Franklin Manufacturing Co. v. Union Pacific Railroad

Supreme Court of Minnesota

Franklin Manufacturing Co. v. Union Pacific Railroad

248 N.W.2d 324, 311 Minn. 296, 1976 Minn. LEXIS 1636

CourtSupreme Court of Minnesota

DecidedDecember 17, 1976

Docket45974

StatusPublished

Cited by14 cases

This text of 248 N.W.2d 324 (Franklin Manufacturing Co. v. Union Pacific Railroad) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Franklin Manufacturing Co. v. Union Pacific Railroad, 248 N.W.2d 324, 311 Minn. 296, 1976 Minn. LEXIS 1636 (Mich. 1976).

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Opinions

Considered and decided by the court without oral argument.

Per Curiam.

This is an appeal from a judgment of the Hennepin County District Court granting summary judgment in favor of plaintiff, Franklin Manufacturing Company, in the amount of $1,095 as damages arising out of a breach of contract by defendant, Union Pacific Railroad Company. We reverse and remand for further proceedings.

The matter was presented to the trial court upon a stipulation of facts. Plaintiff, a Minnesota corporation, placed an order with Owens-Corning Fiberglass Corporation in Kansas City, Kansas, for insulation materials to be used in plaintiffs manufacturing business. As is customary in the trade, shipping specifications and arrangements were made between plaintiff and Owens-Coming with plaintiff prepaying freight charges to the latter.

On May 7, 1970, defendant, Union Pacific Railroad Company, [297]*297a corporation not registered to do business within this state,¹ was engaged by Owens-Corning to transport the goods to plaintiff. The goods were delivered to defendant’s Erie Car No. 87321 on that date. Although the shipment was to be directly routed to its destination, admitted misrouting occurred, and on May 21, 1970, 14 days after delivery to defendant, the shipment was still in defendant’s possession. At that time the plaintiff had the freight transferred from the defendant’s railroad to a truck transportation company for delivery in Minnesota. The sole contact between plaintiff and defendant prior to the commencement of this action was an inquiry by plaintiff as to the location of the goods after delivery had been delayed for that period of time.

Plaintiff claimed damages in the amount of $1,095, the cost of the alternate transportation of the materials to Minnesota. The court considered evidence that on June 22, 1970, the prepaid freight charges were refunded by defendant to Owens-Corning in the amount of $209.60. In addition, the parties stipulated that the average shipping time of like orders in the past was 7 days and that plaintiff did not notify defendant prior to shipment that any delay would result in damage or loss to plaintiff. Plaintiff’s examination of the goods upon ultimate receipt indicated that they were in serviceable condition without damage.

In awarding summary judgment in favor of plaintiff, the court concluded:

“The Court has awarded plaintiff damages in this matter. Although they may be special damages, the Court is of the opinion that even though the parties to this lawsuit did not deal directly it can be inferred from the very nature of the contract relationship that there was an intent on the part of all the parties that delivery actually be made. The parties have stipulated that in the past shipments of similar materials have taken an average [298]*298of seven days to complete delivery from Kansas City to St. Cloud, Minnesota. The stipulation entered into by the parties also evidences defendant’s breach of contract in failing to transport plaintiff’s property with reasonable dispatch. In fact, this breach is admitted to in defendant’s brief (page 7).

“The Court notes that the claim is not for lost profits but merely the amount spent by plaintiff to remedy defendant’s breach and carry out the objective of the contract.”

It is well established that when an unreasonable and unnecessary delay in the transportation of goods has occurred, the carrier is liable for those damages which may be reasonably supposed to have been contemplated by the parties as a probable result of the breach. See, 13 Am. Jur. 2d, Carriers, § 377; and Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Hep. 145 (1854). In other words, the damages must either have been within the contemplation of the carrier at the time it entered into the contract or be so likely to result from the breach that they can reasonably be said to have been foreseen. As stated in 5B Dunnell, Dig. (3 ed.) § 2560:

“* * * When the damages are assessed as those which it is reasonable to suppose that the parties had; in mind, what is really meant is that the law, aiming at compensation, * * * considers it fair to hold a defendant for damages which as a reasonable man he ought to have foreseen as likely to follow from a breach. What he in fact foresaw or contemplated is immaterial. [Citing several Minnesota cases.]” (Emphasis supplied.)

Thus, the dispositive issue in the instant case is simply whether at the time of entering the contract defendant-carrier could have reasonably foreseen as likely that plaintiff-purchaser would procure substitute transportation if there was a delay in the delivery of the goods.

Whether plaintiff’s action in causing the goods to be shipped to it by means of substitute transportation was reasonably foreseeable as a probable consequence of defendant’s breach is a [299]*299question of fact which depends upon the nature of the contract, the circumstances surrounding its execution, and the circumstances surrounding the cause and extent of the delay itself. While it appears from the stipulated facts that there was no reason for defendant to believe that there was special need for prompt delivery of plaintiff’s goods, it is not clear what the length of the delay would have been before the goods were delivered to the plaintiff by defendant. The length of delay is a critical consideration in assessing the foreseeability of plaintiff’s action in securing other transportation. If the delay in delivery was only going to be minimal, it would not be reasonably foreseeable by the defendant that plaintiff would procure substitute transportation. On the other hand, if the delay was going to be substantial, it could well be reasonably foreseeable by defendant that plaintiff would feel compelled to procure substitute transportation of its goods. Therefore, we have concluded that the matter should be remanded to the trial court to determine the anticipated length of the delay and whether plaintiff’s action in procuring substitute transportation was reasonably foreseeable by defendant in light of the anticipated length of the delay.

