| Ky. Ct. App. | Jun 15, 1897
delivered the opinion of the court.
This action was brought in the Shelby Circuit Court by appellant, Schmidtz, Trustee, and the Northern Division of the Cumberland & Ohio Railroad Company, against the Louisville & Nashville Railroad Company, etc., to' compel said Louisville & Nashville Railroad Company by mandatory injunction to continue to operate the northern division of the Cumberland & Ohio Railroad Company from Shelby-ville to Bloomfield in accordance with a lease and contract set out in the petition.
It appeal's from the allegations of the petition that the northern division of the Cumberland & Ohio Railroad Com* pany in 1879 leased to the Louisville, Cincinnati & Lexington Railway Company its road from Eminence to Bloomfield, as set out in the lease, which reads as follows:
LEASE OF C. & O. TO L., C. & L. RY. CO.
This indenture of a lease made and entered into by and between the northern division of the Cumberland & Ohio Railroad Company, of the first part, and the Louisville, Cincinnati & Lexington Raihvay Company, of the second part, both railroad corporations duly organized under the laws of the State of Kentucky.
Witnesseth: That for and in consideration of one dollar*443 cash in hand by the party of the second part, and in consideration of the mutual covenants and stipulations hereinafter contained, the said party of the first part does hereby lease to the said party of the second part all that part of the first party’s unfinished road-bed, right of way, with improvements and appurtenances, depots and depot grounds, machinery, tools and implements, together with all its property, rights and franchises, including unpaid subscriptions to capital stock, dues, and demands belonging to or in any wise appertaining to the said first' party’s line of railway at the town of Eminence, Kentucky, thence southwardly through a portion of Henry County, and the counties of Shelby and Spencer, and to Bloomfield in the county of Nelson, and the State of Kentucky, for the period of thirty years from the date of full execution hereof, upon the terms, conditions and stipulations hereinafter set out.
1. Under directions of the stockholders of said first party, its president and directors will execute a mortgage upon all the property, rights and franchises belonging to or in any wise appertaining to said first party’s line of road hereinbefore described, for the security of $850,000 of mortgage coupon-bonds, having twenty years to run and bearing interest at the rate of seven per cent, per annum in terest payable on the 1st days of June and December, of each year, all of which is fully set out in said mortgage.
Now said bonds and coupons are to be fully prepared, signed and countersigned and made ready for use, as in the charter of said first party and said mortgage provided, and the same will be delivered to said second party within sixty days after the delivery of this lease.
3. A fundamental condition of this lease is that if said second party shall not be able to dispose of bonds amounting at their face value to $250,000, the proceeds to be in money, material, or labor, by or before the 1st day of September, eighteen hundred and eighty, then this lease terminates, and the parties hereto are released, and said second party is to restore to said first party all bonds; provided, however, that no absolute sale of any of said bonds shall be made by said second party unless and until it can place not less than two hundred and fifty thousand dollars in the value thereof in money or its equivalent; and when that quantity of said bonds have been disposed of by said second party, it shall, as soon as practicable, and not later than the 1st day of September, eighteen hundred and eighty, begin the construction of said first party’s said line, of railway; and a failure to begin work within said time shall operate as a termination of this lease.
Whenever said $250,000 of said bonds shall have been
4. When commenced, said construction shall be pushed ' as rapidly as possible, with due regard to the greatest economy; and the work and superstructure is to be as for a first-class single track railway, with the same gauge as the track of said second party’s line of railway.
5. It is further agreed that said second party shall furnish all the necessary locomotive engines and rolling stock to operate said line of railway; and for the use of same saic' second party is to receive out of the gross earnings of said first party’s line of road the cost of the wear and tear to-such engines and rolling stock as may be so furnished.
But the first party reserves the right to furnish all, or-so much as it can, of said rolling stock, and when so furnished said first party shall receive the same compensation there
6. It is further agreed and understood, that in the operation of said line of railway said second party will make to said first party quarterly returns, giving full details of earnings and operating expenses, including the expense of keeping road-bed in order; and the net profits arising therefrom shall be applied to the payment of interest and providing for sinking fund, and retiring said mortgage bonds.
But out of the gross earnings shall be first deducted annually the sum of $1,000, which shall be paid to said first party, with which to pay the expense of keeping up its organization; and if the net earnings do not prove sufficient to pay the interest and provide for the sinking fund on said mortgage bonds, then said second party, if all other sources of raising money of said first party prove insufficient, wili supply the deficiency, so far as it may be done, by appropriating the net earnings, or so much as may be needed, on its own lines, which may accrue by reason of business coming to it from or over said first party’s line.
This pledge and assignment shall be made effectual by mortgage properly executed, acknowledged, and recorded; and should it become necessary to use any of the net earnings on the lines of the second party to pay said interest and sinking fund, or any part of either, then all amounts so used, as well as all monies paid for said first party by said second party, shall be treated as interest bearing debts, interest at the same rate with said mortgage bonds, payaable half yearly, and to run from date of such payments, the debt and interest to be repaid out of said net earnings
7. It is further agreed and understood, that whenever the net earnings from the leased premises shall be sufficient to pay oil the interest and sinking fund on said mortgage bonds for $350,000, or such portion thereof as is outstanding, and to repay said second party all dues and demands then due or owing, the surplus net earning-s, unless used in retiring said bonds as provided in said mortgage less one-tenth thereof, shall be paid over to said first party, the one-tenth of said net earnings to be retained by said second party for its own use.
