Court Opinion

ID: 3682284
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:27:50.246273+00
Date Added: 2024-06-11T14:09:10.693443
License: Public Domain

On former appeal of this action Company A. v. Hughes, 49 N.D. 626, 193 N.W. 144, this court held "that witnesses who were members and directors of a corporation are not by virtue of that fact alone, qualified to testify to the value of property of the corporation, which is alleged to have been converted." That decision is the law of this case. Schmidt v. Beiseker, 19 N.D. 35, 120 N.W. 1096.
The evidence in this case is the same as the evidence in the former trial. The witnesses are the same except, that one Langley, who was one of the principal witnesses in the former trial, was not a witness in the last trial. The witness Major A.B. Welch was the principal witness in the last trial, and on pages 61 and 62 of the record when he is testifying as to his knowledge of values he is asked this question: "Now this knowledge is the same knowledge that you had when you testified in February 1922, is it not?" Ans. "Approximately the same." On page 72 of the record referring to his testimony in the former trial he is asked this question: "So you had the same knowledge as you had two years ago when this case was tried?" Ans. "Practically."
I am unable to find any testimony in the record justifying the statements in the majority opinion that the witnesses, Welch and Brocopp, had charge of the property involved in the action for upwards of four years. The evidence shows that the witness Welch knew very little about the property and did not have possession of it, as stated in prevailing opinion. On page 80 of the record Major Welch says: "I was in Canada in the summer of 1914 and I spent the winter in New York, I got back here sometime in the spring."
On page 58 of the record he states that: "Captain Wing was the Commanding Officer in charge of Co. `A' when he left." On page 81 he stated: "We got back from the border February, 1917" and on page 78 of the record he states: "We were 16 months on the border."
In speaking of buying punching bags, on page 68, he states: "Why I bought them when I was in school, a member of a gymnasium class." Question. "Where?" Ans. "Puget Sound University, Tacoma, *Page 307 
Washington." "You had been to school at the University before the first trial." Ans. "Yes, sir." On pages 11 and 12 of the record he states that he came to Bismarck in 1904 moved to Mandan in 1916 and is asked this question: "Have you been back here again after that?" Ans. "Not to live." So it appears that he did not live in Bismarck, that he spent the summer of 1914 in Canada, winter in New York city, getting back in the spring of 1915. He was 16 months on the border and at the University of Puget Sound, Tacoma, some of the time, he does not state how long, and that it was while there that he bought the punching bags, so it appears that he was away and out of the state for nearly all of the four years prior to October 1917 and that when in the state he lived in Mandan.
In April, 1917, he was made Captain of Co. "I" and Murphy was made Captain of Co. "A." Company "A" got back to Bismarck in the fall of 1918 and nearly all of the property was in the Armory until March 1920. It is claimed that since the former trial that Major Welch and the other witnesses have qualified as witnesses. Welch's qualifications as a witness on the subject of values are well illustrated in his testimony on the value of the piano. On page 77 of the record he is asked: "You are familiar with the fact that some brands of pianos can be bought for $150 to $175 whereas another piano which looked very much the same on the exterior will cost $1,000 to $1,200?" Ans. "Yes, sir." Question. "You don't know whether this was an inferior or superior make of instrument?" Ans. "No, sir." And yet he is permitted to testify that this piano was worth $1,000 on the first day of October, 1917, while the undisputed testimony shows, that it was bought second hand by Captain Murphy for $165 in 1907. He states that he further qualified himself by writing the piano companies for prices, but if he did not know the kind of piano it was, and whether it was an inferior or superior kind, how could he get accurate or competent information from any piano company?
