Consumers Co-op. Ass'n v. McMahan, 50968
| Decision Date | 12 July 1965 |
| Docket Number | No. 50968,No. 2,50968,2 |
| Citation | 393 S.W.2d 552 |
| Parties | The CONSUMERS COOPERATIVE ASSOCIATION, a Corporation, Appellant, v. Edwin L. McMAHAN, Defendant, Howard C. Blue and Paul A. Jordan, Trustees for the Kansas City Underground Industrial Center, Inc., Respondents |
| Court | Missouri Supreme Court |
Rodger J. Walsh, Kansas City, Rafter, Biersmith, Miller & Walsh, Kansas City, of counsel, for appellant.
William H. Sanders, Dean F. Arnold, William W. La Rue, Kansas City, George W. Harlan, Jr., Kansas City, Caldwell, Blackwell, Sanders & Matheny, Kansas City, of counsel, for respondents.
This is an action for damages in the sum of $18,808.45 alleged to have been suffered when baling wire stored with the Kansas City Underground Industrial Center, Inc., became rusty. The Kansas City Underground Industrial Center, Inc., was a licensed warehouse company incorporated under the laws of Missouri. Its charter was forfeited, however, for failure to file annual reports, and the action proceeded against the last officers and members of the board of directors as trustees for the defunct corporation. One of them, Edwin L. McMahan, was not served and the action was dismissed as to him at the trial. The trial proceeded against the remaining defendants, Howard C. Blue and Paul A. Jordan. The trial court overruled the defendants' motion for a directed verdict filed at the close of all of the evidence. The jury's verdict was for the defendants. The plaintiff's motion for a new trial was overruled and it appealed.
The point relied on by plaintiff are that the trial court erred in giving defendants' instruction No. 3 relating to the burden of proving negligence and defendants' instruction No. 4 regarding contributory negligence, and in refusing to give instructions Nos. 8, 9 and 10 offered by the plaintiff. The errors assigned, however, become immaterial in the view we take of the case which is that the evidence in its most favorable aspect would not support a verdict for the plaintiff.
The plaintiff's action is based on negligence. The petition alleges that 'the plaintiff entered into an oral contract with said warehouse corporation under and by the terms of which said warehouse corporation agreed to store as a duly licensed public warehouseman 5,543 cartons of baling wire for said plaintiff'; that the agents of the warehouse company represented to the plaintiff 'that the humidity in its storage facilities was such that no rust would develop on said baling wire' when in truth and fact the storage facilities were totally inadequate for the storage of baling wire; that the defendants 'did negligently store said baling wire, the negligence consisting of a failure to provide low humidity storage facilities'; and that the warehouse corporation did not exercise that degree of care which a reasonably careful man would exercise in regard to similar goods of his own.
The answer of the defendants Blue and Jordan admitted that the plaintiff stored the baling wire in the warehouse but denied each and every other allegation of the petition. The answer further pleaded contributory negligence and assumption of risk in that the condition of the warehouse and its suitability for the storage of the baling wire was known to the plaintiff prior to and during the time the wire was stored in the warehouse.
There was no essential conflict in the testimony of the witnesses. The defendants offered no evidence. The evidence adduced disclosed that the defendants, McMahan, Blue, and Jordan, had organized a licensed warehouse company under the name of Kansas City Underground Industrial Center, Inc. Mr. McMahan, the president, had been in the food brokerage and transportation business. Mr. Blue, the vicepresident, and Mr. Jordan, the secretarytreasurer were both connected in an official capacity with the Kansas City Quarries and Kansas City Concrete Company. The warehouse company leased an underground limestone quarry or artificial cave which it proposed to use for storage purposes. The cave located in Jackson County was about 100 feet underground; it had a constant temperature of about 55 degrees and occupied an area of about 60 acres.
