City of Dallas v. Milum

BOND, Chief Justice. This suit was filed by appellant City of Dallas (plaintiff) against appellee Phil J. Milum d/b/a The Dallas Bonded Warehouse (defendant), vouching in Associated Indemnity Corporation, his indemnity insurer, for damages to 500 cases of eggs. The suit is based on breach of contract and, in the alternative, on negligence of appellee as a public warehouseman. Plaintiff alleges, in effect, that on or about March 6, 1944, for and in consideration of 14 cents per case for the initial month and 10 cents a month thereafter, the defendant contracted and agreed to store 500 cases of eggs in his public cold storage warehouse; to keep and care for said eggs in the usual and customary manner of storage in such places; to deliver the eggs at such times as the City should call for same; that the eggs were delivered in good merchantable Grade A condition suitable for human consumption; but, in August following, the eggs tendered to plaintiff were rotten, deteriorated and unfit for human consumption, due to defendant’s breach of contract to properly care for said eggs as was his duty as a public warehouseman in the interest of the public and especially of plaintiff. And, in the alternative, plaintiff alleged negligence on part of defendant in the following particulars: (1) For failure of proper refrigeration, permitting the temperature in the cooling vault where the eggs were stored to rise to such a degree that the eggs became spoiled and unfit for human consumption; (2) for failure to ascertain the rise in temperature in time for defendant to remove the eggs from the storage room to another room or place adequately cooled and refrigerated; (3) for failure to advise plaintiff of the rise in temperature until after the eggs had become spoiled and unfit for human consumption, to enable plaintiff to remove the eggs; (4) for failure of defendant to remove the eggs to prevent them from spoiling and becoming unfit for human consumption; (5) for failure of defendant to turn the crates periodically while in storage to prevent the eggs from deteriorating and becoming unfit for human consumption; (6) for failure of defendant to properly stack the crates on the floor of the cooling room as to allow air to circulate through and around the crates, and for allowing water to accumulate on the floor and about the crates; (7) for defendant’s active negligence in storing potatoes, tomatoes and grapefruit in the same cooling vault where plaintiff’s eggs were stored. The defendant answered by general denial and specially pleaded that at the time the eggs were withdrawn from storage, their condition was not due to any breach of contract or negligence of defendant, but was solely caused as the result of natural deterioration; especially so, because the eggs were “weak” and had begun to deteriorate before they were placed in storage ; that eggs are of that particular nature as to rapidly deteriorate in quality through operation of natural causes in cold storage, and that the defendant advised the City official having charge of the eggs that their condition was such that he had no storage space available in his cooling vaults to adequately keep such eggs for any great length of time. That, with that understanding, he accepted the storage of the eggs for only 30 to 60 days and no longer. Defendant further pleaded that, the deterioration of the eggs having already commenced at the time they were received, because of lack of proper care before reaching his warehouse, he was unable to prevent their further deterioration; that under the circumstances his cooling vaults were not adequately designed or intended for the stor [836] age of eggs for a long period of time, and that he so advised said agent at the end of the 60 days and sevbral times thereafter of the condition, and repeatedly requested their removal, but that said agent failed and refused to remove the eggs from storage; hence, as a result, the inferior quality and condition of the eggs at the time they were withdrawn by plaintiff was not due to fault on the part of defendant, but was due ■solely to natural deterioration and plaintiff’s breach of contract in failing to remove same. On trial to a jury, at the conclusion of plaintiff’s testimony and on motion of the defendant, the trial court discharged the jury and rendered judgment for the defendant. The record discloses that defendant operates a public cold storage warehouse under the statutes of the State. Title 93, ch. 2, art. 5568 et seq. and ch. 4, art. 5612 et seq., R.C.S. Vernon’s Ann.Civ.St. arts. 5568 et seq., 5612 et seq. And, as such warehouseman, in absence of contract limiting his liability, he was obligated to perform faithfully the duties of a public warehouseman, which included the duty to properly exercise that degree of care in the safekeeping of goods entrusted to him which a reasonably careful man would exercise in regard to similar goods of his own. On March 6, 1944, plaintiff, acting by and through its duly authorized City Purchasing Agent, delivered to defendant 500 cases of eggs. Defendant accepted the eggs on the basis of the storage fee and thereafter rendered account therefor to the City and was paid the storage fees for the time the number of crates were in storage — from March 6 to August 15, 1944. Plaintiff’s evidence admits that there were some withdrawals, but without the City records being available at the trial, the exact number of crates left with defendant after such withdrawals, and the exact