Great Plains Supply Co. v. Mobil Oil Co.

• Decision Date: 03 November 1969
• Docket Number: No. 8542,8542
• Citation: 172 N.W.2d 241
• Parties: GREAT PLAINS SUPPLY CO., Plaintiff and Appellant, v. MOBIL OIL COMPANY, a division of Socony Mobil Oil Company, Inc., Defendant and Respondent. Civ.
• Court: North Dakota Supreme Court

Page 241

172 N.W.2d 241

GREAT PLAINS SUPPLY CO., Plaintiff and Appellant, v. MOBIL OIL COMPANY, a division of Socony Mobil Oil Company, Inc., Defendant and Respondent.

Civ. No. 8542.

Supreme Court of North Dakota.

Nov. 3, 1969.

Syllabus by the Court

1. A written contract of hire between the bailor and bailee that the bailee will return the property, and where bailee assumes all risk of loss or damage while it is in bailee's possession or under its control and in the event of loss or irreparable damage will pay for the property, creates a liability on the bailee greater than that imposed by law in the absence of a special contract.

2. For reasons stated in the opinion, pursuant to the provisions of the written contract the bailee becomes an insurer for the return of the property.

3. Counterclaimant had the burden to prove by a fair preponderance of the evidence its claim for damages, and where the evidence introduced is insufficient to satisfy this burden, counterclaimant cannot recover.

4. Rule 33, N.D.R.Civ.P., provides that answers to interrogatories may be used to the same extent as the deposition of a party under Rule 26(d), N.D.R.Civ.P. However, in the case at bar, the answers, under the general rules of evidence, may be used as a confession or for impeachment but may not be used by the answering party as a self-serving statement free from the hazards of cross-examination.

5. Where a witness is not the custodian and is unable to testify as to the figures constituting the damage claim, and particularly with reference to the mode of preparation of such figures, the Uniform Business Records as Evidence Act is not applicable.

6. Based on the record in the instant case, it was prejudicial error on the part of the trial court to permit Mobil to introduce its answers to Great Plains' interrogatories with respect to the amount of damages, since the answers were self-serving and Great Plains was not afforded the opportunity to be confronted by and to cross-examine the material witness who computed the damage figures contained in the answers to the interrogatories.

Pringle, Herigstad, Meschke, Loder, Mahoney & Purdy, Minot, for plaintiff and appellant.

Bosard, McCutcheon & Kerian, Minot, for defendant and respondent.

PAULSON, Judge.

This is an appeal by the Great Plains Supply Company from a judgment awarded to Mobil Oil Company and entered in the District Court of Mountrail County, Eugene A. Burdick, J., presiding. Great Plains demands a trial de novo, pursuant to § 28--27--32 of the North Dakota Century Code.

The factual situation giving rise to the controversy is as follows: Mobil planned to erect a new warehouse at Parshall, North Dakota, to provide storage facilities for Mobil's products which were required by its consignee, Gary R. Olson. Mobil solicited bids for the demolition of its old storage building and for the erection of the new warehouse. Mobil had stored in the old warehouse various quantities of oil and grease which had to be removed and stored elsewhere while the old warehouse was being demolished and the new facility was being constructed. The oil and grease so stored during the construction period were then to be placed in the new warehouse facility for storage. Mobil simultaneously solicited separate proposals for the removal, storage, and redelivery of the oil and grease.

The record indicates that Great Plains was the successful bidder for both projects; and the necessary contracts in the form of work orders were executed, by Vernon D. Johnson on behalf of Great Plains, and by Walter G. Junchen for Mobil. The terms of Work Order No. 121 provided for the furnishing of labor and materials to demolish Mobil's old warehouse and to construct a 24- by 40-foot new warehouse for the contract price of $4,705.00. The terms of Work Order No. 122 provided for incidental work involving the furnishing of labor to remove merchandise and of storage facilities until the new facility was completed, and then for the delivery of the merchandise to the new facility, for the contract price of $290.00. Each work order had the following contract provision set forth on its reverse side:

'7. If the work relates to any article entrusted to Contractor, Contractor assumes all risk of loss of or damage to the article while it is in Contractor's possession or under Contractor's control. In the event of loss or irreparable damage, Contractor shall promptly reimburse Mobil for the value of the article specified on the face of this order. Any other damage shall be promptly repaired by Contractor at Contractor's expense.'

