Swift & Co. v. Columbia Ry., Gas & Electric Co.

• Citation: 51 ALR 983,17 F.2d 46
• Decision Date: 11 January 1927
• Docket Number: No. 2525.,2525.
• Parties: SWIFT & CO. v. COLUMBIA RY., GAS & ELECTRIC CO.
• Court: U.S. Court of Appeals — Fourth Circuit

51 ALR 983, 17 F.2d 46 (1927)

SWIFT & CO. v. COLUMBIA RY., GAS & ELECTRIC CO.

No. 2525.

Circuit Court of Appeals, Fourth Circuit.

January 11, 1927.

D. W. Robinson, of Columbia, S. C. (D. W. Robinson, Jr., of Columbia, S. C., on the brief), for plaintiff in error.

J. B. S. Lyles, of Columbia, S. C., for defendant in error.

Before WADDILL, ROSE, and PARKER, Circuit Judges.

PARKER, Circuit Judge.

The Columbia Railway, Gas & Electric Company, a public service corporation of Columbia, S. C., was plaintiff in the District Court, and Swift & Co., a corporation of Illinois, was defendant, and they will be referred to here in accordance with their positions in that court.

Plaintiff filed complaint, seeking recovery on two causes of action — the first, for $2,298.40, balance alleged to be due on the minimum amount which defendant had agreed to pay for electric current to be furnished for the operation of its cotton seed oil mill, fertilizer plant, and ginnery during the season of 1922-23; the second, for $1,731.30, alleged to be due for electric current furnished during March, 1925. Defendant filed answer, admitting the execution of the contract sued on in the first cause of action, but denying liability on the ground that it was not obligated to pay the minimum amount fixed by the contract in case it should be prevented from receiving and using power of that value as the result of any cause reasonably beyond its control and not attributable to its neglect, and that it had been prevented from using power of that value as a result of the shortage of the cotton crop, which in turn was due to bad weather conditions and the prevalence of the boll weevil. The second cause of action was admitted upon the trial, and no question is presented with respect thereto.

In its answer defendant asserted a counterclaim for the sum of $5,438.70, which amount it averred that plaintiff had collected from it for power furnished between September, 1923, and June, 1924, over and above the amount which plaintiff was lawfully entitled to charge. Plaintiff replied, denying the allegations of the counterclaim, and upon the issues raised by the pleadings a trial was had before the District Judge and a jury. At the conclusion of the testimony, plaintiff prayed the direction of a verdict on both of its causes of action and on the counterclaim of defendant, and defendant prayed the direction of a verdict on its counterclaim.

The court granted the motion of plaintiff, and this ruling is the basis of defendant's assignments of error. Two questions are raised by them: (1) Whether there was error in the direction of verdict for plaintiff as to its first cause of action; and (2) whether there was error in the direction of verdict against defendant as to its counterclaim.

The facts with respect to the first cause of action are that plaintiff is engaged in the production and sale of electric current for lighting and power purposes in the state of South Carolina, and the defendant is engaged in operating a cotton seed oil mill, fertilizer plant, and cotton ginnery at Columbia in that state. In the year 1916, plaintiff entered into a five-year contract with defendant, which was extended from year to year, so as to include the season of 1922-23, by the terms of which plaintiff agreed to furnish and deliver to defendant during its operating season, from October to May of each year, electric power for the purposes of defendant's business to the maximum demand of 700 horse power (being the equivalent of 522 kilowatts), and the defendant agreed to pay therefor at the rate of one cent per kilowatt hour with the following proviso:

"Provided, however, that the minimum annual payment under this contract shall be ten thousand ($10,000) dollars, whether power of that value actually consumed or not; said minimum payment being in consideration of the investment of the company for the electric power set aside and maintained in readiness to serve the consumer."

The contract also contained the following provision, which is the one material to this part of the controversy, viz.:

"Tenth. In the event the company shall be wholly or partially prevented from delivering the electric power contracted for herein, or in case the service thereof shall be interrupted, or in case the consumer shall be prevented from receiving, using, and applying the same, by reason of or through strikes, stoppage of labor, riot, fire, flood, invasion, insurrection, accident, the order of any court, judge, or civil authority, the act of God, or any cause reasonably beyond its control and not attributable to its neglect, then and in such event the company shall not be obligated to deliver said electric power hereunder during such period, and shall not be liable for any damage or loss resulting from such interruption or suspension, and the consumer shall not be obligated or liable to pay for such power not delivered, furnished, or supplied during such period; and in any and all such event or events the party suffering such interruption or suspension shall be prompt and diligent in removing the cause thereof, and either party whose plant shall suspend operation by reason of accident to its machinery, plant or system, shall proceed at once to repair the same within a reasonable time, and, failing to do so, the limit of or exemption from liability as fixed in this paragraph shall not apply, and the party so failing shall be liable to the other as though no such limit or exemption had been fixed."

For the season of 1922-23, defendant used and paid for current which at the contract rate amounted to $7,401.60, thus lacking $2,298.40 of paying the $10,000 minimum. There was evidence tending to show that its failure to use the minimum of current contracted for was due to its failure to obtain sufficient cotton seed to keep its mill running, and that this failure to obtain seed was due to the shortage of the cotton crop in that trade territory, resulting from weather conditions and the ravages of the boll weevil in the year 1922.

As the verdict was directed against the defendant on the first cause of action, it is our duty to consider the evidence offered on that cause of action in the light most favorable to defendant; but, even when it is so considered, there can be no question that the trial judge was correct in directing the verdict. Defendant having admitted the execution of the contract and that it has failed to pay the minimum amount specified therein, there remains but one question for our consideration, viz. whether under paragraph 10 of the contract defendant is absolved from paying the balance alleged to be due because of the shortage of the cotton crop and the consequent difficulty of obtaining cotton seed to crush in its oil mill. Of course, weather conditions and the ravages of the boll weevil and the resulting shortage of the cotton crop were matters beyond the control of defendant, and not attributable to its neglect; but we think that they do not absolve defendant from the performance of its contract (1) because they were not the proximate cause of defendant's failure to receive, use, or apply the electric current; and (2) because they were not embraced within either the language or the spirit of the clause excusing performance.

It will be noted that, to excuse performance under paragraph 10, the cause relied on must have been one which prevented defendant from receiving, using, or applying the electric current provided for. And it is settled that, to excuse performance under an absolving clause, the cause relied on must have been the proximate cause of the failure to perform. Berwind-White Coal Mining Co. v. Solleveld (C. C. A. 4th) 11 F.(2d) 80, and cases there cited; Williston on Contracts, vol. 3,...