5 Mo. App. 484 | Mo. Ct. App. | 1878
delivered the opinion of the court.
This is a petition, in the nature of a bill in equity, to enforce specific performance of an obligation alleged to rest upon the appellant to convey to the respondent certain gasworks and property connected with them, which are the subject of the controversy. The original petition was filed against the appellant alone; afterwards an amended petition was filed, making the Laclede Gas-Light Company also a defendant, but as to the latter company the suit was subsequently dismissed. The right of respondent arises from acts of the General Assembly of the State of Missouri, which incorporated the appellant, and at the same time gave to the respondent the right to purchase these gas-works under certain conditions. In the original act, entitled “An act to incorporate the St. Louis Gas-Light Company,” it is recited that sundry citizens of St. Louis have contracted with that city for lighting its streets with gas, and have subscribed shares to form a joint-stock company to erect gasworks for the purpose of lighting the city and its suburbs ; that, as the General Assembly consider these objects a benefit to the city and the public, therefore they grant the charter. Provisions of the charter, besides the ordinary clauses, are that the company shall never charge more than one cent for every cubic foot of gas, nor charge the city more than the company shall be getting at the same time from the majority of the inhabitants using gas ; that the company shall be entitled to the sole and exclusive privilege of vending gaslights and gas-fittings in the city of St. Louis and its suburbs, to such persons as may voluntarily choose to contract for the same; and shall have the power to lay pipes in the streets, etc.; to manufacture lime and gas-fittings, and sell coal, lime, and stone ; to construct a railway from their quarries to their works, etc. Certain powers of insurance are given to the company, but it is forbidden to do a banking business. The act provides that it shall be the duty of the company to prosecute the works necessary for
By the amended act of Feb. 11, 1839, the city and the directors of the appellant “ may contract for and make regulations relating to the lighting of said city with gas, in such manner as may be agreed upon ; and they may make, generally, such contracts in relation to the business of the company as may be beneficial to them and the public.” By this act, the date 1838 is changed to 1840; the city is empowered to subscribe for stock in the company, and three years are given to the appellant, notwithstanding its charter may expire, in which to close up its business. The clauses as to the duration of the company’s charter and the city’s privilege of purchase are given below. Sess. Acts 1838-9, p. 242; Sess. Acts 1845, p. 150.
In the year 1841, a contract was entered into between the company and the city in regard to providing and keeping lighted public lamps. For failure to erect lamps and keep them burning, in certain cases, penalties were provided. Under this contract the respondent claimed that certain penalties accrued to it which were discharged by the contract of 1846. From its claims on this account the respondent, in 1845, agreed to release the appellant, if the appellant would offer a new contract containing such terms as the
By act of March 2, 1857, and acts amendatory of it, which it is not essential to closely construe in this case, the Laclede Gas-Light Company was incorporated, and it was provided that that company should, within that part of the corporate limits of the city of St. Louis not embraced within the corporate limits of the city as established by a certain act of the Legislature of date Feb. 8, 1839, have, during the time specified, the privilege and right of lighting such parts of the city, and of making and vending gas, gaslights, etc.; that the company might contract with the city as to lighting such parts, etc. By act of March 26, 1868, it is provided that the Laclede Company may, “ within the corporate limits of the city of St. Louis, as the same now are or hereafter may be established,” exercise the rights granted to it by the fifth section of the act to which it is
On March 12, 1859, the General Assembly passed “ An act to enable the city of St. Louis to purchase the gasworks of the St. Louis Gas-Light Company.” The first section of this act provides that, in order to enable the city to purchase and pay for the works, according to the twenty-seventh section of the charter of the appellant, the mayor of St. Louis is empowered to issue bonds, as described, which are to be special gas-bonds, which shall be obligatory on the city, and a special lien on the works and franchises, etc. The second section provides tt^at if the city shall not purchase the gas-works in 1860, as provided in the first section, the act shall remain in force, so as to enable the city to purchase the gas-works at any other time when, by the amended charter, the purchase is authorized to be made. This section then says: “And upon said purchase being made, at any time,” all the rights and property, etc., shall be the property of the citjR By act of Feb. 5, 1864, it is provided that it shall be lawful for the city, at any time after the Common Council shall decide to purchase the gasworks, to issue bonds, etc. The recital of this act is to the effect that it is provided in the charter of the appellant that the city has the privilege of purchasing the ivorks in twenty-five years from Jan. 1, 1840, by the City Council giving to the company six months’ notice prior to Jan. 1, 1865, etc.
