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10.10 Risk of Loss Contract Sales and Lease Contracts: Formation, title and Risk

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274 S.E.2d 699
156 Ga.App. 304, 274 S.E.2d 699, 30 UCC Rep.Serv. 1275
(Cite as: 156 Ga.App. 304, 274 S.E.2d 699)
Court of Appeals of Georgia.
GEORGIA PORTS AUTHORITY
v.
MITSUBISHI INTERNATIONAL CORPORA-
TION et al.
No. 60895.
Argued Oct. 9, 1980.
Decided Oct. 31, 1980.
Shipper appealed from judgment entered on jury
verdict by the Fulton Superior Court, Tanksley,
Senior Judge, awarding damages against shipper
and in favor of railroads in suit by seller of ply-
wood against shipper and railroads to recover dam-
ages for their alleged negligence in shipping 12
boxcar loads of plywood by rail from port to city of
buyer's location. The Court of Appeals, Banke, J.,
held that: (1) seller was proper party in interest to
bring suit where evidence authorized conclusion
that risk of loss was on seller during period of ship-
ment from port to city of buyer's location; (2) testi-
mony of buyer's vice-president and plant manager,
based on his experience, that original value of
goods was in fact identical to original sale price
was sufficient to support award of damages based
upon initial sale price of goods; (3) award of in-
terest could not stand where seller's action was ex
delicto and statutory notice was not given; (4) error
in admission of internal memorandum, prepared by
employee of railroad company who was not present
at trial, reciting that shipper had improperly
blocked and braced cargo was harmless; and (5) un-
disputed fact that plywood was shipped “shipper's
weight, load and count” constituted complete de-
fense to shipper's claim that railroads were negli-
gent in inspecting and proving blocking and bracing
work performed by shipper.
Judgment affirmed with direction.
West Headnotes
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 1
[1] Carriers 70 131
70 Carriers
70II Carriage of Goods
70II(F) Loss of or Injury to Goods
70k126 Actions for Loss or Injury
70k131 k. Parties and Pleading. Most
Cited Cases
Seller of plywood was proper party to bring suit to
recover damages for alleged negligence of shipper
and railroad companies in shipping 12 boxcar loads
of plywood by rail from port to city of buyer's loca-
tion, notwithstanding evidence that goods were
shipped “C.I.F.” buyer's city, where there was evid-
ence to authorize inference that seller had agreed
with buyer to deliver plywood in city in which buy-
er was located, shipper billed seller, not buyer, for
its services in blocking and bracing cargo inside
boxcars, and thus evidence authorized conclusion
that risk of loss was on seller during period of ship-
ment to city of buyer's location. Code, §§
109A-2-320(2), 109A-2-505, 109A-2-509.
[2] Carriers 70 135
70 Carriers
70II Carriage of Goods
70II(F) Loss of or Injury to Goods
70k126 Actions for Loss or Injury
70k135 k. Damages. Most Cited Cases
In suit brought by seller against shipper and rail-
road companies to recover damages for their al-
leged negligence in shipping 12 boxcar loads of
plywood by rail from port to city of buyer's loca-
tion, testimony of buyer's vice-president and plant
manager that he had approximately 21 years of ex-
perience in purchasing and dealing with type of ma-
terials involved and that, in his opinion, original
value of goods was in fact identical to original sale
price was sufficient to support award of damages
based upon initial sale price of goods. Code, §
109A-2-509.
[3] Interest 219 19(2)
274 S.E.2d 699
156 Ga.App. 304, 274 S.E.2d 699, 30 UCC Rep.Serv. 1275
(Cite as: 156 Ga.App. 304, 274 S.E.2d 699)
219 Interest
219I Rights and Liabilities in General
219k19 Demands Not Liquidated
219k19(2) k. Amount Readily Ascertain-
able by Computation. Most Cited Cases
Interest 219 62
219 Interest
219IV Recovery
219k62 k. Interest as Distinct Cause of Ac-
tion. Most Cited Cases
Award of interest from date of seller's injury, in
seller's action ex delicto against shipper and rail-
roads to recover damages for their alleged negli-
gence in shipping 12 boxcar loads of plywood by
rail from port to city of buyer's location, could not
stand where statutory notice by registered or certi-
fied mail of claim for prejudgment interest was not
given and damages could not be considered liquid-
ated in sense of being ascertainable by mathematic-
al calculation on basis of established facts since
mathematical calculations in seller's suit were based
on expert opinion testimony as to original value of
goods and extent of damage and thus “established
facts” could only be established by a jury. Code, §
105-2016.