8. It is-further agreed and understood, that so long as said second party may operate said leased line of railway, no greater rate of charges, either for freight or passage thereon, shall be demanded or received under its regular tariff on its own lines of railway for local freights and passage.
9. It is further agreed and understood, that said first party assigns, transfers and sets over to said second party all claims, dues and demands, choses in actions, unpaid sub
10. It is further agreed and understood, that this lease is not assignable without the consent of tire grantor; that during the existence of said lease the second party will pay all taxes lawfully assessed against said leased premises, the amount thereof to be charged to operating expenses; and at the termination thereof said leased premises shall be restored to said first party in good repair, unless the same be extended or renewed by mutual consent, or unless prevented by unavoidable casualty, legal proceedings or operation of law.
11. The second party hereby agrees to furnish any means necessary to complete said first party’s line of road from Eminence to Bloomfield which may not be derived from the sale of the bonds to be issued by said first party, and also to furnish any means necessary to pay any interest which may become due on said mortgage bonds previous to the completion of said first party’s line of road, which may not
12. If said second party be hindered or delayed in beginning or completing said line of railway by act or omission of said first party or by legal or equitable proceedings, then the period or periods of such delay shall not be counted as part of the: time within which said second party is to do or perform any acts or things under this contract.
In testimony whereof, the said second party, acting under .authority and approval of its stockholders duly had in stockholders’- meeting assembled, on the 24th day of June, eighteen hundred and seventy-nine, has caused these presents to be signed in duplicate, in its corporate name, by its president and countersigned by its secretary, and its corporate seal hereto affixed; and the said second party, acting under authority and approval of its stockholders, duly had in stockholders’ meeting assembled, on the 28th day of July, eighteen ■hundred and seventy-nine, has caused these presents to be signed in duplicate in its corporate name, by its president and countersigned by its secretary, and its corporate seal hereto affixed, this---— day of-, 1879.
It will be seen from said lease that it first contemplated building the road from Eminence to Bloomfield, but after-wards the contract was modified, as shown by the contract, which reads as follows: •
Modification of lease — This contract, made and entered into by and between the Northern Division of the Cumber
Witnesseth: That for and on account of the difficulties of carrying into effect the contract of the parties of the first and second parts hereto, in relation to the lease, construction ■and operation of said first party’s proposed line of railway from Eminence to Bloomfield, of date the 28th day of July, one thousand eight hundred and seventy-nine, said parties have and do hereby agree upon the following changes and modifications of said contract and the mortgage therein named, to take effect when and as soon as this change and modification shall have been duly and properly approved by a majority of the stockholders of each of said companies, and fully executed and recorded in the proper offices, when to all intents and purposes the said contract so amended and modified shall be regarded and taken as the true contract and agreement between the parties hereto.
1. Whenever said'second party shall be able to dispose of said mortgage bonds, provided for in .said contract and mortgage, amounting at their face value to the sum of $150,000, (one hundred and fifty thousand dollars), and said bonds numbered from one to one hundred andfiftyinclusive,theproceeds in money, labor or materials, the same may be done, and then this contract as amended and in. all its particulars becomes absolute, and the construction of that portion of said first party’s line of railway between Shelbyville and Bloomfield shall be commenced and pushed tocompletion as rapidly
2. Not more than $250,000 (two hundred and fifty thousand dollars) of the face value of said bonds, numbered from one to two hundred and fifty inclusive, shall be used or disposed of in and about the construction of said railroad between Shelbyville and Bloomfield, and $100,000 (one hundred thousand dollars) of the face value of said bonds, numbered from two hundred and fifty-one to three hundred and fifty (both inclusive), shall be set apart and faithfully preserved in such manner as the board of directors of the first and second parties may agree, for the ultimate construction of said first party’s road between Eminence and Shelbyville; but said second party shall not be bound to begin the construction or operation of said last named portion of said railroad until, in the judgment of the board of directors of the said second party, the operation of the same would result in sufficient earnings to pay operating expenses and interest and sinking fund on the amount required to complete the same; and the mortgage heretofore made to Joshua F. -'Speed, trustee therein, is hereby so modified that the said two hundred and fifty bonds to be used in constructing «aid railroad between Shelbyville and Bloomfield shall con
3. Before any of the said bonds, numbered from one to two 'hundred and fifty, both inclusive, shall be sold or disposed ■of, each shall have a printed or lithographed indorsement thereon to the effect that none of them or their coupons have any lien upon the company’s property, or franchise or line of road from north of SShelbyville until the one hundred bonds aforesaid are issued or used, and that por
4. The boards of directors of the first and second parties may agree to the use of the second-hand rails to be sufficient for the safe transmission of trains, and to be removed and replaced as fast as they become unsafe. The price of said second-hand rails to be agreed upon by said boards before being used.
