Rumford Falls Boom Co. v. Rumford Falls Paper Co.

51 A. 810, 96 Me. 96, 1902 Me. LEXIS 34

• Court: Supreme Judicial Court of Maine
• Decided: January 6, 1902
• Status: Published

Opinion

Savage, J.

Assumpsit for the recovery of the rental of plaintiffs boom for the seasons 1893, 1894, 1895 and 1896, and twelve and one-lialf per cent of the not cost of the booms for depreciation each year. The case was first sent to an auditor, who reported in favor of the plaintiff for the full amount of the claims sued, with interest, amounting in all to $30,641.94 at the date of the writ, January 12, 1898. The case now comes before us on report of the evidence below, including’ the report of the auditor. That report affords ¡mima facie proof that the plaintiff is entitled to recover the full amount in suit, and unless impeached, rebutted, disproved or continued, it should be decisive. Howard v. Kimball, 65 Maine, 308. And ive think that the auditor’s rcjiort, in so far as it depends upon a correct determination of the facts, is not impeached, rebutted or disproved by the evidence. But in so far as it depends upon the correct construction of the contract on Avhich this right of action is based, ave think it is controlled and should be modified in certain particulars.

The rights of the parties depend upon and are controlled and limited by the provisions of a certain contract, under seal, entered into betAVeen them on July 25, 1893. Previous to that time, in 1887, and in 1891, the legislature had,,given to Hugh J. Chisholm and Charles D. BroAim and their assigns the -right to build dams, piers and booms in the Androscoggin River above and beloAV the Great Falls at Rumford, for booming and holding booms, spars and other lumber, and to demand and receive a reasonable toll from the oAvners of logs boomed by them. Private and Special Iatws of 1887, e. 124; Private and Special Laws of 1891, c. 148. In 1890, Chisholm and Brown conveyed these boomage rights to the Rumford Falls Power Company, and in 1892-1893, that company built the piers and booms which are in controversy in this suit. After they were completed, the Rumford Falls Power Co., July 12, 1893, conveyed them, with boomage rights and privileges, to the plaintiff. Then, thirteen days later, the plaintiff and defendant entered into the sealed contract which is now before us for construction.

By one set of its provisions, the plaintiff agreed to boom, sort, hold and deliver all of the defendant’s logs which came into the plaintiff’s boom; and in consideration thereof, the defendant agreed to pay annually to the plaintiff “the net expense of delivering its logs and other lumber as herein provided, and its proportion of the net expense of holding, sorting and booming all logs and other lumber coming or driven into said booms each year plus its proportion of ten per cent upon the capital stock of the Rumford Falls Boom Company then issued and outstanding, which capital stock shall at all times equal, but not at any time while this agreement is in force, exceed the net cost, including renewals, improvements and additions, but excluding ordinary repairs of said booms and piers, such proportion to be determined by the proportion which its logs and other lumber handled at Rumford Falls that year beats to the whole amount of logs and other lumber handled by plaintiff in these booms.”

By a further provision in the contract, it was agreed that if the defendant should, in any one season, own or control the largest ■ quantity [that is to say, larger than the quantity of any other log owner] of fogs and lumber to be received, lield, sorted and delivered at these booms, then for that season, and for subsequent seasons, so long as tlie same condition continued, the defendant should have the right, if it so elected, to take possession and exercise control of the boom, piers and boomage rights of the plaintiff] and “operate the business of receiving, sorting, holding and delivering logs and lumber in tbe same manner as said Rumford Falls Boom Company is now required to carry on said business.”

It is conceded that the condition provided for in this last paragraph did arise, and that the defendant did take possession and exercise control of the plaintiff’s piers and booms, and did operate the boom business in said booms, for the seasons of 1898, 1894, 1895 and 1896.

And the contract further provided that in the event of the defendant’s “ exercising the rights aforesaid, then it shall collect the expense of receiving, holding, sorting and delivering such logs and lumber from such other firms and corporations” as have acquired rights relative to, receiving, sorting, holding and delivering logs and lumber, “ which expense shall include the matters and things only for which said Rumford, Falls Boom Company would have been permitted to charge in the event of its operating said business, and said Rumford Falls Paper Company shall pay said Rumford Falls Boom Company its proportionate part of said 10 per cent upon said capital stock.” This last provision cl'early relates back to the earlier clause in the contract touching the compensation to be paid by the defendant in case the plaintiff operated the business.

