Oliver-Mercer Elec. Co-op., Inc. v. Fisher
| Decision Date | 10 November 1966 |
| Docket Number | No. 8281,OLIVER-MERCER,8281 |
| Citation | 146 N.W.2d 346 |
| Parties | ELECTRIC COOPERATIVE, INC., Plaintiff and Respondent, v. Gene FISHER and Bill Faiman, Partners, Associated in Business under the firmname and style of Missouri River Sand and Gravel Company, Defendants andAppellants. |
| Court | North Dakota Supreme Court |
Syllabus by the Court
1. The object of construction of a contract is to ascertain and give effect to the intention of the parties. To accomplish that purpose the contract should be construed as a whole, all of its parts considered together, and every clause, sentence, or provision should be given effect consistent with the main purpose of the contract.
2. The intention of the parties to a written contract must, if possible, be ascertained from the writing alone.
3. A contract providing that it shall continue for three years, and for the payment of a minimum annual charge for electricity during the term of the contract, rendered the consumer liable to the supplier for payment of the minimum annual charge during the remainder of the three-year period, after which the consumer discontinued its sand and gravel business at the location contracted to be served by the supplier.
4. A contract to supply electricity to a consumer and providing for the payment of minimum annual charges during a three-year period certain is not a 'requirements contract' under which the supplier agreed to sell only the amount of energy actually used by the consumer who could cease to use electric energy at any time and be under no obligation to pay anything except 5. Courts of equity have power to reform written instruments to conform to the true intention of the parties, and parol evidence is admissible for that purpose. However, parol evidence of an alleged mutual mistake as a basis for the modification of a written instrument must be clear, satisfactory, specific and convincing, and a court of equity will not grant the high remedy of reformation even upon a mere preponderance of the evidence, but only upon the certainty of error.
for what the consumer actually used, but was a contract for a three-year minimum term under which the consumer was obligated to pay minimum annual charges specified during that period.
6. The burden of proof is on the party who alleges the mistake to prove that the written instrument does not fully or truly state the agreement that the parties intended to make.
7. In the instant case it is held, for reasons stated in the opinion, that the evidence does not warrant a judgment reforming the contract.
Richardson & Blaisdell, Hazen, for plaintiff and respondent.
Zuger, Zuger & Bucklin, Bismarck, for defendants and appellants.
This is an appeal by the defendants, who hereafter will be referred to as Fisher and Faiman, from a judgment of the district court in favor of the plaintiff, which will be hereafter referred to as the Co-op, in the amount of $7,200, claimed to be the amount due under a contract for seasonal electric service entered into between the parties. The case was tried to the court without a jury, and trial do novo has been demanded on review in this Court.
It is agreed the defendants, Fisher and Faiman, were operating a sand and gravel business as a partnership under the firm name and style of Missouri River Sand & Gravel Company; that the Co-op was a supplier of electric power and a corporation operating under the corporate name of Oliver-Mercer Electric Cooperative, Inc.
In the spring of 1962, the defendants, Fisher and Faiman, opened a new gravel pit at Sanger, North Dakota, and were in need of three-phase electrical service of sufficient quantity to operate a 500 horse-power load. The defendants approached the plaintiff Co-op concerning electrical service to their gravel pit at Sanger, and it was determined that to provide the required service to this location would require construction of a 41,000 volt transmission line from a point approximately five miles distant, and would entail crossing the Missouri River with about an 1800-foot span. It also required setting up a 600 KDA substation at Sanger and a distribution transformer. After several conferences, the contract in issue in this action was entered into on March 21, 1962. Its execution by the respective parties is admitted.
The contract provides:
The Seller shall sell and deliver to the Consumer, and the Consumer shall purchase all of the electric power and energy which the Consumer may need at the location described in Exhibit A, attached hereto and by this reference made part hereof, up to 400 kilowatts, upon the following terms:
1. Service Characteristics.
a. Service hereunder shall be alternating current, 3 phase, 4 wire, sixty cycles, 120/240/440 volts.
b. The Consumer shall not use the electric power and energy furnished hereunder as an auxiliary or supplement to any other source of power and shall not sell electric power and energy purchased hereunder.
c. Service hereunder shall be furnished on a seasonal basis (Less than 12 months per year) and the season (hereafter called 'Season') shall be defined in this section. The Season shall begin on April 1 and end on November 15 each year.
