Opinion
No. 32387.
November 23, 1936. Suggestion of Error Overruled December 7, 1936. Suggestion of Error Overruled January 4, 1937.
1. EMINENT DOMAIN.
State could not provide by statute that owner of private business which is steadily losing money should be compelled to continue to operate business in order to provide competition, since such a statute would accomplish noncompensated confiscation of private property for public use.
2. CORPORATIONS.
No state law or any machinery operating thereunder can compel losing public service corporation, which has no franchise contract unperformed, to continue at a loss, even as to a branch of the business, although profits of other branches of same corporation may be making enough to cover loss.
3. MONOPOLIES.
Where ice dealer, after continuing to buy ice from power company under assurance that expired contract would be renewed, was notified of termination of contract, power company, which had been losing money on ice plant, and competitor, to whom company sold machinery and good will, held not liable to dealer under trust and combines statutes, since company had right to shut plant down and incidental right to sell to competitior and competitor had corresponding right to buy (Code 1930, sec. 3440).
4. TRIAL.
Facts expressly testified to and all inferences which may be reasonably and logically deduced therefrom are to be accepted as true in favor of party against whom peremptory instruction is requested.
5. CONTRACTS.
Where ice dealer, after continuing to buy ice from power company under assurance that expired one-year contract would be renewed, was notified of sale of machinery and good will and of termination of contract, whether contract was renewed for another year and, assuming renewal, whether dealer proved damages because of breach of contract, held for jury.
APPEAL from the circuit court of Sunflower county. HON. S.F. DAVIS, Judge.
Cooper Thomas and B.B. Allen, all of Indianola, for appellant.
That Mr. Pitts had a contract with the power company for another year cannot be doubted, although a new one had not been actually drawn up and signed, he had been assured by the power company that just as quickly as they could get through lobbying with the Legislature and get them out of Jackson the contract would be drawn up and sent to him for his signature carrying the same conditions and provisions as the old one. Mr. Pitts acted on the strength of that assurance and outlaid divers sums of money so that the power company is now estopped from denying the existence of this contract. Then as a matter of law, Mr. Pitts had remained in possession of said premises after the owner of the plant, and after the power company had accepted daily compensation for the use of said plant there arose by operation of law a new contract similar in terms and provisions to the contract which had just expired and which it could not terminate during the year. These facts were all well known to the Leland Ice and Cold Storage Company.
24 Cyc. 1334; Richardson v. Neblett, 84 So. 695; Wachenfeld v. Favre, 119 So. 911; Thomas Hinds Lodge v. Presbyterian Church, 103 Miss. 130, 60 So. 66; Love v. Law, 57 Miss. 596; Usher v. Moss, 50 Miss. 208; Hamilton v. Federal Land Bank, 167 So. 642.
The appellees conspiring together each knowing full well the rights of the appellant to occupy said building and to engage in the ice business in city of Indianola for another year, period ending March 31, 1935, entered into a contract whereby the power company sold its good will, dissembled its plant in Indianola, caused the Breisch interest to electrify its equipment and accepted of the Breisch interest one dollar and fifty cents per ton on all ice produced or distributed in Indianola, Mississippi. Under the terms of this contract the Breisch interest stifled competition and ruthlessly put Mr. Pitts out of the ice business in Indianola, Mississippi.
Joint tortfeasors are both jointly and severally liable, and may be proceeded against either simply, jointly or individually, or all combined.
Bailey v. Delta Elec. Light Co., 86 Miss. 634, 38 So. 354; Miller, State Tax Collector, v. Phipps, 137 So. 479.
This suit is not based upon a contract although it may have been based upon a contract had appellant been financially able to make the necessary injunction bond, but is based upon tort. The appellees conspired to put appellant out of the ice business in Indianola. The record is teeming with evidence of the conspiracies and the sordid motives which prompted both appellees to engage in such conspiracy.
12 C.J. 544, 545 and 546; Wesley v. Native Lbr. Co., 53 So. 346, 97 Miss. 814; Globe Rutgers Fire Ins. Co. v. Firemen's Fund Fire Ins. Co., 52 So. 454, 97 Miss. 148.
