Southwestern Motor Transport Co. v. Valley Weathermakers, Inc., No. B-403

• Court: Supreme Court of Texas
• Writing for the Court: NORVELL; GREENHILL
• Citation: 427 S.W.2d 597,37 A.L.R.3d 1114
• Decision Date: 27 March 1968
• Docket Number: No. B-403
• Parties: SOUTHWESTERN MOTOR TRANSPORT CO., Inc., Petitioner, v. VALLEY WEATHERMARKERS, INC., Respondent.

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427 S.W.2d 597 37 A.L.R.3d 1114 SOUTHWESTERN MOTOR TRANSPORT CO., Inc., Petitioner,
v.
VALLEY WEATHERMARKERS, INC., Respondent. No. B-403. Supreme Court of Texas. March 27, 1968.
Dissenting Opinion May 15, 1968.
Rehearing Denied May 15, 1968.

Hardy & Sharpe, Brownsville, Muse, Currie & Kohen, Ralph Currie, Dallas, for petitioner.

Johnson & Davis, Orrin W. Johnson, Harlingen, for respondent.

NORVELL, Justice.

Valley Weathermarkers, Inc. (Parce Engineering Company), the plaintiff in the trial court and respondent here, contends that its action against Southwestern Motor Transport Co., Inc. was one based upon a special oral contract whereby Parce Engineering Company ¹ performed services

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and furnished materials in repairing damaged air conditioning equipment for Southwestern under an implied promise that it would be paid a reasonable amount for such services and materials.

The trial court after a hearing without a jury rendered judgment against Southwestern for the principal amount of $7,955.23, plus interest, plus $1,537.10, attorney's fees for the trial court, plus $1,000.00 for the Court of Civil Appeals, plus $1,000.00 for the Supreme Court of Texas, plus $1,000.00 for the Supreme Court of the United States, payable in the event the case was appealed to such appellate courts. ² The purported basis of the attorney's fee allowance was Article 2226, Vernon's Ann.Tex.Civ.Stats. ³ The Court of Civil Appeals affirmed. 416 S.W.2d 488.

While it appears that Southwestern is liable to Parce in some amount, it is petitioner's contention that such liability is based upon federal law, notably, the Carmack amendment to the Hepburn Act (Interstate Commerce Act), 49 U.S.C.A. § 20(11), and not upon a special contract whereby Parce was employed to do certain repair work for Southwestern. We agree with petitioner's analysis of the case and accordingly reverse the judgments of the lower courts and remand the cause for another trial consistent with this opinion.

While there are a number of items which make up the amount of the judgment rendered against it which are disputed by petitioner upon one ground or another, the main controversy between the parties relates to attorney's fees. The principal difference between an action for labor and materials furnished under state law and an action for damages under the Interstate Commerce Act is that in the former, attorney's fees may be recovered, while in the latter, they may not. ⁴ See, Strickland Transportation Co. v. American Distributing Co., 198 F.2d 546 (5th Cir. 1952), citing with approval Thompson v. H. Rouw Co., 237 S.W.2d 662 (Tex.Civ.App.1951, writ ref'd n. r. e.).

These are the facts of the case:

On August 28, 1965, Parce Engineering Company, a manufacturer, assembler and supplier of air conditioning equipment, located in Harlingen, Texas, delivered to Southwestern Motor Transport some forty panels of air cooling equipment and allied vessels for shipment in interstate commerce to the Georgia Experiment Station of the United States Department of Agriculture. Southwestern issued its through bill of lading. The panels were unusually large and heavy and were loaded upon a special trailer owned by Strickland Transportation Company. This trailer was hauled

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by a Southwestern tractor to San Antonio where it was turned over to a connecting carrier, Strickland, which undertook to transport the panels eastward toward their Georgia destination. On September 1, 1965, while upon Strickland's lines, the trailer collided with the supports and top of a highway underpass near San Marcos, Texas. The air conditioning panels, while not destroyed, were severely damaged and were returned to Parce at Harlingen.