On page 29 the witness Welch was asked this question: "You described a lot of papers, books, military drill manuals, did you know the price?" "Yes, sir." Objection was made to this testimony and the plaintiff's attorney, Mr. Koffel, states on page 30: "The reason I haven't gone any further was because so far as the last record shows there was nobody who could tell what was in that box." That, of *Page 308 
course, is the box referred to in Mr. Welch's testimony, on page 14: The box which Mr. Welch says "Sergeant Scharnowski filled with records, under his orders to deliver to the Adjutant General's Office." That was prior to the 1st day of October, 1917, and yet the witness is permitted to testify to the value of drill manuals, miscellaneous papers and books, which, according to the plaintiff's attorney's statement, might have been in the box sent to the Adjutant General's Office before the 1st of October, 1917.
The undisputed testimony shows that the water heater was rusted to a mere shell and could not be used, yet he testified that it was worth $75, because that is what he paid for one that he put in his house sometime or other, he does not say when. The plaintiff managed to get before the jury, under objections, what all the property would cost new and that is what the verdict is based on, which is not the measure of damages in conversion.
The majority opinion states that the defendant challenges the correctness of the measure of damages, and states that the point is not argued and is therefore waived, but that the point is not well taken.
The measure of damages is challenged in the third assignment of error which refers to page 29 of the record, and is not waived. On page 28 we find this testimony: "Now state whether or not you know what it cost to replace them here, on or about the first of October, 1917?" On page 29 he is asked: "What were their reasonable values, basing your opinion on the cost price of chairs, and the cost of replacing them, and the use to which they have been put and the condition of repair they were in on that day?"
It is objected to, no foundation laid, not the proper measure of damages or the values. The Court: "He may answer." Ans. "$2 a piece." Referring to the skates, Mr. Koffel states, page 101: "I want to show what was their value; he bought them at $3 and he has given the value at $6 or $6.50; I think it leaves the witness in a bad position; he ought to be permitted to explain that." The Court: "Well he may answer." The witness: "That was the price new skates would cost us." The Court: "You mean by that what?" Witness: "$6.50." Question: "The price of $6.50 is what new skates would cost you?" Witness: "Yes, sir."
The case was tried upon the theory that there was no market price *Page 309 
for the property in question in Bismarck on October 1st, 1917, but plaintiff's witnesses are asked this question (this particular question appears in the testimony of A.B. Welch on page 47 of the record); "And did you, or did you not know the price of articles of that kind here in Bismarck, on the first day of October, 1917?" Ans. "Yes, sir."
In overruling defendant's objection to the testimony of witness Brocopp on the value of the boiler of the heating plant, the objection being that no proper foundation has been laid, the witness hasn't shown himself qualified to express an opinion on this value and it doesn't call for the proper measure of value. The court said that the witness says: "that he is familiar with similar boilers at Bismarck and at that time, and while that would refer to new boilers it seems to me that it qualifies himto express an opinion as to the value of this second hand boiler.
"He may answer." Ans. "$800." This testimony was taken under objection and was assigned as error on appeal.
On page 75 of the record witness Welch states: "I have written various houses regarding all of these articles — wholesale houses, asking them the prices, on October 1, 1917." Question: "On new goods?" Ans. "Yes, sir." This explains the excessive values fixed by plaintiff's witness and the excessive verdict of the jury. They are both based upon hearsay testimony, the admission of which under objection was error. The cost of new property is not the measure of damages under § 7168, Compiled Laws, 1913. The first subdivision being applicable to this case, viz.: "The value of the property at the time of the conversion, with the interest from that time."
Brocopp's testimony shows that he was not familiar with the property. In speaking of the boiler, on page 118, he says: "I didn't say I knew the make, I got prices on boilers and I didn't know what they were made of." On page 119 he says: "At that time I was getting prices on boilers and stuff and connections and other things, one thousand other things." If he was familiar with the property, he would have known that there were two big cracks in the boiler; that it had been used for ten years and was practically worn out, as testified to by Grambs and Murphy. Clough qualifies in the same way, basing his testimony on values of new property secured from wholesale houses.