5. In all respects in which this contract is inconsistent with the original contract or mortgage, said originals are abrogated and the contract as modified and amended by this agreement shall be taken as the true existing contract between the parties.
In testimony whereof the said first and second parties, acting under directions of their respective stockholders, have each caused this contract to be signed with their corporate names and seals annexed by their respective presidents, and countersigned by the secretaries, and also duly signed by the said Joshua F. Speed.
MORTGAGE OF C. & O. R. R. CO.
' This indenture, made and entered into this the 2nd day of July, in the year of our Lord, one thousand eight hundred and seventy-nine, between the Northern Division of the Cumberland & Ohio Railroad Company, a corporation duly organized under the laws of the State of Kentucky, party of the first part, and Joshua F. Speed, as trustee, party of the second part,
Witnesseth: That for and in consideration of one dollar
Now, therefore, for the equal security of each of said bonds at maturity, and the payment thereon of interest as the same matures, the said first party has this day bar
To have and to hold the same to the said party of the second part, his successors and assigns, forever. It is expressly to be understood, and is hereby declared to be the true intent and meaning of these presents, that the said second party shall have and hold the premises hereby granted or covenanted so to be, as.'trustee, for the joint and equal benefit and security of all such persons as may hereafter become the legal holders of any of the bonds aforesaid, and for the security of the principal and interest of each of said bonds, without regard to the time at which the said holders may become possessed thereof; provided,
And provided further, that if said party shall well and truly pay the several installments of interest on said bonds, and each of them, as the same shall become due, then this indenture shall be void and of no further effect.
In the event of the failure of the said first party to pay any part of any installment of said interest for more than sixty days after the same shall have become due and been demanded at the place where the said interest shall be properly payable, or in the event of its failure to pay any portion of said principal for more than ninety days after the same shall have become due- and payable, and been demanded at the place where same shall be payable, then, and in either event, it shall and may be lawful for the said second party, and his successors in the trust hereby created (upon request thereto made in writing by any person holding any of said bonds, in the payment of principal or interest of which default shall have been made as aforesaid), to
But in the event that after such default, and request made and possession taken, it shall become necessary or desirable to sell the premises in order to the more prompt payment of the interest and principal of said bonds, then it shall and may be lawful for second party (upon request made in writing by persons legally holding said bonds to the extent of a majority of the bonds outstanding) to sell the said premises to the highest bidder, upon such terms as not being inconsistent with this indenture, or the tenor ■or effect thereof, may be determined on by said second party and the person or persons holding said bonds. Said sale may be made for the whole amount of the principal and interest then accrued’upon the whole issue of said bonds outstanding, treating the principal as become due by reason of the default in the payment of interest. And the whole
Said sale shall be made in the city of Louisville, and notice of the time, place, and terms of sale shall first have been given by public advertisement for at least four months in one or more newspapers published in each of the cities, of Louisville, Lexington, Cincinnati, and New York. The money arising from any such sale shall be applied (1) to the payment of any interest which may be in arrears upon said bonds, and the expenses of executing the trust, including herein a fair and reasonable compensation to the trustee for his services; (2) to pay the principal of said bonds, or if there be not sufficient to pay them in full, then to their payment pro rata.
And on such sale being made, it shall and may be lawful for said second party, by the execution of all needful and proper instruments of conveyance, to- vest in the purchasers the full and perfect title to the premises, subject only to the lien and power of re-sale aforementioned.
And said first party does hereby covenant to and with
And it does further covenant to and with the said second party, his successors, etc., that it will annually, commencing not later than the first day in January, one thousand eight hundred and eighty-three, appropriate from the earnings of said road a sum not less than $5,000, which sum shall be annually expended in. the purchase and redemption of said bonds, or in the purchase of other interest-bearing securities approved by said second party, so as to form a sinking fund for the payment of the principal of said bonds when it shall become due.
It is further agreed and understood, that said first party, or its lessee or assigns, shall have'the option, at any time after the first of January, one thousand eight hundred and eighty-three, to redeem and take up said bonds, or any of them, by paying par and accrued interest to date of notice of redemption therefor. If election is made so to redeem, notice thereof shall be sufficient if given by advertisement in some daily newspaper publish ed in the city of Louisville for thirty days; and after the expiration of said thirty days, the bonds called for, and the sums due as interest shall cease to bear interest. But said bonds shall be called for in the order of their numbers, beginning at number one and fol
And it is further agreed by and between the parties to this indenture, that in the event of the death, resignation, failure or refusal to- act, of the said second party, trustee as aforesaid, then it shall and may be lawful, for the Shelby Circuit Court, upon the application of the parties holding said bonds, to the amount of $70,000, or more, to. appoint a trustee or trustees in lieu and stead of said second party; and the trustee or trustees so appointed shall thereupon succeed to and be vested with all rights, powers, and privileges which are by this indenture conferred upon said second party, or intended so to be.