In making proof as to the existence of a conspiracy it is seldom, if ever, possible to make this proof by direct and positive evidence in view of the conduct of the conspirators in seeking to cover up their tracks and to make more certain the concealment of their wrongs and consequent escape from punishment therefor. And so the courts are quite liberal in the reception of any and all evidence of secondary and indirect nature which tend in the slightest degree to cast light upon the wrongs complained of.
12 C.J. 633, 634.
We are familiar with the doctrine that it is necessary to show actual damages before punitory damages are recovered, but the courts hold that it is only necessary to show the breach of a duty and that the certainty of damages proved refers to the certainty of the breach and not to the exactness of calculating injuries that flowed as a result of the breach.
17 C.J., page 756, sec. 90, pages 759, 760 and 761, sec. 91, pages 910, 911, 912 and 913, sec. 199 and page 914, sec. 200; Delta Table Chair Co. v. Y. M.V.R.R. Co., 105 Miss. 861, 63 So. 272; Y. M.V.R.R. Co. v. Consumer's Ice Power Co., 109 Miss. 43, 67 So. 657; Neal v. Newburger Co., 123 So. 861; Lay v. Great Southern Lbr. Co., 79 So. 822.
Under the facts in this case now before the court the jury should be authorized to award punitory damages including attorney's fee against the appellees for the wilful, bold and oppressive manner in which they conspired together and which in actuality violated the rights of the appellant, and put him out of the ice business in Indianola, and crushed a business which he had spent seven long tedious years in building up.
17 C.J., pages 977-979, sec. 273.
In addition to asking for damages that flowed to him as a direct result of the tort and wrongdoings on the part of the appellees in the formation and execution of the conspiracy above referred to the statutes of this state provided for a penalty of five hundred dollars enuring to the benefit of anyone injured as a direct result of the unlawful combination and conspiracy referred to in this and similar cases.
Sections 3436, 3437 and 3440, Code of 1930. Moody Johnson, of Indianola and Green, Green Jackson and A.M. Nelson, all of Jackson, for appellee, Mississippi Power Light Company.
Pitts had no contract with the power company.
The old case of Usher v. Moss, 50 Miss. 208, of course, established the rule that has long prevailed that where a tenant continues to occupy farm property which he has held under an annual lease without a definite time of termination, such tenant enters into another and new term for another annual period at the same rate of rental and under the same terms and conditions. This court, however, pointed out in the case of Copiah Hardware Co. v. Johnson, 135 Miss. 358, 100 So. 31, that where the contract itself specified a definite time of termination, the rule suggested in Usher v. Moss, does not apply.
Even though Mr. Pitts had a lease contract on the storage room, which we submit the contract does not give him, yet, by the express terms of the contract, the contract was terminated on March 31, 1934. The mere fact that he thought he had a contract is not controlling, and the fact that he remained in possession of the premises until May 1, 1934, could not in any sense of the word renew this contract for the sale of ice for another twelve-month period. The authorities cited by the appellant are not apposite to the facts presented.
The contract here is one of sale, with permissive use of certain property as an incident to the sale and was not a contract of lease.
55 C.J. 41, Sales, sec. 8.
The fact that the parties by their acts and declaration indicate an intention to treat a written contract as continuing after the time prescribed in it for its termination will not have the effect of continuing such contract, although it may show a subsequent oral agreement on the same terms.
13 C.J. 626, sec. 692; Echols v. N.O.J. G.N.R.R. Co., 52 Miss. 610.
If the contract for the sale of ice was extended by the continued operation thereunder, then necessarily the court, in granting the peremptory instruction found that the power company had the right to terminate the contract as extended, as of May 1, 1934, and that such termination was at a reasonable time and under the above authority, this court will give strong effect to the finding of the lower court on this particular point.
