Globe Woolen Co. v. Utica Gas & Electric Co.

Facts

The plaintiff is the owner of two mills. The defendant generates and sells electricity for light and power. For many years, John F. Maynard has been the plaintiff’s chief stockholder, its president and a board member. He has also been a director of the defendant. As early as 1903 Greenidge, then the superintendent and later the general manager of the defendant’s electrical department, suggested to Maynard the substitution of electric power. In the fall of 1906, the contract was entered into between Maynard and Greenidge. There were other officers of the defendant who knew that the project was afoot, but they took no part in formulating it. In the letter signed by Greenidge, the defendant proposed to supply the plaintiff’s mill with electricity at a maximum rate of $.0104 per kilowatt hour. In February, 1907, letters, similar in most things to the earlier ones, were exchanged. There were, however, new provisions to the effect that the contract should apply to current used for any purposes in any extensions to the mills and that in case of shortage of electricity the plaintiff should be preferred in service over all other customers. The contract was ratified. Nothing was said to others about the new provisions. It quickly appeared that the defendant had made a losing contract; Greenidge had miscalculated the amount of steam that would be required to heat the dye houses.