On June 28, 1859, the Common Council of the respondent passed a resolution declaring that it was expedient for the city to purchase the gas-works from the appellant, as provided by sec. 27 of the amended charter of the appellant ; and, on the next day, the mayor gave to the appellant notice of the passage of this resolution, stating that it was the intention and design of the city, at the expiration of twenty years from Jan. 1, 1840, to purchase the gas-works
The appellant thus having placed itself upon the basis of the contract of 1846, the city took no further proceedings. Both parties acted for many years under the contract of 1846, and the common attitude was that the contract fixed their mutual rights and obligations, so far as concerned the purchase of the works by the city. In 1865, the second period of choice fixed by the charter, the city passed no resolution of purchase, but allowed the time to elapse. In 1869-70, notice was given, and a resolution duly passed, as' provided by the charter. These proceedings need not be particularly described, as they correspond to those of 1859-
The evidence shows that the city had been backward in its payment of dues to the appellant, and that about this time, or in 1870, the city owed some $400,000 to the appellant; that the city was in doubt as to its rights under the charter and contract of 1846 ; that conferences were had, and that there were negotiations for a settlement of the matters in dispute between the appellant and the city, being chiefly those which afterwards formed subjects of the provisions of the tripartite contract. The tripartite contract was executed on Feb. 28, 1873, by the city of the first part, the Laclede Gas-Light Company of the second part, and the appellant of the third part. Shortly before its execution, the appellant had conveyed to the Laclede Company, for the recited consideration of $700,000, “ all its mains, pipes, etc., and all other of its property and effects, north of the south line of Washington Avenue, in St. Louis. The material parts of the tripartite ordinance and contract are as follows : —
The ordinance is entitled, “An ordinance to provide for the better lighting of St. Louis with gas ; for a reduction in the price of gas; for the settlement of litigation between the city and the St. Louis Gas-Light Company; to provide for the establishment of an additional gas company in the city, and for controlling the quality and standard of gas and gas-lights by the city,” etc. It enacts that a contract is
“ The Laclede Gas-Light Company and the St. Louis GasLight Company, each and both of them, further covenant and agree with the city of St. Louis, that each one of said companies shall act only under its own charter and franchises ; that each shall have its own property, and manage and prosecute its own separate business under its own charter and franchises; but the Laclede Gas-Light Company abandons and surrenders, fully and completely, any and all exclusive right of lighting any part of the city of St. Louis with gas, or making or vending gas, gas-lights, or gas-fixtures, and all sole or exclusive right whatsoever, whether claimed under its charter or by the aforesaid surrender to it, or otherwise, such surrenders and abandonments by both companies to be done and effected in legal and binding manner ; it being hereby understood and agreed, that the district and portion of the said city which is to be occupied by the Laclede Gas-Light Company, and for and within which it herein contracts to furnish gas, and do other things herein contracted for by it, is and shall be the district aforesaid, all north of said line above described ; and that the district and portion of said city which is to be occupied by the St.*500 Louis Gas-Light Company, and for and within which it herein contracts to furnish gas, and to do all other things herein contracted for by it, is and shall be the remainder or balance of said city, so far as the charter of said St. Louis Gas-Light Company extends and authorizes.”
The third and fourth sections of the contract contain various provisions in regard to a city inspector of gas and gas-meters, whose salary is, by this agreement, to be paid by the companies; in regard to a certain standard according to which gas, in future, is to be furnished, not only to the city, but to its inhabitants and private consumers ; in regard to a certain price for gas, which is not to be exceeded; to laying additional mains and pipes, upon the order of the city, by the two companies ; and to the erection of such lamps as the city may desire, at all places where the mains are laid. Provisions are then made for the public lamps, each of the two companies contracting as to the keeping in good repair and supply of the lamps within its own district, at a price agreed upon. It is then provided that the contract shall continue in force until Jan. 1', 1890; that the litigation between the city and the appellant shall cease, and that “ all suits pending between them are to be dismissed, and all causes of action between them to be considered as settled.” Provisions are made for extending the time of payment of the debt owing by the city to the appellant. Then follows the following clause: “ And this contract and agreement is a substitute for and in lieu of said contract of date Jan. 9, 1846, between the city and the St. Louis GasLight Company ; and which last-named contract is to be can-celled by the parties thereto, and each and both parties to be absolved therefrom.” Then follows the second section of the ordinance, providing that both companies shall signify their acceptance of the contract, and for its then being executed by the mayor in behalf of the city, and by the officers of the two companies.
This agreement was authorized by the stockholders of the
The court below, upon the basis of the proceedings of 1869-70, as set out in the petition, decreed specific performance as of Jan. 1, 1870, according to the charter and the contract of 1846 ; declared that respondent was entitled to purchase the works at the date named; that the tripartite contract could not deprive respondent of its rights; that by the refusal of the appellant to appoint arbitrators, and thus have the value of the property fixed, a trust was created, and that since Jan. 1, 1870, the appellant had held the property as trustee for the respondent; decreed that the appellant should account for all revenues which had been realized, or which might have been realized, from the. use of the property and management of the business in the manufacture and sale of gas after Jan. 1, 1870. Commis
By this interlocutory decree, the appellant was forever enjoined from manufacturing or selling gas in St. Louis or its suburbs ; a receiver was appointed of the gas-works and the property appurtenant, with specific instructions as to his action ; and orders were made to enable him to properly discharge his duties. The commissioners took evidence which fills some three hundred closely printed pages, and made a detailed report, upon the facts of which the court below based its final decree. By this decree, the court below adjudged that the different matters in controversy between the appellant and respondent be adjusted on the basis of charging the appellant with the total receipts in the operation of the gas-works from Jan. 1, 1870, to June 5, 1876, when the receiver took possession of the works, and also with the money received from the Laclede Company, amounting in all to $6,076,360.35, and with this amount the appellant was charged. Against this sum were allowed to the appellant credits, first, for the value of the gas-works and appurtenances upon Jan. 1, 1870, with five per cent added; then, for the total expenditures of the appellant in and about the business from Jan. 1, 1870, to June 5, 1876 ; then, for the value of coal and gas on hand ; and then, for various items, allowed with a view of adjusting all- matters between the city and appellant; these credits amounting in all to $6,027,310.60. The decree directs that the latter amount, thus found to be due to appellant, be paid by deducting the same from the total with which the appellant is charged; that the respondent have judgment for the balance; and that the title to the works and appurtenances be vested in the respondent. The case is here by appeal.
