Domestic Telegraph & Telephone Co. v. Metropolitan Telephone & Telegraph Co.

| N.J. | Jun 15, 1885

The following dissenting opinion was delivered by

Magee, J.

My examination of this case constrains me to a conclusion different from that reached by a majority of this court. It seems proper that I should briefly state the reasons for my conclusion.

Appellant invoked the aid of a court of equity for relief upon a contract between it and the Bell Telephone Company of New York. The contract provided for the conduct of a telephone business in a certain district for a period of five years, and contained the following clause:

“ 11th. If, at the expiration of the above period of five (5) years, the party of the first part [the Bell Telephone Company of New York] shall not desire to conduct the business of telephonic district exchange directly within said district of the party of the second part, or of merging said district into some other district, but shall, on the contrary, desire to have such business conducted for it, then and in such case the party of the second part shall have the first right of acquiring the license or agency to conduct such business at such rate or rental, and upon such terms, as may then be fixed and determined by said party of the first part.”

Appellant’s claim for relief is based on the provisions contained in this clause. In aid of the relief it sought, it applied to the court below for a preliminary injunction, which was refused, and the propriety of such refusal is the question presented by this appeal.

I shall assume that if appellant appears, upon the facts disclosed in its bill and the answers of respondents, and the affidavits annexed to each, to be entitled to any equitable relief looking to the future conduct of the business referred to in this clause, a preliminary injunction should have issued. For it is manifest that any relief possible to be accorded appellant at the final hearing would be valueless if, in the meantime, it could be ousted from its business, and its patrons and customers diverted to other companies.

The question then is, Was appellant entitled to any relief upon the facts shown by the pleadings, when the application for a preliminary injunction was made ?

I am constrained to conclude that appellant was entitled to equitable relief under this clause.

In the first place, it clearly appears, in my judgment, that the Bell Telephone Company of New York did not desire to conduct the business of telephonic district exchange itself within the district in question, but did desire to have such business conducted for it. Its transfers of interest and license were so made that this business was considered, and the transferees took what interest they acquired expressly subject to the right which appellant might have to compel an extension or renewal of its contract.

In the second place, it also appears that the Bell Telephone Company has not desired to merge this district with any other. The various contracts show a design to include this district with other territory under the control of one corporation, but I can perceive nothing to indicate that the district in question is to be enlarged or merged with any other, within the meaning of this clause.

The result is, that appellant, by the express terms of the contract, is entitled to the first right to acquire the license or agency to conduct such business — i. e., the business which it had been conducting under the same contract.

But it is urged that such a contract cannot be enforced for want of certainty in respect to its terms. In my judgment, the objection cannot prevail. It is true that the clause contains the extraordinary stipulation that the license or agency which appellant has the first right to acquire, is to be on such terms as shall be fixed and determined by the Bell Telephone Company.

In dealing with this most unusual contract, I do not propose to examine the point pressed on the argument, respecting the applicability of arbitration clauses in this contract, to a case of disagreement respecting the terms for the future conduct of the business. Nor do I enter into the question of the court’s power, if the terms fixed shall be unconscionable. Taking the language as it is, it is a contract to give an option to acquire a contract to do a specified work on terms which are to be fixed by one of the parties. If those terms have been fixed in the prescribed manner, then there is no longer any uncertainty, and the contract becomes capable of specific performance, if the party entitled to the option accepts the terms and asks performance.

The contracts disclosed by the answer are such that it is argued that terms on which the business covered by this clause may be conducted, have been fixed. 'Whether these terms are such as appellant can perform is a question not to be considered. If they relate to the business in question — include no more and exclude none — then appellant has a first right to acquire the business on those terms. It is premature to say it cannot do •what it has had no opportunity to attempt to do.

In my judgment, the contracts do disclose the terms on which this business may be conducted. Upon those terms appellant has a right to a contract for the conduct of this business; in other words, to a specific performance of the contract for a contract.

Such relief can be afforded under appellant’s bill.

But, if I entertained a doubt whether the terms on which the business in question may be conducted in the future have been fixed, I should still conclude that appellant is entitled to some relief. In my judgment, it has a right to require them to be fixed in pursuance of the agreement, and thereupon to enforce its first right to take the business on these terms.

Where contracts have left terms to be fixed by arbitration, and one of the contracting parties has refused to enter into the arbitration according to the contract, courts of equity have declined to compel the refusing party to enter into the arbitration he has contracted for. This refusal, I apprehend, is grounded on the general rule that courts of equity will not specifically enforce an agreement to submit any matter of difference between parties to such a tribunal. But the contract before us differs. The contracting party has stipulated to fix terms not by the adjudication of others, but by its own judgment. I can perceive no reason why it should not be compelled to perform this solemn stipulation. The court should not be deterred from according at least this measure of relief upon this unusual contract, by the suggestion that terms will be fixed such as will render acceptance impossible. We have no right to assume that the respondents will fix unconscionable or exorbitant terms. At all events, aj>pellant has a right to know the terms fixed. If they are such that-he cannot accept them, and the business is afterwards granted to other’s on easier or better terms, it can hardly be possible that appellant would be remediless.

I conclude, therefore, that appellant is entitled to some relief in either view that can be taken of the subject, and, therefore, the preliminary injunction asked for ought to have been allowed. I am constrained to vote for the reversal of the decree below.

For affirmance — The Chief-Justice, Dixon, Parker, Reed, Clement, Cole, Whitaker — 7. For reversal — Depue, Magie, Scudder, Brown, Paterson — 5.