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FREY & SON, Inc., v. CUDAHY PACKING CO.

(District Court, D. Maryland. June 21, 1917.) DAMAGES 225— RECOVERY-AMOUNT,

In an action for damages for tortious injury, where plaintiff proved a loss of profits it would have made on resale of a commodity, had it been able to buy such commodity at the price other jobbers could obtain it from defendant, plaintiff can only recover for those damages suffered before the date of the filing of the suit, and is not entitled to recover those suffered between that time and verdict.

[Ed. Note. For other cases, see Damages, Cent. Dig. $ 567.]' At Law. Action by Frey & Son, Incorporated, against the Cudahy Packing Company, a corporation. On objection to the entry of judgment on so much of the verdict as ascertained the damages suffered by plaintiff subsequent to the date of the filing of suit. Judgment entered upon balance of verdict.

See, also (D. C.) 228 Fed. 209; (D. C.) 232 Fed. 640.

Daniel W. Baker, of Washington, D. C., and Horace T. Smith, of Baltimore, Md., for plaintiff.

Gilbert H. Montague, of New York City, and Washington Bowie, Jr., of Baltimore, Md., for defendant.

ROSE, District Judge. The defendant objects to the entering of the judgment upon so much of the verdict of the jury in this case as ascertained the damages suffered by plaintiff subsequent to the date of the filing of the suit. In the nature of things there is no reason why a jury should not be allowed to ascertain and award the damages suffered by plaintiff, down to the time of trial, from wrongful acts of the same nature as those mentioned in the declaration. If such were the law, there would doubtless sometimes be difficulty in applying it; but, on the whole, much trouble and expense would be saved.

The general rule is to the contrary; perhaps because when it was first formulated the judges were interested in the fees paid to the chancery for the writs, and they did not care to furnish for the price of one the justice that from their point of view should be paid for by the suing out of two or more. However this may be, it has long been established that the plaintiff can recover only for such damages as were the consequences of what the defendant did before suit was brought, although it is immaterial whether the effect of what was done showed itself before or after the bringing of the suit, as, for example, where the thing complained of is a tortious injury to the person or property from some particular act, the plaintiff may recover for any damage which manifests itself up to the time of the verdict. On the other hand, where the injury sued for is caused by a mere repetition or continuation of acts of the same class as that for which the suit was brought, the plaintiff's recovery is limited to the damages resulting from such of those acts as were done before the bringing of the suit. In Lawlor v. Loewe, 235 U. S. 536, 35 Sup. Ct. 170, 59 L. Ed. 341, the plaintiff was allowed to recover for the damage done to it by a secon

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

dary boycott instigated by the defendant before the bringing of the suit, although some of the injury did not manifest itself until afterwards; but the authorities cited by the Supreme Court in support of its conclusion do not justify the assumption that it intended to modify the previously recognized principles of law.

In this case the only damage proved by the plaintiff was the loss of profits it would have made on resales of Old Dutch Cleanser, if it had been able to buy Old Dutch Cleanser at the price at which other jobbers could obtain it. Such damage is a damage which occurs from day to day, and the damage on one day is not the necessary result of an act done by the defendant at an earlier date. The difference between . cases in which the jury can give dainages down to the date of the verdict and those in which it cannot may be illustrated thus: If the defendant had made some false and libelous statement against the plaintiff, which acquired general circulation, the damage from that false and libelous statement might well have continued long after the bringing of the suit, and long after defendant ceased to be in business at all. On the other hand, if the defendant in the case at bar had wound up its affairs the day after, the suit was brought, no one would contend that plaintiff was entitled to recover damages caused by the refusal of defendant to sell its goods after that date, or to permit other persons so to do, because both the motive and the power to enforce such refusal or restraint ceased with the defendant's going out of business.

I wish the law were otherwise, but, as it is, I shall be compelled to set aside so much of the verdict as awards the plaintiff damages from the time of the institution of the suit to the verdict. Judgment in plaintiff's favor will be entered upon the balance of the verdict.

ST. JOSEPH GAS CO. v. BARKER, Atty. Gen., et al (District Court, W. D. Missouri, St. Joseph Division. July 28, 1916.) 1. PUBLIC SERVICE COMMISSIONS 7-PUBLIC UTILITIES-CONTRACTS.

Notwithstanding contracts between parties engaged in producing, furnishing, or transporting public utilities, reasonable charges only will be

allowed as against the public. 2. Gas 14(1)-CHARGES--REASONABLE CHARGES.