[4] Damages 115 163(1)
115 Damages
115IX Evidence
115k163 Presumptions and Burden of Proof
115k163(1) k. Necessity of Proof as to
Damages in General. Most Cited Cases
Damages in an action ex delicto must always be
proven by evidence before they can be regarded as
liquidated. Code, §§ 81A-155(a), 105-2016.
[5] Evidence 157 106(1)
157 Evidence
157IV Admissibility in General
157IV(A) Facts in Issue and Relevant to Is-
sues
157k106 Character or Reputation
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 2
157k106(1) k. In General. Most Cited
Cases
(Formerly 272k124(1))
The reputation of defendant or his employee for ex-
ercising care in his actions is not admissible to
show that due care was exercised on particular oc-
casion. Code, § 38-202.
[6] Evidence 157 271(18)
157 Evidence
157VIII Declarations
157VIII(A) Nature, Form, and Incidents in
General
157k271 Self-Serving Declarations in
General
157k271(18) k. Written Statements in
General. Most Cited Cases
In suit brought by seller against shipper and rail-
road companies to recover damages for their al-
leged negligence in shipping 12 boxcar loads of
plywood by rail from port to city of buyer's loca-
tion, internal memorandum reciting that shipper had
improperly blocked and braced cargo, prepared by
employee of railroad company who testified at trial,
reaffirmed his conclusions in memo, and subject to
cross-examination was not inadmissible on ground
that it was self-serving.
[7] Appeal and Error 30 1050.1(11)
30 Appeal and Error
30XVI Review
30XVI(J) Harmless Error
30XVI(J)10 Admission of Evidence
30k1050 Prejudicial Effect in General
30k1050.1 Evidence in General
30k1050.1(8) Particular Types
of Evidence
30k1050.1(11) k. Document-
ary Evidence; Photographs. Most Cited Cases
Error in admissions of internal memorandum, pre-
pared by employee of railroad company who was
not present at trial, reciting that shipper had im-
properly blocked and braced cargo in railroad box-
cars, for which seller brought action against shipper
274 S.E.2d 699
156 Ga.App. 304, 274 S.E.2d 699, 30 UCC Rep.Serv. 1275
(Cite as: 156 Ga.App. 304, 274 S.E.2d 699)
and railroad company to recover damages, was
harmless in context of other evidence presented
during course of four-day trial.
[8] Carriers 70 129
70 Carriers
70II Carriage of Goods
70II(F) Loss of or Injury to Goods
70k126 Actions for Loss or Injury
70k129 k. Defenses. Most Cited Cases
Undisputed fact that plywood was shipped
“shipper's weight, load and count” constituted com-
plete defense, in negligence action against shipper
and railroads for negligence in shipping of ply-
wood, to shipper's claim that railroads were negli-
gent in inspecting and approving blocking and bra-
cing work performed on plywood in boxcars by
shipper. Code, § 109A-7-301(4).
**700 *308 Fred S. Clark, Savannah, for appellant.
J. Wayne Pierce, Henry E. Scrudder, Jr., Robert L.
Pennington, Atlanta, for appellees.
*304 BANKE, Judge.
This is a suit by Mitsubishi International Corpora-
tion against the Georgia Ports Authority, Southern
Railway Company, and Central of Georgia Railway
Company to recover damages for their alleged neg-
ligence in shipping 12 boxcar loads of plywood by
rail from Savannah to Atlanta. Mitsubishi imported
the plywood to Savannah from Taiwan for sale to
the Crown Door Corporation in Atlanta, and the
Georgia Ports Authority loaded it onto the boxcars.
By the time it arrived in Atlanta, the cargo had shif-
ted inside the boxcars, making the job of unloading
it much more difficult and rendering a portion of it
unusable. The question at trial was basically wheth-
er the Ports Authority was at fault for failing to
block and brace the cargo adequately so that it
would withstand the normal stresses associated
with rail transport or whether the railroads were at
fault for subjecting the boxcars to abnormally rough
treatment during switching and coupling opera-
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 3
tions.
Mitsubishi sought $53,362.53 in damages, a figure
arrived at by *305 taking the original sale price for
the goods agreed upon by Mitsubishi and Crown
Door ($177,983.08) and deducting the price which
they later agreed upon for the sale of cargo in its
damaged condition ($124,630.55). Mitsubishi**701
also sought interest from the date of injury in the
amount of $12,008.86, for a total recovery of
$65,371.39. The jury found against the Ports Au-
thority and in favor of the railroads, awarding dam-
ages in the amount of $65,371.39. This appeal fol-
lowed. Held :
1. The Ports Authority contends that Mitsubishi
was not the proper party in interest to bring this suit
because the evidence established that the goods
were shipped “C.I.F. Savannah” from Taiwan, and
thus Mitsubishi's duties to the buyer ended before
either the negligence or the damage occurred. See
generally Code Ann. s 109A-2 320(2).
