International Harvester Co. of America v. Chicago, Milwaukee & St. Paul Railway Co.
| Decision Date | 14 May 1919 |
| Docket Number | 30107 |
| Citation | 172 N.W. 471,186 Iowa 86 |
| Parties | INTERNATIONAL HARVESTER COMPANY OF AMERICA, Appellee, v. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY, Appellant |
| Court | Iowa Supreme Court |
Appeal from Cerro Gordo District Court.--C. H. KELLEY, Judge.
THE plaintiff claims that defendant negligently set fire to certain stocks of farming implements kept by the plaintiff in its warehouse at Mason City. There was verdict and judgment thereon for plaintiff, and defendant appeals.--Reversed and remanded.
Reversed and remanded.
Cook Hughes & Sutherland, and Blythe, Markley, Rule & Smith, for appellant.
Cliggitt & Smith, F. M. Lowes, and Arthur Mullen, for appellee.
The appellant asserts the court erred in permitting plaintiff to introduce in evidence, as the basis for allowance of damages, the prices at which it supplied dealers with goods such as are alleged to have been destroyed by the negligence of defendant; that it erred in this respect because the prices put in evidence by the use of Exhibit F were arbitrarily fixed by plaintiff itself, and were not the cost at which the goods could be replaced by plaintiff from factories at which the destroyed goods had been purchased; that it erred in refusing to strike Exhibit F because same was made up from an arbitrary value put upon the destroyed property by the plaintiff himself, and, therefore, does not show a value determined from a market in which there is competition.
The destroyed articles were farm machinery and binding twine; they were held in storage at Mason City for distribution and sale in 13 counties. Appellant presents that time labor, and expense were required to sell these goods; that it was probable there would be loss by delay and by failure to sell some of the goods, and a loss of interest on the amount invested. It contends that, therefore, the true measure of damages was what it would have cost to replace these goods, and that they could readily have been replaced; and that it was error to let the jury proceed as if said goods, though not delivered, had all been sold at the price fixed by the seller, net, and nothing was left except to collect the price, or as if such price, net, had been paid in cash, and the fire had destroyed that cash. It contends further that the prices permitted to go to the jury were no evidence of market value, because it appears that such prices were those that plaintiff had directed its servants and agents to sell at, and that these articles were not for sale, and were not and could not be sold on the market at Mason City, to which market the testimony as to market value was directed. Related is its claim that it was error to refuse Instruction 26, which declares that value is not to be determined from selling price if the price has been arbitrarily fixed by the seller, and that market value is a criterion of real value only if the article is sold in an open, competitive market. Appellee contends this offered instruction is a concession that "market value is the test if market has been shown," and that, if the seller has not arbitrarily fixed the price, "this value may be established by plaintiff's selling price;" that the offer negatives all claim that replacement is the correct measure of damages. We do not so view it. Appellee adds that the same concession was worked by the offered instructions as a whole. One of these, No. 26, we have just dealt with. There were 27 instructions offered. In addition to Instruction No. 26, Nos. 24, 25, and 27 make some reference to damages. All the others do not touch that subject. Now, appellant does not contend that replacement is generally the true measure, but that it is where goods are totally destroyed. Instruction 24 deals with nothing except goods only partially destroyed, and merely declares that the measure of recovery as to them is "the value of the property destroyed." Neither Instruction 25 nor 27 deals with property that was totally destroyed. And neither can be strained into presenting a theory which excludes the cost of replacement as the compensation for property totally destroyed. Appellee insists further that no complaint was made by objection which adequately indicated that appellant contended replacement was the true measure. Appellant opposes that it may not fairly be said it is bound by any theory of trial proceeding on the line that replacement is not the adequate and proper compensation, and that its objections fairly advised the trial court that such compensation was insisted upon as the only one due, and that the measure of damages adopted was an incorrect one.
Grant the claim of appellee, and, of course, the cases control that hold a complaint may not first be made here. It becomes necessary, then, to investigate what objections were made.
Thereupon, defendant objected "that the cost of machinery is not the price to the dealer;" and despite it, the witness was permitted to answer that he did know such value.
The witness answered, "Yes," over objection "that the cost of machinery is not the price to the dealers, and is not the proper measure of damages, and for the further reason that it does not appear as yet from the evidence whether plaintiff is a manufacturer or a jobber of this machinery." To this, defendant made objection, among others, on the ground "that the proper measure of damages is not the market price." When, later, the witness was asked to say what the fair market value "of this line of stuff" was, in Mason City, on October 7, 1910, defendant asked leave to interrogate the witness as to his competency, and, this being denied, made objection that it was not shown the witness was qualified to testify to such market price. At this point, the court stated it understood that the reference to "fair market value" was to "the wholesale price of the goods in this locality." Counsel for plaintiff responded:
Further discussion ensued. In the course of it, Mr. Markley, one counsel for defendant, stated that the courts held "that the reasonableness of prices must depend upon the cost of production, the cost of material used, the risks of the business, the labor of producing, the demand for the goods, and all things which tend to show the reasonable worth of the article;" that, if it should develop, on cross-examination, that competition was throttled, as to goods like the ones burned, then "the prices at which they sold here and elsewhere would not be an ingredient or element of market value," and it "would go back to the question what the goods were really worth;" and there is no distinction "between price and value,--market value is never admissible except to show the real value."
The witness was asked to state the fair market value in Mason City of one item in the stock of goods burned, on the day of the fire. Defendant objected that the question "does not call for the proper measure of damages or value." Like objection was interposed when witness was asked to state the fair market value in the market at Mason City, on the day of the fire, of the binding twine burned.
The conception of appellee is that the testimony received against objection stated "the market value at which the goods were selling in Mason City in the ordinary course of trade." It seems to us the objections fairly advised court and counsel: (1) That defendant was insisting that such was not the proper measure of damages; (2) that, as to such a stock as this, when destroyed as a whole, the compensation due was not the "market value" in the market of Mason City, nor the price to dealers; (3) that "reasonable price" for such a stock depended upon cost of production and of labor in producing, cost of material, demand for the goods, and the "risks of the business." We think that the objections made fairly indicated that cost of replacement is the only true measure of damages in a case such as this,--indicated that therefore, the measure adopted by the court was an erroneous one. The argument of appellee assumes that the only objection made was that the proposed testimony "would not tend to prove the proper measure of damages;" asserts that such an objection is not more specific than "incompetent, immaterial, and irrelevant," and that the last-named objection is never sufficiently definite. Some aid and comfort is given this position in Graves v. Bonness, 97 Minn. 278 (107 N.W. 163, 164, 165). That case declares, in effect, that the trial court is not presumed to know any law, and adds that counsel It should be noted that this very broad language is largely, if not wholly obiter, because the objection was, "It is incompetent, irrelevant, and...
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