In testimony of all which, the said party of the first part, by its president and board of directors, and in pursuance to action of its stockholders duly had, has caused these presents to be sealed with its corporate seal, and signed with its corporate name, and countersigned by its Secretary,v-’ this second day of July, one thousand eight hundred and seventy-nine.
MORTGAGE OF EARNINGS OF L., C. & L. RY. CO.
This, indenture of a mortgage, made .and entered into by and between the Louisville, Cincinnati & Lexington Railway Company, a railway corporation under the laws of the
Witnesseth: That whereas by authority of an act of the General Assembly of the Commonwealth of Kentucky, approved the 18th day of March, A. D. one thousand eight hundred and seventy-eight, the party of the first part has entered into a contract with the Northern Division of the Cumberland & Ohio Railroad Company for the lease, construction and operation of the latter company’s line of road from Eminence, in Henry county, Kentucky, through a part of said county and the counties of Shelby, Spencer, and into Nelson county, as far as Bloomfield, all in the State of Kentucky, said lease to continue for thirty years upon the terms therein set out, in which it is stipulated by and on behalf of said first party herein that if the net earnings of said leased premises do not prove sufficient to pay the interest and to provide for the sinking fund of three hundred and fifty bonds of $1,000 each, bearing interest at the rate of seven per cent, per annum, payable half yearly, on the first days of June and December, and having twenty years to run from the 2nd day of Juty, A. D. one thousand eight hundred and. seventy-nine, to be issued by said Northern Division of the Cumberland & Ohio Railroad Company; and if all other sources of raising money of said Northern Division of the C. & O. R. R. Co. fail to provide for said interest and sinking fund, then said first party herein .should supply the deficiency so far as the same may be done by appropriating the net earnings, or so much thereof as may be needed, on its own lines which may accrue to it by reason of business coming to it from or over the said lines of the said Northern
Now, in consideration of one dollar cash in hand paid by said second party to said first party and the premises, the said first party has this day and does hereby mortgage and put in lien all net earnings which may accrue to it by reason of business coming to it from or over said lines o'f the Northern Division of the C. & O. R R Co., to the said Joshua F. Speed, as trustee, aforesaid (who is the trustee in the mortgage made by said Northern Division of the C. & O. R. R. Co. to secure said three hundred and fifty bonds of $1,000 each) condition ed, that if the net earnings of the said leased premises do not prove sufficient to pay the interest and provide for the sinking fund of said mortgage bonds, then said first party, if all other sources of raising money of said Northern Division of the C. & O. R. R. Co. prove insufficient, will supply the deficiency, SO' far as it may be done, by appropriating and paying over promptly the net earnings, or so much thereof as may be needed on its own lines, which may accrue by reason of business coming to it from or over said Northern Division of the O. & O. R. R. Cods lines, for the purpose of discharging said interest and sinking fund as they severally fall due.
In testimony whereof, the said first party, acting under the authority and approval of its stockholders, duly assembled in stockholders’ meeting on the 28th day of July, oñe thousand eight hundred and seventy-nine, has caused these
It will further be seen that in order to better secure the holders of the bonds stipulated for in said lease that the L., C. & L. Ry. Co. executed a mortgage upon its net earnings derived from business coming to it from the lines of the said C. & O. R. R. Co. It further .appears that the trustees for the bondholders and the other contracting parties all united in the modified agreement, which together with said mortgage constitutes one entire contract and agreement.
Afterwards the appellee, Louisville & Nashville Railroad Company, purchased the entire property, rights and franchises of the L., C. & L. Ry. Co., including the lease from the O. & O. R. R. Co. of its line of railroad from Shelbyville to Bloomfield, and it is claimed that the said L. & N. R. R, Co. assumed and became bound to perform all the duties and incur all the obligations undertaken by the said L., C. & L. Ry. Co. It appears that said L. & N. R. R. Oo. took possession of said, railroad from Shelbyville to Bloomfield and entered upon the execution of the contract aforesaid, and up to the filing of the petition herein had been operating said road from Shelbyville to Bloomfield, but had given notice of its intention to abandon the operation of said road, and thereupon the said C. & O. R. R. Co., and appellant, Schmidtz, trustee for the bondholders,instituted this action for the purpose aforesaid.
It will be further seen from the contract aforesaid, that the lessee was empowered to sell $250,000 of bonds of the
It will be seen that by the terms of the lease the lessee was to operate said road from Shelbyville to Bloomfield for the term of thirty years.
It is alleged in the petition that great and irreparable damage will be sustained by appellant, if appellee should cease to operate the road in question, and it is made to appear that no adequate remedy, exceptamandatoryinjunction can be obtained by appellant.
It is further claimed in the petition that the earnings on the L., C. & L. Ry. derived from business coming to it over the C. & O. R. R. have always been large, and there is now in the Louisville Law and Equity Court a suit, appealed
The answer of appellee admits that it purchased from the L., C. & L. Ry. Co. all its property rights, which that company had' the right to convey or assign, except the franchise to exist as a corporation, and that the L., C. & L. Ry. Co. have undertaken to assign and transfer to the appellee the lease from the Northern Division of the Cumberland & Ohio Railroad Company referred to in the petition, but that said lease by its express terms provided that it shall no(; be assigned without the consent of the lessor, and the consent of the Northern Division of the O. & O. R. R. Co. was. asked and refused by said company, and said company has never given its consent to the assignment of said lease. But' the answer admits that the appellee took possession of said leased property, and has operated same ever since, but that it has done so as tenant at sufferance and not by virtue of the assignment of the lease.
