Helena Light & Ry. Co. v. Northern P. Ry. Co.

• Court: Montana Supreme Court
• Writing for the Court: MATTHEWS, J. HOLLOWAY, J.
• Citation: Helena Light & Ry. Co. v. Northern P. Ry. Co., 186 P. 702, 57 Mont. 93 (Mont. 1920)
• Decision Date: 02 January 1920
• Docket Number: 4063.
• Parties: HELENA LIGHT & RY. CO. v. NORTHERN PAC. RY. CO.

186 P. 702

57 Mont. 93

HELENA LIGHT & RY. CO. v. NORTHERN PAC. RY. CO.

No. 4063.

Supreme Court of Montana

January 2, 1920

Appeal from District Court, Lewis and Clark County; R. Lee Word Judge.

Action by the Helena Light & Railway Company against the Northern Pacific Railway Company. From a judgment for defendant plaintiff appeals. Affirmed.

Holloway J., dissenting.

O. W. McConnell, of Helena, for appellant.

Gunn, Rasch & Hall, of Helena, for respondent.

MATTHEWS J.

The plaintiff instituted this action to recover from the defendant the sum of $1,016.75, alleged to be due for electricity furnished for lights and power during the months of May, June, and July of the year 1915, at its special instance and request. The respondent admits the use and consumption of the electricity as alleged, but contends that said electricity was furnished and was used, under a contract entered into between the parties hereto in the year 1910, under and by the terms of which the amount due was $494.50, which amount respondent duly tendered to appellant, when due. The case was tried in the district court on an agreed statement of facts, from which it appears:

(1) That on the 3d day of December, 1909, appellant and respondent entered into a written contract by the terms of which the appellant agreed to furnish to the respondent-

"all the electric current the railway company may require for lighting and power purposes at its pumping station, approximately 2 1/2 miles west of the Northern Pacific passenger station, and at its roundhouse, machine shop, car shop, coal dock, passenger and freight stations, lunch room, offices, and other buildings and premises at Helena, Montana."

(2) This contract or agreement was to continue in force for a term of 5 years from the date of the installation of the secondary lighting and power systems of the company, which installation was not completed until April 30, 1910.

(3) The contract further provided that the railway company reserved the right, at its option, upon giving the power company 30 days' written notice prior to the expiration of the contract, "to renew the same for an additional period of 5 years."

(4) The rates fixed by the contract for electric current for power and light were about one-third the regular rates in effect in the months of May, June, and July, 1915.

(5) It is agreed that-

"The inducing cause or reason for entering into such a contract by the plaintiff at the rates for electric current therein named was that the defendant was to use electric current and power at its pumping station; but the plaintiff did not state to the defendant what the inducing cause or reason was for entering into the contract."

(6) The agreed statement of facts recited further:

"That at or prior to the making of said contract neither the defendant, nor its agent or representatives, made any statement or representation to the plaintiff, or its agents or representatives, regarding the amount of electric current to be used, or the time, manner, or places of using said electric current, other than the statements and representations in said contract contained."

(7) The power company performed its part of the contract and in doing so expended the sum of $948.78 in erecting a system to supply the current at the pumping station.

(8) The railway company lived up to the terms of its agreement in all particulars, save and except that on or about November 27, 1913, it abandoned its pumping station, and consequently since that date has used no electric current at or for the pumping station, which fact was known to the power company within 30 days thereafter, and no objection or protest was made by the power company to such abandonment or discontinuance of the use of electric current at the pumping station, but continued to furnish, and collect for, electric current, as formerly under the contract.

(9) That on the 21st day of January, 1915, and within the time provided for in the contract, respondent notified appellant in writing that it desired to renew the contract for the additional term of 5 years under the option contained in the contract.

(10) On April 28, 1915, the appellant notified respondent in writing that it would not renew the contract, on the ground that the respondent was "guilty of a breach of the contract in part during its existence." The breach, as stated in the notice, consisted in the abandonment of the pumping station and the discontinuance of the use of electric current at that point, which, the notice recites, "was one of the principal items of the contract and greatly influenced in making the reduced rate," and, continuing, said notice advised the railway company that from and after May 1, the power company would furnish light and power to the railway company at the rates regularly filed with the Public Service Commission.