New State Ice Co. v. Liebmann, 285 U.S. 262, 76 L.Ed. 747; Head v. Amoskeag Mfg. Co., 113 U.S. 9, 28 L.Ed. 889, 5 S.Ct. 441; State v. Edwards, 86 Me. 102, 25 L.R.A. 504, 41 Am. St. Rep. 528, 29 A. 947; Chickasha Cotton Oil Co. v. Cotton County Gin Co., 74 A.L.R. 1070, 40 F.2d 846; Clark v. Nash, 198 U.S. 361, 49 L.Ed. 1085, 25 S.Ct. 676, 4 Ann. Cas. 1171; Strickley v. Highland Boy Gold Min. Co., 200 U.S. 527, 50 L.Ed. 581, 26 S.Ct. 301, 4 Ann. Cas. 1171.
If the business of manufacturing ice is of the same nature as that of a grocer, of a dairyman, a butcher, a baker, a shoe-maker, a tailor or other enterprise of similar nature, then we submit that the Mississippi Power Light Company had the same right to dispose of its ice business in Indianola as any of these other tradesmen would have had the right to do under similar circumstances. The proof shows that this ice plant of the power company had been operated at a loss for several years, and the power company had operated the plant only as an incident to its other business, that of selling electric current. It was under no contract with Mr. Pitts at the time it sold its good will and going value of the ice plant to the Leland Company. It owed to Mr. Pitts no duty whatever in connection with the continuous operation of the plant, and having no contract with Pitts, owing him no duty, it was not liable to him because he assumed that the power company might some day contract with him. We submit, therefore, that there was no contract between Mr. Pitts and the Power Company that was breached by the combination and conspiracy of the Power Company and the Leland Company, and that for this reason the court was correct in granting a directed verdict for the defendants.
There was no conspiracy or combination to violate the anti-trust laws resulting in injury to Pitts.
Herein Power Company's principal business is distribution of electricity wherefrom its chief revenues are derived. Having acquired an ice plant at Indianola, its operation thereof, both as owner and through Pitts, was unprofitable in that therefrom a loss resulted; so, thus resulting, there was no obligation upon appellee, Power Company, to continue to suffer loss by attempting to carry on that which was thus unprofitable, and it might therefrom desist.
Brooks-Scanlon Co. v. Railroad Commission, 251 U.S. 396, 64 L.Ed. 323.
The Power Company, thus possessing the physical property in Indianola, and the business appurtenant thereto, saw fit to sell this intangible good will and dismantle its plant. There was no obligation upon it to continue to do an ice business at a loss, and it had a right to discontinue at its pleasure.
Munn v. Illinois, 94 U.S. 77; Yazoo Miss. Valley R.R. Co. v. Searles, 85 Miss. 520, 37 So. 939; Houck v. Wright, 77 Miss. 483, 27 So. 617; Sivley v. Cramer, 105 Miss. 13, 61 So. 653.
It will be noted that where there is a sale of the good will of a business and the contract of sale is designed for the purpose of protecting such good will, and to that end to restrain some person or persons from engaging in business, such a contract is not void as being condemned by the anti-trust statutes. The question to be determined is not whether the contract is injurious to a particular person, but if one proceeds under the anti-trust statute, he must show that the contract is injurious to the general public, and particularly to the plaintiff bringing the suit. That has not been shown in this case, and the court correctly granted the peremptory instruction.
Brown v. Staple Cotton Cooperative Assn., 132 Miss. 859, 96 So. 849; State v. Edward Hines Lbr. Co., 150 Miss. 1, 115 So. 598.
The lower court determined upon all the testimony before it in the instant case that the contracts and the agreement between the power company and the Leland Company were not such a restraint of trade and did not so hinder competition in the Indianola ice trade territory as to be inimical to the public welfare.
Jackson v. Price, 140 Miss. 249, 105 So. 538; Gano v. Delmas, 140 Miss. 323, 105 So. 535; Delmas v. Pascagoula St. Ry. Power Co., 103 Miss. 235, 60 So. 210; Plaza Amusement Co. v. Rothenberg, 159 Miss. 800, 131 So. 350.
The plaintiff here showed no damages sustained by him.
