Bell v. Traction

• Decision Date: 25 March 1919
• Docket Number: 3738. [a1]
• Citation: 83 W.Va. 640
• Court: West Virginia Supreme Court
• Parties: William Bell v. Kanawha Traction & Electric Co.

83 W.Va. 640

William Bell

v.Kanawha Traction & Electric Co.

3738. [a1]

Supreme Court of Appeals of West Virginia.

Submitted February 4, 1919.

Decided March 25, 1919.

1. Contracts Excuse for Nonperformance Statute.

Where a contract is lawful at the time it is entered into, but before it has been fully executed its further performance is rendered impossible by a valid legislative act, or by some other supervening cause over which the parties have no control, they will be excused from its further performance. (p. (351).

2. Same Excuse for Nonperformance Damages.

In such case neither party may recover the consequential damages which result to him by reason of the failure of performance upon the part of the other, (p. 651).

3. Same Excused Performance Reeovery of Consideration.

But in such case where one party has paid the full consideration for the contract, in accordance with its terms, and the other party has not performed, or has only partially performed the party so performing will be entitled to recover back the consideration paid by him, or its value, in toto or pro tanto, as the failure to perform by the other party is total or only partial. (p. 642).

Error to Circuit Court, Wood County.

Suit by William Bell against the Kanawha Traction & Electric Company. Demurrer to plaintiff's declaration sustained, and he brings error.

Reversed, demurrer overruled, case remanded.

C. M. Hanna, R. E. Bills and Reese Blizzard, for plaintiff in error.

Van Winkle & Ambler, for defendant in error.

Ritz, Judge:

This writ of error is prosecuted to review a judgment of the circuit court of Wood county sustaining a demurrer to the plaintiff's declaration.

In the year 1901 the defendant secured from the plaintiff a right-of-way for its car track through a certain tract of land owned by him in the county of Wood, the sole consid- eration therefor being that the defendant, when its road was constructed, would furnish to the plaintiff free transportation thereover for himself and his family. In accordance with the agrement, such free transportation was furnished until the year 1906 when the Congress of the United States, by the passage of the Hepburn Act, made it impossible for the defendant to comply with its contract. The agreement was, however, modified at that time so as to provide for the furnishing of such transportation only within the State of West Virginia, and as modified was performed by the defendant until the year 1913, when the Legislature of West Virginia, by an act, made it unlawful for the defendant to further perform the contract even to that extent. This suit was thereafter brought to recover the value of the consideration given by the plaintiff for such free transportation to the extent that the same had not already been furnished.

The substantial question involved is whether the declaration presents a cause of action. It is not contended that the contract in its inception was not entirely legal and proper, such a contract as the parties had a right to make, and enforceable as the law then stood.

It is very well settled that where the further performance of a contract, legal at the time it was made, is rendered unlawful by a subsequent act of Congress or of the Legislature of the state, the parties will be excused from further performance. Elliott on Contracts, §§ 685, 1901; 13 Cor. Jur., 646; 6 R. C. L., 366; Railroad Co. v. Mottley, 219 U. S. 467; American Mercantile Exchange v. Blunt, 10 L. R. A. (N. S.) 414; Dorr v. Railway Co., 78 W. Va. 150; Baily v. DeCrespigny, L. R. 4 Q. B. 180; Scovill v. McMahon, 62 Conn. 378, 21 L. R. A., 58. Nor can it be doubted that the inhibitions of the Hepburn Act are such as to prevent the legal performance by the railway company of this contract. A common carrier by that act is prohibited from receiving such compensation for transportation furnished by it. Railroad Co. v. Mottley, 219 U. S. 467; Dorr v. Ry. Co., 78 W. Va. 150. For this reason specific performance of the contract cannot be compelled, and as was held in the case of Dorr v. Railway Co., supra, rescission cannot be had for the very obvious reasons that the railway company has partially performed the same, and further, the right-of-way thus secured has been dedicated to the public use and cannot be withdrawn therefrom in the interest of a private individual.

It is also very well settled that no action will lie to recover any consequential damages which may result from the failure to perform a contract, the performance of which is forbidden by law, or prevented by some uncontrollable supervening cause. Butterfield v. Byron, 153 Mass. 517, and many authorities there cited. But these conclusions do not answer the question involved here. The plaintiff does not seek specific performance, but on the contrary admits that he cannot have it. He does not seek the cancellation or rescission of the contract, nor does he seek to recover any consequential damages for its non performance. The whole theory upon which the case proceeds is the recovery of that part of the consideration received by the defendant for which it has not made compensation. It is quite true that the defendant is excused from the further performance of the contract, and that no action can be maintained thereon for its breach, for its rescission, or for its specific execution, but does this mean that one of the parties who has received full performance from the other can retain that full performance? Many authorities are cited in argument, but few of them answer the specifie inquiry. Most of them simply hold that specifie execution will not be decreed, or that no action can be maintained for consequential damages for the breach of the contract, or that the party who has not performed is excused therefrom.

The exact question presented here seems not to have been passed upon by the courts of last resort of many of the American states. It was before the Supreme Court of the State of Kentucky in the case of Louisville & Nashville Railroad Co. v. Crowe, 156 Ky. 27, 49 L. R. A. (N. S.), 848, 160 S. W. 759. Crowe had granted to the railroad company a strip of land for a right-of-way in consideration that the railroad company would issue to him free transportation over its lines during his life. The railroad company refused to issue the transportation for the reason that it was forbidden to do so by the provisions of the Hepburn Aet. It was then sued to recover compensation for the consideration given it, just as was done in this case, and it was contended by the railroad company that not only was it excused from the further performance of its contract, but that it had a right to keep the consideration without making any compensation therefor. This contention, however, was denied by the court, and the railroad company held liable for the value of the consideration received by it to the extent that it had not already made compensation therefor. In the case of Cowley v. Northern Pacific Railroad Co., 68 Wash. 558, 41 L. R. A. (N. S.) 559, 123 Pac, 998, exactly the same question was involved, and the Supreme Court of the State of Washington reached a contrary conclusion, holding that the railroad company was entitled to keep the land conveyed to it for a right-of-way without paying for it; that it was not only excused from...