Kirkhof Electric Company v. Wolverine Express, Inc.
| Decision Date | 06 August 1958 |
| Docket Number | Civ. A. No. 2959. |
| Citation | 175 F. Supp. 43 |
| Parties | KIRKHOF ELECTRIC COMPANY, a Michigan corporation, in its own right, and as assignee of F. L. Jacobs Co., Grand Rapids Metalcraft Division, a Michigan corporation, Plaintiff, v. WOLVERINE EXPRESS, INC., a Michigan corporation, Defendant. |
| Court | U.S. District Court — Western District of Michigan |
Williams & Damon, Grand Rapids, Mich., for plaintiff.
Schmidt, Smith, Howlett & Halliday, Grand Rapids, Mich., for defendant.
On July 1, 1955, Kirkhof Electric Company placed an order with the Westinghouse Electric Corporation for three transformers to be installed at the Grand Rapids Metalcraft Division of F. L. Jacobs Company. The order from Kirkhof to Westinghouse did not specify the carrier by which these transformers were to be shipped. On July 11, 1955, Metalcraft forwarded a purchase order to Kirkhof for the three transformers at a total price of $9,810, confirming previous oral negotiations. Metalcraft's purchase order specified that the transformers were to be shipped by rail. Kirkhof also had contracts with Metalcraft for the construction of an electrical substation, for the installation of the transformers, and for the installation of the secondary lines from the transformers to the factory "buss" connections.
The transformers in question were, for reasons unnecessary to this opinion, special orders and not the type transformers which were catalogued and sold as standard. On completion of the transformers, Westinghouse shipped them by truck, including the defendant carrier, to Metalcraft in Grand Rapids. On arrival it was determined that the transformers had been damaged and they were refused. After some negotiations, of which there was little evidence, the transformers, which had been manufactured by Westinghouse in Sharon, Pennsylvania, were shipped to the Westinghouse repair shop in Chicago for repairs.
The basis on which the repairs were to be made is to be found in the deposition of R. C. Blakey, general foreman of the repair shop for Westinghouse in Chicago, which deposition was taken by the defendant but offered by the plaintiff, and received as Exhibit 13. On Page 4 of his deposition, the witness testified in part:
"We had an open order to repair these units in first class operating condition, and there were absolutely no restrictions as to the type or nature of the work necessary to put these jobs in that condition."
After repairs the transformers were shipped to Metalcraft in Grand Rapids on instructions from Kirkhof. Metalcraft refused to accept the transformers. Kirkhof advertised the transformers for sale, and also had them appraised by Westinghouse and by Clement Electric Company, a dealer in used electrical equipment and machinery in Grand Rapids. After negotiations Metalcraft accepted the repaired transformers at a lot price of $6,108.50. The testimony is that the figure arrived at was the result of computation of the cost at the then market of a fourth transformer in the event one of the three previously damaged should break down in service. This cost was deducted from the original price of $9,810, and settlement was agreed upon on that basis.
From the evidence it appears that Metalcraft is and has been for many years one of the best customers of Kirkhof. That it was absolutely essential to Metalcraft that the transformers be installed according to the contract between Kirkhof and Metalcraft. As stated by Joseph L. Seaman, Vice-president of Kirkhof: "They had us over a barrel."
Mr. Seaman testified that they had attempted to secure higher bids in order to force Metalcraft to pay a higher price for the repaired transformers. Admittedly Kirkhof fully expected that the transformers in question would be installed in the Metalcraft plant as soon as an agreement had been reached as to the price to be paid for the transformers. Kirkhof was in no position to delay the installation for any substantial period of time and still retain the good will of one of its best customers.
A conference was had on or about November 9, 1955, in the office of Metalcraft at which time Mr. Seaman, Mr. Russell H. Kirkhof, President and one of the founders of Kirkhof Electric Company, and Mr. Leo A. Funke, sales engineer for Westinghouse in Grand Rapids, attempted to persuade Metalcraft to accept the transformers at the original price. Each of the persons named testified he was satisfied at the time of the conference, after the transformers had been repaired and shipped, to Grand Rapids, that they were exactly as when shipped from Sharon, Pennsylvania, and that functionally they were as good as at the time of original shipment from Sharon, Pennsylvania.
There was produced as a witness Mr. Paul Bogdon, of Clement Electric Company, who testified that he never saw the equipment but from the information given to him he had written a letter to Kirkhof stating that in his opinion the transformers before the repair had a value of $4,000. At the time he testified he stated as his opinion that the repair cost would be approximately $2,000, that he would expect to make a profit of 20%, that the transformers would have a value after repair of $7,200. He further testified that he would not be interested in buying them at any price.
It is the theory and claim of the plaintiff that it is entitled to recover from the defendant carrier the cost of repairs, plus the depreciation in value. It is the theory and claim of the plaintiff that when Westinghouse shipped the transformers title passed to Kirkhof, that title did not pass to Metalcraft because the carrier was not as specified in the Metalcraft purchase order. It is further plaintiff's theory and claim that the depreciated value is determined by the price which Metalcraft was willing to pay and did pay. Plaintiff is, however, willing to accept the valuation as stated by the witness Bogdon.
It is defendant's theory and claim that the plaintiff was acting as agent for Metalcraft in purchasing the transformers on special order; that the transformers became the property of Metalcraft when delivered to the carrier. It is further defendant's theory and claim that the measure of damage for injury to items which have no market value is the cost of repair and admittedly these transformers had no market value.
It is defendant's theory and claim that the depreciation in value is not an element of damage or in the alternative that no depreciation in value has been established by the evidence in this case. It is defendant's theory and claim that the transformers after being repaired were as new; that the inability of the plaintiff to deliver them to Metalcraft at the agreed price resulted from the relationship between plaintiff and Metalcraft rather than any depreciation in the value of the transformers.
The court is satisfied that the plaintiff was not acting as the agent of Metalcraft at the time that the order was placed by the plaintiff with Westinghouse. In Saums v. Parfet, 1935, 270 Mich. 165, 171, 258 N.W. 235, 237, the Supreme Court of Michigan defined agency as follows:
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...in value shown by the difference between the value of the goods after repair and before being damaged. Kirkhof Electric Company v. Wolverine Express, Inc., 175 F.Supp. 43 (W.D.Mich.1958), aff'd 269 F.2d 147 (6th Cir. 1959); Conditioned Air Corp. v. Rock Island Motor Transit Co., 253 Iowa 96......
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