Reversed and remanded for further proceedings.

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Considered and decided by the court without oral argument.

Per Curiam.

This is an appeal from a judgment of the Hennepin County District Court granting summary judgment in favor of plaintiff, Franklin Manufacturing Company, in the amount of $1,095 as damages arising out of a breach of contract by defendant, Union Pacific Railroad Company. We reverse and remand for further proceedings.

The matter was presented to the trial court upon a stipulation of facts. Plaintiff, a Minnesota corporation, placed an order with Owens-Corning Fiberglass Corporation in Kansas City, Kansas, for insulation materials to be used in plaintiffs manufacturing business. As is customary in the trade, shipping specifications and arrangements were made between plaintiff and Owens-Coming with plaintiff prepaying freight charges to the latter.

On May 7, 1970, defendant, Union Pacific Railroad Company, [297]*297a corporation not registered to do business within this state,¹ was engaged by Owens-Corning to transport the goods to plaintiff. The goods were delivered to defendant’s Erie Car No. 87321 on that date. Although the shipment was to be directly routed to its destination, admitted misrouting occurred, and on May 21, 1970, 14 days after delivery to defendant, the shipment was still in defendant’s possession. At that time the plaintiff had the freight transferred from the defendant’s railroad to a truck transportation company for delivery in Minnesota. The sole contact between plaintiff and defendant prior to the commencement of this action was an inquiry by plaintiff as to the location of the goods after delivery had been delayed for that period of time.

Plaintiff claimed damages in the amount of $1,095, the cost of the alternate transportation of the materials to Minnesota. The court considered evidence that on June 22, 1970, the prepaid freight charges were refunded by defendant to Owens-Corning in the amount of $209.60. In addition, the parties stipulated that the average shipping time of like orders in the past was 7 days and that plaintiff did not notify defendant prior to shipment that any delay would result in damage or loss to plaintiff. Plaintiff’s examination of the goods upon ultimate receipt indicated that they were in serviceable condition without damage.

In awarding summary judgment in favor of plaintiff, the court concluded:

“The Court has awarded plaintiff damages in this matter. Although they may be special damages, the Court is of the opinion that even though the parties to this lawsuit did not deal directly it can be inferred from the very nature of the contract relationship that there was an intent on the part of all the parties that delivery actually be made. The parties have stipulated that in the past shipments of similar materials have taken an average [298]*298of seven days to complete delivery from Kansas City to St. Cloud, Minnesota. The stipulation entered into by the parties also evidences defendant’s breach of contract in failing to transport plaintiff’s property with reasonable dispatch. In fact, this breach is admitted to in defendant’s brief (page 7).

“The Court notes that the claim is not for lost profits but merely the amount spent by plaintiff to remedy defendant’s breach and carry out the objective of the contract.”

It is well established that when an unreasonable and unnecessary delay in the transportation of goods has occurred, the carrier is liable for those damages which may be reasonably supposed to have been contemplated by the parties as a probable result of the breach. See, 13 Am. Jur. 2d, Carriers, § 377; and Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Hep. 145 (1854). In other words, the damages must either have been within the contemplation of the carrier at the time it entered into the contract or be so likely to result from the breach that they can reasonably be said to have been foreseen. As stated in 5B Dunnell, Dig. (3 ed.) § 2560:

“* * * When the damages are assessed as those which it is reasonable to suppose that the parties had; in mind, what is really meant is that the law, aiming at compensation, * * * considers it fair to hold a defendant for damages which as a reasonable man he ought to have foreseen as likely to follow from a breach. What he in fact foresaw or contemplated is immaterial. [Citing several Minnesota cases.]” (Emphasis supplied.)

Thus, the dispositive issue in the instant case is simply whether at the time of entering the contract defendant-carrier could have reasonably foreseen as likely that plaintiff-purchaser would procure substitute transportation if there was a delay in the delivery of the goods.

Whether plaintiff’s action in causing the goods to be shipped to it by means of substitute transportation was reasonably foreseeable as a probable consequence of defendant’s breach is a [299]*299question of fact which depends upon the nature of the contract, the circumstances surrounding its execution, and the circumstances surrounding the cause and extent of the delay itself. While it appears from the stipulated facts that there was no reason for defendant to believe that there was special need for prompt delivery of plaintiff’s goods, it is not clear what the length of the delay would have been before the goods were delivered to the plaintiff by defendant. The length of delay is a critical consideration in assessing the foreseeability of plaintiff’s action in securing other transportation. If the delay in delivery was only going to be minimal, it would not be reasonably foreseeable by the defendant that plaintiff would procure substitute transportation. On the other hand, if the delay was going to be substantial, it could well be reasonably foreseeable by defendant that plaintiff would feel compelled to procure substitute transportation of its goods. Therefore, we have concluded that the matter should be remanded to the trial court to determine the anticipated length of the delay and whether plaintiff’s action in procuring substitute transportation was reasonably foreseeable by defendant in light of the anticipated length of the delay.

Reversed and remanded for further proceedings.

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248 N.W.2d 324, 311 Minn. 296, 1976 Minn. LEXIS 1636, Counsel Stack Legal Research, https://law.counselstack.com/opinion/franklin-manufacturing-co-v-union-pacific-railroad-minn-1976.

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