Summary
In Berlin Tanning, the utility, through its own negligence, billed a customer less than the rate on file with the commission and later sued the customer for the difference.
Summary of this case from Hovde v. Village of WaunakeeOpinion
April 8, 1957 —
May 7, 1957.
APPEAL from an order of the circuit court for Green Lake county: RUSSELL E. HANSON, Circuit Judge. Affirmed in part; reversed in part.
For the appellant there was a brief by Schubring, Ryan, Petersen Sutherland of Madison, and oral argument by William Ryan.
For the respondent there was a brief and oral argument by James L. McMonigal of Berlin.
On December 10, 1953, Wisconsin Power Light Company commenced action against Berlin Tanning Manufacturing Company to recover for public-utility gas service.
The complaint alleged in substance that from May 17, 1951, to September 18, 1953, plaintiff furnished public-utility gas service to defendant; that plaintiff installed a meter on defendant's premises; that the meter has a front accumulative indicator or index; that the reading on the index when multiplied by 1,000 equals the number of standard cubic feet of gas used; that the words "front index multiplied by 1,000" appear on the meter open to visual inspection; that in addition to a fixed charge of 75 ¢ per month, the applicable schedule of rates provides a charge for the number of hundreds of cubic feet used per month; that in order to compute the charge, the reading on the meter must be multiplied by 1,000 and then divided by 100 in order to compute the number of hundreds of cubic feet and that the same result is reached if the meter reading is multiplied by 10; that during the period covered by the complaint the meter was read by plaintiff's employees; that the readings were not multiplied by 10 and that in rendering monthly bills the plaintiff billed the defendant for 1/10th of the number of hundreds of cubic feet actually furnished; that as soon as the mistake was discovered the plaintiff called the attention of the defendant to it; that the defendant refused to make payment of the balance; that the correct billing for gas furnished was $26,361; that the defendant had paid the sum of $3,440.79 and that the balance owing to the plaintiff was the sum of $22,920.21; that plaintiff's schedule of rates was on file at all times with the public service commission and that a copy was at all times on file in the office of the plaintiff at Berlin in such form and place as to be readily accessible to the public.
The defendant served an answer and counterclaim. It admitted the furnishing of gas service but alleged "that defendant does not have sufficient knowledge or information upon which to form a belief as to the allegations relating to operation of the plaintiff's gas meter, or the method of interpreting the reading therefrom, therefore denies the same and puts plaintiff to its proof thereof." Similar allegation and denial were made as to the schedule of rates, the filing thereof, and as to the computation of monthly charges for which the defendant was billed. As a setoff and counterclaim the defendant alleged that by reason of contract and statutory obligations as a public utility, the plaintiff was required to read its meter and compute its charges correctly; that it did bill the defendant at monthly intervals and the defendant paid the bills submitted; that the amount of charges for gas service represented a basic and substantial cost to the defendant in the operation of its business and in the determination of prices and charges to be made by the defendant for merchandise and services sold and furnished to its customers so as to permit the defendant to operate its business at a profit; that defendant relied upon plaintiff and its employees to perform their duties in expert and careful manner; that if in fact the amounts of the monthly charges were incorrectly computed and billed, the amount of the deficit is attributable solely to the negligence of the plaintiff; that defendant has no means of recovering the amount thereof from its own customers; that an operating loss exactly equal to the amount of the deficit will result to the defendant "which defendant claims as a setoff and counterclaim against any amount which may be found to be due and owing to the plaintiff in this action;" that the defendant entered the amounts of the monthly statements rendered upon its books of account; that during June, 1953, the defendant agreed to and subsequently purchased certain shares of its own capital stock; that the purchase price was computed and paid upon the basis of the book value of the shares as they appeared from the defendant's books of accounts; that the book value of defendant's stock would have been correspondingly reduced if the plaintiff had made timely demand for the increased charges; that by reason of plaintiff's negligence, defendant was caused to pay an amount of approximately $10,000 in excess of the true book value of its stock; that defendant has no recourse to recover such excess from the seller of the stock and claims $10,000 as a setoff and counterclaim against any amount which may be found to be due and owing to plaintiff. The answer alleges as an additional affirmative defense that plaintiff should have discovered its error within the second billing period after May 17, 1951; that if the error had been discovered and due notice given to defendant, defendant would have been afforded opportunity to determine whether plaintiff's gas service should be continued in defendant's operations; that accumulation of the deficit is attributable solely to inexcusable delay and laches on the part of the plaintiff in discovering its alleged error.
Plaintiff demurred to the defendant's counterclaim upon three grounds: First, that it appears on the face thereof that it does not state a cause of action, secondly, that the cause of action stated in the counterclaim is not pleadable as a counterclaim, and third, that it does not state a defense. Plaintiff demurred to the affirmative defense set out in the answer on the grounds that it does not state a defense.
Plaintiff thereafter moved for summary judgment. In support of the motion, it presented an affidavit of its attorney which in general set forth plaintiff's position with respect to the various pleadings in the action but did not set forth any evidentiary facts and an affidavit of plaintiff's president that he believes that there is no defense to the action but not setting forth any evidentiary facts. The defendant filed no affidavits in opposition to the motion for summary judgment. On September 27, 1956, the court entered an order overruling plaintiff's demurrer and denying plaintiff's motion for summary judgment as well as for judgment and judgment on the pleadings. Plaintiff appealed from the part of the order overruling plaintiff's demurrer and denying plaintiff's motion for summary judgment.
