Texas & N. O. R. Co. v. H. Rouw Co.

• Citation: 271 S.W.2d 666
• Decision Date: 15 September 1954
• Docket Number: No. 12729,12729
• Parties: TEXAS AND NEW ORLEANS RAILROAD COMPANY, Appellant, v. The H. ROUW COMPANY, Appellee.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 666

271 S.W.2d 666

TEXAS AND NEW ORLEANS RAILROAD COMPANY, Appellant, v. The H. ROUW COMPANY, Appellee.

No. 12729.

Court of Civil Appeals of Texas, San Antonio.

Sept. 15, 1954.

Rehearing Denied Oct. 13, 1954.

Kelley, Looney, McLean & Littleton, Edinburg, Baker Botts, Andrews & Shepherd, Houston, for appellant.

James E. Little, Edinburg, for appellee.

POPE., Justice.

This case concerns an attack upon the market value rule of damages applicable in the case of damages to an interstate shipment of perishables. The settled rule of damages in such cases is the difference between the market value of the perishables at destination, had the shipment arrived in good condition, and the market value of the shipment in the condition in which it actually arrived, less the freight charges. The only point in the case is the same one that was decided in Thompson v. H. Rouw Company, Tex.Civ.App., 237 S.W.2d 662, in which case it was decided that commissions should not be deducted from the damages computed on the basis of the wholesale market value.

This case arose on a motion for summary judgment, with each side seeking judgment. The carrier's motion for summary judgment states that there were twenty-six separate shipments involved, that there was a loss to the shipper on each of those shipments, and that it would pay each of those claims provided the shipper would forego any claim to any commissions computed on the loss. In other words, if a shipment sustained a loss of $100, computed on the basis of the wholesale market, the carrier offered to pay that sum less certain percentages that the carrier claimed was a commission that would not need to be said by the shipper, since the produce was not sold by a commission merchant on the wholesale market. How the carrier assigned certain percentages as commissions to the separate shipments is not made known to us. The carrier's motion for summary judgment admitted that it owed for losses in each of the twenty-six shipments, and then added in each of the twenty-six instances, 'If we pay the shipper the item of commission at destination which is an item of unincurred expense, we would be paying damages for the shipment where the shipper would receive more for the merchandise which arrived in a damaged condition than for the merchandise which arrived in a good condition.'

The statement of facts reflects that the trial court pronounced judgment from the bench for the shipper for the full amount sued for, based upon the correct rule of damages stated at the outset of this opinion. The court deducted no commissions. The court then instructed the attorneys to prepare a judgment that would be so clear that this Court could not miss the point nor avoid the issue. The Court's judgment finds that the shipper sued exclusively for his own benefit; that it would make no disbursement to any commission agents; that because it would be collecting for commission but paying none, it would actually be receiving more than if the shipment had arrived in good condition.

We recognize the point, chiefly because it is the same one we decided in Thompson v. H. Rouw Company, supra, but, by reason of the earnestness and care with which this case is pressed, we shall enlarge upon that opinion.

An important and controlling fact is that there was a wholesale market for Thompson case and in this case. Precedents Thomason case and in this case. Precedents which determine damages by methods other than a resort to a market value because none existed are inapplicable to the decision in this case. At the outset, also it should be observed that there is nothing new, unusual nor exceptional about the market value rule of damages. There is no room for any misgivings about the Thompson case disturbing settled law, but should we depart from the rule there announced, we would disturb the law of long standing. In McCaull-Dinsmore Co. v. Chicago, M. & St. P. Ry. Co., D.C., 252 F. 664, affirmed in 8 Cir., 260 F. 835, 836, the question was whether a bill of lading which fixed value at the point of origin was a limitation of liability. Mr. Justice Stone, speaking for the Circuit Court of Appeals, struck down the carrier's contention that the disputed clause in the bill of lading was inserted for the mere purpose of seeking certainty and stated: 'There was no uncertainty as to the time or place of estimating value under the rule of common law-it was the destination.' The court stated also, 'The fair market value of the shipment at destination at the time when it should have been delivered, with interest, and less freight charges, was $1,422.11.' That was the rule at common law, and that was the amount awarded by the court. Mr. Justice Holmes, speaking for the Supreme Court, affirmed the two lower courts and in so doing followed the common law rule of damages, measured by the wholesale market value. Chicago, Milwaukee and St. Paul Railway Company v. McCaull-Dinsmore Co., 1920, 253 U.S. 97, 40 S.Ct. 504, 64 L.Ed. 801. Scores of cases in an unbroken line confirm the rule. The Ansaldo San Giorgio I v. Rheinstrom Bros. Co., 294 U.S. 494, 55 S.Ct. 483, 79 L.Ed. 1016; Pennsylvania R. Co. v. Wm. H. Muller & Co., 4 Cir., 15 F.2d 535, certiorari denied 273 U.S. 748, 47 S.Ct. 449, 71 L.Ed. 872; American Ry. Express Co. v. Ewing Thomas Converting Co., 3 Cir., 292 F. 335; Bussey v. Memphis & Little Rock R. Co., C.C., 13 F. 330; Railway Express Agency v. Smith, D.C., 116 F.Supp. 609; Rio Grande & E. P. R. Co. v. T. A. Austin & Co., Tex.Com.App., 25 S.W.2d 306; Texas Mexican Ry. Co. v. Slaughter, Tex.Civ.App., 241 S.W.2d 749; Thompson v. A. J. Tebbe & Sons Co., Tex.Civ.App., 241 S.W.2d 627; Thompson v. Tankersley, Tex.Civ.App., 238 S.W.2d 263; Thompson v. Associated Growers of Brownsville, Tex.Civ.App., 162 S.W.2d 754; American Ry. Express Co. v. McDaniel, Tex.Civ.App., 20 S.W.2d 1104; Coulter v. Gulf, C. & S. F. Ry. Co., Tex.Civ.App., 286 S.W. 559; Gulf, C. & S. F. Ry. Co. v. Stewart, Tex.Civ.App., 141 S.W. 1020; 8 Tex.Jur., Carriers, § 227; 9 Am.Jur., Carriers, § 781; 13 C.J.S., Carriers, § 264, notes 24 and 25.

