Kirkhof Electric Co. v. Wolverine Express, Inc. ( 1959 )

MARTIN, Chief Judge.

Kirkhof Electric Company brought this action against Wolverine Express, Inc., for damages to three transformers, such damages having been incurred during transportation of the transformers by the common-carrier express company. The plaintiff had placed an order with Westinghouse Electric Corporation for the three devices to be installed at the Grand Rapids Metalcraft Division of the F. L. Jacobs Company. The purchase price was $9,810.

The transformers, which were shipped by truck to the Grand Rapids plant of F. L. Jacobs Company, were found, upon arrival, to have been damaged and, consequently, they were refused by the consignee. They were, thereupon, shipped to the repair shop of Westinghouse in Chicago. After repairs, they were, upon instructions of the Kirkhof Company, shipped again to the Metalcraft Division of the Jacobs Company; but that company refused to accept them. Kirkhof then advertised them for sale, after appraisal, but was unable to find a buyer.

The evidence discloses that the Metal-craft Division of Jacobs has been for a long time one of the best customers of Kirkhof Electric Company; and it was essential to the Metalcraft Division that the transformers, which were made to conform to special requirements, be installed in compliance with the contract between Kirkhof and Metalcraft.

A conference was held on or about November 9, 1955, at which representatives of the Kirkhof Company and the Metal-craft Division were present, along with a sales engineer from Westinghouse. The conference was held at the offices of the Jacobs Company and an attempt was made to persuade that company to accept the repaired transformers as new equipment, at the original price. The Kirkhof representative and the engineer testified that, after the transformers had been repaired and shipped to Grand Rapids, they were as good functionally as they had been at the time of the original shipping from Westinghouse.

Following negotiations, the Metalcraft Division accepted the repaired devices at a valuation of $6,108.50. This price was deducted from the original price of $9,-810; and an agreed settlement was made upon that basis.

Plaintiff’s theory is that it should be entitled to recovery from the defendant express company of the costs for repairs, plus depreciation in value of the transformers ; that the depreciated value should be determined by the price which the Metalcraft Division was willing to pay, and did pay.

The theory of the defendant-appellee is, among other points, that depreciation is not an element of damages; and that the evidence fails to establish the fact of any depreciation. The appellee insists, moreover, that the transformers, after being repaired, were as good as new and that the liability of the plaintiff-appellant to deliver them to Metalcraft at the agreed price was the result of the relationship between plaintiff-appellant and Metalcraft.

The United States District Court held that the Kirkhof Company was not acting as the agent of the Metalcraft Division at the time appellant placed the order with Westinghouse; that, on the other hand, there was an actual sale of goods by Kirkhof to Metalcraft; and that no title to the transformers passed to the Metalcraft Division of the Jacobs Company until after the conference of November 9, 1955. It was held that title to the merchandise was vested in the plaintiff-appellant when the express carrier received the transformers from Westinghouse; and that the risk of loss and the right to recover was in the appellant Kirkhof.

The appellee carrier, though denying negligence, has admitted liability for the damages, including the cost of repairs and the cost of shipping the transformers to and from the repair station. It tendered this amount into the registry of the court.

After discussing pertinent authorities in relation to the measure of damages, the District Judge thus analyzed the nub of the case: “When the transformers in question had been repaired and were guaranteed in the same manner as upon original manufacture and shipped to Grand Rapids, plaintiff through its president and its vice-president was satisfied that the transformers were new within the meaning of the law relating to measure of damage. They were so satisfied of this fact that they were willing to make every effort, as they stated, to persuade their best customer to accept the transformers at the original price of $9,-810.00. If the plaintiff was so satisfied it is difficult to understand how it can come before this court and attempt to force the defendant carrier to pay a greater amount in damages because of the inability of plaintiff’s executives to persuade a customer to accept the goods. The burden of the customer relations and the cost of maintaining the same between Kirkhof and Metalcraft is the responsibility of Kirkhof and not the responsibility of the defendant carrier.

“For the reasons herein stated the court is satisfied that the plaintiff is entitled to recover the cost of repairs, plus the cost of shipping, plus the cost of certain advertising, all of which has been deposited with the Clerk of this Court by the defendant. Defendant having made a proper tender which was refused, defendant may have costs.”

This opinion is practically a re-writing of the reasoning of District Judge Kent in his opinion 175 F.Supp. 43. In view of the dissent of Judge Miller from the opinion of the majority, however, we consider it necessary to pursue the course adopted.

The judgment of the district court is affirmed.