To arrive at a correct solution of the important questions involved in this case, it is essential at the outset to consider
The principal act is spoken of as the charter of the appellant, but it has other aspects than such as belong to a charter, and these are material to the present case. It is a law, an expression of that will which, acting within its sphere, is the sovereign power of the State. The rights and obligations of three parties are involved : those of the State, of the St. Louis Gas-Light Company, and of that municipal corporation to which the State, for the good of a portion of its people, has delegated a part of its sovereign power. The rights of no creditors, or persons asserting claims against the city, are involved. It is with the appellant, the creature of the act, and with the respondent, that the common creator of the two is dealing. To that creator both owe that obedience which the law recognizes as due to the sovereign from those who are subject to its commands.
One main feature of the act and its amendments is the intent, expressed in them in different ways, to benefit the respondent. The General Assembly begin by reciting its opinion that the lighting of the streets of the city of St. Louis with gas, the erection of works for supplying the city and its suburbs with the necessary apparatus for lighting them, is a benefit to the city, and conducive to the public good. Therefore the Legislature proceed to grant extraordinary franchises and jirivileges to the appellant. These are the more extraordinary as th y are exclusive. They
Here the Legislature was willing to confer exclusive franchises, but only on condition of a corresponding benefit to an important section of the State. Eights were given to the city, corresponding to the franchises bestowed upon the appellant. In favor of the respondent, the absolute existence of the appellant as a corporation is limited to twenty years from Jan. 1, 1838 (1840, by amendment). It is with the respondent to say, in the manner prescribed, whether the appellant shall have a longer duration. On the face of the charter, and apart from matters outside of it, there is nothing which secures to the appellant any further term of life. Its existence beyond the twenty years is purely conditional. The sections are as follows : —
“Sec. 27. That, if after the expiration of twenty years from and after the first day of January, 1838, the corporation of the city of St. Louis should resolve to purchase the said gas-works from the St. Louis Gas-Light Company, which they hereby shall have a right to do, the price shall be fixed by arbitrators, one or more to be chosen by the president and directors of the company, and an equal number by the Board of Aldermen of said city; said arbitrators shall not be stockholders in said company, nor members of said Board of Aldermen. They shall take into consider*506 ation the value of the gas-worlcs, and the lands, grounds, buildings, utensils, rights, and interests, and every thing thereunto appertaining, and if they agree, and so report in writing, their award shall be binding on the parties ; but if they should not agree, then the said arbitrators shall elect some creditable and disinterested person as umpire between them, whose decision and award, in writing, reported to the parties above, shall be binding and conclusive, any law to the contrary notwithstanding. To the amount so agreed upon shall be added seven per centum advance on said valuation, which amount, with the seven per centum on the same, shall be paid by the corporation of the said city to the said company, in full consideration for their works, lands, grounds, buildings, interests, rights, and utensils, etc., belonging to the said gas-works.
“ Sec. 28. That in the event the said city shall decline to purchase at the end of twenty years, as provided in the preceding section, then the company shall, in like manner, at the end of twenty-five years from and after the first dajr of January, 1838, and provided the Board of Aldermen then resolve to purchase the same, sell and convey to the city all their estates, interests, and titles to the said gas-works, in manner as is before provided in section 27, except that to the amount of valuation then so to be agreed upon shall be added only five per centum advance, which amount, with the said five per cent on the same, shall be paid by the city to the company, in full of all consideration for the said gasworks and their appurtenances. Provided, however, that the corporation of the city of St. Louis shall notify the president and directors of the company of their intention to purchase, at either of the times prescribed, at least six mouths previous to the expiration of the said terms of twenty years and twenty-five years respectively ; and a failure to notify as herein provided shall be deemed a refusal on the part of the city to purchase the interest of the said company.”
*507 “ Sec. 31. This act shall take effect from and after its passage, and shall be in force for the term of twenty-five yeai-s from and after the first day of January, in the year of our Lord one thousand eight hundred and thirty-eight, unless the company hereby incorporated shall sell and convey, within the said term of twenty-five years, their gasworks, lands, rights, and privileges, as herein provided, to the city of St. Louis; in which event said gas-works, and all rights, powers, and privileges hereby granted, shall be vested in the mayor, aldermen, and citizens of St. Louis, in their corporate capacity, and this charter shall cease and determine. But should the said city not resolve to purchase at either of the times as provided herein, then this act shall be in full force for an additional term of twenty-five years from and after this last date mentioned for such sale and purchase.”
It is the legislative power of the State which speaks in these words ; and in prescribing what is to be done by the respondent, it speaks in reference, not to a private person, but to a municipal corporation, governed by a legislative body. The words are: “If * * * the corporation of the city of St. Louis should resolve to purchase the said gas-works, * * * the price shall be fixed by arbitrators,” etc. By sec. 28 it is provided, “ that in the event,” etc, “the company shall,” etc., “provided the Board of Aldermen then resolve to purchase the same, sell and convey to the city,” etc. In the last words of the twenty-eighth section the Legislature provide what particular act or omission shall be a refusal to buy the works : “ and a failure to notify as herein provided will be deemed a refusal on the part of the city to purchase the interests of said company.” So, the last words of sec. 31 provide that, “ should the said city not resolve to purchase at either of the times as provided herein, then this act shall be in full force,” etc.