In a proceeding to enjoin compliance with an order of the Public Service Commission of Missouri restraining complainant, which purchased natural gas from another company and distributed sich gas to its patrons, from raising the rates of such gas, evidence held to show that the rate fixed as a reasonable rate at which complainant should obtain the natural gas was erroneous, and that the producing company was entitled to a rate equal, or nearly equal, to that fixed by the contract between it and complainant.

[Ed. Note.-For other cases, see Gas, Cent. Dig. 10.) 3. Gas 14(1)-Rates—PUBLIC SERVICE COMMISSION ORDERS-CONTRACTS.

The contract price per thousand cubic feet at which a producing gas company agreed to furnish natural gas to the second company, which distributed the same to its patrons, is prima facie evidence of the reasonable value of the gas.

[Ed, Note.-For other cases, see Gas, Cent. Dig. $ 10.) For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indeses

4. GAS 14(1)-RATES-REASONABLENESS.

A rate of 60 cents per thousand cubic feet of gas, proposed to be charged by complainant gas company, which purchased gas from a producer of natural gas and distributed it to its patrons, held not unreasonably high ; complainant being entitled to earn at least 7 per cent. on its Investment used and useful in the business.

[Ed. Note.-For other cases, see Gas. Cent. Dig. $ 10.) 5. Gas Cw14(1)-RATES-PUBLIC SERVICE COMMISSION-INJUNCTION.

Complainant purchased natural gas from a producing company under a contract whereby the producing company was to receive two-thirds of the rate charged. The producing conrpany was in the hands of a receiver, and, though its receiver represented he would not demand the full twothirds of the retail price to which he was entitled under the contract, the court appointing him had taken no action. The rate of 40 cents per thousand cubic feet of gas in force produced for complainant, the distributing company, as great an income as would the proposed rate of 60 cents in case the producing company demanded its full two-thirds. Held that, until the question of the abrogation or modification of the contract between complainant and the producing company should be presented to the court appointing the receiver, complainant was not entitled to have enjoined an order of the Missouri Public Service Commission probibiting an increase of its rates, for such increase might only result in a detriment to its patrons, and not increase complainant's in

come.

[Ed. Note.--For other cases, see Gas, Cent. Dig. $ 10.) 6. RECEIVERS 95—AUTHORITY-POWER OF RECEIVER.

A corporate receiver, unless authorized by the court appointing him, is without authority to make any binding agreement as to the modification or abrogation of the contract between the corporation of which he was receiver and a third person. [Ed. Note.—For other cases, see Receivers, Cent. Dig. 88 173–175.)

In Equity. Bill by the St. Joseph Gas Company against John T. Barker, Attorney General for the State of Missouri, the Public Service Commission of the State of Missouri, William G. Busby and others, members, and others. On application for injunction. Application denied.

Culver & Phillip and William E. Stringfellow, all of St. Joseph, Mo., for plaintiff.

William G. Busby, of Carrollton, Mo., Alex. Z. Patterson and James D. Lindsay, both of Jefferson City, Mo., for the Attorney General and Public Service Commission of Missouri.

Charles L. Faust, of St. Joseph, Mo., for city of St. Joseph.

Before SANBORN, Circuit Judge, and CAMPBELL and BOOTH, District Judges.

· PER CURIAM. The St. Joseph Gas & Manufacturing Company, the immediate predecessor of the plaintiff, was incorporated in 1885, and the St. Joseph Light & Fuel Company in 1890. Each company for a number of years owned and operated in the city of St. Joseph, Mo., a plant for the manufacture and distribution of artificial gas. In 1897 the physical assets of the Light & Fuel Company were sold under fore, closure, and its property was thereafter consolidated with that of the Gas & Manufacturing Company, and the name of the latter company

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

was changed to the St. Joseph Gas Company, the plaintiff in the present suit.

This company, a corporation of the state of Missouri, continued to own and operate its gas plant, and up to 1905 was delivering manufactured gas at the rate of $1 per thousand cubic feet. On August 13, 1905, the St. Joseph Gas Company entered into a contract, effective December 1, 1905, with the Kaw Gas Company, a corporation of the state of West Virginia (afterwards merged into the Kansas Natural Gas Company). This contract recited that the Kaw Gas Company was the owner of leases of natural gas producing lands, with gas producing wells developed, in the state of Kansas, and was desirous of marketing its natural gas product. Said contract recited further that the St. Joseph Gas Company was the owner of a system of pipes for the distribution of gas in the city of St. Joseph, Mo., and desirous of securing a supply of natural gas for said city. Said contract provided that the Kaw Gas Company should deliver natural gas to the St. Joseph Gas Company at a point at the city limits of St. Joseph, Mo., for a period of 20 years after December 1, 1905; and the St. Joseph Gas Company agreed to purchase, receive, and pay for the natural gas so delivered, as the gas should be demanded by its consumers, and to distribute the same through its system of pipes in the city of St. Joseph, the quantity of gas purchased to be ascertained by monthly readings of the meters in use by the consumers of such gas. The price was fixed for the consumer at the minimum rate of 30 cents per thousand cubic feet for five years, and at a minimum price of 40 cents per thousand cubic feet thereafter. Twenty cents per thousand cubic feet was to be paid by the St. Joseph Gas Company to the Kaw Gas Company during the period when the price to the consumers should be 30 cents for 1,000 cubic feet. The contract further provided that:

