Southern Coal Go. v. State of Illinois

On August 24, 1945, the Southern Coal Company, Inc., claimant, and the State of Illinois, respondent, entered into a written agreement whereby claimant agreed to furnish quantities of coal, totalling an estimated 8,750 tons, to respondent for use of Kankakee, Dixon, East [*86] Moline, Elgin, and Manteno State Hospitals, Pontiac Penitentiary, State Farm at Kankakee, Dixon, East Moline, Manteno, Pontiac, and Vandalia, Illinois. It was agreed that respondent pay claimant a certain price F.O.B. mine, per ton of coal plus a stated freight rate, if delivered.

The sole question existing under this agreement, otherwise fully performed, relates to claimant’s claim for $138.36 for freight undercharges with respect to a part of the 1,000 tons of coal allocated under the agreement and shipped to claimant between July 25 and September 30, 1946, to the Dixon State Hospital. This sum, paid by the claimant, represents an unknown increase of freight rate over the amount of the freight rate set forth in the original contract as the same was orally amended.

It is not contested that at the time the contract was executed it was contemplated the 1,000 tons of coal allocated to the Dixon State Hospital would be furnished by claimant from a mine at Pana, Illinois. However, due to a subsequent interruption in the operation of this mine, an understanding was reached between the parties that the balance of the coal be shipped from a mine at Coulterville, Illinois. Accordingly, further oral agreement was reached between the parties that the freight rates under the contract be adjusted from $1.70 per ton (Pana) to $1.90 and $1.98 per ton (Coulterville) to allow for the change in distance of shipment. The new freight rates so agreed to were the only rates then known to the claimant and respondent, as well as the railroad on whose line the coal originated. Meanwhile, an unknown increase of freight rate had occurred-Ex Parte 148 increases allowed in Illinois intrastate rates, effective July 21, 1946. The undercharge due to the [*87] uiiknown increased freight rate of the Coulterville shipments was later brought to the attention of the railroad.

The railroad, bound by law to collect the undercharge by the regulations of the Interstate Commerce Commission, then issued the undercharge bills to the claimant early in 1948. The freight undercharges were paid by the claimant in the total amount of $138.36.

The arrangement between respondent and claimant was to adjust their contract to freight rates existing at time of shipment. This is substantiated by the change of freight rates upon the necessity of obtaining the coal in question from Coulterville instead of Pana, Illinois.

Claimant contends, and respondent does not deny, that freight rates provided for in contracts, as in the case at hand, are quoted as a matter of information; that such prevailing practice is customary because of the uncertainty of quoting exact freight rates months ahead; that at 110 time, in the previous experience of claimant had the State ever refused, or failed, to amend a similar contract because of increase of freight rates for supplies furnished ; that, however, the present undercharges have not been paid by respondent because they were unknown until after the applicable two year appropriation period had expired.

From the record, we are of the opinion that the contract in question contemplated payment for coal delivered thereunder at certain stated prices plus the amount of the applicable freight rate as it might be amended from time to time by the Interstate Commerce Commission. There is no question that the claim is a just one, and the material facts are admitted. The sole i*eason for non-payment is that the undercharges were incurred in a previous biennium appropriation.

This Court has repeatedly held that an award should [*88] be made where claimant has rendered service or delivered materials to the State in accordance with an authorized contract, has submitted a statement of costs and charges to the State within a reasonable time and was denied payment because of the lapse of the appropriation from which it was payable, provided there remained sufficient unexpended funds in the appropriation to pay the charge at the time it was made. M o l he Comumers Co. v. State, 15 C.C.R. 100; Illilzois Bell Telephorze Co. v. State, 15 C.C.R. 115; Johlzsolz v. State, 16 C.C.R. 96, and Shell Oil Co., he . , v. State, 16 C.C.R. 257.

An awa.rd is therefore entered in favor of claimant, Southern Coal Co., Inc., for the sum of $138.36.