87 Ala. 245 | Ala. | 1888
This bill was filed by the Montgomery Gas-Light Company, against the City .Council of Montgomery, to enjoin the city authorities from “entering into any contract, or passing any ordinance granting to any person or corporation the right to lay pipes for conducting gas
On the 30th day of August, 1852, the City Council of Montgomery passed an ordinance “to provide for the lighting of the city of Montgomery with gas,” in and by the first section of which it was provided, “that the exclusive privilege shall be, and the same is hereby, granted for the term of fifty years from the first day of November, A. D. 1852, to John Jeffrey & Co., of Cincinnati, Ohio, their associates, successors and assigns, of laying pipes for conducting gas under any street, alley or thoroughfare within the corporate limits of the city.” This grant is made to depend upon certain conditions, specified in section 2 of the ordinance, which is in the following language: “That the privilege herein granted is upon the condition, that the said John Jeffrey & Co. shall, on or before the first day of May, A. D. 1854, have completed the requisite apparatus for manufacturing gas, •and shall have laid in connection therewith three miles of main pipe in the streets of Montgomery, and shall further lay, from time to time, such additional main pipes in any street, alley or thoroughfare, as shall be required by the city council; Provided, that the demand for gas to be supplied by such extensions, shall afford a reasonable prospect for a fair remuneration.” Subsequent sections required Jeffrey & Co., their successors and assigns, to furnish from time to time, and at all times, for the public use and benefit, such quantities of gas, of the most approved quality, as might be needed for lighting the streets of the city, at one-half the price per cubic foot, at which gas is furnished to individuals; and that gas in like quantity, and of the same quality, should be furnished the inhabitants of said city, at as low a price as gas, under similar conditions, is furnished to the inhabitants of any other Southern city of equal or greater population.
By section 8, with the terms of which we are chiefly concerned,’it is provided: “That at the expiration of twenty-five years from the first day of November, A. D. 1852, the City Council of Montgomery shall have the right or privilege of purchasing from the said John Jeffrey & Co., their associates, successors and assigns, all the pipes, buildings and apparatus constituting the gas-works, at such price as may be ascertained and determined by five disinterested men, two of whom
Section 9 evidences the purpose and contemplation of the parties, that Jeffrey & Co. should secure a legislative charter, in order to afford citizens and the City Council the opportunity to take shares in the capital stock of a corporation, to be organized thereunder as the successor of the original grantees. The ordinance was assented to by Jeffrey & Co., and went into effect on October 14th, 1852.
The contract thus made, by the adoption of the ordinance on the part of the city and the assent of Jeffrey & Co. to its terms, was soon afterwards assigned by Jeffrey & Co. to certain associates, who were constituted a body corporate by an act of the General Assembly, approved February 15, 1854, which act expressly ratified and confirmed the original contract, as a compact between said company, the complainant in this cause, and the City Council. Under this contract, the gas company established a plant for the manufacture of gas, and laid pipes under the streets for its distribution to and throughout the city, and carried on the business in accordance with the ordinance, for the first twenty-five years of the grant. At the end of this time, the City Council sought to avail itself of the right and privilege guaranteed to it by section 8 of the ordinance, as that section was construed on the part of the city; and “with a view to purchasing” the property of the gas-company, appointed two men, who were citizens of Montgomery and gas-consumers, to act, with two others to be appointed by the company, and a fifth to be selected by the four thus appointed, in the valuation of such property. The company was notified of this action, and requested to name the two appraisers on its part. This the company declined to do, on two grounds: first, that the right reserved to the city, by section 8, was the right to purchase the property, and not the right to have it appraised with a view to purchasing, and that the city had not made its election, upon which alone depended both the necessity and right to have the price fixed; and, second, that the city had failed to comply with the terms of section 8 as to the character of the appraisers it had appointed, in that those named by it were, not “disinterested! men,” as therein required. The City Council, considering that this refusal and failure on the part of the company was a breach of the contract, in such sort that the city was authorized to repudiate
It may be taken as conceded by the arguments at the bar, that the grant of the exclusive privilege to lay pipes in the streets of the city, for the considerations stipulated, was a valid exercise of corporate power, confirmed, as it was, by legislative action. Whether a like grant would be upheld under the provisions of the constitution now in force, we need not decide. It will also be treated as admitted, that the Montgomery Gas-Light Company succeeded to all the rights of John Jeffrey & Co., and for the first twenty-five years of the grant complied with all its terms and conditions; and hence was, for that time, entitled to the exclusive privilege conferred by the ordinance.