No foundation was laid for the witnesses' testimony for the reason *Page 310 
that the information secured from wholesale houses was hearsay. Wigmore, Ev. § 719, p. 1137, states the rule thus: "If A sits in a merchant's office and listens to the terms accepted and rejected for a dozen articles, he acquires a first hand knowledge of value; but if he goes in and asks the merchant to tell the value of a given article, his knowledge is based on a belief in the truth of the merchant's assertion. In the former case, his knowledge is not based on hearsay. But in the latter case his knowledge is based on the hearsay assertion of another person, and therefore is inadmissible (under the principle of § 657)."
"When property has been used, evidence of the cost of replacing it with new, furnishes no measure of value for it. Section 127 California Jurisprudence; Merril v. Pacific Transfer Co. 131 Cal. 582,63 P. 915; Re Slade, 122 Cal. 434, 55 P. 158."
"In Independent Linen Supply  Steam Laundry Co. v. Zakrowsky, 158 N.Y. Supp. 721, it was held that proof of the cost price of napkins when new was insufficient to support a judgment for conversion occurring seven months later, during which time they had been in use; that the measure of damages was their value at the time of the conversion, and damages based solely on proof of their value when new were excessive."
And in O'Neill v. Patterson, 26 Misc. 3, 55 N.Y. Supp. 617, it was held that proof of the value of household furniture when new was insufficient evidence of its market value at the time of its conversion four months later, so as to sustain a judgment for the conversion, where it had been, in the meantime, in constant use by tenants, and there was evidence merely that some of it had been lost or destroyed and the balance had somewhat deteriorated.
Also in Walsh v. New York City R. Co. 93 N.Y. Supp. 552, it was held that evidence of the cost of wearing apparel and of its condition after the accident is insufficient to support a judgment for damages thereto, in the absence of proof of its reasonable value, the amount of its depreciation, or its condition before the accident.
Burchinell v. Butters, 7 Colo. App. 294, 43 P. 459 (wrongful attachment) it was said: "The cost of replacing them might perhaps have been one method of arriving at the value, but it must have been *Page 311 
of the same kind of goods that had been in use for the same length of time and in the same condition, not new goods."
The property involved in this action was nearly all purchased by Capt. Murphy about the time the Armory was built in 1907. The evidence shows that it had hard usage and very little care. On page 60 of the record witness Welch is asked this question: "Well, the fact is that you did not put anyone in charge yourself?" Ans. "No, sir." This is shown by the testimony of the veteran Steven Welch, who states that he had a key from the time that the Armory was built. He was a member of the G.A.R. organization which organization put $300 in the Armory. They held their meetings there. He says: "I lived right across the road on the other side from the Armory and when they wanted to get in there, they would hunt me up and I would let them in." At the time Companies "A" and "I" left Bismarck for the war, he says: "The door was all knocked off and the locks weren't any good and I put a new lock on it."
Witness Welch is asked: "If the chairs were not loaned for a street dance and if they did not remain on the street for several days?" He said: "They were loaned for the street dance, and that he did not know whether or not they remained on the street."
The majority opinion reviews some of this evidence and states that it is apparent "that the jury found the largest number of articles in each item to have been converted and placed thereon the highest values testified thereto by the plaintiff's witness." It then reviews the testimony of Welch, Brocopp and Clough, and states that the other evidence that is evidence outside of the testimony of Welch, Clough and Brocopp might be classed as conjecture. If it was conjecture, to admit it under objections was error. The plaintiff's case must stand upon the testimony of the three witnesses named, and their testimony, "is so unreasonable as to shock the conscience of the court, so that it becomes its imperative duty to reduce the verdict in the sum of $2,500." This is an arbitrary reduction based upon no evidence. The court finds that the verdict is based upon the testimony of Welch, Clough and Brocopp, both as to the number of pieces of the property converted and the highest value placed thereon. The trial court admitted the evidence stating specifically that the information which Brocopp got on new boilers qualified him to testify as to the value of the old boiler. Since the *Page 312 
evidence was admitted as competent it was the duty of the jurors to consider it and to be guided by it if they believed it to be true. The admission of the evidence is error and the case should be reversed and a new trial granted.