Mr. McMahan called on Ray J. Barry, plaintiff's director of Farm Supplies Division, and solicited storage business. As a part of its business, the plaintiff bought and sold large quantities of baling wire. At the time Mr. McMahan called on Mr. Barry in 1959, the plaintiff had purchased from a manufacturer in Belgium approximately 18,000 cartons of baling wire. The delivered price was cheaper than that obtainable in the United States. The wire was transported by ship from Belgium to the Port of Houston, Texas, and from there to Kansas City overland by truck. All but about 5500 cartons was sold immediately or put in the plaintiff's own storage facilities. Mr. Barry became interested in the artificial cave as a storage place for the remaining cartons of baling wire. The discussion between him and Mr. McMahan, to the extent necessary, will be mentioned later. Shortly after the first contact, Mr. Barry and two other representatives of the plaintiff went to the cave, inspected it, and decided to store the remainder of the baling wire there. This was done in July or August 1959. In September 1959 Mr. McMahan had a nervous breakdown. About June 1, 1960, some of the cartons were taken from storage and sent to a customer in Nebraska and the wire was found to be spotted or streaked with rust to an extent that it was not usable in a baler. The wire remained in the cave until December 1960 or January 1961 when the plaintiff sold it at a reduced price and brought suit for the loss.
The plaintiff's verdict-directing instruction was quite general but we will set it out for whatever light it may shed on the theory by which the plaintiff sought to impose liability on the defendants.
It is as follows:
'The Court further instructs the jury that if you find and believe that on or about August 31, 1959, the plaintiff entered into an agreement with the Kansas City Underground Industrial Center, Inc., a warehouse corporation, by which the said warehouse corporation accepted for storage as a duly licensed public warehouseman 5,543 cartons of bailing wire for the plaintiff, and if you find said warehouse corporation did not exercise ordinary care in the storing of said bailing wire in that said warehouse corporation failed to exercise that degree of care which a reasonably careful man would exercise in regard to similar goods of his own then your verdict must be for the plaintiff and against the defendants the statutory trustees of said warehouse corporation, provided the plaintiff exercised ordinary care under the circumstances mentioned in evidence.'
The evidence shows that plaintiff's agents who inspected the storage facility knew it was a mined-out quarry in a rough condition with limestone walls and ceilings with pillars of limestone left in place for support; that the floors were dirt and limestone covered with dust. They further knew there was no heat in the quarry or no mechanical means of controlling humidity. The baling wire was not galvanized but it had a light film of oil; it was sealed in waxed paper and then enclosed in a double carton which was sealed. The cartons of wire were placed in the storage cave in this condition and there is no showing that the warehouse company was obliged to inspect the wire in the cartons or to service it in any manner while it was in storage. In April 1960, Cecil Brainard, the manager of the plaintiff's Internal Audit Department, took a physical inventory of the merchandise in storage. He testified there was no visible deterioration of the cartons and there was no deterioration due to moisture. So far as the evidence shows, the temperature and atmospheric conditions in the quarry remained the same as it was when plaintiff's agents inspected it before deciding to use it for storage.
To constitute actionable negligence three essential elements must exist: (1) a duty or obligation on the defendants' part to protect the plaintiff or his property from injury, (2) a failure to discharge such duty, and (3) injury proximately resulting from such failure. Atcheson v. Braniff International Airways, Mo., 327 S.W.2d 112, 117; Wolfmeyer v. Otis Elevator Co., Mo., 262 S.W.2d 18, 21; Whealen v. St. Louis Soft Ball Ass'n, 356 Mo. 622, 202 S.W.2d 891, 894. Our first concern is to determine the duty or obligation imposed on the defendants by the contract or storage agreement. Specifically a duty or obligation to protect the baling wire from becoming rusty must be established.
In some parts of the testimony and especially its verdict-directing instruction it appears that the plaintiff was depending on a duty or obligation imposed by law, that is, by Chapter 406, RSMo 1959, V.A.M.S. dealing with uniform warehouse receipts and related matters. Section 406.030 prescribes the essential terms of warehouse receipts, none of which are relevant in this case. Section 406.040 provides the receipt may contain other terms and conditions if they are not contrary to the requirements of the chapter and do not impair the warehouseman's duty of...
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