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District Court of Appeal, Third District, California.


Civ. 6736.

Decided: July 29, 1943

J. T. Blalock and A. P. Black, both of San Francisco, for appellant. Oliver J. Carter and Daniel S. Carlton, both of Redding, and J. Everett Barr, of Yreka, for respondent.

On September 27, 1935, as the truck of respondent was being driven on the Pacific Highway between Dunsmuir and Weed in Siskiyou County, it was, without fault of the driver for respondent, hit by a Shellaine tank which fell from a truck driven by an employee of appellant Shell Oil Company. As a result of the accident respondent's truck was damaged so badly that it could not be continued in use until it was repaired, and it was taken to a garage in Weed and repaired at a cost of $222.30. There is some conflict in the record as to who authorized the repairs to be made but we believe it may fairly be inferred from the evidence that appellant Shell Oil Company, shortly after the accident, through its representatives, promised and agreed to pay for the repairs to respondent's truck and also to pay for the hire of a truck to be used by respondent while the damaged truck was being repaired.

The repairs to respondent's truck were completed on October 22, 1935, and Vincent Ferrari, the garage owner, sent the bill for the repairs to appellant oil company and notified respondent that the repairs were completed. The Pacific Indemnity Company, appellant's insurance carrier, on December 3, 1935, wrote a letter to Ferrari, refusing to pay the repair bill unless a release in full were given by respondent. Respondent refused to execute such a release and demanded that appellant pay him $800 for asserted damages to his business. This appellant refused to do, and the truck of respondent remained in the garage of Ferrari.

On January 17, 1936, respondent filed his complaint in which he alleged that he was damaged $1,500 for loss of sales, $10,000 loss on contracts, $222.30 for repair of truck, and $155 for hire of another truck. After issue joined the case went to trial, and on the day the trial commenced, March 18, 1937, appellant paid the amount of the repair bill. On April 30, 1940, more than three years after the trial, the trial court filed its memorandum of decision to the effect that respondent was entitled to judgment for the rental value of the truck from September, 1935, to March, 1937, a period of eighteen months, at $250 per month. Respondent then asked and was granted leave to file an amendment to the complaint to conform to proof, and thereupon filed an amendment which alleged: “that immediately after the damage to plaintiff's said truck said defendant, Shell Oil Company of California, promised said plaintiff that it would, at its cost and expense, repair plaintiff's truck and furnish to plaintiff a truck to be used by plaintiff in his said business while plaintiff's truck was being repaired; and pursuant to said promise said defendant placed plaintiff's truck in a garage at Weed, California, with instructions to the owner of said garage to repair plaintiff's truck; that said defendant, Shell Oil Company of California, in violation of its said promise, wrongfully failed to furnish a truck to plaintiff to use in his business except for a period of three days; that the repairs on plaintiff's said truck were completed on the 22nd day of October, 1935, and the reasonable and actual cost thereof was the sum of $222.30, but said defendant, Shell Oil Company of California, wrongfully refused to pay for said repairs unless and until said plaintiff would execute and deliver to said defendant Shell Oil Company of California a written release unconditionally releasing said defendant Shell Oil Company of California from any and all liability to plaintiff for damages caused by defendants' negligence and carelessness, and that plaintiff refused to execute said release, and said defendant, Shell Oil Company of California, wrongfully failed and refused to pay said repair bill, and the owner of said garage which repaired plaintiff's truck refused to deliver possession thereof to plaintiff until the repair bill was paid; that said defendant, Shell Oil Company of California, failed and refused to pay said repair bill until the date of the trial of this action, to–wit, the 18th day of March, 1937, but by that time said garage owner had made a charge for storage of plaintiff's truck and refused to deliver possession thereof to plaintiff before said storage bill was paid; and plaintiff did not receive possession of his said truck until after the 18th day of March, 1937; that plaintiff was by reason of the negligence and carelessness of said defendants, Shell Oil Company of California, and Harvey L. Foster, and the wrongful failure of said defendant Shell Oil Company of California to pay said repair bill deprived of the use of his said truck for a period of seventeen months and nineteen days, that is, from the 27th day of September, 1935, to the 18th day of March, 1937; that the reasonable rental value and reasonable value of the use of plaintiff's said truck during said time was the sum of $250.00 per month, or a total sum of $4,416.67; that plaintiff was unable during said period of time to obtain for hire a truck to use in his said business in the place and stead of his said General Motors Company truck; that by reason of the premises plaintiff has been damaged in the sum of $4,416.67.”

Findings of fact following the language of the complaint as amended were filed, but before judgment was entered appellant moved to set aside the submission and that it be permitted to plead to the subject matter set forth in the amendment and offer proof with reference thereto. This motion was denied by the court, and judgment was thereupon entered in favor of respondent for the sum of $4,416.67, and this appeal is from said judgment.