2. Payment.
a. The Consumer shall pay the seller for services hereunder at the rates and terms and conditions as set forth in Schedule LP. Should the Consumer desire service during any period other than the Season, the attached Schedule B shall apply during the time such service is used.
b. The initial billing period shall start at the commencement of each Season.
c. Bills for service hereunder shall be paid at the office of the Seller in Hazen, State of North Dakota. Such payment shall be due on the 20th day of each month as provided in the Schedule for service furnished during the preceding billing period. If the Consumer shall fail to make any such payment is due, fifteen days after such payment is due, the Seller may discontinue service to the Consumer upon giving fifteen (15) days' written notice to the Consumer of its intention so to do, provided, however, that such discontinuance of service shall not relieve the Consumer of any of its obligations under this Agreement.
d. The Consumer agrees that if, at any time, the rate under which the Seller purchases electric service at wholesale is modified, the Seller may make a corresponding modification in the rate for service hereunder. The Consumer may also request an annual review of the rate in effect should the investment/revenue ratio improve.
3. Membership.
The Consumer shall become a member of the Seller, shall pay the membership fee and be bound by such rules and regulations as may from time to time be adopted by the Seller.
4. Continuity of Service.
The Seller shall use reasonable diligence to provide a constant and uninterrupted supply of electric power and energy hereunder. If the supply of electric power and energy shall fail or be interrupted, or become defective through act of God, Governmental authority, action of the elements, public enemy, accident, strikes, labor trouble, required maintenance work, inability to secure right-of-way, or any other cause beyond the reasonable control of Seller, the Seller shall not be liable therefor or for damages caused thereby.
5. Right of Access.
Duly authorized representatives of the Seller shall be permitted to enter the Consumer's premises at all reasonable times in order to carry out the provisions hereof.
6. Term.
This Agreement shall become effective on the date first above written and shall remain in effect until three (3) years following the start of the initial billing period and thereafter unless terminated by either party giving to the other six (6) months' notice in writing.
7. Succession and Approval.
a. This Agreement shall be binding upon and inure to the benefits of the successors, legal representatives and assigns of the respective parties hereto.
b. If the KW demand shall exceed 350 kilowatts, approval of the Administrator
of the Rural Electrification Administration will be required.
Exhibit A, attached to the contract, reads as follows:
Exhibit A
Description and Location of Service
Service Will be Made Available On or Before: May 1, 1962
Size of Largest Motor: 150 HP (500 total HP)
Section: 26
Township: 143
Range: 81
Town: Sanger
Owner: Missouri River Sand and Gravel Co.
Address: % William Faiman
238 W Divide
Bismarck, North Dakota
Large Power Service, Schedule LP, reads as follows:
LARGE POWER SERVICE
Schedule LP
Oliver-Mercer Electric Cooperative, Inc.
Rate
Demand Charge
$1.25 per month per KW of billing demand.
First 200 kwh's per month per kw of billing demand at 1.5cents per kwh.
Balance of kwh's @ 1cents per kwh per month.
The billing demand shall be the maximum kilowatt demand established by the consumer for any period of fifteen consecutive minutes during the month for which the bill is rendered, as indicated or recorded by a demand meter and adjusted for power factor as provided below.
The Consumer agrees to maintain unity power factor as nearly as practicable. The measured demand will be adjusted for consumers with 50 kw or more of measured demand to correct for average power factors lower than 90%, and may be so adjusted for other consumers if and when the Seller deems necessary. Such adjustments will be made by increasing the measured demand 1% For each 1% By which the average power factor is less than 90% Lagging.
Minimum Annual Charge for Seasonal Service.
The minimum annual charge shall be.$9.00 per maximum kw demand during any one month of the season or $3600. whichever amount is greater. Should service be required during any period other than the season, the established Schedule B shall apply.
The above rates are net, the gross rates being ten percent higher on the first $25.00 and two percent on the remainder of the...
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