This contract as a whole is in the alternative. It provided for a contingency when the boom business might be operated by the plaintiff, and for another contingency when it might be operated by the defendant. We are only concerned with the latter contingency. It did arise, and the defendant did take possession and carry on the business. When this contingency arose, and the defendant exercised the option of taking possession and operating the business, the contract, as we construe it, became effective as a lease. The plaintiff was the lessor, the defendant was the tenant, and the agreed rental was a proportional .part of ten per cent of the net cost of the booms, piers and other boomage works of tire plaintiff, including renewals, improvements and additions, but excluding ordinary repairs, which proportional part was to be determined by the proportion which the logs and lumber of the defendant bears in any year to the whole amount of logs and other lumber handled at Rumford Falls that year in and by such boom.

Such being the rights of the parties'with respect to rental, and the' rent not having been paid, is the plaintiff pursuing a proper remedy ?' The learned counsel for the, defendant strenuously urges that this action is both misconceived and premature; that the action should have been covenant broken rather than assumpsit;, and that even if assumpsit might in general lie for the recovery of rent, under It. S.,> e. 94, § 10, yet that it will not lie in this case until the net cost of the plaintiffs works has been determined by mutual agreement, and so likewise of the proportionate share of the ten per cent to be paid ; that the determination of these facts is a prerequisite to a right of action in assumpsit, and that in case of failure of such determination, the plaintiffs only remedy is by action for damages for breach of covenant. The defendant further contends that until such determination there is nothing due as rent, and that the statute does not apply unless the rent due is a definite and liquidated sum.

On the contrary, we think the statute referred to is applicable to the facts of this'ease. It provides that “sums due for rent on leases under seal or otherwise may be recovered in an action of assumpsit.” To be sure, the recovery must be for a “sum due.” And it may be conceded, following the analogy of actions of debt for rent reserved in leases under seal, that the sum must be certain, or one that can be made certain. Taylor’s Landlord and Tenant, 6th Ed. § 616. But that does not mean that the actual amount due must have been agreed upon. It is sufficient if the definite elements of which it is composed are agreed upon, or if a certain basis of computation is agreed upon. What remains will be merely a computation. Nor does the basis become indefinite or uncertain, in legal contemplation, because the parties may afterward disagree about the items which composed it.

In this case the basis for rental agreed upon was certain, or could be made certain by computation. It was ten per cent of the net cost of fhe boomage works then just completed. When this contract was made, every pier had been laid, every boom stick had been strung, every dollar had been expended. The net cost was then ascertainable by computation. Time the parties might afterwards dispute about what items should enter into the net cost. The lessor might claim more than the tenant would be willing to allow. Controversy and litigation might ensue. But that would not alter the fact. The net cost had become fixed, and was subject to no contingencies. And the “net cost,” which was the basis for computation of rent at the date of the lease, remained unchanged during the entire period of the defendant’s occupancy. It does not appear, and it is not claimed that “any renewals, improvements and additions” were made at the expense of the lessor during the tenancy. There was, therefore, no uncertainty in this respect in any year’s rental.

But the proportion which the defendant’s logs bore to the whole amount of logs handled differed from year to year. Still, if, as the defendant claims, it is liable in any event only for its proportion of the ten per cent of the net cost, that proportion was easily ascertainable by count or measurement. In that case the rent would be fixed each year by an ascertainable, computable proportion. We, therefore, think that this ground of defense fails, and that assumpsit is maintainable.

Nor is the action premature. There is nothing in the contract which can be construed as requiring a “ determination,” by mutual agreement, of the net cost of the works, or of the proportion of rent chargeable, as a prerequisite to right of action. The contract uses the word “determine” or an equivalent expression only once, and that is when it says that the defendant’s proportion of the net expense of booming and of the ten per cent of the net cost are “to be determined by the proportion” which its logs bear to the whole amount of logs handled. The word here means simply ascertained or computed. It certainly does not imply any mutual action or agreement bjr the parties. It was agreed that settlements were to be made on or before the fix’st day of Deceixiber ixx each year. The axxxxual x’exxtal became dxie, thex-efore, on the first day of each Deeexnbei’, and suit begun afterwards woxxld xxot be premature.

The x'ight to maixxtaiix the actioxx being settled, the remaixxing question is, how nxxxch is recoverable. The first dispxxted element ixx th e amount of rexxtal is the xxet cost of the construction of the booms and piex-s. The axxditor must have found the net cost to be $29,300, of which ten per cexxt would be $2930. We do xxot think the prima facie effect of this fixxding is overcome by any evidence ixx the case.