The complaint in essence states a cause of action for a quantity of gas service furnished which at applicable rates was worth $26,361 and for which defendant has only paid $3,440.79. The answer sufficiently raises an issue of fact as to the plaintiff's claim of the amount of gas furnished. The form of the denial in the answer is not in the exact language of the statute but is a form widely used and in substance amounts to the same thing. With respect to the allegations of the complaint which form the gist of the plaintiff's cause of action, the answer "alleges that defendant does not have sufficient knowledge or information upon which to form a belief . . . therefore denies the same and puts plaintiff to its proof thereof." Sec. 263.13(1), Stats., provides that the answer must contain a specific denial of an allegation or "of any knowledge or information thereof sufficient to form a belief."
Plaintiff claims that denial of knowledge or information sufficient to form a belief as to some of the allegations such as the filing of rate schedules was an insufficient denial because the truth of the allegations was a matter of public record or otherwise readily ascertainable by defendant. Plaintiff's pint is well taken. Goodell v. Blumer (1877), 41 Wis. 436, 444; Elmore v. Hill (1879), 46 Wis. 618, 624, 1 N.W. 235; Mineral Point v. Davis (1948), 253 Wis. 270, 274, 34 N.W.2d 226. Denials of other allegations, however, sufficiently raise an issue as to the amount of gas the plaintiff furnished.
Sec. 270.635, Stats., permits the entry of summary judgment upon the affidavit of a person with knowledge setting forth such evidentiary facts as shall establish plaintiff's cause of action sufficiently to entitle him to judgment. Plaintiff did not file any affidavit setting forth evidentiary facts as to the amount of gas actually furnished and the applicable rates. The affidavits did nothing to eliminate the fundamental issue of fact: Was the amount furnished in excess of the amount billed and paid for? Accordingly, plaintiff's motion for summary judgment was properly denied and the order appealed from must be affirmed in that respect.
Defendant attempted to plead certain setoffs. Whether tested as causes of action or as defenses, it would perhaps require more than liberality of construction to say that they sufficiently plead injury or damage resulting from defendant's reliance upon the correctness of the bills rendered. The same is true of the separate defense of laches.
We are, however, required by statutes relating to the business of public utilities, plaintiff being one, to hold that these counterclaims and defenses are insufficient in any event. Sec. 196.22, Stats., makes it unlawful for any public utility to receive a greater or less compensation for its service than is specified in its rates schedules. If defendant's pleas are recognized either as setoffs or defenses, defendant will have paid less for gas than the proper rate. This means that it will have paid less than other like users were required to pay for like service.
Most of the decisions dealing with mistake in quotation of rates or mistake in billing have involved the Interstate Commerce Act but in all material respects, that statute is similar to sec. 196.22, Stats. Misquotation of rates by a railroad does not estop the railroad from collecting the correct rate. Mellon v. Johnson Co. (1928), 196 Wis. 64, 68, 219 N.W. 352. Under the Federal Motor Carrier Act prohibiting receipt of less compensation for service than the tariff rates, neither the doctrine of waiver nor estoppel can be invoked when the application thereof would result in such violation. Hanaman v. Liberty Trucking Co. (1943), 242 Wis. 92, 97, 7 N.W.2d 609. The obligation to pay the applicable rate is statutory and is not a matter of contract. Northern Wisconsin P. Co. v. Chicago N.W. R. Co. (1931), 203 Wis. 549, 234 N.W. 726. In Chicago N.W. R. Co. v. J. I. Case Plow Works (1921), 173 Wis. 237, 180 N.W. 846, defendant ordered goods on which the freight was to be prepaid and when the goods arrived, the railroad gave defendant an expense bill which showed the freight had been paid. In reliance thereon defendant paid for the goods without deducting any freight charge. It developed that the freight charge had not been paid and the railroad sued the defendant. It was decided that the railroad was not estopped by its own negligence in informing defendant that the freight had been paid. At page 240, the court quoted New York, N. H., H. R. Co. v. York Whitney Co. (1913), 215 Mass. 36, 102 N.E. 366, as follows: "`The public policy thus declared supersedes the ordinary doctrine of estoppel, so far as that would interfere with the accomplishment of the dominant purpose of the act. It does not permit that inequality of rates to arise indirectly through the application of estoppel, which it was the aim of the act to suppress directly.'"
Defendant points out that it has not pleaded that plaintiff is estopped by reason of plaintiff's negligent error in billing and defendant's reliance thereon and resulting injury. Defendant asserts that the cases above referred to are inapplicable because defendant has pleaded a cause of action for damages resulting from negligence. We do not see any important difference between reducing the amount to, be paid plaintiff by a defense of estoppel arising out of negligent billing and reducing the amount by setting off damages arising from negligent billing. In two railroad cases the United States supreme court denied recovery on a similar claim. In Texas Pacific R. Co. v. Mugg (1906), 202 U.S. 242, 26 Sup. Ct. 628, 50 L.Ed. 1011, the shipper sued the railroad in the courts of Texas alleging that the railroad had misquoted a rate; that the shipper relied on it in quoting a price at which it would sell goods on a freight prepaid basis; that the shipper suffered loss when required by the railroad to pay the correct freight rate which was higher than the one quoted. Recovery was permitted in the state courts but the decision reversed in the United States supreme court. In Illinois Central R. Co. v. Henderson Elevator Co. (1913), 226 U.S. 441, 33 Sup. Ct. 176, 57 L.Ed. 290, a similar case arose. The Kentucky court granted recovery but its decision was reversed.
Accordingly, we reach the conclusion that defendant can base neither a counterclaim nor a defense upon negligent underbilling by plaintiff.
By the Court. — Order affirmed in so far as it denied plaintiff's motion for summary judgment; order reversed in so far as it overruled plaintiff's demurrer to counterclaim and affirmative defense; cause remanded with directions to sustain the demurrer and for further proceedings according to law.