It denies that it has made any net earnings on the line of the Northern Division of the O. & O. R. R., or appropriated same to its own use, or that there ever have been any net earnings, but alleges that the necessary cost of operation has exceeded the receipt s in the sum of $199,411.70. It is admitted that the appellant instituted suit against the Northern Division of the C. & O. R. R. Co., and recovered judgment against it for $419,803.35, and that said company was justly indebted to appellee under the lease referred to, but which it failed and refused to pay. The answer also shows -that the execution for said sum was returned no property found, and judgment was rendered for the sale of
Appellee also denies that it owes any duty to the public or the bondholders represented by appellant to operate
The defendant, the L., C. & L. Ry. Co., by'its answer shows that on the first day of November, 1881, it by deed sold and conveyed to its co-defendant, the L. & N. R. R. Co., all its property, rights and franchises, except the franchise to exist as a corporation; that since that day it has had no property, money or credit and as a result is unable to operate the Northern Division of the C. & O. R. R., or do anything else which requires money or credit. It also has no power to comply with the order of this court, even if it should be made to operate said road.
The replies of appellant may be considered a traverse of the affirmative allegations of the answer, and the affirmative allegations of the replies are controverted of record.
A temporary injunction was granted by the Shelby Circuit Court, and upon motion to modify or dissolve the injunction thei’eto before Judge Hazelrigg of this court, the appellant was required to give an additional bond, and having failed to do so, the injunction was dissolved. Upon final
It is contended by the appellee that the contract as claimed is too indefinite to be specifically enforced by a Court of Equity, and even if the contract was more definite and certain, yet equity will not undertake to specifically enforce performance of a contract calling for continuous service requiring skill and judgment, and calling for continuous supervision upon the part of the court. It is also contended that the lessor in this case being in default and ■having failed to comply with its obligation that the contract should not be enforced. It is also contended that this contract should not be specifically enforced because of harsh results that would follow its enforcement. It is further claimed that the appellee, L. & N. R. R. Oo., never became bound to operate the road in question for the term of thirty years.
It is contended for appellants, that appellee, L. & N. R. R. Co., became bound to perform the covenant of the L., C. & L. Ry Co. Secondly, the only way in which the rights of the bondholders under the contract can be protected is through the operation and maintenance of the L., C. & L. Ry. and the C. & O. R. R. Thirdly, this is a case of specific performance.
It seems to us that the appellee having purchased all the property and rights of the L., C. & L. Ry. Co., including the lease in question, and having taken charge of the road in question and operated the same for a long time, and having elected to sue and recover the sums due to the L., C. & L. Ry. Co. from the C. & O. R. R. Co., conclusively establishes
The leases and mortgages hereinbefore referred to were for the benefit not only of the lessor and lessee, but also for the benefit of the bondholders of the lessor company, and this being true it follows that the trustee for the bondholders has a right to maintain an action for the enforcement of the contract for the benefit of the bondholders. It is true that the lessor has not paid sums of money falling due under the lease to the appellee, but it by no means follows that such failure authorizes the lessee to abandon the contract and cease to operate the road in question. It will be seen from the lease that certain acts or omissions to act should be held to terminate the lease, but the failure to pay the sums of money falling due from the lessor is not one of the conditions provided for as authorizing an abandonment of the lease. It is provided in the lease that for the sums of money becoming due to the lessee from the lessor that the lessee might sue and recover the same, and are given a lien subject to that of the bondholders upon the road in question, and it may be well argued this remedy being expressed in the lease that a forfeiture of the lease was not intended to be allowed either as a remedy or punishment for non-payment; moreover it was a statutory duty of lessor to operate the road, and the lessee having for a term of thirty years agreed that the
We are clearly of the opinion that the contract required the lessee to operate the road for the term specified. No other construction seems reasonable or tenable, and this view is sustained by the further fact that the lessee continued to operate the road for many years. But be this as it may, the bondholders having an interest in the contract in question and being in law a party thereto the failure of the lessor to pay the sums due from it to the lessee can not defeat the rights and interests acquired by the bondholders under and by virtue of the contract aforesaid.
It is earnestly insisted by appellee that the contract is not sufficiently certain to be specifically enforced. It seems, however, to us, that the terms of the lease are sufficiently certain and definite as to enable the court to compel specific performance. It would not be difficult for the court to safely and intelligently fix and determine the number of trains to be run upon the road and arrange Jhe various details necessary for the operation of the road, and a fair construction of the lease would authorize such an operation of the road as the business interests of the community from time to time would require. (Robinson v. U. S., 13th Wallace, 165.)
It is further insisted by appellee that a court of equity will not enforce specific performance of a contract calling for continuous service involving skill and judgment and requiring continuous supervision on the part of the court.
