Morrow v. Missouri Pac. Ry. Co.

• Decision Date: 06 December 1909
• Parties: MORROW et al. v. MISSOURI PAC. RY. CO.
• Court: Missouri Court of Appeals

123 S.W. 1034

MORROW et al. v. MISSOURI PAC. RY. CO.

Springfield Court of Appeals. Missouri.

December 6, 1909.

Rehearing Denied January 6, 1910.

1. CARRIERS (§ 158) — DELAY IN TRANSPORTATION — DAMAGES — CONTRACT.

Provision in a bill of lading that, in case of loss of the property, its value or cost at place of shipment shall govern the settlement does not

cover the owner's damages from delay in transportation.

2. CARRIERS (§ 159) — CONTRACTS OF SHIPMENT — CLAIMS FOR DAMAGES.

The provision in a bill of lading that as a condition to liability of the carrier all claims for damages must be reported by the consignee in 36 hours after arrival of the goods, refers solely to loss of or damage to articles shipped, and not to special damages to the owner from delay in transportation.

3. CARRIERS (§ 105) — NOTICE OF NECESSITY OF SPEEDY TRANSPORTATION — STATEMENT TO AGENTS.

A carrier is, through its station agent and bill clerk, under the agency of whom it receives freight for transportation, charged with notice rendering it liable for special damages for delay in transportation; the shipper having before delivery of the freight to them explained that the articles, the rolls of his mill, were being shipped for repair, and that till their return he could do no business, and marked on the bill of lading "Rush through."

4. DAMAGES (§ 45) — INTERRUPTION OF BUSINESS — EXPENSES OF IDLE HELP.

Expenses for help of a mill, necessarily under pay and idle while the mill is shut down owing to delay in transportation of freight, which the carrier knew must arrive before the mill could start, are recoverable as damages.

5. DAMAGES (§ 40) — INTERRUPTION OF BUSINESS — EXPECTED PROFITS.

Loss of expected profits of a mill, due to interruption of the business, is recoverable, where the business is an established business, and the amount of such profits is made reasonably certain by competent proof.

6. DAMAGES (§ 190) — INTERRUPTION OF BUSINESS — LOSS OF PROFITS — EVIDENCE.

To recover for loss of profits of an established business by its interruption, it must be shown what for a reasonable time previous thereto were the usual income and expenses, and such average earnings will constitute a standard for measuring the loss.

7. DAMAGES (§ 40) — INTERRUPTION OF BUSINESS — "PROFITS."

The word "profits" in a manufacturing or agricultural business means the net earnings, or the excess of returns over expenditures, and relates to any excess which remains after deducting from the returns the operating expenses and depreciation in capital, and also, in a proper case, interest on capital employed.

8. EVIDENCE (§ 70) — PRESUMPTION — USUAL COURSE OF BUSINESS.

It is presumed that, in case of a large manufacturing business carried on by a partnership, a set of books showing gross receipts and expenditures is kept, according to the usual and ordinary course of business.

9. EVIDENCE (§ 354) — COMPETENCY — BOOKS OF ACCOUNT.

The books of account of a manufacturing business are competent evidence, in favor of the parties conducting it, to show the income and expenses, and so the average net profits, as a basis for damages for interruption of the business.

10. EVIDENCE (§ 75) — PRESUMPTION — FAILURE TO PRODUCE DOCUMENTS.

A party having documents in his possession, important to sustain his case, and not producing them, the presumption is against him.

11. EVIDENCE (§ 501) — ESTIMATES.

Loss from interruption of a business may not be shown by a mere estimate, without any basis therefor being given or shown.

12. DAMAGES (§ 218) — LOSS OF PROFITS — INSTRUCTIONS.

The court, in an action for loss of anticipated profits from interruption of a business, should define for the jury the word "profits," and call their attention to the rule of law by which they are to be guided in determining the amount of profits.

Appeal from Circuit Court, Jasper County; Hugh Dabbs, Judge.

Action by S. O. Morrow and another against the Missouri Pacific Railway Company. Judgment for plaintiffs. Defendant appeals. Reversed and remanded.