"The price of 20 cents per thousand cubic feet for natural gas to be paid by the St. Joseph Company is based on a general price of 30 cents net per thousand cubic feet to the St. Joseph Company's consumers; but should the St. Joseph Company at any time obtain a higher price for natural gas than 30 cents net per thousand cubic feet for any part or all of the gas purchased from the Kaw Company, then and in that event, the price to be paid the Kaw Company shall be, for all natural gas sold at the higher price, 20 cents per thousand cubic feet, plus two-thirds of the excess price obtained by the St. Joseph Company. In the event that any natural gas is sold at less than 30 cents per thousand cubic feet as hereinafter provided, to the St. Joseph Company's consumers, then the price to be paid the Kaw Company shall be 20 cents per thousand cubic feet less two-thirds of the reduction made by the St. Joseph Company from its regular price of 30 cents per 1,000 cubic feet. The Kaw Company shall receive two-thirds of the amounts collected from the consumers failing to take advantage of the discount allowed for prompt payment."

Pursuant to the terms of said contract, the St. Joseph Gas Company since about February, 1906, has been engaged in selling and distributing natural gas. The St. Joseph Gas Company did not dismantle or abandon its manufactured gas plant, but maintained and improved the same, for the purpose of being ready to supply any deficiency in the supply of natural gas, and at various times during the period after February, 1906, has delivered manufactured gas to its consumers when the supply

of natural gas for any reason has failed. During the years 1912 and 1913, especially, plaintiff was unable to procure an adequate supply of natural gas for its customers, and at various times during those years attempted to meet the deficiency by supplying manufactured gas.

In 1913 notice was given by the St. Joseph Gas Company to the public that, whenever it became necessary to manufacture gas in large quantities to supply the deficiency of natural gas, such manufactured gas would be charged for at the rate of $1 per thousand cubic feet net for the proportionate amount of manufactured gas each patron consumed. In February, 1914, a complaint was filed in the name of certain members of the city council

, before the Public Service Commission of Missouri, against the St. Joseph Gas Company, in which it was alleged that the company had no authority to charge $1 per thousand cubic feet for manufactured gas at any price proposed, and prayed the Commission to restrain the charge of $1 per thousand cubic feet for manufactured gas; and by an amended complaint it was further alleged that the $1 rate was unreasonable. The St. Joseph Company in its answer alleged that the rate of $1 for manufactured gas had been the rate in force during the whole period of the Gas Company's life, and was a rate as low as would afford a reasonable return. It alleged further that the 40-cent rate which was then in force for natural gas was insufficient to afford any return upon its investment, and prayed the Commission to make such investigation as should be necessary in order to be advised as to what would be a reasonable rate for natural gas, which would afford the company a reasonable and fair return upon its investment, and to fix such rate. In July, 1914, the Commission issued its order directing the Gas Company to file certain reports, and directing an inspection of the company's books, and an inventory and an appraisal of its property by the accountants and engineers of the Commission.

The report of the engineers was filed May 28, 1915, and that of the accountants June 1, 1915. In the meantime, on account of its financial difficulties, the St. Joseph Gas Company on September 30, 1914, filed with the Commission a proposed new schedule of rates, effective November 1, 1914; the change to be effected by said new schedule being to raise the rate of natural gas from 40 cents to 60 cents per thousand cubic feet. The city of St. Joseph filed its objection to the 60-cent rate, and requested that it be suspended. October 19, 1914, the Commission issued an order suspending said rate to March 1, 1915, and thereafter by subsequent orders continued the suspension until September 1, 1915. The power of the Commission to make further suspension being then exhausted, the suspension was continued by agreement until November 29, 1915.

The three matters, namely, that of the $1 rate for manufactured gas, that of the valuation of the Gas Company's property, and that of the proposed 60-cent rate for natural gas, were, by consent of the parties, heard together as one case, and on November 27, 1915, the Commission handed down its opinion and order. The order, omitting the caption, is as follows:

"These causes being at issue upon complaint and answer filed with the application of the St. Joseph Gas Company for an increase of rates and

243 F.-14

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