Green Bay & Mississippi Canal Co. v. Kaukauna Gas, Electric Light & Power Co.

157 Wis. 412 | Wis. | 1914

Lead Opinion

Vinje, J.

Several questions arise upon the appeal of the-defendant Kaukauna Company, the main one being whether it or the city of Kaukauna is liable to plaintiff for the unpaid rental of $4 per annum per horse power from October 1,. 1907, to January 1, 1912, being the difference between $6, the amount paid during this time by the defendant Kau-Jcauna Company, and $10, the amount found, to he due by the arbitrators. The Kaukauna Company contends that since the city had succeeded to its rights and had taken oyer its property at the time the arbitrators made their award, and had become the lessee of the lease, it became liable to plaintiff for the amount of the award; that liability did not accrue till the award was made August 14, 1912. It further contends that no liability exists against it because at the time the rent accrued it was not a party to the lease and it could not be enforced against it. A long argument with numerous citations of authorities is made on the liability of substituted lessees and as to the effect of assignment of leases upon the right of the lessor to recover against the assignee. In the view of the court this argument and these authorities do not reach the question here presented, which is substantially this: Does a municipality, in acquiring a public utility subject to the provisions of secs. 1797m — 80 et seq., Stats. 1911, render itself liable for unpaid rent on a lease owned by the utility and acquired in the proceedings ? . When the defendant Kau-kauna Company received an indeterminate permit it thereby agreed that the city of Kaukauna might acquire its property subject to the provisions of the Public Utility Law. That law, however, authorizes the municipality to acquire nothing but the property of the public utility. It does not authorize it to acquire the corporation itself or its obligations or to incur any indebtedness on account of any liability of the corporation. The statute limits the municipality strictly to the acquisition of the property of the public utility, and such was the scheme consented to by the Kaukauna Company when it received its indeterminate permit. It cannot now be heard to say that in acquiring such property the city also assumed an obligation to pay for rental of power used by it long before the city took over its plant. In acquiring such property the municipality must take it subject to any valid liens thereon up to the amount of compensation fixed by the railroad commission; but it does not assume a liability for any indebtedness arising out of tbe use of power furnished tbe public utility before it acquires tbe' plant. Sucb indebtedness must be liquidated by tbe public utility.

Erom October 1, 1901, to January 1, 1910, receipts in full were given by tbe plaintiff wben quarterly payments were made. Afterwards receipts “on account” were given. Tbe trial court found there bad been no accord and satisfaction and that tbe intent of both parties was that tbe payments of $6 per annum per horse power were on account, and if a larger sum was fixed by tbe arbitrators tbe Kaukauna Comr pcuny would pay tbe additional amount, and if a smaller sum tbe plaintiff would refund tbe difference. There is abundant testimony to support this finding. Tbe arbitration agreement dated November 14, 1910, was “to determine . . . tbe annual rent which tbe Kaukauna Gas, Electric Light & Power Company ought in justice to, and shall, pay to tbe Green Bay & Mississippi Ganal Company as rent for said premises and power during said renewal period, to wit, from tbe 1st day of October, 1907, to tbe 1st day of October, 1917.” December 11, 1911, tbe president of tbe Kaukauna Company wrote tbe plaintiff:

“Tbe rental payment by our company of $124 each month is made to you under tbe terms of - tbe arbitration agreement. If tbe arbitrators’ decision will be for a larger rental than $6 per horse power per annum, our company will be charged with tbe additional amount, and if tbe decision will establish a lower rental, your company will be charged with tbe excess paid during tbe period covered in tbe arbitration agreement.”

There is additional evidence in support of tbe court’s finding, but that here set out establishes beyond question that tbe parties did not regard tbe payments made as an accord and satisfaction.

We have carefully examined tbe evidence as to tbe alleged misbehavior of the arbitrators, and from such examination we are satisfied the conrt properly found that there was none. In making their independent investigation the arbitrators did nothing more than the parties consented they might do.

Upon the plaintiff’s appeal the question of whether it is entitled to interest upon the amount unpaid only from the time of the award, as the court adjudged, or from the time the quarterly payments should have been paid, is raised. The court found that plaintiff was not entitled to any interest on any of the instalments of rent till after the award of the arbitrators was made and forwarded to the parties. The lease provides, both as to the first period up to October 1, 1901, and for renewal periods, that the rent should become due and payable quarterly in advance, and that “in case said rent, or any part thereof, shall not be paid as and when the same become due and payable, the same shall bear and draw interest from the time it becomes due, till paid, at the rate of six per cent, per annum.” This provision of the lease, taken in connection with the arbitration, and the letter of the defendant Kaukauna Company above referred to, as well as the general conduct of the parties as shown by the evidence, quite clearly indicates that though the annual rental was not fixed in' amount until the award of the arbitrators was made, yet it was contemplated that, when fixed, an equitable accounting according to the terms of the lease would be made; that the delay in fixing the amount of rent should not operate to the disadvantage of either party, but that the settlement made would place each party in the same position it would have been in had the amount of rent been seasonably fixed and paid according to the terms of the lease. Both parties were to blame for the delay in having the amount of rent fixed. Each no doubt felt that an accounting at any time based upon the terms of the lease would not prejudice any one, and hence the long delay. The defendant Kaukauna Company has had the use of the money which it should have paid quarterly in advance and which the lease provides should draw interest at six per cent, if not so paid. There is nothing in the terms of the award to militate against the idea that interest should date from the time when the payments should have been made had the rent been fixed, for it says that the Kaulcauna Company and the city of Kaulcauna ought, respectively, for the period for which each is liable, in justice, to pay to the Creen Bay & Mississippi Canal Company as rent the sum of $10 per horse power per annum, payable quarterly according to the condition of the lease.

It is elementary that, in the absence of contract or of conduct evincing a contrary intent, interest is not chargeable upon an unliquidated claim. But parties may by agreement provide for interest on unliquidated amounts. They did so in this case by providing that any unpaid balance of quarterly rent should draw interest. The defendant Kaulcauna Company has had the use of this money. It was always within its power to demand and secure a determination of the amount of rental to be paid quarterly. Its failure to do so ought not to discharge it from the obligation to pay the interest provided for in the lease. In Laycock v. Parker, 103 Wis. 161, 181, 79 N. W. 327, the court says: “The rule of course is that the debtor should pay interest from the time when he ought to have paid the debt. That time may be fixed by agreement.” True, it was equally within the power of the plaintiff to demand and secure a determination of the amount of rental. But both parties neglected to do so. Both parties were aware of the conditions of the lease and must have understood that an award or agreement as to amount of rental when made would relate back and apply to the whole renewal period and put parties in the same situation, substantially, that they would have been in had the rental been fixed at the commencement of the renewal period. To do that, interest on unpaid balances of rent should be allowed plaintiff from the time they should have been paid had the amount of rent been fixed in advance. Tbe court, therefore, erred in allowing interest only from tbe time of tbe award. Tbe difference in sucb allowance from wbat should have been allowed is tbe sum of $598. This sum will be added to tbe judgment as of tbe date thereof, and as so modified tbe judgment is affirmed.

By the Court. — Judgment affirmed as modified. Tbe defendant will take nothing on its appeal.

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Dissenting Opinion

Keewiit, J.

(dissenting). On plaintiff’s appeal I think tbe judgment should be affirmed.