The plaintiffs' cause of action in this case was for damages for the delay in the shipment of certain mill rolls. The evidence tended to show the following state of facts: That at and prior to the institution of this suit, the plaintiffs were partners owning and operating a flour mill on Spring river near Carthage, Mo., and the defendant operated a line of railroad and was a common carrier of freight and passengers between Carthage, Mo., and Leavenworth, Kan., and elsewhere. On about the 28th day of September, 1907, the mill rolls, being a part of the machinery of the plaintiffs' mill, and necessary for the operation, became worn and defective, and had to be repaired, and it was necessary to send the same for that purpose to the Great Western Manufacturing Company of Leavenworth, Kan., the plaintiffs having made an agreement with that company to repair said rolls upon receipt of the same and return them promptly to the plaintiffs. On the 28th day of September, 1907, the rolls were taken to the station of the defendant company at Carthage, Mo., and delivered to it for shipment to Leavenworth, Kan. Plaintiffs notified the shipping clerk who took charge of the freight at the time of shipment, and who issued the bill of lading, of the nature of the shipment, the purpose for which the rolls were being shipped, the necessity of prompt shipment of the same, and that, while the rolls were away from the mill, it would have to stand idle. The defendant, with such knowledge, agreed to transport the rolls to Leavenworth, Kan., and did receive the same for the purpose of transporting them. The defendant's shipping clerk, at the time he received the freight for shipment, gave the plaintiffs a bill of lading on which was indorsed, "Mill rolls, rush," in pencil memorandum. The bill of lading contained a condition that all claims for damages must be reported by the consignee in writing within 36 hours after he was notified of the arrival of the freight, and that there was no liability unless such notice was given. The goods were transported and delivered to the consignee, and no notice for claim for any damages was given the defendant. Another condition of the bill of lading was: "That in the event of loss of property under the provisions of this agreement, the value or cost of the same at the point of shipment shall govern the settlement." The mill rolls were sent to be recorrugated. The bill of lading was signed by the defendant's shipping clerk. The rolls were lost or delayed in the course of the fulfillment of the contract of shipment, and did not reach their destination until October 16, 1907, and were some 11 days longer in transportation than they should have been in the ordinary course of business. The mill, during this time, remained idle, awaiting the return of the mill rolls.

At the trial, the plaintiffs introduced evidence tending to show the number of hands they had employed, and the amount paid them during the time that the mill was idle. One of the plaintiffs, S. O. Morrow, testified as to the profits they lost by reason of the unnecessary delay in transportation, in substance, as follows: He stated that he had been connected with his present mill for 22 years; that it was a roller flour mill — both water and steam — that his trade was principally in the South, but that he also had a fair local business in Carthage; that they made, besides flour, chops, ground meal and bran; that the mill had been shut down prior to September 28th, since July; that there was nothing to prevent the mill from running except the rolls, and the mill was ready to run when the rolls were sent away for repairs; that they had no other rolls, and couldn't procure any sufficient to run the mill. He then gave the names of the different employés and the amount he had to pay them per month while the mill was idle, and stated that he had no work for them to do which could not have been done while the mill was running. He stated that they always had a market for their product; that they had wheat and material in the mill on hand to grind and operate. "Q. Now, Mr. Morrow, you may state, keeping inside of any doubt, what would have been the reasonable profits per day in the operation of the mill during the 11 days' time above the usual period to transport the rolls, taking into consideration the capacity of the mill, what you had on hand, and the market, under the conditions at that particular time? A. Under the conditions at that particular time, $75 per day. I would have expected to have made more than that. Court: You mean that amount made above all expenses if you had the rolls? A. Yes, sir." On cross-examination the witness testified in substance as follows: "The mill was not operated from July until the rolls were returned in October. During that time I turned out no flour, and had no men on the road; can't say whether I had orders out at that time; would have started the mill as soon as the rolls returned. Q. How can you tell what the profits would be on wheat sold, unless you know what orders you had for wheat, and what price you make on flour? A. I didn't answer that kind of a question. He asked me what the profit of the mill would have been per day under the conditions at that time if the rolls had been there. I would had to have had men on the road to take orders in order to make a profit. I couldn't entirely depend on the local market at Carthage. We had men waiting to start on the road; could not have made a profit without having men on the road and taking orders, nor run at a profit and supply Carthage alone, but didn't get all our orders from salesmen. We had a man ready to start at the time the rolls went away, but never tried his capacity. He had been in the flour business for 30 years. I can't give you the price of wheat. The price of wheat would regulate the profit on flour. Wheat was at a high point, a dollar and one cent, but was not that...