Assessment of Damages Where Property Has No Market Price

1922 Columbia Law Review  
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more » ... out Early Journal Content at http://about.jstor.org/participate--jstor/individuals/early-journal--content. JSTOR is a digital library of academic journals, books, and primary source objects. JSTOR helps people discover, use, and build upon a wide range of content through a powerful research and teaching platform, and preserves this content for future generations. JSTOR is part of ITHAKA, a not--for--profit organization that also includes Ithaka S+R and Portico. For more information about JSTOR, please contact support@jstor.org. NOTES ASSESSMENT OF DAMAGES WHERE PROPERTY HAS No MARKET PRIcE.-In a recent case in New York , where the defendant warehouseman converted the plaintiff's household goods, stored in the warehouse, the court sent the case back for a new trial, and in commenting upon the rule of damages there to be applied, said that the market value of the goods was not the test, but that the value to the owner based on his actual money loss was the measure of damages. Lake v. Dye (1921) 232 N. Y. 209, 133 N. E. 448. The ordinary measure of damages for conversion is the market price of the goods at the time of conversion.1 In this field of the law, damages are intended only as compensation,2 i. e., an amount sufficient to put the injured person in as good a position as if the act had not been done. If the property has a market value, the awarding of the price as damages is intended to enable the injured party to purchase goods identical in nature with the property converted, and thus put himself in the same position. But it is frequently true, as in the instant case, that the market price would not be a reliable means of determining what damages would so compensate. The secondhand value of household goods, for example, is so far below the cost price of new goods, that the owner, who perhaps cannot use or will not buy secondhand goods, is not fully compensated by the market price.3 On the other hand, to give him the cost price of new goods does not take into consideration the depreciation due to the use of the goods, and is, therefore, not a correct measure of his loss.4 Or, even where the market price is ordinarily used as a base for estimating damages, as in the case of a contract to sell a chattel, where the damages are the difference between the market price and the contract price, the market price may in a particular instance be unduly inflated, and, therefore, if used as a conclusive measure, would operate to give one of the parties an undue advantage.5 Or, as frequently happens, the property may have no market value at all, as in the case of family portraits,6 or a set of building plans.7 In these cases the market price clearly cannot be utilized to determine what sum will compensate the plaintiff. In the last analysis, therefore, market price is nothing more than evidence of the amount to which the injured person is entitled.8 If such evidence does not, for any reason, correctly indicate what amount will compensate, there should be no hesitancy in discarding it; this the courts have done. They have then been confronted with the problem as to what is the proper test. The courts have variously declared the measure of damages to be the "actual value," "actual cash value," "actual value to the owner," or "intrinsic value."9
doi:10.2307/1112494 fatcat:v4qse3kq7nfczn67yqdsqvtzje