Court Opinion

ID: 6918230
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:50:36.217319+00
Date Added: 2024-06-11T16:06:43.304390
License: Public Domain

SHACKELFORD MILLER, Jr., Circuit Judge
(dissenting).
It is true that in some cases the measure of damage in the case of personal property which has been damaged but not destroyed is the cost of the repairs. This is not the rule, however, where the reasonable market value of the property damaged after being repaired is less than its reasonable market value immediately before the accident. In such cases the resulting depreciation in value is a proper element of damage in addition to the cost of repair. General Construction Co. v. Kemplin, 309 Ky. 587, 588-589, 218 S.W.2d 384; Broadie v. Randall, 114 Kan. 92, 216 P. 1103, 32 A.L.R. 708; Byrne v. Western Pipe & Steel Co., 81 Cal.App. 270, 253 P. 776; Cook v. Packard Motor Car Co., 88 Conn. 590, 92 A. 413, L.R.A.1915C, 319; Latham v. Cleveland, C. C. & St. L. R. Co., 164 Ill.App. 559; Yawitz Dyeing & Cleaning Co. v. Erlenbach, Mo.App., 221 S.W. 411; Cooper v. Knight, Tex.Civ.App., 147 S.W. 349; Metcalf v. Mellen, 57 Utah 44, 192 P. 676; Southern Bus Co. v. Simpson, 214 Ark. 323, 215 S.W.2d 699; Merchants Shippers Association v. Kellogg Express & Draying Co., 28 Cal.2d 594, 170 P.2d 923; Houchen v. Oregon-Washington R. & Nav. Co., 103 Wash. 598, 175 P. 316. In Restatement, Law of Torts, Sec. 928, the rule is stated as follows:
“Where a person is entitled to a judgment for harm to chattels not amounting to a total destruction in value, the damages include compensation for
“(a) the difference between the value of the chattel before the harm and the value after the harm or, at the plaintiff’s election, the reasonable cost of repair or restoration where feasible with due allowance for any difference between the original value and the value after repairs, and
“(b) the loss of use."
The majority opinion, in eliminating the depreciation in market value after the transformers had been repaired, is not in accordance with this well settled rule. The majority opinion apparently accepts as a fact appellee's contention that the transformers, after being repaired, were as good as new, and that accordingly there was no depreciation in market value. But there is no finding of fact by the District Judge that there was no depreciation in market value after they had been repaired. His reference to the fact that the appellant considered the repaired and guaranteed equipment the same as new equipment is not a finding of market value. The seller’s opinion of the value of the equipment which he is trying to sell is only one factor of several in the determination of reasonable market value.
It is common knowledge that new equipment which has been damaged and repaired, does not command in the market place the same respect as does new undamaged equipment of the same specifications, even though the repaired equipment may be just as good functionally and carries the same guarantee. The fact that the equipment has been damaged has a psychological effect upon the mind and judgment of a buying customer which results in a difference in the inherent value of the repaired equipment offered for sale and its reasonable market value. General Construction Co. v. Kemplin, supra, 309 Ky. 587, 588-589, 218 S.W.2d 384.
With respect to the evidence on this question, the witness Bogdan, an employee for twenty-one years of the Clement Electric Company in Grand Rapids, and in charge of its repair shop, and also engaged in inspecting and passing upon the purchase of used equipment, testified that it was difficult to sell anything as new that had been damaged, regardless of how little the damage was, that the fact that the transformers had been damaged and repaired definitely had an effect upon the selling price, that under *150normal circumstances of supply and demand the repaired transformers would definitely have a depreciated value over their new value even though they carried the same guarantee as new equipment, that the market value of the equipment after being repaired was about $7,200, but that he personally would not have bought it at any price for stock purposes. Appellant was willing to accept the depreciated value of $7,200 stated by this witness.
The District Judge, in rejecting the element of depreciation in value, in which the majority opinion concurs, relied largely upon the fact that the transformers had no market value and that the price of $6,108.50 at which they were sold to the Metalcraft Division of F. L. Jacobs Company was not the true market value but an arbitrary reduced value agreed to by the appellant because of the existing customer relationship between it and the Jacobs Company.
The fact that there is no current market value established by contemporaneous sales of like property in the way of ordinary business does not prevent the party damaged from recovering the damages to which he is entitled. Where there is no such market value, other evidence is resorted to which will show the sum which in all probability would result from fair negotiations between an owner willing to sell and a purchaser desiring to buy. Standard Oil Co. of New Jersey v. Southern Pacific Co., 268 U.S. 146, 155-156, 45 S.Ct. 465, 69 L.Ed. 890; Brooks-Scanlon Corp. v. United States, 265 U.S. 106, 123-124, 44 S.Ct. 471, 68 L.Ed. 934; Kennedy v. Treleaven, 103 Kan. 651, 175 P. 977, 7 A.L.R. 274; Jonas v. Noel, 98 Tenn. 440, 444, 39 S.W. 724, 36 L.R.A. 862. There was evidence in this case, hereinabove referred to, from which such a finding could have been made.
Nor should the fact that the appellant attempted to persuade the Jacobs Company to accept the transformers at the contract price after they were repaired, and in doing so took the position that the ■ repaired transformers were functionally as good as new, prevent the appellant from recovering the depreciation in market value from the appellee in this present action. It was the appellant’s duty to minimize its damage and to get the-best possible price in a resale of the transformers. Its argument in doing so was in furtherance of that duty. The argument was not successful in making a favorable sale. It did not establish market value. It was not relied upon by anyone. There is no estoppel involved. Nor is the final sale to the Jacobs Company at the alleged reduced price of $6,-108.50, conceding for the moment that it was a reduced price, a material factor in the case. Appellant’s claim for depreciation in market value is not based on-that figure. It is based on a market value after damage and repair of $7,200, which figure is supported by substantial evidence in the record. Appellant is entitled to an item of damage in addition' to the cost of repair, which is the difference between the contract price of $9,810 - and the reasonable market value of the transformers after they were repaired,, regardless of the price which was eventually agreed upon by it and the Jacobs. Company. That market value is the decisive issue in the case. There has been no finding with respect to it and no award of damages based upon it.
If the transformers had not been damaged in transit, they would have been delivered to and accepted by the purchaser at the agreed purchase price of $9,810. The only reason this price was not received by appellant was because of their damage in transit, for which appellee, not the appellant, was entirely responsible. Yet the majority opinion places the resulting loss upon the appellant, who was in no way responsible for the damage which prevented the contract from: being carried out.
I am of the opinion that the judgment' should be reversed and the case remanded' for further proceedings consistent with the views expressed herein.