The issue of who, as between the buyer and seller,
had the risk of loss was not litigated either before
or during the trial. The underlying and unques-
tioned assumption upon which all of the pleadings
and the evidence were based was that Mitsubishi
was responsible for delivering the goods to Crown
Door in Atlanta in satisfactory condition.
Code Ann. s 109A-2 509 sets forth the following
rules for determining which party has the risk of
loss during shipment: “(1) Where the contract re-
quires or authorizes the seller to ship the goods by
carrier (a) if it does not require him to deliver them
at a particular destination, the risk of loss passes to
the buyer when the goods are duly delivered to the
carrier even though the shipment is under reserva-
tion (109A-2 505); but (b) if it does require him to
deliver them at a particular destination and the
goods are there duly tendered while in the posses-
sion of the carrier, the risk of loss passes to the
buyer when the goods are there so tendered as to
enable the buyer to take delivery ... (3) In any case
not within subsection (1) or (2), the risk of loss
274 S.E.2d 699
156 Ga.App. 304, 274 S.E.2d 699, 30 UCC Rep.Serv. 1275
(Cite as: 156 Ga.App. 304, 274 S.E.2d 699)
passes to the buyer on his receipt of goods if the
seller is a merchant; otherwise, the risk passes to
the buyer on tender of delivery.”
[1] There was evidence to authorize the inference
that Mitsubishi had agreed with Crown Door to de-
liver the plywood in Atlanta. In the first place, their
mutual conduct evidences such an agreement;
Crown Door initially rejected the goods because of
their damaged condition and subsequently agreed to
accept them only after Mitsubishi agreed to a re-
duced price, based on an appraisal of the damages.
In the second place, the Georgia Ports Authority
billed Mitsubishi, not Crown Door, for its services
in blocking and bracing the cargo inside the box-
cars. Thus, the evidence authorized a conclusion
that the risk of loss was on Mitsubishi during the
period in *306 question, and the trial court did not
err in denying the Ports Authority's motion for dir-
ected verdict based on the allegation that Mit-
subishi was not the proper party in interest to bring
this suit.
[2] 2. The Ports Authority contends that Mit-
subishi's evidence of damages was inadequate be-
cause all of its calculations were based on the initial
sale price of the goods rather than their initial mar-
ket value. See Hoard v. Wiley, 113 Ga.App. 328(2),
147 S.E.2d 782 (1966). However, the vice president
and plant manager for Crown Door, who testified
that he had approximately 21 years of experience in
purchasing and dealing with the type of materials
involved in this case, testified that in his opinion
the original value of the goods was in fact identical
to the original sale price. This was sufficient to sup-
port the award of damages. See generally Rowe v.
City Council of Augusta, 119 Ga.App. 571(1), 168
S.E.2d 209 (1969); Rosenberg v. Mossman, 140
Ga.App. 694(1), 231 S.E.2d 417 (1976); Housing
Auth. v. Starcher, 149 Ga.App. 402(3), 254 S.E.2d
515 (1979).
[3][4] 3. The award of interest cannot stand because
of Mitsubishi's failure to comply with Code Ann. s
105-2016, which requires that in order to collect
prejudgment interest in an action ex delicto, the
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 4
claimant must first give notice of the claim by re-
gistered or certified mail. Mitsubishi cites several
cases for the proposition that damages are con-
sidered liquidated whenever they are ascertainable
by mathematical calculation on the basis of estab-
lished facts; however, the mathematical calcula-
tions in **702 this case were based on expert opin-
ion testimony as to the original value of the goods
and the extent of the damage. Thus, the
“established facts” could only be established by a
jury. Indeed, damages in an action ex delicto must
always be proven by evidence before they can be
regarded as liquidated. See Code Ann. 81A-155(a);
Tallman Pools of Ga., Inc. v. Napier, 137 Ga.App.
500(2), 504, 224 S.E.2d 426 (1976); Dukes v.
Burke, 139 Ga.App. 583(3), 228 S.E.2d 729 (1976).
Accord, Republic Ins. Co. v. Cook, 129 Ga.App.
