Wissmath Packing Co. v. Mississippi River Power Co.
| Decision Date | 16 May 1917 |
| Docket Number | 31354 |
| Citation | 162 N.W. 846,179 Iowa 1309 |
| Parties | WISSMATH PACKING COMPANY, Appellee, v. MISSISSIPPI RIVER POWER COMPANY, Appellant |
| Court | Iowa Supreme Court |
Appeal from Lee District Court.--W. S. HAMILTON, Judge.
ACTION for damages for alleged injuries to a right of redemption in certain real estate. There was a general denial by the defendant. The jury rendered a verdict for plaintiff for $ 53,000, and the defendant appeals.
Reversed.
James C. Davis, George B. Stewart and J. O. Boyd, for appellant.
E. C Weber, A. J. Wissmath and J. R. Frailey, for appellee.
The case presented by the plaintiff is unique. The plaintiff is a Missouri corporation, and the defendant, a Maine corporation. The defendant constructed the public improvement popularly known as the "Keokuk Dam." This improvement was constructed by defendant under authority of an act of Congress, which imposed, however, upon the defendant the obligation to make compensation to all persons whose property might be taken or damaged by the construction and maintenance of such improvement, in accordance with the laws of the state where such property might be situated, the improvement in question extending across the Mississippi River, and being therefore, situated partly in Iowa and partly in Illinois.
The plaintiff was the owner of a certain packing plant located at Fort Madison, near the Mississippi River and about 25 miles above the dam. This plant was encumbered by two mortgages, and these mortgages had been foreclosed and an execution sale had thereunder prior to the injuries complained of. Judgments of foreclosure had been entered for something more than $ 56,000. Execution sale was had on December 14, 1912, and the property was bid in for the amount of the judgments.
The injuries complained of by plaintiff first occurred on June 20, 1913, and continued for a period of 6 or 8 weeks. The plaintiff had as a part of its plant eight cellars, 8 or 10 feet deep. These communicated with sewers. The claim is that, into three of these cellars, the water backed through the sewers to a depth of 5 or 6 inches, and that this condition continued for said period. It is claimed also that this was caused by the raising of the level of the river, which resulted from the maintenance of the dam. The defendant denies that such was the cause of the presence of the water, and the record of the government gauges shows that at no time in 1913 did the river rise high enough to enable the water therefrom to enter the sewers in question. But whatever the cause, it is undisputed that it was entirely remedied within the period indicated, and that no water has ever since appeared in such cellars. The claim of plaintiff is not for damages done to the plant. But it claims that because of the flooding of such cellars the value of the plant was depreciated, and that it was for that reason unable to redeem it from execution sale, and unable to interest other parties in a purchase or lease of the same. Paragraph 10 of its petition is as follows:
"That, due to defendant's failure to properly protect said plant, water was, during the period of redemption, backed up in plaintiff's cellars, and that it was known to defendant that, if said property was not protected, that the same would be flooded and the property become useless for its intended purpose and would depreciate in value, and that said property during the period of redemption became useless for its intended purposes and could not, by reason of the acts hereinbefore set forth, be operated as a packing plant, and depreciated in value to such an extent that plaintiff was unable to redeem the property and was unable to interest parties to purchase said plant or to lease the same, or to put the same in operation as a packing plant, and that, by reason of the acts herein set forth, plaintiff lost his right of redemption, and has been damaged in the sum of $ 93,500."
The plaintiff introduced evidence to the effect that the plant was worth $ 150,000; that it was under lease for a term of two years from May 15, 1912, to one Schaper; that, in January, 1913, Schaper promised to furnish the money necessary to make redemption from the execution sale; that, in March or April, 1913, Schaper ceased the operation of the plant, and the same has never since been operated; that, in August, 1913, Schaper refused to furnish the money for the purpose of redemption; that the reason for such refusal was that he had seen the water in the cellars and was influenced thereby to refuse the loan. The record shows also that this suit was begun on November 22, 1913, while the right of redemption still subsisted. The contention in argument for the defendant is that the damages here claimed were remote and speculative; that the facts upon which plaintiff purports to found such claim for damages were not proven; that the verdict, on any theory, was grossly excessive.