8 R.C.L. 501, 510, 652; 17 R.C.L. 1042; 17 C.J. 753, 910; Vicksburg, etc., R.R. Co. v. Ragsdale, 56 Miss. 458; American Express Co. v. Jennings, 86 Miss. 329, 38 So. 374, 109 A.S.R. 708; Birdsong v. Ellis, 62 Miss. 418; Beach v. Johnson, 102 Miss. 419, 59 So. 800; Crystal Ice Co. v. Holliday, 106 Miss. 714, 64 So. 658; Y. M.V.R.R. Co. v. Consumers' Ice Power Co., 109 Miss. 43, 67 So. 657; Kalmia Realty Ins. Co. v. Hopkins, 163 Miss. 556, 141 So. 903; B. Bluethenthal Co. v. McDougal, 163 Miss. 406, 141 So. 291, 142 So. 13; Miss. Power Co. v. Cochran, 167 Miss. 705, 147 So. 473; Montgomery Ward Co. v. Hutchinson, 159 So. 862; Y. M.V.R.R. Co. v. Mullen, 158 Miss. 774, 131 So. 101; McInnis v. Manning, 131 Miss. 119, 95 So. 250. Everett, Forman Everett, of Indianola, for appellee, Leland Ice Cold Storage Company.
The law is well settled that the exhibits to a bill or declaration govern and determine the value of the right of action, and prevail over statements or allegations in the declaration or the bill.
House v. Gamble, 78 Miss. 259, 29 So. 71; McKinney v. Adams, 95 Miss. 832, 50 So. 474; Columbian Mutual Life Assur. Soc. v. Harrington, 139 Miss. 826, 104 So. 297.
The declaration in this case is based upon the contract exhibited, a contract of sale and purchase of ice, and there is no possible way for counsel, by their allegations in the declaration, to change a contract from one of sale and purchase of personal property to a lease contract of the realty consisting of the buildings and equipment for the manufacture of ice. Therefore, the argument on that question, and the authorities presented by counsel, have no bearing on the case at bar.
As we understand a conspiracy, it is where two or more people agree and commit some overt act towards its accomplishment, to perpetrate an unlawful act detrimental to some one else, or to do a lawful act unlawfully, and before the appellant can recover in this cause he must show such acts on the part of the appellees as come within the condemnation of a conspiracy.
We contend that there is not a syllable of evidence in this record showing a conspiracy, nor would evidence undertaking to establish a conspiracy be permitted under the declaration filed by appellant. Under the declaration the appellant does not declare on a conspiracy to put him out of business, but he alleges that the acts shown were for the purpose of violating the anti-trust laws of the state of Mississippi.
Sections 3436 and 3437, Code of 1930, do not condemn any combination in restraint of trade, but only those which are inimical to public welfare.
The Mississippi Power Light Company was engaged chiefly in the selling of electricity and also in the manufacture and selling of ice in Indianola. The Leland Ice Cold Storage Company was engaged in the business of manufacturing and selling ice in Indianola, but not in selling electricity, nor at the time of the contract did it purchase electric current for its power from the Mississippi Power Light Company. Therefore, by the contract, the former agreed to cease the manufacture of ice at Indianola in consideration of the latter agreeing to purchase electric current in the operation of its ice plant from the former.
Brown v. Staple Cotton Cooperative Assn., 96 So. 849; Jackson v. Price, 105 So. 538; Plaza Amusement Co. v. Rothenberg, 131 So. 350.
In fact our own Supreme Court has passed on contracts of the character here involved so often that we will not quote further from any authorities, but we cite, as being in accord with our contention in this case, the cases of:
Telephone Co. v. State, 100 Miss. 103; Railroad Co. v. Searles, 85 Miss. 250.
By reference to the contract here involved between the Mississippi Power Company and Pitts it is readily seen that it is a contract of purchase and sale of personal property, and not a line, paragraph or statement inimical to the public or by which the public is either interested or affected, but on the contrary we have a situation which warrants the elimination of one of the ice plants at Indianola.
The Power Company and the Leland Ice Company were dealing with reference to their own private business affairs, which they had a perfect right, under the law, to do.
Globe Rutgers Fire Ins. Co. v. Firemen's Fund Fire Ins. Co., 97 Miss. 148.
