Court Opinion

ID: 8739512
Source: CourtListenerOpinion
Date Created: 2022-11-26 10:40:56.491426+00
Date Added: 2024-06-11T17:00:19.030763
License: Public Domain

On Motion for Rehearing.
In the motion for rehearing counsel have not questioned the basic principles on which the decree for plaintiff is founded, but have strongly questioned some of the findings of fact and, in certain respects, the measure of damages applied by the court. I will notice the contentions that have not been pressed heretofore.
It is urged that the profits shown by the evidence to have been lost during the shutdown of the mine due to defendants’ wrong may not properly be assessed as damages against the defendants; that plaintiff’s damages based upon lost profits should be measured by the loss of interest at legal rate upon such profits for the time the plaintiff was wrongfully deprived of the use of the mine and thus delayed in realizing and having use of such profits. This contention is bottomed upon the theory that since the lost profits were calculated upon the mining and sale of coal that was not actually removed, the profits were not lost but merely postponed for the period of the wrongful shutdown. In support of their contention defendants cite Hoogendorn v. Daniel, 9 Cir., 202 F. 431; McCornick v. United States Mining Co., 8 Cir., 185 F. 748; Carter v. Cairo, Vincennes & Chicago *230Ry. Co., 145 Ill.App. 653, affirmed 240 Ill. 152, 88 N.E. 493; Newark Coal Co. v. Upson, 40 Ohio St. 17; Bradford Oil Co. v. Blair, 113 Pa. 83, 4 A. 218, 57 Am.Rep. 442.
In the two federal cases cited the rule contended for seems to be recognized. In neither was the rule applied by the court in this case advanced or considered. The other cases bear but indirectly upon the question. Time and space will not be taken to discuss the facts involved in those cases. In none were the. facts similar to those in the case before the court.
Here plaintiff held by deed and by lease a large acreage of proved Goal lands sufficient to keep 'it working in production over a period of years. It had a large investment in heavy machinery and equipment suitable for operating a strip mine with a heavy overburden. It had a ready market for its coal and could obtain a continuous return upon its investment only by mining and marketing the coal continuously so' as to keep its necessary Capital at work. For the period the mine was shut down the plaintiff lost its return upon the entire investment in mine, machinery, and equipment. It suffered heavy losses through the depreciation of its machinery and equipment while they were lying idle, exposed to the weather; also injury and damage to its mine resulting from water, erosion and slides.
The plaintiff’s losses enumerated in the foregoing paragraph could not be compensated for by an allowance of interest upon lost profits during the period of the wrongful shutdown. When capital investments, including machinery'and equipment subject to depreciation, are involved, time is valuable and costly just as it is when personal services are involved. Earnings upon an investment lost through wrongfully enforced idleness can never be recovered through subsequent earnings any more than a wasted hour can be recalled for subsequent use. Depreciation of machinery and equipment not. balanced by contemporary earnings represents a present and not a postponed loss. Where there is a‘large capital investment, as here, the fact that the coal remained in the ground is not a controlling factor, particularly where there is sufficient other coal to keep the capital working over a substantial period of time. Then, too, in arriving at the net lost profits here the value, of the coal in place was figured out of the gross profits under the item of depletion. Whether it can be mined at some future time, after plaintiff has exhausted its other coal, at a net profit that will fairly compensate plaintiff for its then required use of its capital investment and also for its losses suffered through its enforced idleness during the period in question, as shown by the evidence, takes one into the realm of pure speculation.
Mature consideration of the problem confirms my conviction that under the circumstances here, the net profits lost by the plaintiff during the period of the shutdown caused by defendants’ wrong is' a proper element to be included in an equitable and fair assessment of the damages suffered by the plaintiff. This seems to be in harmony with the principles applied in similar cases by state and federal courts alike as will appear from the following decisions: Midland Valley R. R. Co. v. Excelsior Coal Co., 8 Cir., 86 F.2d 177; Julian Petroleum Corporation v. Courtney Petroleum Co., 9 Cir., 22 F.2d 360; Berwind-White Coal Mining Co. v. Martin, 3 Cir., 124 F. 313, certiorari denied 191 U.S. 569, 24 S.Ct. 841, 48 L.Ed. 306; Daughetee v. Ohio Oil Co., 263 Ill. 518, 105 N.E 308; Stoddard v. Illinois Improvement Co., 275 Ill. 199, 113 N. E. 913; Texas Pacific Coal & Oil Co. v. Barker, 117 Tex. 418, 6 S.W.2d 1031, 60 A.L.R. 936; Freeport Sulphur Co. v. American Sulphur Royalty Co., 117 Tex. 439, 6 S.W.2d 1039, 60 A.L.R. 890; American Sulphur Royalty Co. v. Freeport Sulphur Co., Tex.Civ.App., 276 S.W. 448; Paul v. Cragnaz, 25 Nev. 293, 59 P. 857, 60 P. 983, 47 L.R.A. 540.
