267 F. 47 | 8th Cir. | 1920
(after stating the facts as above).
“Separate and distinct causes of action disclosed by tbe record in a single suit, upon either of which a separate suit could have been maintained, and the determination of neither of which is essential to the disposition of the other, constitute separable controversies, within the meaning of the acts of Congress.”
“In a determination of the jurisdiction of the national courts, and the right to remove causes of action to them, indispensable parties only should be considered, because all other parties may be dismissed and disregarded, if their presence would oust or restrict the jurisdiction or the right.”
These rulés were stated and the authorities sustaining them were cited many years ago by this court. Boatmen’s Bank v. Fritzlen, 135 Fed. 650, 658, 663, 68 C. C. A. 288, 296, 301. The opinion and decision in that case was twice challenged and affirmed in the Supreme Court. Fritzlen v. Boatmen’s Bank, 198 U. S. 586, 25 Sup. Ct. 803, 49 L. Ed. 1174; Fritzlen v. Boatmen’s Bank, 212 U. S. 364, 371, 29 Sup. Ct. 366, 53 L. Ed. 551. The later decisions of .the national courts have not disturbed these rules. Texas Co. v. Central Fuel Co., 194 Fed. 1, 10, 114 C. C. A. 21, 31.
If the Wichita Company has not assumed and agreed by one or more of these acts thus pleaded to perform the original agreement of Patti-son in the ordinance contract to supply natural gas to the city and its inhabitants at not exceeding the 30-ceut rate, it is not bound under the complaint in this action to the city so to do, and the only controversies between the Wichita Company and ihe city are whether or not it has made any of these alleged assumptions. Each of the controversies concerning these assumptions, however, is conditioned by the acts, writings, and sayings of the Wichita Company, and by those alone. The trial and the determination of these controversies cannot adjudge or affect'the issue whether or not, by the Winfield Natural Gas Company’s purchase and use of the property, rights, and privileges of the old Winfield Company it assumed and agreed to perform the conditions of the ordinance contract. It was not and is not, therefore, an indispensable or necessary party to the trial and adjudication of the controversies between the city and the Wichita Company.
Those controversies arise from, and their determination is conditioned by, alleged agreements of assumption by the Wichita Company of the obligations of the grantee of the ordinance contract and its successors, distinct and separate from the alleged agreement of assumption thereof by the Winfield Natural Gas Company by its purchase, acceptance, and use of the property and franchises of the old Winfield Company. The causes of action alleged against the Wichita Company, on the one hand, and that averred against the Winfield Natural Gas Company, on the other hand, were separate and distinct, conditioned by separate alleged contracts, upon either of which a separate suit might have been maintained, and the determination of none of the alleged causes of action against one of these corporations was essential to the determination of any of the causes of action against the other. Their controversies with the city were therefore separable, and the court below had jurisdiction of this suit.
. Unless the Wichita Company contracted with the city to supply it and its inhabitants with natural gas at the 30-cent rate by some written or verbal promise, or by acts equivalent thereto, it is not lawfully bound so to do, and it has the right to refuse to sell or deliver it at that rate, or at any other rate. There is no allegation in the complaint that it ever made any written or verbal promise to the city or its inhabitants to that effect. The complaint contains averments, however, that by certain acts, which it sets forth in detail, that company assumed the obligation so to do of C. H. Pattison and his successors and assigns under the ordinance contract of 1906.
Now, counsel for the city claim and have alleged in the complaint, that by the facts and acts just stated, the Wichita Company assumed and agreed to perform the obligation of Pattison and his successors under the ordinance contract to furnish natural gas to the city and its inhabitants at the 30-cent rate until October 23, 1926; but one who thoughtfully reads the complaint cannot fail to see from it that the only way in which the Wichita Company supplied gas to the city or its inhabitants through the old Winfield Company or the receiver, during these years, was through the performance of its Hackney supply contract of November 25, 1906, which had been assumed by the Winfield Company, and under the terms of that contract. That agreement evidenced and governed the relation of the Wichita Company to the Win-field Company, and the ordinance contract covered the relation of the Winfield Company to the city and its inhabitants. Neither the city nor any of its inhabitants was a party to the Hackney supply contract of the Wichita Company. They were parties to the ordinance contract with the Winfield Company and to no other. They purchased their gas
But these acts and facts tend rather to prove the intention and careful provisions not to assume rather than an assumption by the Wichita Company of the obligations of Pattison and his successors under the ordinance contract. If it had intended to agree with the city to assume those obligations, it would naturally have purchased the property and franchise of the -old Winfield Company in its own name and vested their title in itself, and then have ended the supply contract of November 25, 1906. If, as alleged, it became the owner of the property and franchise held by the old Winfield Company by the sale, it was then the owner of that company’s interest in the Hackney supply contract at the same time. It could then have merged them and ended the supply contract. The legal presumption is that it did not intend to and did not do so, and the fact that the Winfield Natural Gas Company assumed the obligations of the old Winfield Company thereunder, and
In considering these transactions, the fact must be constantly remembered that the Wichita Company owed no duty to supply gas to the city or its inhabitants, and that it had no contract with the city or its inhabitants to assume any obligation to them to furnish gas, and that there is no fraud or deception alleged in any of these transactions. It had the right to refuse to assume, and to prevent assumption, of the obligations of its insolvent debtor to the city, and this is what it did; and it did it in the ordinary, natural, and normal way, by organizing a corporation that made that assumption, and thereby prevented its stockholder, the Wichita Company, from so doing. Stripped of legal inferences and conclusions of the pleader, this was the transaction: The Wichita Company was the largest creditor of the old insolvent Win-field Company. To save something from its wreck, as the judicial sale of its debtor’s property approached, it organized the new corporation, the Winfield Natural Gas Company, to take its property and assume its obligations to the city under the ordinance contract and to the Wichita Company under the Hackney supply contract. It caused its president to bid in the property of the insolvent debtor at the sheriff’s sale and to convey it to the new company. It paid the sheriff the purchase price with its funds and money, doubtless chiefly, with the mortgage bonds of its debtor which it held, and in payment by the new company for this property of the debtor, the title to which it caused Neely to vest in the new company, it took the stock of that company.