Appellant makes a vigorous attack upon the judgment. Its first contention is that it was error to award damages to respondent which he could have prevented with reasonable care and at small expense. It argues that respondent could have taken his truck out of the repair shop on October 22, 1935, the date the repairs were completed, by the payment of the comparatively small repair bill of $222.30, and that respondent could not permit the truck to remain in the repair shop for seventeen months thereafter and recover for the loss of use thereof for that period. Appellant cites numerous authorities enunciating the well established rule that it is the duty of a person injured by the wrongful act of another to exercise reasonable care to avoid loss or minimize the resulting damages.

In 8 Cal.Jur. 782, it is stated: “It is the duty of one who knows he is threatened with detriment, either in person, property or business, through another's breach of contract or tort, to do all that he reasonably can to prevent or minimize the damage, and if he negligently fails to do this, he cannot recover for what he might have prevented. In cases of contract, the duty is mutual.”

In 15 American Jurisprudence 426, the rule is stated as follows: “He cannot recover for that which he might reasonably have avoided. When it is practicable to minimize the loss and injury by a reasonable outlay of money, it is incumbent upon the party injured to make such outlay, which he may recover as a part of his damages in the action for the breach of the contract.”

In Vitagraph, Inc., v. Liberty Theatres Co., 197 Cal. 694, at page 697, 242 P. 709, at page 711, the court said: “It is a recognized rule of law that, in a case where injury or damage to a plaintiff's property is threatened as the result of a tort or breach of contract by another, the duty rests upon the plaintiff to use reasonable care and diligence to protect his property against such threatened loss or injury, and, if he fails to do so, he will not be permitted to charge the defendant for that portion of his loss or injury which was due to plaintiff's own neglect in this behalf. This rule has been repeatedly recognized and applied in this state, as well as elsewhere.” Citing Mabb v. Stewart, 147 Cal. 413, 81 P. 1073, and Alaska Salmon Co. v. Standard Box Co., 158 Cal. 567, 112 P. 454.

In Schultz v. Town of Lakeport, 5 Cal.2d 377, at pages 383, 384, 54 P.2d 1110, at page 1113, 55 P.2d 485, 108 A.L.R. 1168, it is said: “On the other hand, it is undoubtedly a settled proposition that the plaintiff may not recover damages which have accrued by reason of his failure to do everything reasonable in his power to reduce the injuries which would otherwise ensue by a discontinuance of the service. In Holly v. City of Neodesha, supra [88 Kan. 102, 127 P. 616], the dispute arose over the imposition of a $6 or $15 yearly rate for furnishing water to the plaintiff, a difference between the parties of but $9, and the question of the installation of a meter. The plaintiff sought damages of $7,490 and was awarded the sum of $4,550. The case was reversed on the holding of the court that reasonable diligence under the facts required the plaintiff to secure water from the city at once by paying the excess claimed and thereafter suing for the overpayment, and that the plaintiff was entitled therefore to recover only the amount he would have been obliged to pay in securing a reconnection of the service and the amount of damages, if any, probable to the time water could again have been turned on.” Citing Mabb v. Stewart, supra; Henrici v. South Feather Land, etc., Co., 177 Cal. 442, 170 P. 1135; Severini v. Sutter–Butte Canal Co., 59 Cal.App. 154, 210 P. 49; and Sargent v. North End Water Co., 190 Cal. 512, 213 P. 33. Also see 25 C.J.S., Damages, § 33, pp. 499–501, and 8 R.C.L. 442.

Respondent says, however, that the rule cited in the foregoing is not applicable here; that “the facts do not show that plaintiff by the use of reasonable care could have avoided the consequences of defendants' wrongful refusal to pay the repair bill or that he was able to pay the sum of $222.30 at the time the repairs were completed * * *.” He argues that the duty to minimize damages by the payment of money does not run to a person who has not sufficient funds to make the payment required, and cites 25 C.J.S., Damages, § 33, p. 502, where it is stated: “The person injured is not required, however, to make extraordinary expenditures requiring a disproportionate outlay in endeavoring to guard against the consequences of the wrongdoer's act. So plaintiff's lack of funds to meet the situation presented may excuse efforts to lessen the injury.” Also 15 Am.Jur. 425, to the effect that “It appears that a want of sufficient funds will excuse an absence of effort to lessen damages.” However, it appears from the testimony of respondent that he was the owner and operator of a service station in Weed which had cost him $5,000 to build and against which there was an indebtedness of only $500; that there were two or three payments of $71.48 each still remaining unpaid upon the truck which had been purchased new by him in 1933 and upon which he had installed a tank costing $300 and a meter costing $145, and that he had a credit rating of $600 with the Mileage Gasoline Company in 1935 for the payment on the truck and trailer if he wanted to use it. He did testify, however, as follows:

“Well, when my truck was wrecked, I couldn't make any payments on the truck. I was meeting all the obligations as far as I could, as soon as the truck was wrecked, they turned around and they tied up the truck and my car and my bank account, which left me, well, penniless.”

