Document Type

Response or Comment

Publication Date

1920

Abstract

The economic convulsions due to the World War are abundantly reflected in the relations between the public and their public utilities operating under franchises fixing rates for service. The enormous rise in cost of labor and materials has, in many cases, so reduced the net income of such utilities as to make it a negative quantity at existing franchise rates. The utilities are crying to be saved from bankruptcy, but the unfortunate suspicion bred by past dealings of many such companies has made the public skeptical, and perhaps in many cases entirely unreasonable. In some cases plain selfishness may explain the attitude on both sides. The Supreme Court of the United States has recently held that a contract is still a contract, notwithstanding the critical conditions caused by the war. Columbus Ry. P. & L. Co. v. Columbus, (U. S. 1919) 39 Sup. Ct. 349, (see 17 MICH. L. REV. 689), followed in Michigan Ry. Co. v. Lansing, (1919) 260 Fed. 322. Though the German steamship company may have been justified in turning back and failing to carry out its contract to deliver at Plymouth and Cherbourg gold shipped on the Kronprinzessin Cecilie, since the imminent danger of capture by a belligerent which would have ended possibility of performance excused performance entirely, Kronprinzessin Cecilie, 244 U. S. 13, yet this does not affect the general principle "that if a party charge himself with an obligation possible to be performed he must abde by it. unless performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties will not excuse performance." lb. The very essence of a contract is that the contractor takes the risk within the limits of his undertaking. Day v. U. S., 245 U. S. i59; North Hempstead v. Pub. Serv. Corp., 176 N. Y. S. 621. The courts cannot relieve nor make new contracts for the parties. Muscatine Lighting Co. v. Muscatine, (1919) 256 Fed. 928.


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