We will notice soixxe of the objections. Anxoixg other things, the defendant objects to the allowaxxce of the cost of a stiff boom, oxx the groxxxxd apparexxtly that it was or became useless. This booxxx, however, was a pax't of the structure when it was leased to the defexxdaxxt, axxd its cost necessarily entered iixto the entire net cost. The contract did not exclude from the net cost, the cost of such things as did not turn out to be useful.

Again, the defendant objects to the price charged for stone used in filling certain piers, on the ground that the Rumford Falls Rower Company, which built the piers, had taken the stone from an excavation which they made in building the dam at Rumford; that the stones excavated and afterwards used in the piers, represented a part of the expense of building the dam, and should not be charged to the booms. But from whatever source the Rumford Falls Power Company obtained these stones, it does not appear that they have charged more than it would cost to obtain other stone for the same purpose, or more than they were fairly worth, under the circumstances. Had there been no use for these stones, they might have been worthless, or even it might have cost the company something to get them out of the way. But a use for them appeared, and the company had a right to take advantage of it.

Again, the defendant objects to a charge of engineering, on two grounds; first, that the work was not well done, and secondly, that the engineer was the regular engineer of the Rumford Falls Power Company in its other business, and received a stated salary from them, and that nothing extra was paid to him on account of engineering done for the boom. Neither ground is tenable. The work had all been done before; this contract had been made, and, good or bad, had entered into the net cost. And if the Power Company employed its regular engineer in this outside, extra work, it surely may charge this extra service on the booms to the boom account.

Such are the chief objections offered to the net cost as found by the auditor. It is not necessary that we should discuss the other objections specifically. Me have carefully examined them, and we find them unavailing.

It is plain that the entire annual rental of the booms and piers was conceived to be ten per cent of their net cost. If the plaintiff operated the business, the defendant was to pay its proportion of the ten per cent, and presumably the other log owners using the boom would pay the remainder. So if the defendant operated the business, it was to pay its “ proportionate part of said ten per cent.” What is that proportionate part ?

Now the case shows that the defendant owned all of the logs handled in 1894 'and 1895, but not all in 1893 and 1896. Nevertheless, the plaintiff contends that it is entitled to recover the entire ten per cent of the defendant for the years 1893 and 1896, as well as for the years 1894 and 1895. The plaintiff’s theory is that the contract fairly construed means that when the defendant was sole tenant and in sole possession and operation of the booms, and when it alone was entitled to collect payment from the other owners of logs, the “proportionate” part of the ten per cent would be the whole, that any other construction would put the booms and piers in the possession of the defendant, with authority to collect from the owners of logs boomed, and leave the plaintiff no remedy whatever. This construction, unfortunately for the plaintiff, has little in the contract to stand upon, and we cannot extend or enlarge the contract. The contract contemplates that if the defendant took possession at all, it was to take sole possession, and that its right to take possession was not to be deferred until it owned all of the logs to be handled, but only until it owned the major part of them. By taking possession, it assumed, so the contract in substance provides, the duties incumbent upon the Boom Company, of booming the logs of other owners. It was obliged to receive, sort, hold and deliver their logs and lumber. Now all through this contract the elements of expense to the log owner are twofold; first, the net expense of operating for that yeax-, and secoxidly, ten per cent of the capital stock, or xxet cost of structures. Such would have been the basis of settlemexxt between these parties, in the event that the plaiixtiff had operated the business. But when the defendant took possessioxi, it paid all operating expenses, and so was entitled to collect from others their shares of the opex-ating expenses. As the contx’act says, it “shall collect the expense of x’eceiving, holding, sorting and deliverixxg such logs and lumber from such, other firxns and corporatioxxs.” That is, it could so reimburse itself for expenses incurred oxx account of the logs and lumber of others. This langxxage by its very terms x’elates to curreut operatiixg expenses. It relates to the expense of receiving, holding, sorting and delivering logs and lumber. It does not authorize tlie defendant to collect from others any part of the ten per cent, for that is not an operating expense, but is an increment to capital. Nor can this construction be enlarged by the sentence in the same paragraph which reads, “which said expense shall include the matters and things only which said Bumford Falls Boom Company would have been permitted to charge in the event of its operating said business.” This is an expression of limitation, rather than enlargement. If any doubt remains, we think it should be removed by a consideration of the final clause of this paragraph, the clause which embodies the defendant’s agreement to pay rent. What is that clause and what is that agreement? It is this : — “And the said Bumford Falls Paper Company shall pay said Bumford Falls Boom Company its proportionate part of said ten per cent upon said capital stock as aforesaid.” This is express, and clear, and definite. As the defendant is not bound, or even authorized by the contract, to collect proportionate parts of the ten per cent from others, so it has not bound itself to pay any more than its own proportionate part of the ten per cent. Had it appeared, however, that the defendant had actually received proportions of this ten per cent from others, there is no doubt it might have been liable for it in this action under the count for money had and received. But that fact does not appear. The contrary, rather, does appear.

