Huff v. Electric Plant Bd. of Monticello

• Decision Date: 08 March 1957
• Citation: 299 S.W.2d 817
• Parties: Carl F. HUFF, Appellant, v. ELECTRIC PLANT BOARD OF the City of MONTICELLO, Kentucky, and City of Monticello, Kentucky, Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 817

299 S.W.2d 817

18 P.U.R.3d 96

Carl F. HUFF, Appellant, v. ELECTRIC PLANT BOARD OF the City of MONTICELLO, Kentucky and City of Monticello, Kentucky, Appellees.

Court of Appeals of Kentucky.

March 8, 1957.

Leonard E. Wilson, Jamestown, Bruce H. Phillips, Monticello, for appellant.

Parker W. Duncan, Duncan & Huddleston, Bowling Green, for appellee.

STEWART, Judge.

The Monticello Electric Light Company sold its facilities for the distribution of electricity to the City of Monticello on January 20, 1954, and the city has henceforth managed the system through an agency known as the Electric Light Plant Board. We shall hereinafter refer to these parties as 'the company', 'the city' and 'the board'. As a part of the closing agreement, the city contracted with the company that it would collect its unpaid bills for electric current furnished and disconnect the service of a patron if his account was not paid. Carl F. Huff operated a sawmill near Monticello to which the company had supplied electric power, and Huff continued on as a customer of the city after the sale. Two bills for electricity, as shown by meter readings of December 15, 1953, and January 15, 1954, amounting to $177.05, were rendered to Huff on February 1, 1954, as an indebtedness owing the company. Huff on his own initiative deducted $75 from the debt and remitted the balance. He asserted the company owed him this sum, giving as a reason that one of his motors had been 'burned out' due to low voltage allegedly caused by the company's negligence. His previous requests of the company for settlement for the ruined motor had been refused.

On February 24, 1954, Huff received a writing signed by the company notifying him that because of the nonpayment of a past due bill of $75 for electric power, his service would be disconnected. He refused to pay and his electricity was cut off three days thereafter by the board. Huff then installed diesel engines, being unable, as he testified, to obtain electric current elsewhere. Huff admits that, long before any controversy arose over the nonpayment of this bill he wrote the chairman of the board advising that unless his rates were reduced he was going to revert to diesel power.

Huff instituted this suit against the city and the board, as defendants, to recover $25,000 damages which he claimed resulted from the wrongful and unlawful discontinuance of power to his sawmill, averring loss of profits and damage to his logs and timber. These defendants traversed the allegations of the complaint and then pleaded affirmatively their right to cut off the electric service under the city's contract with the former owner. They brought in by a third party complaint the company in order that they might recover of it any amount adjudged against them. The company denied liability and entered a counter-claim against Huff for the balance of $75 due on the delinquent account. Huff then instituted a claim against the company for $500 for damages incurred in closing down his plant because of its supposed negligence in furnishing power of too low voltage. The lower court directed a dismissal of the complaint as to the city and the board. The action in relation to the company's responsibility was abated pending final decision on this appeal of the initial case. Huff challenges the correctness of the judgment dismissing his claim.

Our first inquiry is whether the company would have had the legal right to cut off Huff's electric power had it continued the operation of the system, for if it did not possess this right, and its action was wrongful, it would follow that the city and the board would be liable.

It is the generally accepted rule in this jurisdiction that a public service company may adopt and enforce regulations providing for the discontinuance of its service to any customer who, after reasonable notice, fails to pay his bill. See City of Middlesboro v. Kentucky Utilities Co., 255 Ky. 140, 72 S.W.2d 734; Kentucky Utilities Co. v. Warren Ellison Cafe, 231 Ky. 558, 21 S.W.2d 976; City of Winchester v. Ky. Utilities Co., 182 Ky. 144, 206 S.W. 296; Louisville Tobacco Warehouse v. Louisville Water Co., 162 Ky. 478, 172 S.W. 928. This principle of law is based upon a sound public policy which recognizes that it would be highly impractical to compel a utility company to resort to an infinite number of actions at law to collect small accounts against scattered consumers. The only qualification of the rule is that the company may be liable for damages resulting from the disconnection of the current if the bill rendered is not just and correct.

It is not enough that a consumer may be convinced that the bill is erroneous or that it is exorbitant. Indeed he may in good faith believe these things, but if he is erroneous in his judgment and refuses to pay he may not recover damages because of the denial of service. See Kentucky Utilities Co. v. Warren Ellison Cafe, supra; Louisville Tobacco Warehouse v. Louisville Water Co., supra. The patron may not justify his refusal to settle the account by setting off against it a claim which is unliquidated or uncertain. See City of Winchester v. Kentucky Utilities Co., supra; Central Louisiana Power Co. v. Thomas, 145 Miss. 352, 110 So. 673, 111 So. 142; Barrett v. Broad River Power Co., 146 S.C. 85, 143 S.E. 650.

In the present case there was no dispute whatever between the parties over the correctness of the amount of the statement rendered. On the contrary, the demand made by the customer was based upon a claim of extraneous liability on the part of the company for damages to a motor occasioned by the alleged negligence of the company. So, the question is whether a customer may arbitrarily adjudge his own claim to be well founded and collect it by way of an unliquidated and unadjudicated setoff against a legitimate charge for subsequent service. We think such procedure is unwarranted.

The case of Central Louisiana Power Company v. Thomas, 145 Miss. 352, 110 So. 673, 111 So. 142, is quite similar to the case at bar. Thomas operated a gin and gristmill by electric power. He deducted $56 from the sum rendered him for electricity, which amount he contended he had been damaged by a brief interruption in the current. The power company refused to recognize his claim and, upon the refusal of the customer to pay the balance of the bill, it cut off his power. In reversing a judgment of the lower court granting an injunction and allowing damages to the customer, the court held that a public service corporation cannot be denied the benefit of the rule which permits it to disconnect a patron for default in payment of an account because he presents a counterclaim for unliquidated damages. The court ruled that the consumer should have continued to pay his monthly bills and then should have brought suit for any damages he may have suffered by reason of the interruption in the electric current for his gin and gristmill.

We, therefore, conclude that the company would have been justified in cutting off the current had it been supplying the customer with the power at the time it did so. This leads us to the ultimate inquiry, namely, whether the successor owner and the operator of the electric system had the legal right to cut off the current to Huff's mill.

The board maintains that not only did it have the authority but that it was its duty to cut off the supply of electricity to Huff under its contract of purchase of the facilities. This contract obligated the city to 'assist the seller (the company) in collecting its unpaid bills for electric service rendered prior to the closing date (of...