Case Name: PIEDMONT POWER AND LIGHT COMPANY v. L. BANKS HOLT MANUFACTURING COMPANY
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1922-04-19
Citations: 183 N.C. 327
Docket Number: 
Parties: PIEDMONT POWER AND LIGHT COMPANY v. L. BANKS HOLT MANUFACTURING COMPANY.
Judges: 
Reporter: North Carolina Reports
Volume: 183
Pages: 327–333

Head Matter:
PIEDMONT POWER AND LIGHT COMPANY v. L. BANKS HOLT MANUFACTURING COMPANY.
(Filed 19 April, 1922.)
1. Payment — Duress— Contracts — Evidence—Courts—Judicial Notice_ War.
Where there is evidence that the plaintiff, an electric power company has induced the defendant, a manufacturer, to scrap and sell the steam-power plant he was then using and enter into a contract with it for a term of years to furnish the electric energy required for the operation of the manufacturing plant, and after increasing the price, by agreement with the manufacturer, arbitrarily makes a further increase before the termination of the contract, during war conditions, and when the manufacturer could not get the electrical power elsewhere, it is held, the court will take judicial notice of the chaotic conditions prevailing during the war, and while the defendant is chargeable for the increase he has agreed to pay, the question is raised for the determination of the jury whether the defendant protesting against but continuing to pay the increase, did so under duress.
2. Same — Actions.
Where a debt has been paid by one under duress in excess of that due the creditor under the existence of a contract, the amount in excess so paid may be recovered by the debtor in his action, there being no consideration therefor.
B. Public-service Corporations — Corporations — Contracts— Increase in Charges — Corporation Commission.
Where a public-service corporation desires to increase its charges for electrical energy furnished to the owner of a manufacturing plant oveir those agreed upon by contract, it is the duty of the furnisher of the power to apply to the Corporation Commission for the right to charge the increase, and cannot otherwise raise the rate to the manufacturer, whose rights are acquired under the contract, without his assent.
Appeal by botb parties from Daniels, J., at September Term, 1921, of ÁLAMANCE.
Tbe plaintiff is a public-service corporation, with its principal office at Burlington. On 21 December, 1915, it entered into a contract with tbe defendant to furnish it electric power to operate and light its mills situated in tbe town of Graham at tbe rate of one cent per k. w. b. for electric energy. This contract was later modified by divers agreements to tbe basis of one and one-half cents per k. w. b. In September, 1921, tbe plaintiff wrote tbe defendant advising that on account of increased cost due to war conditions it would be necessary to raise tbe rate to two cents per k. w. h., and thereafter tbe bills were made out against tbe defendant at that rate. Tbe defendant pleaded as a counterclaim all collected above tbe one and one-half cent rate which it bad paid from November, 1918, to June, 1920.
At tbe close of tbe evidence, on motion of tbe defendant, tbe court directed a judgment of nonsuit as to tbe plaintiff’s claim to recover tbe amount in excess of one and one-half cents, which excess tbe defendant bad refused to pay after June, 1920.
Tbe court charged tbe jury that if they found tbe facts to be as testified to by tbe witnesses they should answer against tbe defendant tbe issue on its counterclaim to recover back tbe excess above one and one-half cents which tbe defendant bad paid on plaintiff’s demand between November, 1918, and June, 1920..
Judgment accordingly, and appeal by botb parties.
J. J. Henderson and A. L. Broolcs for plaintiff.
Bynwm & Alderman, Sanies II. Melane, and Parleer & Long for defendant.

Opinion:
Clark, O. J.
Tbe contract made between tbe plaintiff and defendant in December, 1915, stipulated a schedule of rates on a basis of one cent per k. w. h. Tbis contract was to extend for five years from 1 April, 1916, and thereafter until terminated by either party upon 6 months notice given in writing to the other. In October, 1911, the defendant agreed to increase this amount to be paid by .003 (three mills) per k. w. h. for 6 months from 1 October, 1917. On 1 June, 1918, the defendant, in writing, agreed to pay for said electric current, in addition to the amount previously paid, the sum of .005 (five mills) per k. w. h. "only so long as the cost of New River or Pocahontas coal shall be more than $5 per ton f. o. b." The current was billed the defendant on this agreement at one and one-half cents per k. w. h. until 2 or-3 September, 1918. On that date the plaintiff wrote defendant a letter with a full statement of their expenses and financial condition, and said: "It is now necessary for us to arrange to increase our rate to our large customers to two cents per k. w. h., and to ask our lighting customers to pay us a surcharge of 30 per cent as long as present conditions prevail." After this, beginning in October or November, 1918, the plaintiff charged the defendant, and the defendant paid for current, at the rate of two cents per k. w. h. until June, 1920. In the spring of 1919 Mr. "Williamson, active manager of defendant, advised plaintiff that he was "going to get power elsewhere at a lower rate than the two eepts charged" by the plaintiff.
