Coal District Power Company v. Katy Coal Company

• Decision Date: 22 December 1919
• Docket Number: 76
• Parties: COAL DISTRICT POWER COMPANY v. KATY COAL COMPANY
• Court: Arkansas Supreme Court

217 S.W. 449

141 Ark. 337

COAL DISTRICT POWER COMPANY v. KATY COAL COMPANY

No. 76

Supreme Court of Arkansas

December 22, 1919

Appeal from Sebastian Circuit Court, Fort Smith District; Paul Little, Judge; affirmed.

Judgment affirmed.

Hill Fitzhugh & Brizzolara, for appellant.

1. The contract was in general terms, there being no agreement for the supply of any definite amount of current nor any guaranty that there would be no interruptions, nor promise to take any definite amount, nor any special object for which current was taken. The contract was in general terms for the sale of current of electricity without any special provisions whatever. The proof shows defendant exercised the highest degree of care at all times. Any interruptions of service were solely on account of matters entirely beyond the control of defendant and in spite of all efforts to furnish current no negligence was shown but the interruptions were caused by failure in the insulators, which it was impossible to obtain on account of the war and a strike. 112 Ark. 425 is different from this case, nor does 64 N. J. Law 240 apply. Wigmore on Publ. Serv. Corp., §§ 657-9; 38 Mass. 417; 13 C. J 640; 149 U.S. 1. See also 3 Page on Contracts, pp. 2113-2140.

2. Loss of anticipated profits were not recoverable. 91 Ark. 192; 49 C. C. A. 244; 91 Ark. 180; 1 Sedgwick on Dam., §§ 184-6-7-8; 34 Ark. 184; 44 Penn. St. 156, 169; 91 Ark. 433; 113 Id. 588; 75 Id. 469; 77 Id. 150. The leading case in this State is 72 Ark. 275. See also 104 Id. 215; 139 U.S. 199; 1 Sedg. on Dam. (8 Ed.), § 159; 190 U.S. 540; 31 Okla. 292.

3. The instructions were erroneous, and the case tried entirely upon an erroneous theory as to the liability of appellant and the measure of damages. Cases supra.

4. If plaintiff was entitled to recover, the measure of damages was not the loss of profits but the rental value of the property or interest on the investment during the time of the interruptions of the business. 35 A. 1127; 3 Suth. on Dam., p. 2127; 77 Ark. 150; 134 Id. 345.

5. The evidence as to losses is not sufficient to support the judgment on the cross-appeal. See 77 Ark. 150.

Warner, Hardin & Warner, for appellee.

1. Defendant is liable for the breach of the contract. There was no ambiguity, and its construction was for the court and not the jury. 126 Ark. 19. The contract was prepared by defendant alone and all doubts resolved against it. 112 Id. 6.

2. Even if the contract was impossible of performance, defendant had agreed in absolute terms to perform it and after breach non-performance from impossibility was no defense. 112 Ark. 425; 52 L. R. A. (N. S.) 502; 126 Ark. 46, 50; 93 Id. 447-952; 234 F. 817; 105 Ark. 419; 91 Id. 180; 61 Id. 312; 181 S.W. 640; 13 C. J. 635-706; note to L. R. A. 1916 F, 31-37 et seq.; 107 Me. 279; 78 A. 288; 91 N.Y.S. 544; 74 P. 52; 60 U. S. (L. Ed.), 576; 34 So. 744; 183 S.W. 431; 164 F. 980.

112 Ark. 425-435 definitely settles the liability of defendant for all damages caused by the breach. See also 72 F. 227; L. R. A. 1916 F, 37 and note; 78 A. 288; 136 Ark. 231; 13 C. J. 637.

3. The question of ordinary care does not enter into this case. The action is ex contractu, not ex delicto. 105 Ark. 419; 52 S.E. 677.

The defense of act of God was a conclusion and not a statement of fact, and since the order to suspend was of a temporary nature, it was available as a defense. L. R. A. 1916 F, 67, also lb. 12 and note 8.

The court below properly declared the effect of a violation of the contract. 45 A. 692; 112 Ark. 425; 89 Id. 24; 64 Ind. 125; 22 A. 633.

4. Plaintiff was entitled to recover for loss of profits and the instructions properly submitted the question to a jury. U. S. Auto Co. v. Arkadelphia Mill Co., ms. op., October 6, 1919; 136 Ark. 231; 111 Id. 474; 91 Id. 192.

Profits were reasonable in the contemplation of the parties at the time the contract was made. 53 Ark. 434-443; 69 Id. 219; 104 Id. 215; 74 Id. 358; 72 Id. 275; 71 A. 759; 4 R. C. L. 461, § 28; 6 L. R. A. (N. S.) 1058; 136 Ark. 231.