It is not denied that one may purchase the property and franchise of a public utility corporation, and so use it or refuse to use it as to make himself liable for the obligations of the former holder to operate it; but it is the common practice at the judicial sales of property and franchises of insolvent railroad companies, water companies, light companies, and other such corporations for one or more of their creditors, or a committee for them to organize a new corporation to take this property, for one or more of the creditors or the committee to bid in the property at the sale, for the creditors to pay the purchase price chiefly with the securities of the insolvent debtor which they hold, for the bidder or bidders to convey to and vest the title to the property and franchises in the new corporation, which accepts and uses them, and for the creditors or some of them to take the stock of the new company in payment therefor. No decision or opinion of any court has been cited or discovered to the effect that such bidders at such sales, who constitute in fact a mere conduit through which to pass the property and franchise rights to the new corporation, or the creditors who pay the purchase price therefor and take the stock of the new company, thereby assume the obligation of the railroad company perpetually to operate its railroad, or of the other like corporations to discharge their franchise duties to the public after the new corporation has assumed and entered upon the discharge of them. This method of transferring the property and franchises to a new corporation was devised and has been practiced for the express purpose of preventing such a result, and this court will hesitate long before holding that Mr. Neely or the
In the third place, the city alleges that the Wichita Company has assumed the obligation of Pattison and his successors by these alleged facts: Since July, 1909, it has, by virtue of the terms of the ordinance contract and the acceptance thereof, and through the agency of the Winfield Natural Gas Company, occupied the streets, alleys, and avenues of that city, by maintaining therein its gas mains, pipes, etc., formerly belonging to the old Winfield Company, and carrying its gas through these mains and pipes, and selling it to the inhabitants of the city at the 30-cent rate. But while the complaint recites the acceptance by the Wichita Company of the ordinance contract, it also alleges the facts which the pleader claims constitute this alleged acceptance, and these alleged facts not only fail to evidence such an acceptance, but show that there was no acceptance. The complaint discloses the fact that the Wichita Company’s only occupancy or use of the streets and alleys was by the fact that the Winfield Natural Gas Company distributed the gas which the Wichita Company delivered to it at the limits of file city through the mains and pipes of the Winfield Natural
The analysis and consideration of the averments of the complaint which have now been made have resulted in the conclusion that they are insufficient to show that the Wichita Company ever made or assumed any agreement with, or obligation to, the city or its inhabitants to supply natural gas to them, unless that agreement or assumption can be found in the Hackney supply contract. Two questions therefore arise: Was the Wichita Company on June 14, 1919, when the court below dissolved the injunction, bound by the Hackney supply contract, as changed by the supplemental agreement of January 2, 1912, to the Winfield Natural Gas Company, by a lawful contract, enforceable in equity, to deliver natural gas to that company at the rate fixed in that contract or at any other rate? Second, if it was so bound, was the city of Winfield the proper party to enforce that obligation ?
The first of these questions must be answered in the negative; (1) because that contract was void for lack of mutuality ever after January 2, 1912, as to natural gas not delivered and accepted; and (2) because, under the complaint and the evidence in this case, the capability of the gas wells and acreage of leases in the gas belt of Kansas, described in the contract, to supply natural gas there specified, which conditioned the existence of any obligation of the Wichita Company to supply it, did not exist on June 19, 1919, and for a long time prior thereto. For the reasons for this answer, reference is made to the opinion in Hutchinson Gas and Fuel Co. v. Wichita Natural Gas Co., where this question is more exhaustively discussed.
The second of these questions must also be answered in the negative,, because neither the city nor any of its inhabitants was or is a party to that supply contract, or ever became an assignee of any of the obligeesof the Wichita Company thereunder, either by express assignment or subrogation.
The Winfield Natural Gas Company was indeed the agent of the Wichita Company. But the extent and terms of that agency were set down in plain words in the Hackney supply contract; they neither empowered nor permitted the Winfield Natural Gas Company to assume for or on behalf of the Wichita Company the obligations of Patti-son and his successors under the ordinance contract. No mistake, fraud, deceit, or other equitable ground for avoidance of these legal relations of the parties has been discovered in the complaint or in the evidence. The reinstatement of the interlocutory injunction would be in effect a decree of temporary specific performance by the Wichita Company of alleged contracts which it never made, or which as to their executory parts are unenforceable and void.
The record in this case falls far short of presenting clear proof that the court below disregarded any of the applicable rules or principles of equity jurisprudence, or abused its discretion in dissolving the injunction. Its order must be affirmed; and it is so ordered.