Gonzales v. Rivera

25 P.2d 802, 37 N.M. 562
CourtNew Mexico Supreme Court
DecidedApril 17, 1933
DocketNo. 3734.
StatusPublished
Cited by22 cases

This text of 25 P.2d 802 (Gonzales v. Rivera) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gonzales v. Rivera, 25 P.2d 802, 37 N.M. 562 (N.M. 1933).

Opinions

WATSON, Chief Justice.

This suit results from Gonzales et al. v. Reynolds et al., 34 N. M. 35, 275 P. 922, to which reference may be had as to important facts. The appellants in that cause obtained from this court a supersedeas, staying the operation of the injunction granted by the district court. The effect of the supersedeas was to permit those appellants to continue in business in competition with the then appellees, pending the appeal. To obtain it they were required to give and did give a $5,000 bond conditioned to “pay all damages and costs suffered or sustained * * * by reason of the suspension, stay and supersedeas of the said injunctive order. * * * ” The injunction having been sustained by this court, the present suit was instituted to recover on the bond. This appeal is from a judgment in the full amount of the bond.

The trial judge, upon findings, concluded, as matter of law, “that the loss to the plaintiffs, occasioned by the suspension of the injunctive order, and the continued operation of the general mercantile business by the defendants during such suspension, exceeded the penalty of the bond.”

This conclusion is challenged generally as unsupported by the evidence and findings, and particularly because of a finding, made at appellants’ request, as follows: “That soon after said bond was made, to-wit; on the 20th day of September, 1928, one, Henry Pick, opened and operated a general merchandise store, within one hundred yards of most of the homes of the customers of the Plaintiffs herein, and that said Henry Pick at all times carried a stock of merchandise of not less than ten thousand dollars, and that the Chili Red Store of Plaintiffs at no time carried a stock of over five thousand dollars, and that Henry Pick operated during the entire term of the bond herein sued upon and did a substantial volume of business.”

It is to be borne in mind that, so far as this suit is concerned, appellants are not liable for the loss of profits sustained by appellees by reason of their unlawful competition. They are chargeable only with so much of that loss as accrued during and by reason of the operation of the supersedeas.

In the findings and briefs there is great confusion as to important dates. We accept these: Appellants engaged in business, in unlawful competition with appellees, on May-15, 1928. The bond in suit took effect as a supersedeas September 19, 1928. Appellees sold their business February 25, 1929, and evidence of damages does not extend beyond that date.

It is the position of appellants that there is no basis on which there can be any severance or segregation of the lost profits for the period in question; some being naturally occasioned by the competition of appellants and some by that of Pick; and that, accordingly, because of uncertainty of the proofs, nominal damages only are recoverable.

After making and refusing findings for each of the parties, the court found of its own motion: “The court finds that it is difficult, if not impossible, to ascertain the accurate and exact amount of net profits for any period from the bookkeeping system in use by the Ohili Red Store. The Court, however, is able to ascertain the amount of- gross sales during the period pertinent to this ■ inquiry, and, in fact, these amounts seem to he agreed upon by the parties and are shown by the requested findings of the defendant. Taking these gross sales and applying a far less percentage of profit than the percentages testified to by experts in the case, the result would show that profits would ordinarily have been earned during the six months period in which the injunction was superseded in- an amount in excess of the penalty of the bond.”

' This discloses, in a general way, that the court based its conclusion on the evidence of gross sales, adduced for fourteen months, January, 1928, to February, 1929, inclusive; and that he assumed a percentage of profit, “far less * * * than the liercentages testified to by experts in the case.” The evidence most favorable to appellees was that gross profits were 37 per cent, prior to- competition; immediately falling to 22 per cent, when appellants commenced business.

The evidence covers three periods: (1) The normal or precompetition period; (2) the period of competition for which damages are not here recoverable; (3) tbe period following tbe taking effect of the bond in suit. We insert bere tbe figures in evidence, with certain calculations of our own.

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Appellees’ losses during the second period-might he estimated thus:

But such losses are not recoverable in this suit.

Appellees’ losses during the third period might be estimated thus:

This would sustain the conclusion of the trial court and approximate appellees’ claims. But, it is a practical certainty that the Pick competition is to some extent responsible for these losses.

We cannot sustain the contention that this renders the loss of profits chargeable to appellants so uncertain as to limit appellees’ recovery to nominal damages. In the first place, we deem this such a case of wrongdoing that sound policy requires that the risk of estimating the damages too high or too low should be thrown upon appellants. Allison v. Chandler, 11 Mich. 542, quoted with approval in State Trust & Savings Bank v. Hermosa L. & C. Co., 30 N. M. 566, 240 P. 469. In the second place, we think that the data before us, with proper inferences, will permit an approximate severance of these losses and a determination of the recoverable damages.

If 4y2 months are a sufficient criterion of appellees’ precompetition sales and profits, 4% months should be a sufficient criterion of the effect of appellants’ competition. We assume that in that time it had spent its force and that the situation had become stabilized. Therefore we allocate the subnormal sales of $2,807 monthly, during the third period, thus: $1,600, as due to appellants’ competition, and $1,207, as due to Pick’s competition. For the SVs months the loss in sales chargeable to appellants’ competition is accordingly $8,533.

The questions now arise whether the loss in gross profits should be considered 37 per cent, or 22 per cent, of this sum, and whether appellees should also recover for the decrease of 15 per cent, in the gross profits of the merchandise they actually sold.

It is impossible to infer that if appellants had not superseded the injunction, appellees’ business would have gone back to normal. Any recovery must be upon an assumption that some business would have been regained. We infer, as favorably as possible to appellees, that they would have regained the business lost to appellants; monthly sales of $1,-600. We cannot so infer with respect to the business lost to Pick. This justifies the segregation made. But Pick’s appearance on the scene apparently had no effect on the level of retail prices. The drop in gross profits from 37 per cent, to 22 per cent, was the immediate effect of competition upon 'a business theretofore sole occupant of the field. The same logic that attributes this fall in retail prices originally to appellants’ competition, requires the inference that Pick’s competition would have kept them down, even if the earlier competition had ceased.

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Bluebook (online)
25 P.2d 802, 37 N.M. 562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gonzales-v-rivera-nm-1933.