When the contract was made between the plaintiff and defendant in 1915, the defendant was operating its plant with power generated by steam, and upon the faith of that contract they scrapped and sold their steam plant. In June, 1920, the defendant notified the plaintiff that they would no longer pay for current for power in excess of one and one-half cents per k. w. h., and demanded repayment for all in excess of this sum, and this is the counterclaim set up in this action.
The plaintiff was under an absolute contract to supply the defendant with all the current it desired to use for 5 years from 1 April, 1916, at the rate specified. This sum was afterwards increased by consent to one and one-half cents per k. w. h., which sum was duly paid. "Where an electric light or power company, operating under a gMasi-publie charter, enters into an ordinary contract to furnish electricity for a given number of lights or for a given amount of power, the obligation as to the amount of power or light to be supplied must be construed and determined according to the general principles of contract, which, as a rule, are absolute." Turner v. Power Co., 154 N. C., 135.
Under the laws of this State the plaintiff could have gone before the Corporation Commission and have made an application to raise its rates. In re Utilities Co., 179 N. C., 161; Dry Goods Co. v. Public Service Co., 248 U. S., 372. This was not done, but the plaintiff arbitrarily notified the defendant that it had raised its rates to two cents per k. w. h.
Tbe following agreement is set out in tbe record: "It is agreed between tbe plaintiff and defendant tbat if tbe plaintiff is entitled to recover tbe difference between tbe one and one-balf cents and tbe two cents demanded for power supplies by tbe Piedmont Company of tbe L. Banks Holt Manufacturing Company after June, 1920, tbat tbe amount sued for by tbe plaintiff is correct, and it is further agreed tbat if defendant is entitled to recover on bis counterclaim for payments made for power from September, 1918, to June, 1920, in excess of tbe rate of one and one-balf cents per k. w. b., tben tbe amount set out in tbis answer as a counterclaim is tbe correct amount to wbicb defendant is entitled."
Tbe pleadings sbow tbat tbe defendants began, in July, 1920, to deduct from tbe monthly bills for current used by it tbe sum of one-balf cent per k. w. h., paying to plaintiff one and one-balf cents per k. w. h., and retaining tbe balance of one-balf cent per k. w. h., and tbat tbe amount so retained by tbe L. Banks Holt Manufacturing Company amounts to $4,172.64; and tbis is tbe amount sued for as per tbe above agreement. On tbe other band, tbe defendant claims as a counterclaim tbe difference between one and one-balf cents and two cents for electric current wbicb it paid without any agreement or by any order of tbe Corporation Commission from November, 1918, to June, 1920, amounting to tbe sum of $9,529.33.
Tbe defendant asked tbe court to charge tbe jury: "If you should find from tbe evidence and by its greater weight tbat tbe defendant paid tbe difference between one and one-balf cents and two cents for its electrical current in order to prevent tbe shutting down of its mill, and so as to continue operating same, tben I charge you to answer tbe issue £Yes,' and to fix tbe amount at $9,529.33," wbicb was refused, and tbe defendant excepted. Tbe defendant further asked the' court to charge tbe jury: "If you shall find from tbe evidence and by its greater weight tbat tbe defendant bad no other source from wbicb to obtain power to operate its mill, and tbat it paid tbe difference between one and one-balf cents and two cents for tbe time tbat it did pay same in order to obtain power to operate its manufacturing plant, and in order to prevent tbe shutting down of tbe same, tben I charge you to answer tbe issue 'Yes,' and to fix tbe amount at $9,529.33."
The evidence as to whether tbe plaintiff could have made a profit, or even expenses, if tbe rate bad not been raised by it above one and one-balf cents is irrelevant and immaterial. Tbe plaintiff was a public-service corporation, and bad made a contract extending for five years, from April, 1916, at tbe rate of one cent per k. w. h., and tben to terminate only upon six months notice. During tbe lifetime of tbat contract there bad been modifications increasing tbe rate by agreement to one and one-balf cents, but' tbe plaintiff could not go beyond tbat agreement except by order of tbe Corporation Commission.
Tbe defendant scrapped its steam plant upon faitb in tbe contract made in 1916 for five years, and later voluntarily assented to increase tbe price to one and one-balf cents. If tbe demand for tbe extra one-balf cent was paid under duress, "payment coerced under duress or compulsion, tbougb not made in ignorance of tbe fact, may be recovered." Within this rule are payments of charges or exactions under apprehension on tbe part of tbe payers of being stopped in their business if tbe money is not paid. Brewing Co. v. St. Louis, 2 A. & E., Anno. Cas., 821, and notes.