These peculiar expressions, thus recurring, indicate plainly the legislative intent. It is not said, “ If the said corpora
If the respondent gives notice as required by the act, and the resolution of purchase is duly passed as provided for, an obligation on the part of the appellant immediately springs up. The respondent has the right to purchase, and
So, sec. 31, by its language, shows that the Legislature anticipated that the appellant would perform its contract and exactly obey the law. The act is to be in force for twenty-five years, etc., “unless the company hereby incorporated shall sell and convey, within the said term of twenty-five years, their gas-works,” etc., “ to the city of St. Louis ; in which event said gas-works, and all rights, powers, and privileges hereby granted, shall be vested in the mayor,” etc., “ and this charter shall cease and determine.” As a matter of course, the General Assembly did not intend to* provide that the appellant should have a five years’ additional term of life as a reward for violating its contract and the law. If the appellant refused to appoint arbitrators, when bound to do so under sec. 27, it was liable to be immediately proceeded against. It could not, by its wrongful act, renew its life. The words just quoted from sec. 31 presume that the company will “sell and convey” when the law requires, and will take all necessary steps to that end. By sec. 28, the appellant is required to “ sell and convey to the city,” “ provided the Board of Aldermen then resolve to pur
The scheme of the General Assembly was not only to be carried out; it was to be carried out in the manner prescribed by the General Assembly. A leading inducement for their grant of the charter is the carefully contrived plan, elaborated in successive sections with a minuteness unusual in legislative acts, by which, for public pui-poses, the city of St. Louis might become possessed of the gas-works. If the notice was given and the resolution passed as prescribed in the scheme, the legal consequences followed as a matter of course. The appellant could legally no more refuse to appoint arbitrators than it could refuse to sell and convey after every preliminary had been accomplished. It had enjoyed for twenty years the franchise which had belonged to the people of the State, on the express condition that it should, among other things, appoint arbitrators when called upon so to do in the manner prescribed by the act. It was subject to legislative commands in matters of detail, as in other matters, and here the matter of detail was of such a character that to defeat that part of the plan was to defeat the whole scheme of the General Assembly. Even the sovereign State cannot violate the obligation of the contract ; it would be strange indeed if the party with whom that sovereign State has contracted could with impunity, as against that State and its grantee, not only violate an express provision of the contract, but build up a superstructure of rights on the basis of such violation.
Taking the act of Eeb. 4, 1837, by itself, it is impos
In allowing the respondent to purchase these gas-works ; in bestowing upon the city, in case it formally resolved to buy them, the franchise which had previously been exercised by the appellant, the General Assembly had in view, as the acts show, the good of the city and the welfare of its citizens. Beyond this it is not possible to know, nor is it material to inquire, the particular motives which induced the Legislature to give to this municipal corporation the power to hold this property and to manufacture illuminating gas. That the manufacture of this article bears the same relation to the political functions of such a corporation which is borne by the manufacture, for instance, of leather
It may be advisable that a city should have gas-works for its public uses exclusively; or the Legislature-, designing to give a city the power to manufacture gas and hold gas-works, may annex the power to sell, as incidental, and as a means of sustaining the public works. A policy proper for one city, or at one time, may be wholly unsuitable for another city, or at another time. The grant of such powers constitutes no contract. The parties are public parties, the interests public interests; the power is given by the State for governmental purposes, and the right is implied to alter, adapt, or withdraw. This is the distinction between such grants and those which are contracts. East Hartford v. Hartford Bridge Co., 10 How. 511; City of New Orleans v. Hoyle, 23 La. An. 740; The State, etc., v. Railroad Co., 12 Gill & J. 438; s. c., 3 How. 534. Except so far as concerns the rights of third persons, such powers are subject to the legislative will. Police Jury v. Shreveport, 5 La. An. 661; The People v. Pinckney, 32 N. Y. 377; City of Clinton v. Railroad Co., 24 Iowa, 475; Berlin v. Gorham, 34 N. H. 266; The State v. Branin, 23 N. J. L. 484; Borough of Dunmore’s Appeal, 52 Pa. St. 374; Broughton v. Pensacola, 93 U. S. 269. The position in the case at bar, that the powers and property are held as by a private corporation, ignores not only the necessity of artificial light for good government in cities, and that the choice
As was observed at the outset, it is not with any rights accruing to third persons, or obligations insisted upon in their favor, that we are here concerned, but with the rights of the appellant and respondent, both of whom ai'e directly the subjects of the legislative enactments. The cases at this point cited by the appellant have no application here. For instance, no attempt is made to apply by analogy the facts of Bailey v. Mayor, etc., 3 Hill, 531, to the facts of this case, but expressions of opinions used arguendo by Chief Justice Nelson are cited. Even as doctrine applicable to the facts of that case, the expressions as there uttered were unnecessary, and have since been disapproved. Mayor of New York v. Bailey, 2 Denio, 433; Darlington v. City of New York, 31 N. Y. 164. In the Savings Fund Society cases, 31 Pa. St. 175, 185, the question was as to the rights of creditors to whom the gas-works had been pledged, and it was, of course, held that the obligation of the contract could not be impaired. The language as used in one of the cases was afterward qualified, and carefully limited to the facts, in Wheeler v. Philadelphia, 77 Pa. St. 354. The more recent cases express the sounder view, and in these the unqualified expressions of the earlier cases find little support. It is now seen that the line must be arbitrary which affects to separate public powers from private powers, where both have relation to good government, and are bestowed by the Legislature with a view to the common benefit; and it is no longer held that public purposes cannot be recognized because the Legislature sees fit to accomplish them through grants which might be conferred on indi
The stockholders of the appellant bought their stock with notice of the legislative reservations, and are presumed to have known their legal effect. Upon certain conditions, the “mayor, aldermen, and citizens of St. Louis” were to receive and hold the gas-works, and were to possess the franchise granted by the General Assembly. These they were to hold, by the legislative grant, as public property. The City Council were agents for the citizens, with powers limited and defined by the charter. The extent of the authority of these agents was a matter of law, and was known to the appellant and the public. Where property or rights are conferred upon a municipal corporation for the benefit of the citizens, the officers of the corporation must use the property according to the trust imposed by the Legislature. As a matter of course, these agents for the time being cannot defeat the plans, or alter the policy, or dispose of the property of the State.
