267 Pa. 500 | Pa. | 1920
Opinion by
In 1917, and prior thereto, there were two retail ice companies in the City of Easton, the City Retail Ice Company which sold natural ice obtained from streams and lakes, and the Pure Distilled Water Ice Company which sold only artificial ice. Defendant, also located in Easton, was and is an ice manufacturing company, originally formed for the purpose of producing ice for its stockholders; but, as this limited business was not profitable, certain of these stockholders organized the Pure Distilled Water Ice Company, to sell at retail any surplus ice which might be produced. Both said retail companies had been operating at a loss; so much so that the Pure Distilled Water Ice Company had determined to sell its horses, wagons and other assets and retire from business, and suggested to the officers of the City Retail Ice Company that it become the purchaser thereof. Negotiations were then entered into, resulting in an agreement by which each was to sell its assets to a new company, which should issue its stock
Plaintiff was then organized to purchase and did thus purchase and pay for the assets of the two retail companies at their appraised value; and an agreement between defendant and the Pure Distilled Water Ice Company for the sale and delivery of the former’s product — except so much thereof as should be needed by its own stocKholders — was executed on December 6, 1917, and later, with defendant’s approval, assigned to plaintiff. The price of $2 per ton specified therein was fixed by defendant’s board of directors after an investigation into the cost of manufacture during prior years.
For some fifteen months defendant complied with its contract, but during the latter part of the time urged plaintiff to increase the price per ton, and alleged the agreement was invalid because part of a scheme to create a monopoly. Plaintiff refused to maKe the increase and insisted upon compliance with the contract, whereupon defendant gave notice that after a given date no more ice would be furnished, and thereafter refused to deliver any more. The present bill was then filed setting forth the foregoing facts, and also that on the faith of defendant’s agreement plaintiff had itself made contracts with a large number of consumers in Easton to deliver ice to them, that during the preceding winter natural ice could not be obtained, that thereafter it was unable to get either natural or artificial ice from any other source than defendant, and prayed specific performance of the contract of December 6, 1917. Defendant’s answer admitted the facts,
To say the least, defendant’s attitude is an ambiguous one, and does not commend itself to a court of equity. It alleges its contract is part of a monopolistic scheme to wrongfully increase the price of this necessity of modern life, yet is willing to aid in the continuancé of the monopoly, if it receives a part of the alleged wrongful exactions; with the probable result, if defendant’s estimate of plaintiff is correct, that ultimately the price of ice to the public would be increased by reason of this additional expense, and with the certain result, as pointed out by the court below, that if “allowed to violate its contract, it would become the monopolist,” for it alone would have ice to sell in the City of Easton. Despite this, however, if the contract is founded in illegality the courts will refuse to enforce it; but in considering this question “The presumption is that contracts are legal, and not illegal, and the burden is on him who sets up illegality as a defense on a suit to enforce a contract, to show how and why it is unlawful”: Harbison-Walker Refractories Co. v. Stanton, 227 Pa. 55, 63.
Defendant admits that the contract for the purchase of its product and the sale to plaintiff of the assets of the two retail companies, are in themselves harmless; but avers that though “on the surface [the arrangement] looks like a series of perfectly legal transactions and absolutely unassailable,” yet equity will “look at the substance, not at the outward form,” and if it finds they were made “for the purpose of creating a monopoly,” the contract will not be enforced. This is, of
In tbe present instance there would have been ultimately but one retail ice company in Easton (tbe City Retail Ice Company), if some such arrangement as this bad not been made; for, as already stated, defendant was not equipped to sell ice at retail, and tbe Pure Distilled Water Ice Company bad decided to sell its assets and quit tbe business. This latter would have resulted in its stockholders losing substantially all tbeir investment, and nobody being benefited thereby. Public policy does not require so useless a sacrifice. On tbe contrary, as said by tbe Supreme Court of tbe United States in United States v. United States Steel Corporation et
Defendant’s contention that the bill should have been dismissed because plaintiff has a full, complete and adequate remedy at law, was not raised “by demurrer or answer explicitly so stating,” and hence it is not considered: Act of June 7, 1907, P. L. 440. Nor are we impressed with its suggestion that the decree should have gone no further than to enjoin it from selling to any one else than plaintiff. At the time the decree was entered, manifestly specific performance was the only adequate remedy, and the needs of the consumers of Easton, as well as the rights of plaintiff (defendant’s wrongful conduct having been found), then imperatively called for the measure of relief given by it.
The decree of the court below is affirmed and the appeal is dismissed at the costs of appellant.