We know of no law requiring a person to sell his goods or his products to any particular person against his own will, although he might sell them to an advantage to that particular person, and no such authority has been cited by counsel.
Houck v. Wright, 77 Miss. 483.
We do not see where, on an appeal from a directed verdict, the question of damages should be discussed. The court held, in giving a directed verdict for the defendants, that the contract which is the basis of the suit, was not violative of the anti-trust laws; was not inimical to the public welfare, and that the contract was not renewable by operation of law. Therefore, the question of damages, whether they be actual, punitive or statutory, do not affect this appeal.
Argued orally by Forrest Cooper and B.B. Allen, for appellant, and by J.M. Forman and Forrest B. Jackson, for appellee.
Appellee, the Mississippi Power Light Company, hereinafter to be called the Power Company, in March and April, 1934, owned, and was operating, an ice plant in Indianola, Miss., and had owned and operated it for about ten years, except for the period from March 31, 1932, to March 31, 1933, when it was operated under a lease by appellant, Pitts. The principal business of appellee Power Company was that of furnishing electric current, but it had acquired this ice plant as a part of the same transaction when it purchased the electric light plant in Indianola. The ice plant had been operated at a loss year by year. There was a competing plant in Indianola owned by the appellee Leland Ice Cold Storage Company, hereinafter to be called the Ice Company, and this plant also had been for several years operating at a loss. The fact that these two plants had been operating at a loss is undisputed, except by the opinion of appellant that two ice plants could make money in Indianola; but this does not amount in probative force to a substantial dispute, particularly when taken in connection with the fact admitted by appellant that he himself lost money in the year when he operated the Power Company's ice plant as lessee.
The Ice Company's plant in Indianola used internal combustion engines for its motive power. The appellant Power Company desired to dispose of its money-losing ice plant, and particularly desired to furnish electric power to the Ice Company's plant. For some time next before the dates first above mentioned, these two companies had been in negotiations, looking to an arrangement by which the objects mentioned might be accomplished; and in April, 1934, they finally reached an agreement which was carried into executed written contracts by which the Power Company conveyed to the Ice Company a small portion of the machinery then in the Power Company's ice plant, together with all the good will of the latter's ice business, with proper stipulations and limitations in that regard, and the Ice Company agreed to convert its plant into an electric plant as respects the power used, the electric current to be taken from the Power Company at the regular ice plant rates. The contracts were effective on May 1, 1934. The installations agreed upon were made, and the remainder of the machinery in the Power Company's ice plant was taken down and moved away.
On March 31, 1933, the Power Company had entered into a written contract with appellant for a period of one year, under which agreement appellant bound himself to buy, and the Power Company bound itself to sell, to appellant the output of the Power Company's ice plant, but not as an agent of the latter. The arrangement was that the ice would be manufactured by the Power Company's ice plant, and placed in its storage room, the ice to become the property of appellant as soon as placed in the storage room. Appellant was to have the use of the storage room for keeping the ice until loaded into delivery trucks, and appellant was to have also the appurtenant facilities for loading the ice into the trucks. The ice was to be paid for by appellant at three dollars and seventy-five cents per ton, when and as placed in the storage room by the Power Company, and appellant was to furnish the trucks and all like facilities and all expenses thereof for the delivery of the ice to customers, in the doing of which diligence was required of appellant; the Power Company to have as its share of the operations only the three dollars and seventy-five cents per ton as delivered to the storage room, and the appellant all the profits of the sale to his customers, if there should be any profits.
On March 6, 1934, about three weeks before the expiration of the contract, appellant wrote to the division manager of the Power Company, having jurisdiction of that territory, that he desired to renew the contract for another year on the same basis. With the exception of the year heretofore mentioned when appellant operated the plant, appellant had worked under a similar contract with the Power Company for about seven years; and, hearing nothing in reply to the letter of March 6th, he supposed it to be the intention of the Power Company to continue the contract as suggested, especially in view of the fact that it was known to the Power Company, as the proof would indicate, that appellant was engaged in making the necessary preparations for the new ice season then about to open. But the renewal contract did not reach appellant on March 31st, whereupon within the next day or two he called the division manager by telephone, and the division manager stated to appellant that he had been busy with the Legislature and that as soon as he could get them out of town he would draw the contract; and with this assurance appellant went on with the work receiving and paying for the ice and using the storage and delivery facilities as heretofore. The division manager said not a word to appellant about the negotiations then going on with the Ice Company, and appellant knew nothing of that until late in April, when he was informed that he had no contract and that after May 1st no more ice would be delivered to him by either company.