Pomeroy’s Equity, Vol. 3, section 1343, which reads as follows:
“Contracts for personal services or acts — Where a contract stipulates for special, unique, or extraordinary personal services or acts, or for such services or acts to be rendered or done by a party having special, unique, and extraordinary qualifications, as, for example, by an eminent actor, singer, artist, and the like, it is plain that the remedy at law of damages for its breach might be wholly inadequate, since no amount of money recovered by the plaintiff might enable him to obtain the same or the same kind of services or acts elsewhere, or by employing any other person. It is, however a familiar doctrine that a court of equity will not exercise its jurisdiction to grant the .remedy-of an affirmative specific performance, however inadequate may be the remedy of damages, whenever the contract is of such a nature that the decree for its specific performance can not be enforced and its obedience compelled by the ordinary processes of the court. A specific performance in such cases is said to be impossible; and contracts stipulating for personal acts have been regarded as. the most familiar illustrations of this doctrine, since the court can not in any direct manner compel an actor to act, a singer to sing, or an artist to paint. Applying the same course of reasoning, the English courts formerly held that they could not negatively enforce the specific performance of such contracts by means of an injunction restraining their violation. Those courts have, however, entirely receded from this latter conclusion.*473 The rule is now firmly established in England, that the violation of such contracts may be restrained by injunction, whenever the legal remedy of damages would be inadequate, and the contract is of such a nature that its negative specific enforcement is possible.’ This rule was first applied to stipulations which were in form expressly negative, but was soon extended to affirmative contracts which implied or involved negative stipulations.”
It will be seen from the foregoing that the contract here sought to be enforced is essentially different from the illustrations or cases cited in the section quoted.
Marble Co. v. Ripley, 10th Wallace, 358, is cited: It will be seen from the opinion in that case that the contract was to deliver a quantity of marble of certain kinds and in blocks of a kind, and the court there held that specific performance ought not to be granted on, account of the great difficulty of enforcing same, and further that one party had the right at any time to terminate the contract on one year’s notice.
The case of Texas Railway Company v. Marshall. 136th U. S., 406 is relied on by appellee. It appears from that case that the city of Marshall agreed to give to the Texas Railway Company $300,000 in bonds and 66 acres of land for shops, ■etc., and the company in consideration of the donation agreed to permanently establish its eastern terminus and offices at Marshall, and to establish and construct its machine shops, car works, etc., in said city. The city performed its agreement, and the company made Marshall its eastern terminus and built a depot, etc., there. After the expiration of a few years Marshall ceased to be the terminus
It may be conceded that some of the authorities cited by appellee sustain its contention, but we deem it unnecsary to notice any further in detail.
• It is also insisted by appellee that the enforcement of the contract under consideration would result in great hardship, and equity will not enforce specific performance of a contract that will result in great hardship.
We do not think the facts in this case bring it within the rule announced in any of the decisions cited. It is manifest that the loss to appellee by reason of expense incurred in building the road, 'and for which it has obtained judgment against the C. & O. R. R. Co. will remain .unaffected by operation of the leased line. A court of equity might refuse to enforce a contract that at the time of its execution involved hardship or was unconscionable, but the mere fact that one having a number of years to run might turn out a losing investment or contract affords no reason of refusal to specifically enforce it; moreover, if we are to regard the judgment referred to in the pleadings in the case of
It seems clear to us that there is no adequate relief for the bondholders to be had except by specific enforcement' of the contract; hence the important question to be considered, is the power of the court to enforce specifically the contract, and whether the same in equity should be enforced. As before said, there is some authority cited which sustains the contention of appellee, that courts of equity can not or ought not to specifically enforce a contract requiring skill and. long or continuous supervision of the court, but it is in; sisted by appellants that the weight of recent decisions sustains its contention that such contracts can and ought to be enforced, and they cite several decisions in support of this contention, among which is the case of Prospect Park and Coney Island Railroad Company v. The Coney Island and Brooklyn Railroad Company, 144 N.Y., 152" court="NY" date_filed="1894-12-11" href="https://app.midpage.ai/document/prospect-park--coney-island-railroad-v-coney-island--brooklyn-railroad-5479467?utm_source=webapp" opinion_id="5479467">144 N. Y., 152. It appears that the plaintiff granted to the defendant use of certain of its tracks in the city from a point named to said depot for 21 years from June 1st, 1882, free of charge, and defendant covenanted to run cars to plaintiff’s depot to connect with trains run to and from the island. The- contract contained the provision that in case defendant should use steam as a motive power on its line between the city and the island either party could terminate the contract on six months’ notice. The parties acted under the contract until October, 1889, when defendant adopted the trolley system of running cars by electricity for use upon its road between the city and the island, ceased to run its cars to said depot, and ad
As a final point the learned counsel for the defendant insists that equity will not enforce the specific performance of a contract having some years to run which requires the exercise of skill and judgment and a continuous series of acts.
While there is some conflict in the cases, and all are not to be reconciled, yet the great weight of authority permits specific performance in the case at bar.