The sections quoted confer, so far as they respect the respondent, not ordinary property rights upon an individual, or mere business company, but give additional powers connected with its political function to a municipal corporation. This branch of the government, acting through a deliberative body, is to “ resolve,” is to exercise its best judgment, taking all the facts affecting the welfare of the city into consideration. If the city so decides, these powers pass to the citizens in their corporate capacity. As a part of the grant, and as a means of executing the new powers of regulation and control, the works and appurtenances, on the terms named, are also to pass. It is the resumption, by the State, of an extraordinary and exclusive franchise, conferred only with an express and carefully limited reservation upon
The facts in regard to the notice and resolution of 1859-GO, to the ordinance of the City Council, the appointment of arbitrators, and the notice of the appointment, have already been recited. The respondent requested the appellant to appoint arbitrators, according to law and the ordinance. The board of directors of the appellant passed a resolution by which they refused to sell the gas-works to the respondent. It is contended by the appellant that, upon the basis of the proceedings of 1859-60, the present suit was not brought in time ; but, as the refusal of the appellant was not signified until Oct. 25, 1860 (the resolution to purchase having been passed by the City Council on June 28, 1859, and notice of it having been given to the appellant on June 29, 1859), it is not easy to see how the respondent could know that the appellant would refuse to comply with the law, until the respondent received the notice of Oct. 25, 1860. As the suit was brought upon May 21, 1870, it would not be barred by the statute. But the Statute of Limitations has no proper application to the case. It was not the intention of the Legislature that these acts, passed for special purposes, and, so far as the sections nowin question are concerned, embodying a policy and carrying out a particular scheme, should be affected by the general statute of repose. Immediately, the present suit relates to the gas-works and their appurtenances, but the possession of this property is the means of carrying out the will of the State, by which, in a certain event, the franchises were to pass- to the city, and the property to be purchased by it. The condition fixed by the Legislature happening, the franchise vested at once in the city. The omission to sue immediately on the appellant’s refusal to sell did not give
It is the office of the court of equity, as nearly as may be, to place a plaintiff who is entitled to relief in the situation in which he would have been, had the defendant observed his obligations and executed his contract. This is the basis of specific performance. Had the appellant appointed arbitrators and conveyed the property, as it agreed to do, and as the General Assembly anticipated it would do, its charter as an active business corporation would have ended in 1860, its franchise would have passed to the respondent, and the works and their appurtenances would, through the means of payment provided by the Legislature in 1859, have belonged to the city. Except under the contract of 1846, which is not now in question, it is only on the basis of its violation of its agreement, and its refusal to obey the legislative command, that the appellant held the franchise and property beyond the year 1860. But, as has been shown, the appellant cannot build up rights upon the basis of its own wrong. The law does not hold out a premium for disobedience to its commands. If the respondent had brought a bill to compel the appointment of arbitrators, after the appellant’s refusal in 1860, the appropriate court of equity must have enforced the law. The respondent had complied with the act; the appellant had violated an express condition of its contract; and, apart from enforcement by those-tribunals which administer the law and afford process, the law would have been idle words, and the design of the State defeated. The authorities at this point cited by the appellant, as to enforcement of an agreement to arbitrate, ignore this : that the present is not merely a contract, but a law. That “the price shall be fixed by arbitrators” is a fiat of legislative will, and as such addresses itself to the courts. The law itself makes the remedy.
If the above sections of the act of 1837 have been properly construed, and the principles which have been laid down are correct, their application will go far towards solving many of the questions which arise under the contracts of 1846 and 1873. The sections of the contract of 1846, material to be considered, are as follows: "Fifth. The party of the first part (the city) agrees and does hereby relinquish the right to purchase the gas-works property, etc., of the gas-light company at the expiration of twenty years from and after the first of January, 1840, as provided for by the twenty-seventh section of the charter of said company; provided, that in the event the said party of the first- part shall decline to purchase the gas-works property, etc., at the end of twenty-five years from and after the first of January, 1840, as is provided in the twenty-eighth section, it shall have the privilege of purchasing as aforesaid at the
If, for all or any of the reasons alleged by the appellant, the contract of 1846 is void, then the relinquishment of the city’s right to purchase in 1860 amounted to nothing, and, under the act, the franchise, resumed by the State, passed directly to the city. If, on the other hand, the city could relinquish the right in 1846, it must be because the parties
Whether time is or is not of the essence of a contract depends on many circumstances, some of which have no bearing on ordinary questions of construction. It was formerly the doctrine of chancery that the parties could not make time essential. Gregson v. Biddle, cited by Sir Samuel Romilly, in Seton v. Slade, 7 Ves. 265. Though this is no longer held, yet time is not ordinarily of the essence of contracts, and the mere use of negative words does not make it so. The general intention overrides particular words. The courts look at the object for the insertion of the provisions as to time, to questions of resulting injury, to the possibility of compensation, and especially to the
But let it be supposed that the times are essential; we come, then, to the conduct of the parties. In Benedict v. Lynch, 1 Johns. Ch. 370, express words avoiding the contract were used ; yet Chancellor Kent, after reviewing the authorities, came to the conclusion that, while in such cases time is of decisive importance, it may be waived by the parties themselves ; and he quotes with approbation the following words, used by Lord Loughborough in Lloyd v. Collett, 4 Bro. *469: “ In most of the cases, there have been steps taken. * * * I want a case to prove that, where nothing has been done by the parties, this court will hold, in a contract of buying and selling, a rule that certainly is not the rule of law, that the time is not an essential part of the contract.” So, in Falls v. Carpenter, 1 Dev. & B. Eq. 277, Chief Justice Ruffin says that where time is a substantial part of the contract, “ a court can no more dispense with it than with any other vital provision. But the parties themselves may dispense with it; and the inquiry, where it has once existed, is whether they have dispensed with it.” That time ceases to be important when the parties cease to treat it as such, and that they may waive the objection by their acts, is well settled. Webb v. Hughes, L. R. 10 Eq. 281; Wells v. Maxwell, 32 Beav. 408; Hunter v. Daniel, 4 Hare, 420; Hull v. Sturdivant, 46 Me. 34.
