Helmerich & Payne v. Colorado Interstate Gas Co.

*290SOUTHERLAND, C. J. (for a majority of the Court):

In the court below Colorado Interstate Gas Company filed an action at law against Helmerich & Payne, Inc., to recover alleged overpayments for natural gas purchased by Colorado and paid for by Helmerich.

The pertinent facts are these:

Colorado is an interstate pipeline company; Helmerich is a producer of natural gas. In 1947 and 1948 they entered into three contracts for the purchase of gas by Colorado from Helmerich. The price fixed was 6c per 1000 cubic feet measured at specified presssures.

A series of orders regulating the production and sale of natural gas in Kansas was adopted by the Kansas State Corporation Commission.

The order of March 1, 1949, undertook to fix a minimum price for gas at the well-head of 8c per 1000 cubic feet. Under the Kansas statutes, violations of the order entailed criminal penalties.

Colorado paid the increased price without protest, beginning March 1, 1949.

On June 7, 1954, in Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672, 74 S. Ct. 794, 98 L. Ed. 1035, the Supreme Court of the United States, reversing holdings of the Federal Power Commission, held that all wholesale sales of natural gas in interstate commerce were subject to the jurisdiction of that commission. On April 11, 1955, an order of the Oklahoma Corporation Commission fixing a minimum price for natural gas was held invalid. (National Gas Pipeline Co. v. Panoma Corporation, 349 U. S. 44, 75 S. Ct. 578, 99 L. Ed. *291866), and on January 20, 1958, an eleven-cent minimum price order of the Kansas Commission was held invalid. Cities Service Gas Co. v. State Corporation Commission, 355 U. S. 391, 78 S. Ct. 381, 2 L. Ed. 2d 355.

Colorado then demanded that Helmerich repay to it $388,307.42, representing the total overpayments made by it to Helmerich under the invalid orders. Helmerich refused and Colorado brought suit. The complaint alleged two grounds for recovery: (1) duress, and (2) mistake of law.

Helmerich moved to dismiss. It argued (1) no relief may be granted for a mistake of law; (2) the charge of duress is overridden by the “admission” in the complaint that the payments were attributable to a mistake of law, and duress cannot be treated as a separate ground of recovery; and (3) that the action is barred by the Delaware three-year statute of limitations. 10 Del. C. § 8106.

The trial judge held, as we read his opinion, (1) that the effect of the allegation of duress was not vitiated by the allegation of mistake of law and could stand alone; (2) that the issue of duress presented a question of fact to be determined later; and (3) that the statue of limitations did not begin to run until January 20, 1958, when the Kansas Commission eleven-cent order was officially voided. Helmerich appeals and renews the arguments made below.

The issue whether mistake of law may be a ground for recovery is, however, no longer before us. After the case came here Colorado amended its complaint by striking the allegation of mistake of law. By special order this Court, sua sponte, ordered the record supplemented to show this fact, since the issue had become moot.

(We pause to observe that the supplementation of the record with matters occurring after appeal is quite unusual, and the order here should not be taken as establishing a precedent.)

*292There are therefore before us questions (2) and (3) only:

First, may the allegation of duress stand alone as a separate cause of action? The trial judge held that it could, and we agree. The supposed inconsistency with the allegation of mistake is of no consequence.

Second, is the action barred by the statute of limitations? This is the important question before us. Its answer depends upon the date of the “accruing of the cause of action.” 10 Del. C. § 8106, above cited.

When Colorado made the first payment to Helmerich in 1949 under the Kansas minimum price regulation, its claim to recover, if any (argues Helmerich), arose at once; and in like manner it could have sued for the recovery of each subsequent payment as soon as it was made. Helmerich cites and relies upon Wise v. Delaware Steeplechase & Race Association, 28 Del. Ch. 161, 39 A. 2d 212, aff’d 28 Del. Ch. 532, 45 A. 2d 547, 165 A. L. R. 830. That case involved an erroneous interpretation of “breakage” as defined in the Delaware law regulating pari-mutuel betting at race-tracks. It does not control here, for it does not present any question of duress. In this case Colorado was faced with the choice of compliance or noncompliance with the Commission order. If it had chosen noncompliance, it would have run the risk of severe criminal penalties. Hence, it replies, it chose compliance, under duress or business compulsion. In such a case, it argues, any cause of action to recover the payments illegally received by Helmerich did not arise until the unconstitutionality of the Kansas orders had been established.

The court below upheld Colorado’s contention, and we think it was right. The common law rule that voluntary payments, though not legally due, are not recoverable, has in modem times been relaxed in cases of “business compulsion” or duress. See 75 A. L. R. 658. In such cases the pay*293ments are held to be involuntary. And it is also held that if such duress exists, the cause of action to recover such payments does not arise until the duress ceases. See 121 A. L. R. 1294.

The reversal of the Federal Power Commission’s interpretation of the Natural Gas Act, and the payment for natural gas at rates specified by state regulations in excess of contract prices, have resulted, as is natural, in a large number of suits by pipeline companies seeking reimbursement from producers. All, or nearly all, of these suits have been successful. The courts have taken the view that the payments were involuntary, and that the cause of action to recover them did not accrue until the final determination of the invalidity of the State Commissions’ price orders. See Natural Gas Pipeline Co. v. Harrington, D. C. Tex., 139 F. Supp. 452, aff’d 246 F. 915; Cities Service Gas Co. v. United Producing Co. (U. S. D. Ct. N. D. Okla.) C. A. #4554 (unreported) ; Northern Natural Gas Co. v. London, (U. S. D. C. Kans. Sept. 7, 1961) No. T-2166 (unreported).

The result appears to be in accord with the principles of equitable restitution, which we think should be applied here. The retention by Helmerich of the excess payments made under the Kansas order would be clearly unjust. Restatement, § 1.

In remanding the case to the Superior Court for trial we note that the issue of duress has not been decided. If Colorado fails to prove it, its case must fail; if it does prove it to the satisfaction of the court (or the jury, if the issue goes to the jury), its claim is not barred by the statute of limitations.

The order of the Superior Court is affirmed.