The special term enjoined the defendant from operating any of its cars unless it performs its contract with the plaintiff.
The provisions of this contract are neither complicated nor difficult and are such as a court of equity can enforce in its discretion.
A few of the cases may be referred to as illustrating the power vested in a court of equity to compel the specific performance of contracts similar to the one at bar.
In Storer v. Great Western Railway Co. (2 Young & Coll. N. R. 48) the court compelled the defendant to construct and forever maintain an archway and its approaches. The court said there was no difficulty in enforcing such a decree. In Wilson v. Furness Ry. Co. (Law Rep. 9 Equity Cases, 28) the defendant was compelled to erect and maintain a wharf, (See also Green v. West Cheshire R. Co., Law Rep., 13 Equity Cases, 44.
In Wolverhampton & W. R. Co. v. London & N. W. R. Co., (Law Rep. 16 Eq. Cas. 433) the agreement between the
The bill was filed to restrain the defendant from carrying' a portion of the traffic which ought to have passed over the plaintiff’s line by other lines of the defendant.
‘A point was made that the court could not undertake to enforce specific performance, because it would require a series of orders and a general superintendence to enforce the performance, which could not conveniently be administered by a court of justice. The injunction issued and Lord Selborn said (p.438): 'With x’egard to the argument that upon the principles applicable to specific performance no relief can be granted, I can not help observing that there is some fallacy and ambiguity in the way in which in- cases of this character those words 'specific performance’ are used. * * * * The common expression as applied to suits known by that name, presupposes an executory as distinct from an executed agreement * * * Confusion ha.s sometimes arisen from transferring considerations applicable to suits for specific performance, properly so called, to questions as to the propriety of the court requiring something or other to be done in specie. * * * Ordinary agreements for work and labor to be performed, hiring and service and things of that sort, out of which most of the cases-have arisen, are not, in the proper sense of the word, cases for 'specific performance;’ in other words, the nature of the contract is not one which requires the performance' of some definite act, such as the court is in the habit of requiring
The American cases are equally clear.
In Lawrence v. Saratoga Lake Ry. Co. (36 Hun., 467) the defendant was among other things, to erect a depot at which all trains were to stop. Specific performance was decreed, the court holding that, although under the agreement the defendant could not be compelled to run trains upon its road, yet it might properly be enjoined from running any regular trains which did not stop at the station.
"The objection that the judgment in this case involves continuous acts and constant supervision of the court is well met by the reasoning in Central Trust Co. v. Wabash, St. Louis & P. (29 Fed. Rep., 546) being affirmed as Joy v. St. Louis (138 U.S. 1" court="SCOTUS" date_filed="1891-01-19" href="https://app.midpage.ai/document/joy-v-st-louis-92928?utm_source=webapp" opinion_id="92928">138 U. S. 1, 47, 50), where Judge Blatchford wrote the opinion.
As to inconvenience or circumstances which affect, the interest of one party alone constituting a reason why performance should not be decreed, the case of Marble Co. v. Ripley (10 Wall. 339" court="SCOTUS" date_filed="1870-12-19" href="https://app.midpage.ai/document/marble-co-v-ripley-88266?utm_source=webapp" opinion_id="88266">10 Wall. 339, 358) furnishes a clear discussion of the general principles involved.
The rule established by the above and kindred eases is that a contract is to be adjudged as of the time at which it was entered into, and if fair when made the fact that it has become á hard one by the force of subsequent circumstances or changing events will not necessarily prevent its specific
A large number of other cases might be cited sustaining the power of the court to decree the specific performance of this contract, but we do not deem it necessary.
There can be no well-founded doubt as to the power of the court in the premises, and the important question is whether in the exercise of a wise discretion and in view of all the circumstances specific performance should be decreed.
After a most cai'eful consideration of this case we have reached the conclusion that the plaintiff is entitled to have the contract specifically performed.
The order of the general term is reversed and the judgment of the special term is affirmed, with costs in all the courts.’7
The case of Joy v. St. Louis, 138 U. S., page 1, seems alsq to sustain the contention of appellant. Union Pacific Ry. Co. v. Chicago & Rock Island Ry. Co.; and Union Pacific Ry. Co. v. Chicago, Milwaukee & St. Paul Ry. Co., 163 U. S. Reports, 564 (decided May 25, 1896), were cases seeking specific enforcement of a contract for the use of certain railroad trackage rights. It was urged in that case that courts of equity would not undertake to enforce specific performance of a contract requiring skill and having a long time to run. The court in discussing that question said:
“3. The jurisdiction of courts of equity to decree the spe*480 dñc performance oí agreements is of a very ancient date, and rests on the ground of the inadequacy and incompleteness of the remedy at law. Its exercise prevents the intoler* .able travesty of justice involved in permitting parties: to refuse performance of their contracts at pleasure by electing to pay damages for the breach.