In the present case, the postponement of the time was in
The application of the principles laid down in the cases cited, to the facts here involved, is obvious. Whether the words of the act are mandatory in relation to the times or not, it does not lie in the appellant’s mouth to urge that they are so. Its own acts stand in the way, and it can invoke in its favor no principle of equity. The respondent wished to comply with the terms of the law as to time ; the appellant refused to do it. From the failure to adhere to the provisions as to the stipulated periods, the respondent der-ived injury, the appellant benefit. If we inquire'whether there has been delay injurious to the party resisting performance, the answer is, the delay has been to its advantage.
The stockholders of the appellant, who urge that without their consent the contract of 1846 could not be made, by virtue of that contract enjoyed the franchise from 1860 to 1870. The directors of the appellant, who, it is claimed, had no power to sell out the business of the company and terminate its existence in the future, did, in fact, by insisting on the contract which they subsequently repudiated, prolong the company’s enjoyment of the franchise for ten years.
In another aspect of the case, reasons pointing to the same conclusion arise. The appellant was bound to obedience to the law. The command of the Legislature was directed expressly to it. It could not by circuitous action do what it could not do directly, and defeat the public purpose of the State. The whole argument founded on the necessity of adhering to the times named in the act is of no avail unless it has this for its basis : that the city had an opportunity, at those times, of exercising its privilege. The purpose of the Assembly, not in regard to a mere matter of time, but in regard to the privilege itself, is defeated if the city is deprived of its choice. The essential purpose may be carried out if the period of decision merely is postponed; the whole scheme is set at naught if the opportunity for decision is not given. But the facts of the case show that, owing to the conduct of the appellant in 1860, the city forbore to press its right, and in 1865 forbore to pass any resolution. It was justified in believing that, as the contract of 1846 expressly provided that in the event the city shall decline to purchase in 1865 it shall have the privilege in 1870, these words meant something, and that, after getting the benefit of this provision, the appellant would, as it had engaged, allow the privilege in 1870. It is not by playing fast and loose with the contract — by now asserting, now denying its validity — that the exercise of the right can be prevented and the scheme of the General Assembly be defeated. It was not the intention of the Legislature that the appellant should, by management, or by any act of its own, renew its charter and prolong its life until 1890. Its monopoly, after 1860, depended on the city’s action, and the appellant was bound to do nothing to defeat the city’s privilege.
The application of the doctrine of estoppel to the con
It is with the sections of the contract of 1846 above quoted that we are concerned, not with clauses foreign to the subject of this action. As it is no good ground of estoppel against the appellant that it brought suit on the contract of 1846, so it is none that the respondent failed to observe some of its obligations in reference to matters foreign to those now in question. Matters are not made in pari materia by putting them in the same contract. The subject is to be considered; and so far as relates to the obligations here essential, the respondent performed all which were incumbent on it. Two acts of the General Assembly were procured providing for means of payment. It is true, no resolution was passed in 1865, and no suit was brought until 1870. But the city had no reason to doubt that the appellant would adhere to its contract. In the state of things which existed up to 1869-70, it would have been bad faith on the respondent’s part to sue ; and equity does not require acts inconsistent with the uberrima fides which it does require. In 1869, the city gave notice, resolved to buy the gas-works, and appointed arbitrators to value them. Early in December, 1869, the appellant refused to appoint arbitrators, or to sell. On May 21, 1870, this suit was brought. Before that, though not executed in form in the eye of equity, the purchase was made. In legal contemplation, the price of the gas-works and their appurtenances was fixed. The respondent held the amount of the purchase-money in trust for the appellant, while the appellant held the legal title to the gas-works and appurtenances as trustee for their equitable owner, the city. The vendor in such cases is, from the time of his contract, a trustee for the purchaser ; and the vendee, as to the money, a trustee for the vendor. — Green v. Smith, 1 Atk. 572; Huffman v. Hummer, 17 N. J. Eq. 263; King v. Ruckman, 21 N. J. Eq. 599;
Such was the condition of things when the contract called the tripartite agreement was entered into. This contract has been placed in antagonism to that of 1846, and the weapons with which the respondent has defended the contract of 1846 have been turned against it when it has attacked the contract of 1873. But there are broad contrasts between the contract of 1846 and that of 1873. The contract of 1846, in the features with which we are concerned, carries out the charter and the legislative will, while to essential features of these the contract of 1873 is in direct antagonism. Though by the contract of 1846 the right of the city to deoide in 1860 is surrendered, yet, as the substitution of later periods carries with it the material conditions of choice, if the contract of 1846, as made, is carried out according to the intent of the parties as expressed in it, there is in this respect no essential violation of the legislative will. If for its own benefit the appellant insisted on later periods, and the city acquiesced, what reason for objection could there be, provided the city in 1869-70 had its free choice? The divergence, if such, upon the facts of the ease was immaterial, and the facts showing its immateriality are stronger, in this respect, than those of almost any case which the books afford.