Defendants contend that the earnings of the mine during the ten and one-half months in 1936, immediately following its reopening, is not a fair measure of the earnings it would have produced from September 7, 1934, to January 20, 1936. Undoubtedly, it is not an exact measure. Yet it was the best that could be made available. As applied in assessing plaintiff’s damages, it w-as more than fair to the defendants. It satisfactorily appears from the evidence that there was at all times a market upon which the coal from this mine, in view of its low production cost, could have been sold profitably- in competition with other coal of the same quality having the same freight rate. The substantial profit made by the mine in the hardest year, 1932, fairly demonstrates this. Any probable variances in earnings between the period in question and 1936, if unfavorable to defendants, were more than compensated for *231by the elimination of several substantial elements of loss suffered by plaintiff. No allowances were made plaintiff by reason of the facts that the cost of reopening the mine in the favorable weather of September, 1934, would have been much less than the cost of reopening sixteen months later in dead of winter in January and February, 1936; that the injury to mine, machinery, and equipment had increased during the delay; that the beginning of the good coal sales §eason in October, 1934, would have been a more favorable time to reestablish a market and advance quickly into full production than was the mid-season of 1936 when, as shown by the evidence, the best season for sales had passed before the market could he reestablished and normal production resumed; that if the mine had been reopened in September, 1934, it would have been in full production on January 20, 1936, with market reestablished so that the production and profits for 1936, beginning on January 20 instead of February 11, would have been increased. Basing plaintiff’s damages on 1936 net profits results in the cost of reopening the mine and reestablishing the market being twice figured off plaintiff’s profits instead of once as would have been the fact if the mine had been permitted to reopen in September, 1934. Other elements of loss similar in nature to the foregoing were considered, but all were merged in the item of $70,000, designated as lost profits, which, in fact, is less than the amount that would have been earned during the period in question measured on the basis of the 1936 net profits.
Defendants’ argument that labor conditions were less favorable to plaintiff’s successful operation in September, 1934, than in January, 1936, is not sustained by the evidence. The same bitter dispute between the contending unions was raging at both times. It stands to reason that more of the former employees of the mine had found employment elsewhere by January, 1936, than by September,. 1934. As early as September and October, 1933, a substantial number had shown themselves anxious to work by signing a petition to secure a provisional local of United Mine Workers so the mine could be reopened. With fear of defendants’ violence removed from the minds of those otherwise ready and willing to go to work for plaintiff in September, 1934, labor would undoubtedly have been available then to operate the mine as economically and as well as in 1936. In considering the small production on September 7, 1934, it should not be overlooked that the mine was operated but part of a day and in face of the certainty that defendants would quickly descend upon the mine in full force and with violence. Not only were their worst fears realized the following day as abundantly shown by the evidence, but sufficient evidence appears in the record to bring conviction that the same threat hung over the mine continuously from September 7, 1934, to January 20, 1936, when the injunction was issued, thus effectively preventing the reopening of the mine before the latter date.
Defendants contend that the portion of plaintiff’s general overhead properly allocable to this mine during the period of the shutdown cannot be determined from the record for the reason that the record does not disclose the tonnage produced at plaintiff’s other mines nor the amount of plaintiff’s general overhead during the period in question. It is true that this mine’s proper share of such general overhead, assuming that during such period it would have produced proportionately the same tonnage that it produced in 1936, is dependent upon the tonnage produced at the other mines and upon the amount of plaintiff’s actual general overhead during the same period. It is also true that the record does not disclose such tonnage nor such general overhead in so many figures. But an inspection of the exhibits introduced by plaintiff in which is shown the portion of the general overhead attributable to this mine for the entire period of the shutdown, broken up into, years, on a basis of the production of the mine in 1932 of 239,000 tons, discloses that the actual tonnage produced at the other mines and the actual general overhead of the plaintiff expended during the period in question are both reflected in the calculations. The books of the plaintiff showing such tonnage and expenses, from which the exhibits were made up, were in court. The witnesses who made up the exhibits from the books were cross-examined, and by agreement of counsel the books themselves were not introduced in evidence. Accepting the figures in those exhibits as true, it is not difficult to determine with approximate accuracy the amount of general overhead attributable to the Freeburg mine for the period in question on a tonnage estimated as proportionately the same as that actually produced in 1936. The tonnage produced in 1936 calculated oil an annual basis was *232but slightly less than the tonnage in 1932, and it will be seen that the general overhead expense properly attributable to the Free-burg mine during the period in question was substantially more than the $22,000 allowed by the court.
The position taken by defendants’ counsel in regard to defendants’ liability for necessary shutdown expenses actually paid out by plaintiff during the period the mine was kept closed, in my judgment, is not tenable.
A review of the evidence has led me to believe that liability for damages has not been established against the defendants Local Unions Nos. 76 and 89 of District No. 1, Progressive Miners of America.
The defendants’ motion for a rehearing must be and is hereby denied except as to defendants Local Unions Nos. 76 and 89 of District 1, Progressive Miners of America, and as to them the judgment for damages is set aside. Counsel for plaintiff will present order pursuant hereto in open court at East St. Louis, Illinois, on February 23, 1938, at 9:30 a. m.