amount of the City voucher given to defendant in payment for such storage were not disclosed. However, there is evidence to the effect that there were in storage during the time the eggs were placed with defendant until they were withdrawn, 500 cases. Hence the amount of the voucher is only a matter of mathematical calculation, and, at least, there is evidence that plaintiff suffered damage to the amount of 300 cases. The record further discloses that defendant knew that the City of Dallas had acquired the eggs as active distributing agent for the Federal Government for surplus commodities accumulated during the war, to be used for hospitals and needed charity purposes, and that the eggs were to be released to the City hospitals as demanded. Manifestly, the City was the special owner of the eggs for the purpose of carrying out such distribution; hence authorized to place them in storage and sue for their damage. It is further in evidence that at the time the eggs were received by the City, 100 cases were delivered to Parkland Hospital, a recognized charity institution of the City and County of Dallas; and 500 cases were delivered to defendant’s warehouse for the account of the hospital. In view of the action of the trial court in withdrawing the case from the jury and rendering judgment for the defendant at conclusion of plaintiff’s testimony, we deem it necessary only to relate testimony as relates to plaintiff’s cause of action or which, by reasonable deduction or inference, presents issues raised by plaintiff’s pleadings. Aside from the un-controverted testimony as related above, the evidence shows that 100 cases of the eggs, taken from the gross shipment of 600 cases, were good wholesome Grade A eggs, and the eggs withdrawn from storage in March and April thereafter were also of that grade, and we think a reasonable inference could be drawn that the eggs when placed in storage were of the same grade, that is, good wholesome Grade A eggs. In August the remaining eggs in storage were found to be deteriorated to such a degree as to be unfit for human consumption. Thus it may well be presumed that such deterioration, less natural deterioration, occurred while in storage; and, in absence of proof on the part of defendant, such deterioration was the result of some want of ordinary care on the part of the warehouseman. There is further evidence in the record that when the eggs were inspected in August, the paper crates were wet and damp; so much so as to [837] cause the crates to fall apart; that the crates were stacked in tiers of IS or 16 crates high and more or less placed together, one stacked upon and against the other; that the crates were not turned any time during storage; and that tomatoes and other perishable goods were stored in the same vault with the eggs. There is also in evidence that the failure to turn crates of eggs in storage at various intervals ; failure to stack crates in such a way that air will circulate about them; and the storing of other perishable products in the same room with eggs, would cause deterioration. There is expert testimony in evidence that if Grade A eggs are placed in storage and properly handled, the natural deterioration would be only about 10 percent of their value from March running to August, approximately six months, or would be worth $9 per case. We think, as a whole, the testimony of plaintiff raised the issues as pleaded, and should have been accorded a jury determination. It is a sound rule of law that every reasonable inference of fact supported by the statement of facts must be drawn in favor of the losing party where the trial court withdraws the case from the jury and renders judgment. Therefore, if there is any evidence in the record on any theory raised by pleadings, it is the duty of the court to submit the issue. The delivery of property to a warehouseman for storage and the failure of such warehouseman to return the property, or if the property is returned in a damaged condition, the burden rests upon the warehouseman to show that the damage resulted without fault or negligence on his part. In absence of proof to the contrary, the presumption of negligence prevails in such cases. So, in the case at bar, 500 cases of eggs admittedly having been delivered to defendant under contract for storage, the jury could have reasonably found that at time the eggs were put in storage they were good Grade A eggs fit for human consumption; that at the time they were withdrawn, had they been properly handled, would have been reasonably worth $9 per crate. Under such showing, the jury could well have found that the defendant was guilty of breach of contract or negligence in the particulars alleged by the plaintiff and that such breach or negligence resulted in the damages plaintiff sustained. On the other hand, the defendant relates facts and circumstances from which the jury might well have acquitted him of any such breach or negligence in the storage or handling , of the eggs. But, the defendant having been offered as a witness by the plaintiff, he being an interested witness, and the defendant having failed to offer any testimony in defense, plaintiff was not foreclosed by his adverse testimony and the jury not bound to have accepted same as true. At most, the testimony raises issues for the: determination of the jury. The case not having been fully developed, and without comment on the weight of the testimony, the judgment of the court below is reversed and the cause remanded for a new trial.