It is claimed that there is a difference between the property which, under the charter, was to pass to the city by purchase, and that which was to pass, by purchase, by the contract of 1846. But the charter does not show that other property besides the gas-works and appurtenances was to
The franchise was, just before the execution of the contract of 1873, in the city, and the appellant had no power to contract as it did. It was indeed a de facto corporation, and of course could be sued and treated as such. But, apart from the fact that the franchise had vested in the respondent, the gas-works and appurtenances were held in trust for the respondent. These the city officers had no power to part with, under the guise of dismissing a suit. A suit may be anything or nothing. To ascertain the nature of the act proposed to be done, the nature of the suit must be ascertained. Here the act involved the surrender, by the city officers, of the gas-works and franchise. The decree of the court below in this case has not created any rights or liabilities ; it has merely ascertained and established those which were before existing. Sufficient has already been said in regard to the nature of the franchise and the gasworks, their character as property, the purposes for which they were by the State intrusted to the city for the citizens, as well as the relation which the city officers bore to those for whom they acted, to show that the city had no such power as that implied in the so-called arrangement to dis
Not only did the tripartite agreement, under a clause providing for the dismissal of a suit, provide for the surrender of the franchise of the city and of the gas-works to the appellant, but in express terms that contract provided that it should be a substitute for the contract of 1846, and that the latter should be cancelled, and each party absolved from its obligations. Thus, the-contract of 1846 is again, and as late as 1873, recognized by the appellant as an existing contract, but recognized only to be destroyed ; a destruction, however, which would seem to imply its previous existence. In this clause, the effort and intention is apparent, the success of which would, upon the appellant’s own basis, defeat the legislative will and render nugatory the scheme by which the city was to have, at two periods, separated by an interval of five years, the privilege secured to it. Up to the date of the tripartite agreement, Feb. 28, 1873, the respondent, upon the appellant’s basis, had never had these privileges, which are the vital part of the legislative scheme. It had not, according to the appellant, had an opportunity of exercising the privilege in 1859-60, because the contract of 1846 prevented; so the appellant alleged at the time. The city had had no opportunity in 1869-70, because the contract of 1846, which extended the charter times of purchase, was void; so the appellant alleged at the time. Thus, just before the execution of the tripartite contract, the respondent, according to the appellant, had never had any two opportunities of choice, separated by an interval of five years. Though it may well be that the General Assembly thought it immaterial what precise periods of choice should be selected, it is undeniable that they intended that there should be two opportunities, and that the two should be
In the case of Wiggins Ferry Company v. Railroad Company (ante, p. 347), this court had occasion to consider, as affecting the validity of a contract, the power of a corporation to bind itself not to exercise part of the franchise committed to it by the State for public purposes. That case related to incorporated common carriers; but this feature creates no difference, the essential question being whether the public interests are involved. The authorities there cited, and what was there said, apply, so far as the principle is concerned, to this case. The rules by which the powers of such corporations are thus indirectly restrained rest upon principle, and their application to cases involving the validity of contracts made by such corporations is undoubtedly correct. It would indeed be singular doctrine, that, while the power of the State is limited, while it ceases to be sovereign, as, so far, it does when restrained by the obligation of a contract, the other party to the agreement should not be bound by a corresponding obligation. But the grantee in such grants is a subject of the law, as well as a contracting party. Franchises, often of immense value, are committed to such companies on the condition that they will serve the public according to the terms of the grant. If they may depart from those terms, they may select the profitable part of the franchise, and disregard those parts which, in the eyes of the grantor, were the consideration of the grant. This they cannot do. They cannot alter the grant, or make such provisions in contracts as imply the refusal or inability to exercise, on their
It is objected that tbe surrender of the power, however unauthorized, is not properly in question here, and that whether the contract of 1873 is ultra vires is not a pertinent inquiry. But if, as the cases cited show, a contract thus beyond the power of the corporation to execute cannot be the foundation of an action, how can it be the foundation of a defence? The cases of Bissell v. Railroad Co., 22 N. Y. 258, and Whitney Arms Co. v. Barlow, 63 N. Y. 62, have no application here. The present is not a case of a corporation, to which a consideration has passed, seeking to repudiate the corresponding obligation on the ground that its contract was ultra vires; and the public purpose creates another essential difference. Here, the defendant corporation pleads the contract, and, as against a plaintiff who makes out a prima facie case, asks a court of equity to declare that the contract of 1873 is a valid contract, and to award rights and property to the defendant, on the ground that the contract is valid. Even where a case is not founded on the agreement, yet if the action or interference of the court would promote the object of the agreement, or extend or facilitate its operation, the court will not assist either party in obtaining a collateral benefit arising out of a contract which is ultra vires of a corporation and against the policy of the law. Great Northern R. Co. v. Railway Co. (supra). In Taylor v. Railway Co., the point was made and overruled that dissentient shareholders only could take advantage of the objection of ultra vires in such cases, by bill in equity. L. R. 2 Exch. 369.