The project for the removal, temporary storage, and delivery of merchandise, pursuant to the terms of Work Order No. 122, was subcontracted by Great Plains to Delton Snyder of Parshall for the contract price of $290.00. Synder leased a warehouse in Parshall and removed the merchandise from Mobil's old warehouse to his leased warehouse. During the time the Mobil merchandise was stored in Snyder's warehouse, there was considerable rainfall in Parshall, including at least one rainfall of very unusual proportions, and the stored merchandise purportedly became saturated, and it deteriorated. Mobil, shortly thereafter, destroyed all of its stored merchandise and refused to pay Great Plains for constructing the new warehouse, Mobil having determined that Great Plains was liable for the alleged damage to Mobil's merchandise.

Counsel for Great Plains, on January 11, 1967, caused a summons and complaint to be served on an agent for Mobil. The complaint alleged that Mobil was liable to Great Plains in the amount of $5,307.00, which amount included $4,705.00 for the new warehouse, $312.00 for extra gravel fill, and $290.00 for the moving, storage, and return of the merchandise.

Mobil answered the complaint, denying the allegations in the complaint and included in its counterclaim the figure of $6,069.20, which was the alleged amount of damage to Mobil's merchandise during storage, and the amounts expended for labor and vehicles necessary to dispose of the merchandise. Mobile prayed for judgment in the sum of $762.20, or the difference between Great Plains' claim and Mobil's counterclaim, together with its costs and disbursements.

Great Plains, on February 10, 1967, interposed a reply to Mobil's counterclaim, and served a first amended reply to counterclaim on July 18, 1967, wherein Great Plains denied Mobil's allegation of negligence and asserted the defense that the negligence of Mobil and its agents contributed to and caused the damage complained of, and that Mobil had knowledge of the location and condition of the temporary warehouse and had full access thereto and control thereof and therefore Mobil assumed the risk of loss or damage.

The case was tried to the court without a jury and the court found that Mobil's merchandise was damaged in the amount of $5,139.25, as the result of Great Plains' negligence; and that Mobil owed Great Plains $5,017.00 for construction of the warehouse. The court made no finding with regard to the contract price of $290.00 under Work Order No. 122. The court further found that there was a bailment for hire; that the bailed property was damaged while in the care and custody of Great Plains; and that Great Plains did not go forward with the evidence to prove that it exercised the degree of care required in a bailment relationship. The court therefore determined that there was a breach of the bailment contract and that Mobil was entitled to be compensated for the reasonable value of its damaged merchandise. The court then awarded judgment to Mobil in the amount of $122.25, plus costs and disbursements in the amount of $147.60, for a total judgment of $269.85.

Great Plains appeals from this judgment, and the issues involved ae as follows:

1. Is Great Plains liable for water damage to Mobil's merchandise, which Great Plains moved to temporary, substitute storage?

2. Are Mobil's answers to interrogatories by Great Plains, during pretrial discovery, admissible on behalf of Mobil at the trial as evidence of its damages?

In determining whether Great Plains is liable for the alleged damage to Mobil's merchandise, it is uncessary to examine carefully the relationship of the parties. The trial court found the relationship to be one of bailment for hire and not one of landlord and tenant. The court further found that the merchandise was damaged while it was in the care, custody, and control of the bailee, Great Plains, and that Great Plains failed to refute the presumption of negligence arising therefrom.

It is difficult to ascertain whether the facts which culminate in a particular transaction constitute a bailment or create some other contractual relationship. In determining whether a relationship is one of bailor and bailee, or landlord and tenant--

'* * * the test is whether the person leaving the property has made such a delivery to the owner of the premises as to amount to a relinquishment, for a time, of his exclusive possession, control, and dominion over the property, so that the latter can exclude, within the limits of the agreement, the possession of all others. If he has, the general rule is that the transaction is a bailment. If there is no such delivery and relinquishment of exclusive possession, and control and dominion over the goods is dependent in no degree upon the co-operation of the owner of the premises, and access to the goods is in no wise subject to the latter's control, it is generally held that the owner of the goods is a tenant or lessee of the space upon the premises where they are left.' 8 Am.Jur.2d, Bailments § 20, p. 926.

Courts have stated that to constitute a bailment, there must be such a full transfer, actual or constructive, of the property to the bailee as to exclude the possession of the owner and all other persons and give the bailee the sole custody and control of the goods. Freeman v. Myers Automobile Service Co., 226 N.C. 736, ...