In support of defendant's contention, there was evidence to the effect that the plant was of comparatively little value; that it was out of date, having been built more than 25 years ago; that its operation was attempted by many persons successively, and that none ever attained any success therein; that the plant was idle for many years; that it was purchased by the plaintiff in 1909 for $ 10,000; that it was operated for 2 or 3 years by the plaintiff very unsuccessfully, and was finally mortgaged, as already stated, for the payment of existing debts; that it was then leased to Schaper for a rental of 40 per cent of the profits; that the president of the company became an employee of Schaper's in the operation of the same; that there were no profits from the operation thereof by Schaper and that, therefore, no rent was earned; that Schaper abandoned the use of the property entirely long prior to June 20, 1913; that no interest, taxes or insurance was paid by the plaintiff after the execution of the mortgages under which execution sale was later had; that the immediate cause of the abandonment of the use by Schaper was undisputedly that certain improvements were required by the Federal inspector which would require an expenditure of $ 300 or $ 400, which expenditure both Schaper and the plaintiff refused to make; that, after the promise made by Schaper in January, 1913, to make the redemption, the subject was not again mentioned until August, although the parties worked together daily; that, if Schaper promised to make such redemption in January and in good faith intended to make the same, no reason is made to appear why it should not have been done forthwith; that the promise by Schaper contemplated the purchase by him of the plant for the amount of the debt and the furnishing of employment by him to the president of the company in the operation of the same; that the later abandonment of the use of the plant by Schaper and the reasons given by him therefor were contradictory to any intention of further operation of the plant or the purchase thereof; and that the conduct of Wissmath, president and manager of the plaintiff corporation, was inconsistent with any intention on his part to redeem from the execution sale. The foregoing will indicate the general scope of the issues and the general nature of the evidence.
Speaking negatively, the plaintiff does not predicate its claim of liability against the defendant upon any wrongful act of the defendant's. On the contrary, all that was done by the defendant was admittedly done under the authority of the act of Congress hereinbefore referred to. Nor does plaintiff claim damages for any alleged permanent injuries to the real estate, nor for any physical injury thereto, either temporary or permanent, because such damages would admittedly accrue under our statute to the purchaser at execution sale, if redemption from such sale were not made. Nor does the plaintiff claim damages for any interference with the use or possession of the premises during the year of redemption, because such damages, if any, would accrue to the tenant. Nor does the plaintiff claim that the alleged depreciation in value resulted from any injury thereto which affected its general market value. The last analysis of its claim is that it had a right of redemption of the property; that it was financially unable to exercise that right; that Schaper would have loaned it sufficient money for the purpose of redemption if he had not seen the water in the cellar; that the presence of the water in the cellar, therefore, was an injury to its right of redemption, in that it operated as an interference with Schaper's contract to loan the money. The case was submitted, therefore, to the jury upon the theory that the extent of the injury to the real estate and the extent of the depreciation of market value resulting therefrom were each immaterial; that, if the presence of the water was the sole cause of the failure of the plaintiff to obtain a loan sufficient to make redemption, then the plaintiff was entitled to recover the difference between the value of the property prior to June 20, 1913, and the amount of the bid at execution sale, and this regardless of the extent of damage to the property itself. In other words, the damage and the cause thereof were wholly psychological, and this psychological cause was confined in its operation wholly to its effect upon the mind of one man, Schaper. The testimony in support of the contract for a loan and the failure thereof was given by the president of the plaintiff company as a witness and by Schaper, and the same was as follows, omitting all objections:
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Wissmath Packing Co. v. Miss. River Power Co.
... 179 Iowa 1309 162 N.W. 846 WISSMATH PACKING CO. v. MISSISSIPPI RIVER POWER CO. No. 31354. Supreme Court of Iowa. May 16, 1917 ... Appeal from District Court, Lee County; W. S. Hamilton, Judge. Action for damages for alleged injuries to a right of redemption in certain real estate. There was a general denial by the defendant. The jury rendered a verdict ... ...