practical and economical method it could pursue. Certainly it was much less expensive than replacing all 206 panels, so the color would be uniform throughout.

It is true no witness testified directly that value of the 153 replacement panels was $1250 less than the value of those replaced if they had not been damaged in transit. Such testimony might well have been produced and perhaps would have simplified our problem. But we feel evidence that plaintiff was compelled to accept for the replacement panels $1250 less than it would have received for the original ones, if not damaged, is substantial evidence of their reduced value. It is not suggested plaintiff did not negotiate in good faith with the principal contractor and the school board, nor that it did not effect the best possible sale of the replacement panels. Of course it was to its advantage to do so. See Meltzer v. Pennsylvania R. Co., D.C.Pa., 29 F.Supp. 840, 842 Evidence of the price for which personal property sells at a bona fide sale is competent evidence of its value. Vincent, Albin & Strahl v. Hines, 198 Iowa 1224, 1230, 200 N.W. 1, and citations; Southwestern R. Co. v. Davis, 58 Ga.App. 712, 186 S.E. 899, 902; Garlington v. Ft. Worth & D. C. Ry. Co., 34 Tex.Civ.App. 274, 78 S.W. 368, 369; Rodgers v. Texas & P. Ry. Co., Tex.Civ.App., 172 S.W. 1117; 2 Sutherland on Damages, 4th Ed., section 447, page 1448; 13 C.J.S. Carriers § 255, 1(2), page 573, § 264a, pages 611-612; 32 C.J.S. Evidence § 1049a; 20 Am.Jur., Evidence, section 373.

The Garlington and Rodgers cases, supra, hold evidence is receivable that damaged goods were sold for the best price obtainable and what such price was. See also Gulf, C. & S. F. R. Co. v. Texas Packing Co., supra, 244 U.S. 31, 37, 37 S.Ct. 487, 61 L.Ed. 970, 973.

There is authority that the contract price is also evidence of the value of the goods shipped. Lyons v. Grand Trunk R. Co., 185 Mich. 417, 152 N.W. 88, 89, Ann.Cas. 1917D, 162, 164; 13 C.J.S. Carriers § 264e, page 615; 9 Am.Jur., Carriers, section 783.

Our conclusion also finds support in Weirton Steel Co. v. Isbrandtsen-Moller Co., 2d Cir., N.Y., 126 F.2d 593, 594; Meltzer v. Pennsylvania R. Co., supra, D.C.Pa., 29 F.Supp. 840, 842; Cordery v. American Ry. Exp. Co., 5 N.J.Misc. 600, 137 A. 719.

III. Defendant's principal argument in support of its first two assigned errors is that the item of $1250 constitutes special damages...