It is not contended that multiplicity of suits to recover damages for the refusal of defendants to perform would afford adequate relief, nor could it be, for such a remedy under the circumstances would neither be plain nor complete, nor a sufficient substitute for the remedy in equity, nor would the interests of the public be subserved thereby. But it is objected that equity will not decree specific performance of a contract requiring continuous acts involving skill, judgment and technical knowledge, nor enforce agreements to arbitrate, and that this case occupies that attitude. We do not think so. The decree is complete in itself, is self-operating and self-executing, and the provision for referees in certain contingencies is a mere matter of detail and not of the essence of the contract.
It must not be forgotten that in the increasing complexities of modern business relations equitable remedies have necessarily and steadily been expanded, and no inflexible rule has been permitted to circumscribe them. As has been well said, equity has contrived its remedies “so that they shall correspond both to the primary right of the injured party, and to the wrong by which that right has been violated and “has always preserved the elements of flexibility and expansiveness, so that new ones may be invented, or old ones modified, in order to meet the requirements of*481 every case, and to satisfy the needs of a progressive social condition in which new primary rights and duties are constantly arising and new kinds of wrongs are constantly committed.” Pom. Eq., sec 111.
We regard the case of Joy v. St. Louis, 138, U. S. 1, as determining that this contract was one within the control of a court of equity to specifically enforce. In that case the St. Louis; Kansas City & Colorado Railroad Company acquired by succession, under a contract, the right of runj ning its trains over the line of the Wabash Company from a point on the Northern line of Forest Park, through the park and into the Union Depot at St. Louis, together with the right to use side tracks, switches, turnouts and other terminal facilities. It was a continuing right and unlimited in time, and the contract contained provisions regulating the running of trains and prescribing the duties of superintendents, trainmasters and other officers. The objections that' are urged against the specific performance of the contract under consideration were urged against the specific performance of that contract and were severally overruled, and it was held that nothing short of the interposition of a court of equity would provide for the exigencies of the situation.
This case was cited with approval in Franklin Telegraph Co. v. Harrison, 145 U.S. 459" court="SCOTUS" date_filed="1892-05-16" href="https://app.midpage.ai/document/franklin-telegraph-co-v-harrison-93397?utm_source=webapp" opinion_id="93397">145 U. S., 459. The contract there was one for the use by Harrison Bros. & Co. of a wire of the Franklin Telegraph Company between Philadelphia and New York. It. appeared that Harrison Brothers & Co. had been in the possession of a certain valuable contract with the Insulated Lines Telegraph Company, to the rights of which company
The same was laid down in Prospect Park & Coney Island Railroad v. Coney Island & Brooklyn Co., 144 N.Y., 152" court="NY" date_filed="1894-12-11" href="https://app.midpage.ai/document/prospect-park--coney-island-railroad-v-coney-island--brooklyn-railroad-5479467?utm_source=webapp" opinion_id="5479467">144 N. Y., 152, where many authorities are cited.
In Railroad Company v. Ailing, 99 U.S., 463" court="SCOTUS" date_filed="1879-04-21" href="https://app.midpage.ai/document/railway-co-v-alling-89968?utm_source=webapp" opinion_id="89968">99 U. S., 463, the court directed an injunction against the Canon City Railway Company from preventing the Denver road from using the right of way through the Grand Canon, and said: “If,"in any portion of the Grand Canon, it is impracticable or impossible to lay down more than one road bed and track, the court, while recognizing the prior right of the Denver Company to con
In the Express Cases, 117 U.S. 1" court="SCOTUS" date_filed="1886-03-01" href="https://app.midpage.ai/document/st-louis-iron-mountain--southern-railway-co-v-southern-express-co-91580?utm_source=webapp" opinion_id="91580">117 U. S. 1, the express companies sought to restrain the railway companies from refusing to carry express matter on the terms of contracts which had expired, which the court held could not be done, and it was said: “The Legislature may impose a duty, and when imposed it will, if necessary, be enforced by the courts; but, unless a duty has been created either by usage or by contract, or by statute, courts can not be called on to give it effect.” It was objected in Joy’s case that the court was proposing to assume the management of the railroad “to the end of time,” but Mr. Justice Blatchford, speaking for the court, responded that the decree was complete in itself, and that it was “not unusual for a court of equity to take supplemental proceedings to carry out its decree and make it effective under altered circumstances.” And the court applied the principle that' considerations of the interests of the public must be given due weight by a court of equity, when a public means of transportation, such as a railroad, comes under its jurisdiction. “Railroads are common carriers and owe duties to the public,” said Mr. Justice Blatchford. “The rights of the public in respect to these great highways of communication should be fostered by the courts; and it is one of the most useful functions of a- court of equity that its methods of procedure are capable of being
Clearly the public interests involved in the contracts before us demand that they should be upheld and enforced, it seems to us that the weight of modern authorities sustain the contention of appellant, and a court of equity can enforce specific performance of the contract under consideration. — /It is pretty well known history of the country that many railroads and for long terms have been operated under the direct supervision and control of courts of equity. It does not seem to us that it would be difficult to enforce specific execution of the contract under consideration. The court might enforce its orders by attachment or rule according to equity practice, or, if deemed best, it might place the road in the hands of a receiver to be operated at the cost and expense of the appellee, the Louisville & Nashville Railrogd-Gompany.