At this juncture, we pause to examine the legal situation of the parties. It seems to be the position of Parce that immediately after the collision and damage to the shipment, Southwestern became liable for the repair of the air conditioning panels. This is not strictly accurate. The damage occurred on Strickland's lines. At common law, Southwestern would not have been liable to Parce. Its liability as an initial carrier is affixed and controlled by the Interstate Commerce Act and the bill of lading. ⁵ The liability affixed by the Interstate Commerce Act and the bill of lading is for 'the full actual loss, damage or injury to such property.' Title to the damaged panels remained in Parce. If it wished to comply with and complete its contract with the Department of Agriculture, it would of necessity have to repair, replace or rebuild the damaged panels. It is the usual rule that 'where goods are not totally destroyed, a shipper is ordinarily bound to accept the goods in damaged condition looking to the Carrier for the difference in value * * *.' Sunset Motor Lines, Inc. v. Lu-Tex Packing Company, 256 F.2d 495 (5th Cir.1958); Strickland Transportation Co. v. American Distributing Co., 198 F.2d 546 (5th Cir.1952); Gulf, Colorado & Santa Fe Ry. Co. v. Everett & Long, 37 Tex.Civ.App. 167, 83 S.W. 257 (1904, no writ). The difference in value may be measured by the reasonable cost of repair in a suitable case. In Continental Can Co. v. Eazor Express Co., 16 Federal Carriers Cases, 81,701 (S.D.N.Y.1964), aff'd 354 F.2d 222 (2nd Cir.1965), it was said:

'The reasonable cost of repair is an appropriate measure of that loss where the property is not a total loss, but can be and is repaired, and the cost of repair is not out of proportion to the value of the property.'

See also, Kirkhof Electric Co. v. Wolverine Express, Inc., 269 F.2d 147 (6th Cir.1959).

This rule is one of general application and applies to both interstate and intrastate transportation. Pasadena State Bank v. Isaac, 149 Tex. 47, 228 S.W.2d 127 (1950). See also, Restatement of Torts, Comment under clause (a) of § 928, wherein it is pointed out that if a

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chattel is not rendered entirely worthless, 'The owner thereof can recover only the difference in its value before and after the harm, except that if, after the harm, it appears to be economical to repair the chattel, he can elect to recover the cost of repairs, * * *.'

While the reasonable cost of repair would appear to be the appropriate measure of the 'full actual loss, damage, or injury to (the) property,' the selection of this measure is not automatic. Parce could have taken the position that its damages should be measured by the difference in value of its property immediately before and immediately after the injury occurred. Southwestern was not bound to repair simply because an injury to property had taken place. The reasonable cost of repair was after all a measure of damage to be applied only if insisted upon by the party who has suffered damage, or agreed to by the parties, or if found by a court to be the most appropriate and economical measure.

This then was the legal status of the parties shortly after the damage had occurred and the panels had been returned to Parce as the owner thereof. It was an appropriate situation for negotiation and settlement. The parties proceeded to negotiate and on September 13, C. W. Parce, as President of Parce Engineering Company, wrote Southwestern a letter which contained the following:

'We expect a complete and full replacement of all damaged panels, condensing or cooling units, or any other items damaged in the shipment; rental expense on a warehouse for the use in rebuilding, replacing, repainting damaged equipment, along with any other necessary services in conjunction with said equipment; the cost of transportation of personnel to the warehouse from our place of business, along with the cost involved of obtaining necessary materials, parts, etc.; the cost of all labor for carpenters, mechanics and helpers to rebuild, repair and replace damaged items; the cost of supervisory personnel as required to supervise repairs or replacement; the cost of telephone calls and other communication necessary to obtain, repair or replace items; interest at 7% On the amount of contract with the Government for the delay in effecting delivery, from the date shipment was originally made on August 27, 1965, until totally repaired or replaced shipment is received at final destination, less reasonable time of delivery...