Much has been said in argument concerning the rights of the city in the premises, assuming a breach of the contract, in the particular referred to, to have been committed, on the part of the gas company. The appellant insists, that the city’s remedy for such violation lay in an action for damages ; or, if this mode of redress should be held inadequate, full relief could be had on a bill for specific performance. On the other hand, the appellee contends, that commensurate relief could only be had by treating this contract as abrogated, and securing the benefits, which the default of the company had denied to it, through another contract with other parties, on whom it proposed to confer the privilege of using the streets for the purpose of distributing gas. This right is denied by the appellant, because, it is said, to allow it would be to give section 8 the effect and operation of a condition subsequent, which its terms do not import or require; and we are referred to the authorities which support the doctrine, that such conditions are not favored in the law, and the language of contracts should be construed, in cases of doubt, against the divestiture of an estate by acts or omissions occurring after its creation. Without, for the present at least, entering upon an elaborate consideration of
The other mode of redress suggested by the appellant does not exist. There is no principle better settled in reason and by authority, than that an executory contract for the sale of property, by the terms of which the price to be paid for the whole subject-matter is to be determined by appraisers, to be selected directly or indirectly by the parties, can not be specifically enforced in equity, so long as there is a failure from any cause to appoint referees, or a failure of such referees, after appointment, to assess the value. — Vickers v. Vickers, 3 Eq. Cases (L. R.) 532; Milnes v. Gery, 14 Vesey, 400; Cooth v. Jackson, 6 Ves. 34; Thurnell v. Balburnie, 3 M. & W. 786; 1 Benj. on Sales, p. 54; 2 Benj. Sales, p. 755. A different rule prevails, where the thing which is to be appraised by such valuers constitutes only .a minor part of the subject-matter of the contract; as, for instance, where land is purchased at a fixed price, but the contract of sale also includes fixtures, or timber, or furniture, the valuation of which is to be determined by third persons; or, as in the ease of a contract of partnership, containing a stipulation for a sale by one co-partner to the other, on dissolution, at a price to be ascertained by arbitrators. But the case at bar is not of this class.—Smith v. Peters, 20 Eq. Cas. (L. R.) 511; Dinham v. Bradford, 5 Ch. App. Cas. 521.
The attitude of the city could be justified, by treating its contract as a grant of the right to lay pipes in its streets, coupled with a covenant not to grant a like privilege to others for fifty years; and so regarded, it would be competent for -the city, upon the failure of one of the considerations on which it so covenanted, through the default of the company with respect to the right of purchase given by section 8 of -the ordinance, to hold itself no longer bound thereby. This view, we think, might be taken, and this construction resorted to, if necessary to the ends of justice. Whether it is necessary depends, of course, upon the question, whether
The presumption would be, that a construction which produces such an unequal status of parties, who, in the outset, at the time of executing the stipulation in question, and with reference to that stipulation, dealt on terms of the utmost equality, is not in accordance with their intention; and it should not be allowed to obtain, unless the language employed by them requires it. Does the language of section 8 lead to this result? It is possible to impute two purposes to the parties in the ase of the words, “at such price as may be ascertained and determined by five disinterested men,” &c. One of these purposes could have been subserved by holding the meaning to be that, after the city had elected to purchase, there should be an ascertainment and a determination by five men of the amount it should pay. The only other possible meaning is, that the appraisement should be first made, and the city’s election predicated on it. Considering, on the one hand, that many things might have transpired between the date of the contract and the time at which the option of the city was to be exercised, to make the sale objectionable to the company, and to induce it to throw obstacles in the way of the city’s acquisition of its property; and on the other hand, that the property of the company was of such public character, so open to inspection, especially on the part of the municipal authorities, is it not more reasonable that the provision quoted was intended to further and secure the consummation of the sale after election made, than to afford the city data upon yhich to make
The same conclusion would be reached by considering the question from another point of view. The legal effect of section 8 of the ordinance was to impose on the gas company the duty of offering its property to the city, at a price to be ascertained and determined in a certain way. The rights of the parties on November 1, 1877, were precisely the same as if the contract had been silent as to the city’s right to purchase; and the company, of its own volition, not induced thereto by an antedecent obligation, had then offered to sell its property to the city “at such price as may be ascertained
It is thus seen that, from whatever point of view section 8 of the ordinance is regarded, the same result as to its interpretation is reached. Every consideration of fact presented by the transaction, and every principle of law applicable to it, concur in the enforcement of the conclusion, that the right of the city was to make its election with reference to the purchase of the property at a price to be thereafter appointed; until the city exercised this option in such way as to bind it to purchase, there was no obligation on the company to proceed with the appraisement; that the city did not elect to purchase, and the company was not in default by reason of its failure to appoint appraisers.
Considering the effect of section 8 to be, as we have said, to require an offer to be made by the gas company on November 1,1877, to sell its property to the city, and the rights of the parties on that day to have been the same as if the offer had not been induced by the contract, it follows that the subsequent rights of the parties are to be determined by the principles of law applicable to ordinary offers to sell, in which there is no limitation or specification of the time in which the proposition is to be passed on and accepted or rejected by the other party. Under such circumstances, the rule is well settled, that the acceptance must be made within a reasonable time. What would have been a reasonable time in this case, we need not undertake to determine with any approach to precision — a week, it may be, or a month, or perhaps longer — as the question here is, whether the proposition was open to acceptance up to December 28,1885, when the bill was filed; and we have no hesitancy in saying that was far in excess of our conception of what would have been a reasonable time during which the gas company should have held itself ready to consummate the sale to the city council. 1 Benj. on Sales, p. 61, n; Judd v. Day, 50 Iowa, 247; Martin v. Black, 21 Ala. 721.
This construction comports with the language employed by the parties, which gives the right of purchase “at,” and not after a particular time, or for an indefinite period; and is the more reasonable in view of the fact that the property is of that character in which investments are usually made with regard to their permanency, and that an outstanding indefinite right of purchase would naturally depreciate its value. The company, at the time of instituting this suit, was, therefore, under no obligation to sell to the city, and was not required to embody an offer to do so in its bill.
It remains to be considered whether the case presented by the bill of complaint is such a one as calls for, or admits of the interposition of a court of equity by injunction. If an
The principle announced in this case has received the indorsement of such text-writers as Billon and High, and is supported by the weight of adjudications. — High on Injunc. § 1246; 1 Dillon Mun. Corp. § 308; Chicago v. Evans, 24 Ill. 52; Smith v. McCarthy, 56 Penn. St. 359.
We consider this the better view of the question, though