Defendant actually possessed sufficient knowledge and notice of the special circumstances which might cause special damages to follow the breach of contract. 8 R. C. L. 461, § 28.

5. The damages from loss of profits were certain in their nature and as respect to cause. Cases supra; 91 Ark. 433; 105 Id. 433; 63 Tex. 381; 38 So. 64; 17 C. J. 756, § 90; 111 Ark. 190.

6. There was no error in the instructions. The facts are undisputed and a directed verdict was proper. 104 Ark. 267; 57 Id. 461.

7. Plaintiff was entitled to recover damages for expenses incurred. 28 U. S. (L. Ed.), 168; 17 C. J. 798, note 18; 85 Ark. 605; 134 Id. 345. See also 134 Ark. 430; 1 Suth. on Dam., pp. 257-8; 17 C. J. 800, § 126 (b).

OPINION

SMITH, J.

The parties to this litigation entered into the following contract:

"The following contract entered into and made this 24th day of May, 1917, by and between the Katy Coal Company, a corporation duly organized and existing under and by virtue of the laws of the State of Arkansas, to be hereinafter referred to as the consumer, and the Coal District Power Company, a corporation duly organized and existing under and by virtue of the laws of the State of Arkansas, to be hereinafter referred to as the company. Witnesseth:

"For the sum of one dollar and other good and valuable considerations, each paid to the other, receipt of which is hereby acknowledged; the company agrees to deliver to the premises of the consumer at a central transformer station located at what is known as 'Midland Six Mine,' about one and one-half miles north of Midland, Arkansas, and the consumer agrees to accept, use and pay for upon the terms and conditions as herein provided, what is commercially styled Three Phase Sixty Cycle Alternating Current at a potential of approximately two hundred and twenty volts.

"The company agrees to build at its expense and provide sufficient transformer capacity, a transmission line to the location of a transformer station, said location to be decided upon by both parties to this contract. The consumer agrees to construct at its expense all pole lines, wires, etc., etc., necessary for the conduction, or transmission of such electrical energy as it may use, from the transformer station to the location of the pumps, fans, hoists, or other power using appliances.

"The consumer agrees to and does hereby grant to the company permission to construct upon the land now owned or leased by the consumer, the transmission line necessary to serve the consumer, and to allow said company to extend said transmission line for the service of other consumers.

"The consumer agrees to pay the company all bills for electric power not later than the tenth of each month upon the following basis:

"First--A demand charge of one dollar per month per killowatt of maximum demand as indicated by the name plate ratings on the transformers installed, plus an energy charge of:

"First 1,000 K. W. H. per month

$ 0.04 k. w. h.

"Next 2,000 K. W. H. per month

.03 k. w. h.

"Next 3,000 K. W. H. per month

.025 k. w. h.

"Next 4,000 K. W. H. per month

.0225 k. w. h.

"All in excess of 10,000 K. W. H. per

month

.02 k. w. h.

"The consumer agrees that at no time during the life of this contract that a demand charge of less than forty killowatts shall be used.

"The company agrees to provide such additional capacity as the consumer may require for its purpose, however such additions in capacity shall establish the basis of the demand charge for the remainder of the life of this contract.

"This contract shall be in full force and effective force for a period of five (5) years from and after the date power is turned on the line, which shall not be later than sixty days from the date of the signing and acceptance of this contract, unless the company shall be prevented in the construction of said line by causes reasonably beyond its control."

The circumstances under which the contract was executed are as follows: G. W. Skow was the superintendent of the power company, which is in the business of dealing commercially in electric power in the coal mining district, and he appears to have been conversant with the methods of mining coal generally and to have been familiar with conditions in appellee's mine. The negotiations leading up to the contract were had between Skow and H. F. Rogers, the president and manager of the coal company. The mine passed into the control of the coal company on April 15, 1917--it having been operated prior to that time under a different management--and was being operated at the time of the execution of the contract. Skow and Rogers consulted, both at the company office and at the mine, and a blue print was prepared showing the details of the mine. The blue print gave the dimensions of the slope and showed the number, position and dimensions of the entries connected with it and of a concrete dam which had been constructed to prevent the flow of water down a depression or swag in the mine from an adjacent creek.

Water accumulated at this depression and required pumping to prevent it flooding the mine. A steam pump had been employed for this purpose with unsatisfactory results, owing to the distance from the steam power, and Skow was advised that steam power was being used for that purpose, and that electric power was desired for the purpose of operating the pump and supplanting steam as the power to be used in the general operation of the mine. Skow prepared the specifications for the pump and the accessories necessary to handle the water situation, and he advised Rogers the machinery necessary to install to use the electric current. After these details had been discussion and agreed upon, Skow prepared the...