{
  "id": 2823366,
  "name": "RUST TRACTOR COMPANY, a Delaware corporation, Plaintiff-Appellant, v. CONSOLIDATED CONSTRUCTORS, INC., a New Mexico corporation, Defendant-Appellee",
  "name_abbreviation": "Rust Tractor Co. v. Consolidated Constructors, Inc.",
  "decision_date": "1974-08-28",
  "docket_number": "No. 1276",
  "first_page": "658",
  "last_page": "660",
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    "name": "Court of Appeals of New Mexico"
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  "last_updated": "2023-07-14T22:44:27.328252+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
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  "casebody": {
    "judges": [
      "SUTIN and HERNANDEZ, JJ., concur."
    ],
    "parties": [
      "RUST TRACTOR COMPANY, a Delaware corporation, Plaintiff-Appellant, v. CONSOLIDATED CONSTRUCTORS, INC., a New Mexico corporation, Defendant-Appellee."
    ],
    "opinions": [
      {
        "text": "OPINION\nHENDLEY, Judge.\nThe claims in this case arise out of two separate lease transactions between plaintiff Rust, a Caterpillar tractor sales and leasing company, and defendant Consolidated, a construction firm.\nThe first transaction was the lease of a scraper for a period of three months. Approximately one month and nine days into the contract the scraper was accidentally submerged in a sewage lagoon. The next day Rust\u2019s employees removed the scraper and took it to the Rust yard. Rust repaired the scraper extensively, going beyond the damage done in the lagoon to prepare it for pending sale. Rust failed to notify Consolidated of the nature or extent of the repairs, or the fact that repairs were completed before the three-month termination date on the lease. Consolidated never again used the scraper.\nRust sent Consolidated an invoice showing full rental due for the second lease month. Consolidated tendered a check to Rust for $924.03 to cover only the nine days of actual use in the second month, with a letter stating that it would only pay that amount. Rust accepted the check and adjusted the Consolidated account to omit any additional charge for the month. Rust demanded no more rental until the initiation of this suit.\nThe second transaction occurred immediately after the incapacitation of the scraper. Consolidated leased a loader from Rust for two days at $100 per day. Incident to the contract Rust procured an \u201call risk\u201d insurance policy to cover the use of the loader by Consolidated. At the end of the lease period, Consolidated was to \u201croad\u201d the loader back to the Rust yard. In route the engine broke down due to the negligent failure of Consolidated to maintain the proper oil level. The loader required extensive repair with prolonged down time. Rust made no insurance claim for the loss, nor did they notify Consolidated soon enough to make a claim within the claim period.\nThree of the claims stated in Rust\u2019s complaint are relevant to this appeal: (1) rental on the scraper for the full three-month lease, (2) rental for loader down time, (3) damages for loader repair. Consolidated, in a counterclaim, alleged that the loader damage in Rust\u2019s claim three above, was covered by insurance, and Rust\u2019s failure to make a claim damaged Consolidated to the extent of the damage to the loader minus the deductible amount.\nAfter' trial without a jury, the court found for Consolidated on claims one and two and on the counterclaim. It found for Rust on claim three and allowed a setoff of Consolidated\u2019s counterclaim. Rust appeals. We affirm.\nScraper Rental\nRust first contends the trial court erroneously failed to award the remaining rental for the three-month lease period on the scraper. It argues that the trial court interpreted the lease agreement by reference to custom and usage while expressly refusing to find the agreement ambiguous. See Tipton v. Clower, 67 N.M. 388, 356 P. 2d 46 (1960). Rust ignores, however, the alternative basis for the trial court\u2019s conclusion. By unchallenged findings of fact and conclusions of law, the trial court found that the parties terminated the lease as of the ninth day of the second month by Rust accepting the check and adjusting its accounts. Since Rust did not object, \u201c[t]he court\u2019s findings and conclusions are . . . deemed true and controlling.