In considering the contract of 1873, we must look at the intention of the parties, and the purpose which the contract itself shows was intended to be accomplished. It is obvious that the two companies, the appellant, and the Laclede Gas-Light Company, intended to divide the city
The public purposes for which this franchise was given to the appellant are obvious from what the acts contain. To
It is urged that the city derived advantages from the contract of 1873 ; that suits were dismissed; time given for the payment of debts ; a standard fixed, below which gas could not be manufactured; an obligation imposed upon the appellant to pay salary for a gas-inspector; and that the city, being a stockholder in the appellant, received a portion of the purchase-money paid by the Laclede Company to the
But, further, how can the appellant in reason complain of advantages it has surrendered, when the contract of 1873 carries evidence on its face that the two companies knew the risks they were running, and took them as a part of their bargain? “ Such surrenders and abandonments by both companies to be done and effected in legal and binding manner.” What does this clause mean? Especially is this question pertinent when it is considered that the suit of the city was not dismissed, and when we also consider, in connection with its non-dismissal, the testimony of the then mayor of the city. As to the most essential part of the tripartite agreement, that agreement was and always remained unexecuted; and, by assent of the parties, its execution seemed to depend, if not on what is referred to in the clause just quoted, then on some condition not embodied in the contract. It is impossible to avoid being impressed, from the whole evidence, with the conviction that the validity of the agreement as made was a mooted point when the contract was executed; that the two companies intended to procure a legislative sanction if they could,
It follows from what has béen said, that the respondent was entitled to a decree; that the dismissal as to the Laclede Company was not error; and it also follows, if the principles laid down are correct, that the appellant was properly charged with profits from Jan. 1, 1870. It is assumed that in respect to the question of profits the appellant stands in the same position as a person who has made an ordinary contract for the purchase of real property, which the vendor refuses to convey. This position ignores a vital fact: that the franchise, by which alone the profits could accrue, had been resumed by its owner, the State, and had, during the pleasure of the State, become the property of the city. The provisions of the charter to this effect have been fully discussed. The appellant continued to use, as before, the franchise, and to use also the works and appurtenances which it held in trust for the city. Its use was further wrongful, as the appellant was disobeying an express command addressed to it. If this command had been obeyed, the appellant could have reaped no profits, nor can the law presume that proceedings would have been indefinitely protracted. The appellant is entitled-to urge no such plea, as its positive refusal, before Jan. 1, 1870, to comply with its contract fixed its position. The principles upon which equity proceeds in reference to compensation apply with a force increased by the peculiar circumstances of this case. Worrall v. Munn, 38 N. Y. 137; Nelson v. Bridges, 2 Beav. 239; Corporation of Ludlow v.
To give it interest would be obviously inconsistent with the theory upon which equity proceeds. The appellant is not entitled to be put in the same situation in which it would have been had it obeyed the law. It has throughout stood upon the basis of denying any right in the respondent, and has refused all tender’s. It is ixot entitled to interest. 6 Watts, 162, 207 ; 2 Watts & S. 365 ; 2 Saixdf. Ch. 273 ; 16 Serg. & E. 268.
It is further objected, that the court below exued in allowing the suit to be dismissed as to the Laclede Company, and charging the appellant with the amount received by it from the Laclede Company oix the latter’s purchase; that the decree is inconsistent, because, while it pi’oceeds upon the basis that the surrender and sale were ultra vires of the appellant, and that the appellant ceased to exist as a corporation in 1870, or at least in 1873, the decree xxevertheless charges the appellaixt with $655,000, the sum which the appellant received from the Laclede Company oxx the purchase. It is said that the coui’t below thus affirmed the sale which it had decreed to be void, and gave life to a corporatioix which, on its theory, had ceased to exist. But these inconsistencies are imaginary. As well might it be ai’gued that when a court gives judgment agaixxst a defendant iix axx action for money had and received, the court xxecessarily affirms the validity of every step that leads up to the receipt of the money. Facts do not cease to be such
It is finally objected, that if the appellant is to be charged, as it is, with the amount which was received for the property north of Washington Avenue, the appellant should be credited with what the property had cost. But it appears from the decree, that the appellant is credited with “the value of the gas-works and property of said defendant as the same existed on Jan. 1, 1870, which value the court finds to be the sum of $1,565,468.73, and also five per cent,” etc. The appellant asserts that this amount does, not include the property north of Washington Avenue, which, under the theory of the decree, belonged to the appellant. This assertion appears to be wholly without foundation, if we are to judge by the commissioners’ report, by the decree, and also by the conduct of the appellant in the court below. It seems clear that in the above aggregate the whole property, that lying north as well as south of Washington Avenue, is included. To say that the sum named comprises merely the latter, is expressly to contradict the words of the commissioners’ report. On Jan. 1, 1870, there had been no sale, and the “ commissioners report that the gas-works and property of the St. Louis Gas-Light Company, upon Jan. 1, 1870, consisted of real,
The commissioners are here reporting as to a fact actually found by them. Afterward, when giving schemes or possible plans for the statement of accounts, they say, under the third head, that that plan “is made up by assuming the works in 1873 (after sale) to have included the same items of property as on June 5, 1876,” etc. There, and upon that basis, the appellant is credited “ with the value of the works as they exist on June 5, 1876, at prices prevailing in 1870,” etc. So, in the same way, assumptions are made and a speculative basis adopted in the fourth plan. Both of these were rejected by the court below, which proceeded upon the basis of crediting the appellant with the value of the whole property as it existed on Jan. 1, 1870, as found as a fact by the commissioners, and charging the appellant with the amount it received from the Laclede Company, not with any estimated profits upon the property sold to the Laclede Company. It would indeed be singular if, disobeying the interlocutory decree, the commissioners had neglected to find one of the first facts to be found, the value of the whole property in 1870; yet, if not in the clause first above quoted, it is not to be found in their report. It is a curious fact that the appellant discovers for the first time, in this court, that it has received credit only for the value of the property south of Washington Avenue. In its exceptions to the commissioners’ report in the court below, its objection was not that the commissioners had omitted to find the value of the whole property as it was on Jan. 1, 1870, but that that value, as found, was too small.
No error has been pointed out in the record, and the judgment of the court below will be affirmed.