833(2), 201 S.E.2d 668 (1973). Since this is an ac-
tion ex delicto and the statutory notice was not giv-
en, the award of interest cannot stand.
The amount of interest included in the jury's verdict
is readily ascertainable. Mitsubishi asked for
$53,362.53 in damages and $12,008.86 in interest
and received a verdict for $65,371.39, the sum of
these two figures. The judgment is accordingly af-
firmed with direction that it be reduced by
$12,008.86.
[5] 4. The trial court did not err in disallowing the
following portion of the deposition testimony of a
former employee of the Ports Authority, with refer-
ence to the blocking and bracing work performed
by another Authority employee named Herschel
Sikes: “I don't remember the particular blocking
and bracing on this *307 particular shipment, but I
always have known Mr. Sikes to do real good work
and he was always conscious of what he was doing,
and he wanted to do a good job always, so he would
always try his best.” The reputation of a defendant
or his employee for exercising care in his actions is
not admissible to show that due care was exercised
on the occasion in question. See Code s 38-202; At-
lanta & W.P.R. Co. v. Newton, 85 Ga. 517(2), 11
S.E. 776 (1890); Southern R. Co. v. O'Bryan, 112
274 S.E.2d 699 Page 5
156 Ga.App. 304, 274 S.E.2d 699, 30 UCC Rep.Serv. 1275
(Cite as: 156 Ga.App. 304, 274 S.E.2d 699)

Ga. 127(3), 37 S.E. 161 (1900).
5. Similarly, the trial court did not err in striking
that portion of Sikes' own deposition testimony
wherein, asked whether he was aware that the ship-
ments in question had arrived damaged, he respon-
ded in the negative and went on to say: “If there
was anything ever went wrong with any of it that I
braced in seven years, it's more than I have ever
known of. I've never heard of a kickback.”
[6][7] 6. Also enumerated as error is the admission
of two internal memoranda prepared by employees
of the Southern Railway Company, both of which
recited the conclusion that the Ports Authority had
improperly blocked and braced the cargo. The Au-
thority objected that the documents were self-
serving.
“A statement is self-serving only when it is of be-
nefit to or in the interest of the one who made it
(Cit.), was made out of court and not under oath,
and does not include testimony which he gives as a
witness. (Cit.)” Price v. Star Svc. & Petroleum
Corp., 119 Ga.App. 171, 177, 166 S.E.2d 593
(1969). See also Hortman v. Gresham, 137 Ga.App.
253(1), 223 S.E.2d 285 (1976). The author of one
of the memos in question testified at trial, reaf-
firmed his conclusions in the memo, and was sub-
ject to cross examination. This document was ac-
cordingly not inadmissible on the ground that it was
self-serving. The author of the other memo was not
present at trial; therefore, that document was clearly
subject to the objection that it was self-serving.
However, we find that the error was harmless in the
context of the other evidence presented during the
course of the 4-day trial. See generally, Dual S. En-
terprises, Inc. v. Webb, 138 Ga.App. 810(3), 227
S.E.2d 418 (1976).
ing and bracing, then I charge you that this is a
complete defense on behalf of the defendants
Southern Railway Company and Central of Georgia
Railway Company and that you must return a ver-
dict in their favor. I further charge you with respect
to the defense that the rule above stated is not
changed by reason of the fact that employees or
agents of the **703 Southern Railway Company
and/or Central of Georgia Railway Company may
have inspected, approved, or otherwise been aware
of the fact that the loading, blocking and bracing
was improper.”
[8] It is apparently undisputed that the plywood was
in fact shipped “shipper's weight, load and count.”
Under Code Ann. s 109A-7 301(4), this constituted
a complete defense to the Ports Authority's claim
that the railroads were negligent in inspecting and
approving the blocking and bracing work per-
formed by the Ports Authority. See D. H. Overmyer
Co. v. Nelson-Brantley Glass Co., 119 Ga.App.
599(1), 168 S.E.2d 176 (1969). The charge did not
contain any incorrect statement of law and was not
argumentative.
Judgment affirmed with direction.
McMURRAY, P. J., and SMITH, J., concur.
Ga.App., 1980.
Georgia Ports Authority v. Mitsubishi Intern. Corp.
156 Ga.App. 304, 274 S.E.2d 699, 30 UCC
Rep.Serv. 1275
END OF DOCUMENT

7. The following charge to the jury is enumerated

as error: “(I)f you find that the plywood in this case
was shipped shipper's weight, load and count, or
other words of like import, and if you further find
that any damage which occurred to such plywood
was the direct result of improper loading or block-

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.