Kilby Locomotive & Machine Works v. D.B. Lacy & Son

• Decision Date: 11 February 1915
• Docket Number: 205
• Citation: 67 So. 754,12 Ala.App. 464
• Parties: KILBY LOCOMOTIVE & MACHINE WORKS v. D.B. LACY & SON.
• Court: Alabama Court of Appeals

67 So. 754

12 Ala.App. 464

KILBY LOCOMOTIVE & MACHINE WORKS v. D.B. LACY & SON.

No. 205

Court of Appeals of Alabama

February 11, 1915

Appeal from City Court of Anniston; Thomas W. Coleman, Jr., Judge.

Action of deceit by D.B. Lacy & Son against the Kilby Locomotive &amp Machine Works. From a Judgment for plaintiff, defendant appeals. Reversed and remanded.

Knox Acker, Dixon & Sterne, of Anniston, for appellant.

P.F Wharton, of Anniston, for appellee.

THOMAS, J.

The general rule as to the measure of damages, when a person is injured by the false and fraudulent representations of another, is, as stated in the first authority cited below and borne out by the others, this:

"He is entitled to recover all the damages which were within the contemplation of the parties, or which, though not within the contemplation of the parties, were either the necessary or the natural and proximate consequences of the fraud; and he can recover nothing more than this, unless the circumstances were such as to render the other party liable in exemplary damages." 14 Am. & Eng.Ency.Law (2d Ed.) 177-179; 20 Cyc. 130 et seq.; 8 Am. & Eng.Ency.Law (2d Ed.) 640 et seq.; 13 Cyc. 28 et seq.

And by the great weight of authority, where the fraud relied on consists of false representations as to the quality of personal property which induced its purchase, and where there has been no rescission of the contract, and the purchaser retains the property, the measure of his damages, in an action of deceit for such fraud, is, in ordinary cases, the difference between the value of the property at the time of the sale and what its value would have been if the representations had been true. 14 Am. & Eng.Ency.Law (2d Ed.) 182; 20 Cyc. 132, 133; Foster v. Kennedy, 38 Ala. 359. 81 Am.Dec. 56; Moncrief v. Wilkinson, 93 Ala. 373, 9 So. 159; Ward v. Reynolds, 32 Ala 384; Gibson v. Marquis, 29 Ala. 668.

In some cases, however, this rule is not applicable. It does not apply in any case when the difference between the actual value of the property and what its value would have been if the representations had been true does not in fact represent the actual damage sustained as the natural and proximate result of the fraud. In such cases, since it is a cardinal principle of the law that the person injured is entitled to receive compensation for the injury actually inflicted, the party defrauded may prove and recover his actual damages, except, of course, such as he might have avoided by the exercise of reasonable diligence. 14 Am. & Eng.Ency.Law (2d Ed.) 183; 20 Cyc. 130 et seq., 136, 140, 141; 1 Smith's Leading Cases, 248-252; Jones v. Ross, 98 Ala. 448, 13 So. 319; Hogan v. Thorington, 8 Port. 428; Kornegay v. White, 10 Ala. 255; Willis v. Dudley, 10 Ala. 933; Milton v. Rowland, 11 Ala. 732; Marshall v. Wood, 16 Ala. 806; Worthy v. Patterson, 20 Ala. 174; Rowland v. Shelton, 25 Ala. 217.

One of the bones of serious contention in the present case, which is an action for deceit in the sale of a secondhand locomotive engine, is as to the proper measure of damages. The complaint, which was filed by appellees as plaintiffs below against appellant, who sold to appellees the said engine, alleged in substance, in the only counts that need be here noticed, that, at the time of and in the negotiations for the sale, the appellant, through its agent who conducted the sale, represented that said engine had recently been overhauled, repaired, and rebuilt by it in its shops, where the engine was at the time, so that it, and every part of it, was then as good as new. The complaint then alleges in effect that the representations were false and untrue--setting out how and wherein--and that defendant's said agent, who made them in conducting said sale, knew, at the time, that they were false and untrue, but that plaintiffs, in ignorance of their falsity and in reliance upon them, were induced to and did purchase said engine. The complaint claimed as damages the sums of money which plaintiffs were alleged to have expended (and which there was some evidence tending to support) in having said engine overhauled and repaired so as to make it as good as new, and in hiring another engine to use in its place while the one in question was undergoing such repairs.

The evidence tended to show, further, however, that the engine was not overhauled or repaired until after it had been used by plaintiffs for about a year, and that, when it was so overhauled and repaired, the original design of the engine, as respects the bracing of the fire box and boiler, was changed so as to make it meet the requirements of the federal Boiler Inspection Act, ^[1] which act was passed by Congress, or became operative, after plaintiffs purchased the engine.

Of course, the defendant was not liable for any of the costs of the overhauling and repairing that was rendered necessary by the wear and tear resulting from the use and service to which the plaintiffs had put the engine between the time of the purchase and the time that the overhauling and repairing was done, nor for any cost of such overhauling and repairing that was done in making the engine conform to the requirements of the federal act mentioned, but was, we think, liable, as the natural and proximate result of the wrong complained of, for the reasonable cost and expense to which the plaintiffs had been put in having the engine overhauled and repaired to the extent necessary to change it from the condition in which it was actually at the time of the purchase to the condition it was then represented to be in--in other words, to the extent necessary to make such representations good--and was likewise, we think, liable for the reasonable costs and expense...