But there is no finding by the trial court that plaintiff was unable to pay the repair bill, and we are cited to no evidence in the record that respondent made any effort to raise the $222.30 to pay same; and in view of his own testimony as to his assets we cannot assume on this appeal that he was not, at any time after the repairs were completed, able to pay the bill and get his truck. While respondent may have been justified in relying upon appellant Shell Oil Company's asserted promise to pay the repair bill up to the time that he was definitely advised that it would not pay it unless respondent gave a release, yet when he was so advised, it was his duty to minimize his damage by paying the repair bill, if he was able to do so.

Appellant next contends that the evidence does not substantiate respondent's claim that it agreed either with respondent or with the garageman to pay for the repair of respondent's truck. As hereinbefore stated, there is some conflict in the record as to who authorized the repairs to be made, but the trial court found that appellant Shell Oil Company did, and there is evidence to sustain said finding.

But, as we view the matter, even though appellant's agents did acknowledge that the damage was due to appellant's negligence and did agree to pay the repair bill, this did not justify respondent in refusing to pay the repair bill and take possession of his truck as soon as he learned that appellant would not pay the bill without the execution of a complete release by respondent. In our opinion respondent could not thereafter continue to permit his truck to remain in the garageman's possession by failure to pay the repair bill of $222.30 and recover from appellant for loss of use of the truck for the subsequent period if he could, with reasonable effort, have raised the money to pay said bill; and as we have already pointed out, the record does not show that he made any effort to do this, and there is no finding that he was financially unable to do so. It was the duty of respondent to use reasonable care to minimize the damages arising from the accident, whether appellant's failure to pay the repair bill was due to a breach of duty arising out of tort or out of contract.

It appears from the record that on the day the trial commenced, which was nearly eighteen months after the accident, appellant paid the repair bill, and that the trial court awarded respondent judgment for loss of use of the truck from the date of the accident to the date the bill was paid. We believe that, in the absence of a finding that plaintiff was unable to pay the repair bill, the judgment was erroneous, and that respondent was not entitled to recover for loss of use of the truck after the time that he was definitely and finally informed that appellant would not pay the repair bill, except, perhaps, for a reasonable time thereafter within which to raise the money to pay said bill, if he could, with reasonable effort, have done so.

Appellant's third contention is that the trial court erred in denying appellant's motion to set aside the submission of the case and to allow appellant to file an amended answer to the amendments to the complaint which the trial court permitted respondent to file, and for permission to introduce further evidence upon the issues presented by said amendments. The original complaint alleged the damage to respondent's truck by appellant's truck and that respondent was damaged in loss of sales to the general public in the sum of $1,500, and in the further sum of $10,000 because he was rendered unable to fulfill his station contracts, and in the further sum of $155 for hire of another truck, and prayed for total damages in the sum of $11,655. As hereinbefore stated, after the trial court filed its memorandum of decision, which was three years after the trial, respondent was granted permission to file the amendment to the complaint hereinbefore set forth. Appellants moved to set aside the submission of the cause and that they be permitted to plead to the subject matter set forth in the amendment and offer proof with reference thereto, which motion was denied.

The theory upon which the trial court permitted the amendment was in order to conform to proof. As is stated in Burrows v. Burrows, 18 Cal.App.2d 275, at page 279, 63 P.2d 1135, at page 1136: “Under the provisions of section 470 of the Code of Civil Procedure, the trial court is invested with discretionary power to permit and even to order the pleadings of the parties to be amended at any stage of the trial of the cause, and even after its submission, so as to make such pleadings conform to the proofs; and it has been uniformly held that this discretion will not be interfered with upon appeal except in cases of its manifest abuse. Graham v. Stewart, 68 Cal. 374, 9 P. 555; Firebaugh v. Burbank, 121 Cal. 186, 53 P. 560; Andrus v. Smith, 133 Cal. 78, 65 P. 320; Stohlman v. Martin, 28 Cal.App. 338, 152 P. 319.”

We cannot say that the trial court abused its discretion either in permitting the amendment or in denying appellant's motion; but in view of the fact that the amendment changed the theory upon which the action was tried, we believe that the trial court might well have granted the motion to set aside the submission and have permitted appellant to plead to said amendment and offer further proof. The amendment and the judgment were for loss of use of the truck and the case was tried upon the theory of loss of business and profits. Counsel for respondent at the trial stated: “This is an action for damages to recover for loss of profits that plaintiff suffered as the result of his inability to continue his gasoline distributing business.” And counsel stated further: “Well, it is true in this action he is not suing for loss of the truck; he is suing for loss of business.” No testimony whatever was introduced upon the question of the value of the loss of use of respondent's truck. The court in its memorandum of decision stated he could not say that respondent's business “was destroyed to the extent to justify compensation” but that respondent's compensation should be the value of the loss of use of the truck. The motion to amend to conform to proof was thereupon made and granted, the motion to set aside the submission was denied, and judgment entered in accordance with the amendment.

In view of the fact that the judgment must be reversed and a new trial ordered, the trial court may, in the exercise of its discretion, see fit to permit appellant to file an amended answer to the complaint as amended, so that any defenses which appellant may have to same may be passed upon in the new trial.

The judgment is reversed and a new trial ordered in accordance with the views herein expressed.