Cleveland, Etc., R. Co. v. Bement-Rea Co. , 86 Ind. App. 67 ( 1926 )

Complaint by appellee to recover damages by reason of the alleged failure of appellant to deliver a carload of sugar shipped from New York to Terre Haute, and consigned to appellee. The court found the facts specially and concluded, as a matter of law, that appellee was entitled to recover $7,365.69. The judgment followed the conclusion of law, and this appeal followed. It appears from the special finding that appellee purchased a carload of sugar (600 bags) from a manufacturer in New York and the same was shipped by rail over appellant's railroad and that of a connecting carrier. The sugar arrived at Terre Haute August 23, 1920, and appellee started to remove it from the car to its warehouse. One hundred twenty bags were removed, when it was discovered that some of the sugar was wet. As soon as appellee discovered that part was wet, it notified appellant of that fact and that it was returning the wet sugar to the car. Appellee refused to accept any of the sugar which it claimed was damaged, and claimed the right to accept the part which it considered not damaged, and to refuse to accept that which it claimed was wet, and was at all times ready and willing to accept the part not wet. Appellant refused to allow appellee the privilege of taking a part of the sugar and rejecting that which it claimed was damaged. Appellant tendered appellee the entire shipment, which appellee refused to accept, and appellant refused to permit appellee to take the undamaged part of the sugar and leave the wet sugar. After appellee refused to take the damaged sugar, appellant shipped the entire carload to Indianapolis and stored it in its warehouse, where it remained until March 10, 1921, when the parties entered into an agreement to ascertain what part was salable to the grocery trade at the market price as first class sugar. Appellee agreed to take that part which was found to be first class and credit appellant with the market price. Appellant agreed to take that part unsalable as first class and to pay appellee therefor the market price in New York on August 23, 1920, which was agreed to be $19.80 per 100 pounds. This agreement was not to affect the legal right of either party.

When the examination was made, it was found that ninety bags of the sugar were wet and damaged on August 23, 1920, and appellant paid appellee therefor $1,922.80 and retained the ninety bags, which it later sold for $598.05. The remaining 510 bags were then shipped to appellee, and, on March 14, 1921, were accepted and unloaded by appellee, the market price of the sugar so received by appellee at that time being $8.637 per 100 pounds. The ninety bags were not damaged so as to render them of no value, but had a real and substantial value at all times of not less than seven cents a pound.

There is no controversy as to the amount of the judgment in case appellee is entitled to a recovery. Appellant's contention is that appellee is not entitled to a judgment for any sum. It insists that, where a shipment is merely damaged, it is the duty of a consignee to accept the shipment as an entirety from the carrier, and then seek his remedy through a claim for damages to the damaged portion.

In McGrath Bros. v. Charleston, etc., R. Co. (1912),91 S.C. 552, 75 S.E. 44, 42 L.R.A. (N.S.) 782, Ann. Cas. 1914A 64, cited by appellee, two lengths of steel shafting and other hardware were shipped and, on arrival, the shafting was found to be damaged so that it was useless and of no value, except for old iron. The consignee evidently accepted the hardware and refused to accept the shafting, and later sued for the value of the shafting. The only question before the court was the measure of damages to the shafting. The right of the consignee to reject the whole shipment was not involved. In discussing the measure of damages, the court said: "While there can be no doubt that, if the shafting in its bent condition had a substantial value, the consignees were bound to receive it and give the carrier credit for the net amount realized from its due disposition." The bent shafting having no substantial value, the consignee was not required to receive it.

Where goods intrusted to a carrier for shipment are injured only, the owner's remedy is for damages for the injury and not for the value. Dudley v. Chicago, etc., R. Co. 1. (1906), 58 W. Va. 604, 52 S.E. 718, 3 L.R.A. (N.S.) 1135, 112 Am. St. 1027: "Even though the goods be badly damaged, the shipper is not justified in abandoning them or in charging the carrier with their full value." Parsons v. United StatesEx. Co. (1909), 144 Iowa 745, 123 N.W. 776, 25 L.R.A. (N.S.) 842.

Before a consignee can refuse to receive a shipment of goods, the damage must be such as substantially changes the general character of the goods so as to leave them unfit for 2. ordinary purposes, such as might happen to fruit which had been frozen during transportation by reason of negligence of the carrier. See Hackett v. B.C. M. Railroad (1857), 35 N.H. 390. In Gulf, etc., R. Co. v. H.B. Pitts Son (1904), 37 Tex. Civ. App. 212, 83 S.W. 727, where a carload of chops was injured in transit by wetting, the fact that the consignee was in the wholesale trade, to which the chops in their damaged condition were unsuitable, did not entitle him to refuse to accept them and sue the carrier for their original value. In answer to the contention of the consignee that he was justified in refusing the chops, the court said: "As a general rule the fact that the goods are injured in transportation, for which the carrier is responsible, does not justify the consignee in refusing to receive them, but he must accept them, and hold the carrier responsible for the injury."

The rule is thus stated in Hutchinson, Carriers (3rd ed.) § 1365: "As a general rule, the doctrine that where goods are injured the owner may abandon them as for a total loss and sue for their value does not apply to contracts of affreightment. The fact, therefore, that the goods are injured upon the journey, through causes for which the carrier is responsible, does not of itself justify the consignee in refusing to receive them, but he must accept them and hold the carrier responsible for the injury. Where, however, the damage is such that the entire value of the goods is destroyed, the consignee may refuse to receive them and sue the carrier for their value."

We hold it was appellee's duty to have received the whole carload of sugar and then brought suit to recover damages because of the damaged sugar. If it had done this, it would have 3. suffered no loss on the 510 bags of sugar that was not damaged. This being true, the court erred in its conclusion of law.

Judgment reversed, with directions to restate the conclusion of law in favor of appellant and to render judgment accordingly.