(11) It is further agreed that the current used by respondent at the pumping station amounted to 24 1/2 per cent. of the electricity used by respondent under the contract.

The court found in favor of the railway company, and rendered judgment but for the amount due under the contract, and entered its decree to the effect that the contract in question had been duly extended and continued for the additional term of 5 years. The appeal is from the judgment.

The question here presented is: Was there, during the months of May, June, and July, 1915, a valid and existing contract in full force and effect? Appellant contends that the contract was one which could not be renewed, for the following reasons:

(1) That the respondent company violated the terms of the contract by abandoning its pumping station and its refusal to take any power.

(2) A renewal of a portion of the contract only is desired.

(3) Such contract is unlawful under the present statute.

We will take the matters suggested up in order and under the subheads employed in appellant's brief.

1. The "inducing cause," referred to in the statement of facts, is relied upon to establish a breach of the contract. The contract was complete in itself, the result of the meeting of the minds of the contracting parties, and the obligations of each, as expressed, depend upon the corresponding obligations of the other, and on no extrinsic matter. 9 Cyc. 643. Being in writing, the contract supersedes all oral stipulations of the parties. Rev. Codes, §§ 5018, 7873. This being so, it cannot be said that an inducing cause, in the mind of one of the contracting parties, undisclosed to the other, can thereafter be read into the contract as a part of the consideration for its execution.

Counsel contends that courts must give to a contract such a construction as was within the contemplation of the parties at the time they entered into it. This is true, but an "inducing cause" or motive, hidden in the breast of one, does not come within the rule. This court has said, in the case of Armington v. Stelle, 27 Mont. 13, 69 P. 115, 94 Am. St. Rep. 811:

"Even if everything that was said and done at the time the lease was executed by the defendants were admissible, as defendants contend, for the purpose of showing what the contract actually was, the unexpressed motive or mental reservation entertained by the defendants could not aid the court in arriving at a correct conclusion, nor could the defendants be permitted to testify to it, in order to modify or add to the express words of their contract."

Mr. Elliott, in his work on Contracts (section 204), has this to say on the subject:

"The 'motive' for entering into a contract and the 'consideration' of the contract are not the same. An expectation of certain results is often the motive which leads to the formation of a contract, but neither the expectation nor the result necessarily makes the contract binding. Nothing is consideration that is not regarded as such by both parties."

Here there was no representation by the railway company as to continuous use of electric current at any one point designated in the contract, and if the agents of the power company labored under an erroneous opinion of the value of the contract by reason of the contemplated use of current at the pumping station, uncommunicated to the railway company, the courts are powerless to assist or relieve appellant.

"Whatever may be thought of the propriety, from a moral standpoint, of holding a person to a contract into which he entered under a mistake as to a collateral material fact, the law is confronted with the necessity of adopting a rule which will make it possible to enforce contracts at all. Accordingly the rule adopted by the great weight of authority is that mere mistake in the inducement is not operative, and that a contract induced by reason thereof is perfectly enforceable and valid. A mistake of this sort is 'an error for which the law furnishes no relief."' Page on Contracts, § 155.

See, also, 9 Cyc. 320; Philpot v. Gruninger, 14 Wall. 570, 20 L.Ed. 743; Peck Colorado Co. v. Stratton (C. C.) 95 F. 741; Levy & Cohn Mule Co. v. Kauffman, 114 F. 170, 52 C. C. A. 126; Armington v. Stelle, supra; Cream of Wheat Co. v. Crist Co., 222 N.Y. 487, 119 N.E. 74, 1 A. L. R. 150.

The circumstances under which a contract is made, or the intent of the parties existing at the time, are only material when the contract is ambiguous in some of its terms. Bullard v. Smith, 28 Mont. 387, 72 Pac. 761; Quirk v. Rich, 40 Mont. 552, 107 P. 821; Ming v. Pratt, 22 Mont. 262, 56 P. 279.

2. New Contract.-It is admitted by respondent that, if the contract is renewed, it does not desire to renew in so far as the use of electric current for power purposes at the pumping station is concerned. This, appellant contends, calls for a new and different contract from that originally entered into....