Appellant made efforts to procure ice elsewhere to furnish the trade which he had built up through the several years mentioned, but was unable to do so except at a haulage of such distance as to render it unprofitable. He then filed this suit against the Power Company and the Ice Company for his loss of profits for the year, March 31, 1934, to March 31, 1935, and for the statutory damages provided in the statutes on trusts and combines (Code 1930, sec. 3440), the declaration containing averments which sought to bring the transaction within the prohibition of those laws, the assertion being that the arrangement here between the two companies was designed to hinder or destroy, and did hinder or destroy, competition.
Upon the subject last mentioned, we deem it unnecessary to enter upon any lengthy discussion of the authorities. No law has intended to say, nor, within the permissible field of state action, could any statute say, that the owner of a private business which is steadily losing money shall be compelled to continue to operate that business in order to provide competition; for that would be to accomplish a noncompensated confiscation of private property for the public use, and there is no such allowance under our constitutional form of government. Even as to public service corporations, no law of the state nor any machinery operating thereunder can compel a losing business to continue at a loss, when it has no franchise contract unperformed; and this may not be compelled as to a branch of the business which is losing money, although the profits of other branches of the same corporation may be making enough to cover the loss. Brooks-Scanlon Co. v. Railroad Commission, 251 U.S. 396, 40 S.Ct. 183, 64 L.Ed. 323.
As already stated, the Power Company, under the proof in this case, was steadily losing money on this ice plant. It was therefore beyond the power of the state or of any statute, directly or indirectly, to compel its continued operation. The Power Company had the right, so far as concerns the statutes dealing with competition, to shut it down and to allow it to disappear in decay; or it had the right to move it to another place. In either event, its existence as a competitor to the Ice Company plant would be at an end. Having thus the right to end its existence as a competitor, it follows that the Power Company had the incidental right to sell all or a part of its machinery, together with its good will, to the competitor, and the competitor had the corresponding right to buy; whence it follows as a legal consequence that no cause of action against either of them may have its foundation in the exercise by them of the stated right. It is a truism of the law that no man may be cast in any suit which has as its sole basis the doing of that which he had a lawful right to do. But it is equally obvious that the exercise of the stated privilege would not lessen the legal rights of any holder of a prior contract with one of the parties to the sale, which contract because of the sale, and as an incident thereto, remained unfulfilled; for there the basis of the right of action is not in the sale, but had its origin and foundation anterior thereto. On the other hand, the rights of such a contract holder will not thereby be enhanced or enlarged, as, for instance, by making the purchaser from the contractor also liable, unless the purchaser expressly assumed the contract, which was not done here.
The conclusion is that appellees are not liable to appellant in any respect or particular under the trust and combines statutes, and, the Ice Company not being liable to appellant under any contract with him, the peremptory instruction in favor of the Ice Company was properly granted. The remaining question is whether the Power Company is liable to appellant under the ordinary principles governing contracts as respects the unfulfilled portion of its alleged contract for the furnishing of ice to appellant from May 1, 1934, to March 31, 1935. As to this, the Power Company says, first, that the contract was not renewed for that period, and, second, assuming there was a renewal, that appellant failed to prove any damages because of the breach of the contract. Keeping in mind that not only the facts expressly testified to, but all inferences which may be reasonably and logically deduced therefrom, are to be accepted as true, in favor of the party against whom a peremptory instruction is requested, we are of the opinion that there is enough in the record to escape a peremptory charge upon the two issues just stated, and that those issues should have been submitted to the jury under proper instructions.
Affirmed as to the Ice Company; reversed and remanded as to the Power Company.