From what has been said, it does not follow that the absence of a market value at destination prevents a shipper's recovery. When no market exists at destination, resort is made to other means to prove damages, as exceptions to the rule. The general rule is not abandoned, however, when all facts exist by which it can be applied. Appellant's authorities are exceptions to the general rule. We find no instances applying exceptions when a wholesale market actually exists. In the Thompson case we sought to point out that there was a wholesale market.

Appellant urges that the phrase, 'full actual loss, damage, or injury to such property', used in Title 49 U.S.C.A. § 20(11), was a statutory departure from the common law rule of damage, and that since its enactment, some measure other than the market value measure was adopted. We find no cases so stating, but the many cases cited above hold to the contrary. Some cases have expressly so stated. Chicago, Milwankee and St. Paul Railway Company v. McCaull-Dinsmore Co., supra; Meltzer v. Baltimore & O. R. Co., D.C., 38 F.Supp. 391; Piazza v. Louisiana & Arkansas Ry. Co., La.App., 46 So.2d 670; Gore Products, Inc., v. Texas & N. O. R. Co., La.App., 34 So.2d 418; Thompson v. A. J. Tebbe & Sons Co., Tex.Civ.App., 241 S.W.2d 627, 629; Thompson v. H. Rouw Company, supra; Matthews-Carr v. Brown Express, Tex.Civ.App., 217 S.W.2d 75, 77; 13 C.J.S. Carriers, § 264, note 25, citing many cases. Appellant's attack upon the Thompson case ignores the general rule, and would read into the words, 'full actual loss, damage or injury,' a meaning different from the settled market value rule. Appellant would convert it into a 'cost to the shipper' rule.

One exception to the general rule is that a shipper may recover in some instances on a basis other than market value when there is no market. United States v. Palmer & Parker Co., 1 Cir., 61 F.2d 455. Appellant has briefed this exception to the general rule. We shall examine those cases. In Baltimore & O. C. Terminal R. Co. v. Becker Milling Machine Co., 7 Cir., 272 F. 933, the court properly refused to fix the market price at the price to individual purchasers of specially manufactured machines when the manufacturer controlled the price. That, of course, was not a valid market price. In Weirton Steel Co. v. Isbrandtsen-Moller Co., 2 Cir., 126 F.2d 593, certain parcels of tin plate were damaged. The tin was intended to be made into oil cans, and the tin was used for that purpose apparently at no loss in price. If the case is applicable at all there was no proof with reference to the wholesale market value of tin at Hong Kong, the destination. In Waterman S. S. Corp. v. United States Smelting, Refining & Mining Co., 5 Cir., 155 F.2d 687, 694, thirteen sheets of steel were lost overboard into the sea. The sole evidence of value was the replacement value at Seattle, which was the destination, and the Court stated: 'In the absence of any contrary evidence, 'the value at Seattle' may be taken as the market value.' (Emphasis ours.) In Continental Distributing Co. v. Reading Co., 3 Cir., 168 F.2d 967, there was no proof of market value at destination of wine, the commodity which had been lost. Only one witness testified with reference to values and he undertook to prove value of the wine at Chicago by the cost method, which is the method appellant here sponsors. The witness fixed the value of wine by testifying to cost in New York rather than at destination. He then added to that cost other costs necessary to get it to Chicago, and also tax and duty. The method and the evidence were properly rejected. Meletio Sea Food Co. v. Gordons Transports, Inc., Mo.App., 191 S.W.2d 983, states the general rule as we have stated it. The case concerned a special food preparation, and the case makes no mention of its having a market price. The facts show that the...