\u201d Miller v. Connecticut General Life Insurance Co., 84 N.M. 321, 502 P.2d 1011 (Ct.App.1972). Rust\u2019s first contention is without merit, as is its claim for service charge and attorney\u2019s fees.\nLoader\nRust\u2019s two other contentions concern the loader lease. In the first of these, it argues that the trial court mistook the third claim in its complaint to be for loader rental, when in fact it was for loss of use incident to negligent damage. The trial court\u2019s \u201cmistake\u201d is understandable. The complaint states:\n\u201c2. Defendant is justly indebted to Plaintiff on account of the rental of one (1) Caterpillar 988 Loader leased from Plaintiff by Defendant and delivered to Defendant and for Defendant on open account at Plaintiff\u2019s principal place of business . . ., in the amount of $4,800.00. . . .\u201d\nRust\u2019s requested Conclusion of Law number eight states: \u201c. . . Plaintiff is entitled to rental in the amount of $100.00 per day for the time it was deprived of the use of the 988 Caterpillar Loader occasioned by Defendant\u2019s negligence.\u201d Rust cannot change its argument on appeal, much less its claim for relief. See \u00a7 21-2-1(20) (1), N.M.S.A.1953 (Repl.Vol.1970).\nLoader Insurance\nRust\u2019s final contention concerns insurance coverage on the loader damage. The court\u2019s finding of fact number fourteen states: \u201cThe loss and damage to the loader occasioned by its having run out of oil is not excluded by the terms of insurance policy under which Rust obtained insurance coverage on the loader.\u201d Rust challenges that finding.\nThe insurance policy \u201c. . . insure[d] against all risks of direct physical loss or damage to the insured property from any external cause except as hereinafter excluded.\u201d The policy excluded . . [ljoss or damage due and confined to delay, wear and tear, rust, inherent vice, latent defect, extreme of temperature, mechanical breakdown or failure, and directly resulting therefrom unless fire or explosion ensues and then for the loss or damage by fire or explosion only.\nRust contends the loss was due and confined to mechanical breakdown or failure . . .,\u201d and therefore not externally caused within the meaning of the policy.\nMechanical breakdown or failure can be the cause of loss or the effect of the loss itself. This insurance policy excludes losses \u201c . . . due to . mechanical breakdown or failure. . . .\u201d Thus mechanical breakdown is relevant only when it is a causative factor. The unchallenged facts in this case establish that negligent failure to maintain the oil level was the cause of the loss. Mechanical breakdown was merely the effect of the loss itself.\nEven assuming mechanical breakdown was a cause of the loss, the exclusion still does not apply. Where a risk insured against operates to subject the insured property to a risk not insured against, the loss is covered. Annotation, 160 A.L.R. 947 (1946); 7 Am.Jur.2d \u201cAutomobile Insurance\u201d, \u00a7 64 (1963) ; Terrien v. Pawtucket Mut. Fire Ins. Co., 96 N.H. 182, 71 A.2d 742 (1950) ; Sackett v. Farmers Insurance Exchange, 237 Cal.App.2d Supp. 899, 47 Cal.Rptr. 350 (1965). Compare Farmers Mutual Hail Ins. Co. of Iowa v. Stansbury, 291 S.W.2d 347 (Tex.Civ.App. 1956). In this case the negligent failure to maintain oil level is an \u201cexternal cause\u201d and is insured against. That negligent failure operated to subject the loader to mechanical breakdown which was excluded. The loss was covered.\nThe judgment is affirmed.\nIt is so ordered.\nSUTIN and HERNANDEZ, JJ., concur.",
        "type": "majority",
        "author": "HENDLEY, Judge."
      }
    ],
    "attorneys": [
      "Benjamin S. Eastburn, Farmington, for plaintiff-appellant.",
      "John R. Cooney, Modrall, Sperling, Roehl, Harris & Sisk, Albuquerque, James B. Cooney, P. A., Farmington, for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "526 P.2d 800\nRUST TRACTOR COMPANY, a Delaware corporation, Plaintiff-Appellant, v. CONSOLIDATED CONSTRUCTORS, INC., a New Mexico corporation, Defendant-Appellee.\nNo. 1276.\nCourt of Appeals of New Mexico.\nAug. 28, 1974.\nBenjamin S. Eastburn, Farmington, for plaintiff-appellant.\nJohn R. Cooney, Modrall, Sperling, Roehl, Harris & Sisk, Albuquerque, James B. Cooney, P. A., Farmington, for defendant-appellee."
  },
  "file_name": "0658-01",
  "first_page_order": 688,
  "last_page_order": 690
}