In Newland v. Turnpike Co., 26 N. C., 372, Ruffin, C. J., said: "It was, however, objected on tbe trial tbat although tbe money was not due to tbe company tbe plaintiffs could not recover it back because they bad paid it without suit and voluntarily; but this objection counsel very properly abandoned here. Tbe payment was not voluntary, tbat is, as payment of a debt admitted to be due and willingly made; but it was made as a means of obtaining a passage over tbe road for tbe mail which tbe plaintiffs were obliged to carry, and of keeping their property from being taken from them by duress; and so it was compulsory and without consideration."
In Lumber Co. v. R. R., 141 N. C., 191, it is said: "It is not necessary tbat at tbe time of payment there should be any protest. Tbe nature of tbe business considered, tbe shipper does not stand on equal terms with tbe carrier in contracting for charges of transportation, and if tbe shipper pays tbe rates established in violation of law to the carrier rather than forego bis services, such payment is involuntary in tbe legal sense, and tbe shipper may maintain bis action for money bad and received to recover back tbe illegal charge."
Tbe manufacturing company bad scrapped its steam plant and tbe Court must take judicial notice tbat at this time there was a chaotic condition in industry, so tbat it was practically impossible for tbe defendant to arrange for power elsewhere, and in view of tbe testimony tbat in 1919 the protest was so vigorous tbat tbe defendant was trying to get power elsewhere, and tbat in June, 1920, it positively refused to pay this price, tbe matter should be referred to tbe jury upon tbe instructions asked and refused whether tbe payment was made under duress or not. It was irseless to protest, and the law does not require tbe doing of a vaiia thing. Gerringer v. Ins. Co., 133 N. C., 417; Bateman v. Hopkins, 157 N. C., 474.
There was no duty upon tbe defendant to apply to tbe Corporation Commission, for it bad an absolute contract by which tbe rates were fixed. Tbe plaintiff was bound by those rates until relieved by tbe Corporation Commission.
In Public Service Co. v. Finishing Co., 178 N. C., 546, tbe public-service company applied to tbe Corporation Commission and received permission to increase its rates in tbe corporate limits of Salisbury. Tbe public-service company attempted to increase its rates beyond tbe limits of Salisbury to a customer wbom it was under contract to serve at rates specified in tbe contract. Tbe Court beld tbat it could not do so, and tbat tbe contract was binding, and tbe Court in tbat ease, in effect, beld tbat tbe contract was binding until changed by tbe Corporation Commission. Tbe exact question presented was decided in Power Co. v. Burditt Bros., in 1920, Public Utility Reports, 1921 B, 6, where tbe Court said: "It is suggested by tbe plaintiff tbat if tbe defendants felt aggrieved by tbe action of tbe plaintiff in raising tbe rate, their remedy was by complaint to tbe Public-service Commission, but it was not necessary for them to pursue tbat course. Tbe contract rate was valid and binding upon both parties, but' subject to revision by the public-service corporation, as tbe public good might require."
If this sum was not paid by agreement, then certainly it can be recovered back. An agreement to pay this sum would have been void unless there was some consideration, as tbe plaintiff was doing nothing which was not already under contract to do. Tbe prayers for instruction should have been given, and tbe court should have left it to tbe jury to determine whether this sum was paid in order to prevent tbe shutting down of its mill. In refusing this instruction tbe judge in effect told tbe jury tbat there was not a scintilla of evidence tbat defendant bad paid to keep from shutting down bis plant and to prevent injury to bis property.
There is, therefore, simply and purely a question of damages for breach of contract. Tbe amount of such damages is settled by tbe agreement above set out, dependent upon tbe proposition of law. Tbe sole issue in effect is whether tbe defendant, by not giving an earnest protest, acquiesced in tbe illegal demand from November, 1918, down to June, 1920; or whether, having scrapped its steam plant upon making this contract, it was forced to make tbe payment demanded, under duress lest its plant might be closed.
It is very clear tbat tbe plaintiff's demand cannot be sustained and tbe court properly so charged, for after June, 1920, tbe defendant not only protested, but absolutely refused to pay. "We think tbat tbe two prayers of instruction asked by tbe defendant should have been given and tbe jury should have found whether tbe defendant made tbe payment of tbe extra one-balf cent per k. w. b. between November, 1918, and June, 1920, by duress. If tbe answer is in tbe affirmative, tbe amount of tbat verdict is agreed upon as above stated. If tbe answer is in tbe negative, then the defendant will not be entitled to recover anything. In refusing these instructions there was, in the defendant's appeal, error for which there should be a
New trial.
In the plaintiff's appeal the judgment of nonsuit should be
Affirmed.