We do not need here to consider how the plaintiff' is to collect the balance of the ten per cent. The original charter authorizes the collection of a “reasonable toll,” but how so much of “reasonable toll” as exceeds current operating expenses may be collected of other log owners during the existence of this contract, is not before us now.

The contract defines “proportionate part” to mean the proportion which the defendant’s logs bore to all the logs. The evidence is not full or satisfactory as to what that proportion was, but it is all that the parties have given us. One witness, introduced by the plaintiff, swore that in the season of 1893 two-thirds of the logs handled belonged to the defendant, and one-third to others; that in 1894 and 1895 all belonged to the defendant; and that in 1896 nine-tenths belonged to the defendant and one-tenth to others. Although this was merely an estimate of the witness, it appears that this witness was in position to be able to make a fair estimate. Besides, his estimate is not disputed in this case. For these reasons, we assume it to be true.

Accordingly, the plaintiff is entitled to recover upon its items of rent as folloAVS:—

For the season of 1893, two-thirds of $2930, $1,953.83

For the season of 1894, 2,930.00

For the season of 1895, 2,930.00

For the season of 1896, nine-tenths of $2930, 2,637.00

$10,450.33

Upon these sums, we think the plaintiff may recover interest from the times they severally became due under the contract, namely, December first each year. Swett v. Hooper, 62 Maine, 54; Maine Central Institute v. Haskell, 73 Maine, 140; Taylor’s Landlord and Tenant, 6th Ed., § 615.

The plaintiff has also sued to recover for depreciation of the booms each year. And it bases its right to recover for depreciation upon the clause in the contract which provides that the defendant “shall have the right if it so elects to take possession and exercise control of the booms and piers and other property and rights of said Rumford Falls Boom Company and operate said business as said Rumford Falls Boom Company is now required to carry on said business.” What was the manner in which the Rumford Falls Boom Company was required to carry on said business? In answer, the learned counsel for the plaintiff call our attention to a provision in the deed of these piers and booms from the Rumford Falls Power Company to the plaintiff, which reads as follows: — “This deed is made, given and accepted upon the express condition‘that said Rumford Falls Boom 'Company, its successors and assigns, shall and will at all times hereafter maintain in good order and repair said booms and piers substantially as at present constructed, and will and shall at all times hereafter, and without discrimination or preference, receive, sort, hold, boom and deliver the logs and other lumber of all persons, firms or corporations doing business at Rumford Falls upon the request of such persons, firms or corporations.” Tlie plaintiff claims that the covenant relied upon in the contract relates to the duty imposed upon the plaintiff by the deed to keep the booms and piers in good order and repair. The argument of the plaintiff seems to be that by allowing the booms to grow old and depreciate, the defendant has not kept its agreement, and that damages for the breach are recoverable.

Even if the plaintiff’s premises are correct, we think it would be a sufficient answer to say that the remedy for such a breach would be covenant broken, and not assumpsit. Dunn v. Auburn Electric Motor Co., 92 Maine, 165. But as the question has been fully argued, we go farther, and say that we think that the construction placed by the plaintiff on this (¡lause in the contract is not the correct one. By the deed referred to, the plaintiff was placed under two obligations. One was to maintain the booms and piers in good order and repair, and the other was to receive, sort, hold, boom and deliver logs and other lumber without discrimination or preference. The latter relates to the manner of operating the business. The clause in the contract relied upon by the plaintiff seems to relate specifically to this latter duty. It says in so many words, that the defendant shall “operate the business of receiving, sorting, holding and delivering logs and lumber in the same manner as said Numford Ealls Boom Company is now required to carry on said business.” There are no apt words by which this obligation (¡an bo extended to the duty of keeping the booms in good order and repair. We do not think such a construction is permissible. The auditor, therefore, erred in allowing the items for depreciation, and his report must be controlled by the true construction of the contract. The plaintiff is entitled to recover only for the rent and interest thereon, as herein-before stated.

Judgment for plaintiff for $10,450.33, and interest, on the several instalments of rent from the times they respectively became due, viz: on $1953.33 from Dee. 1, 1893; on $2930 from Dec. 1, 1894; on $2930 from Dec 1, 1895; and on $2637 from Dec. 1, 1896.