194 F. 1 | 8th Cir. | 1912
(after stating the facts as above).
“An appellee or defendant in error who takes no appeal or writ of error himself cannot, by assigning cross-errors or by brief or argument, confer jurisdiction upon a federal appellate court to consider, review, or decide rulings against him in the court below.”
So far as the allegations of the bill show, the duties of these defendants are only to secure and protect the rights of the Indian lessors by collecting the royalties due them. The question in issue in this cause, in so far as it affects these defendants, is not whether the court has the power to enjoin them from doing lawful acts, but whether they are proper parties in view of the interests of the Indians who are the owners of the lands leased, and for whose protection these officers are acting. Although they are not indispensable, nor even necessary, parties, they are proper parties, and the mere fact that they are em-ployés or officers of the government does not exempt them from being made parties in an action of this nature. But, even if the special pleas of all the parties who filed them should have been sustained, it would riot affect the power of the court to proceed with the cause so far as the other defendants are concerned. The rule of law is well settled that only the absence of indispensable parties will deprive a court of equity of the power to proceed against the other defendants. Proper parties, or even necessary parties, may be dispensed with, but the decree will not affect their rights. Payne v. Hook, 7 Wall. 425, 19 L. Ed. 260; Hotel Company v. Wade, 97 U. S. 21, 24 L. Ed. 917; Carrau v. O’Calligan, 125 Fed. 657, 60 C. C. A. 347, affirmed sub nom. Farrell v. O’Brien, 199 U. S. 89, 25 Sup. Ct. 727, 50 L. Ed. 101; Geer v. Mathieson Alkali Works, 190 U. S. 428, 23 Sup. Ct. 807, 47 L. Ed. 1122; Cella, Adler & Tilles v. Brown (C. C.) 136 Fed. 439, affirmed 144 Fed. 472, 75 C. C. A. 608; Rogers v. Penobscott Mining Co., 154 Fed. 606, 83 C. C. A. 380.
“The inadequacy of legal remedies ordinarily against an insolvent trespasser is obvious, and the reason tor equity's intervention in such eases is clear. The number of eases in which the defendant’s insolvency is made a material part, of the court’s reason for granting an injunction is very great. The number of cases in which the question has arisen whether insolvency alone is enough to support it is not so large, but it is sufficient to show the general recognition by the courts of the glaring insufficiency of a judgment for damages against an insolvent.” 5 Pomeroy, Eq. Jur. § 497.
But, aside from the question of insolvency, an action at law for damages would not enable complainant to recover all damages it may suffer by reason of the breach of contract. The damages in this case are impossible of proof. No one can say what amount of oil the Central Company will or can produce during the life of the contract by a conscientious attempt to comply with it. It is a well-known fact, of which courts are bound to take judicial notice, that oil is fugacious, and may be drawn away by strangers through other wells. The flow of the wells decreases in the course of years, and long before the expiration of this contract these wells may become entirely dry. Any damages awarded would be wholly speculative and uncertain, and without any possibility of sufficient legal proof to sustain the judgment. Wilkinson v. Colley, 164 Pa. 43, 30 Atl. 286, 26 L. R. A. 114; McCornick v. United States Mining Co., 185 Fed. 748, 108 C. C. A. 86, and authorities there cited; Peale v. Marian Coal Co. (C. C.) 190 Fed. 376, 388.
In addition to these considerations, it appears from the bill, and the contract between the parties establishes it, that one of the main inducements to this contract was to enable the complainant, by obtaining the crude oil, to utilize the three refineries it then owned and had in operation in the state of Texas and one it was then constructing in the state of Oklahoma; and to enable the Central Company, which at that time could only dispose of the oil produced from its wells through a sale to the Prairie Oil & Gas Company, to make sales of its products to other companies and obtain the benefit of competitive prices. For this purpose, it was necessary for the Central Company to have pipe lines extended to its oil fields and to be connected with lines extending to places where there was a market for its crude oils. One of the provisions of the contract was:
“The Texas Company agrees that it will promply and with all reasonable speed extend its pipe line system to Bartlesville or the north Oklahoma field, as above described, and will establish an adequate gathering system and related facilities as will enable it to perform the duties of this contract, such to be completed nor later than January 22, 1911.”
The bill charges that complainant built this pipe line and erected tanks and installed pumping stations necessary -to carry out the provisions of the contract at an expense of $700,000, that these improvements are of a permanent nature, and, unless the oil thus contracted for is delivered to it, this pipe line and pumping stations are of but little value, if any, and the cost thereof practically lost. These facts clearly exclude a conception that an action at law will afford a complete and adequate remedy.
In Watson v. Sutherland, supra, an injunction was sought to restrain the levy of an execution on a stock of merchandise claimed by the plaintiff to be his property, and not that of the execution debtors. Objection was made that there was a,complete remedy at law by an action of trespass against the sheriff and the execution creditors. In overruling this objection the court said:
“If the appellants made the levy and prosecuted it in good faith, without circumstances of aggravation, in the honest belief that Wroth and Fullerton owned the stock of goods, and it should turn out, in an action at law instituted by Sutherland for the trespass, that the merchandise belonged exclusively to him, it is well settled that the measure of damages, if the property were not sold, could not extend beyond the injury done to it, or, if sold to the value of it, when taken, with interest from the time of the taking down to' the trial. And this is an equal rule, whether the suit is against the marshal or the attaching creditors, if the proceedings are fairly conducted, and there has been no abuse of authority. Any harsher rule would interfere to prevent the assertion of rights honestly entertained, and which should be judicially investigated and settled. ‘Legal compensation refers solely to the injury done to the property taken, and not to any collateral or consequential damages, resulting to the owner by the trespass.’ Loss of trade, destruction of credit,*13 and failure of business prospects are collateral or consequential damages which, it is claimed, would result from the trespass, but for which compensation cannot be awarded in a trial at law. Commercial ruin to Sutherland might, therefore, be the effect of (dosing his store and selling Ms goods, and yet the common law fails to reach the mischief. To prevent a consequence like this, a court of equity steps in, arrests the proceedings in, limine, brings the parties before it, hears their allegations and proofs, and decrees, either that the proceedings shall be unrestrained, or else perpetually enjoined. The absence of a plain and adequate remedy at law affords the only test of equity jurisdiction, and the application, of this principle to a particular case must depend altogether upon the character of the case as disclosed in the pleadings. In Ihe case we are considering it is very clear that the remedy in equity could alone furnish relief, and that the ends of justice require the injunction to be issued.”
In Equitable Gaslight Co. v. Baltimore Coal Tar & Mfg. Co., specific performance was decreed on a contract to sell coal tar which plaintiff needed in order to fulfill existing contracts and which it was impossible to obtain otherwise than by purchasing in distant cities and transporting the same at great expense. In Gloucester Isinglass & Glue Co. v. Russia Cement Co. specific performance was decided of a contract to furnish fish skins to be used in the manufacture of glue. It appeared that fish skins were of very limited production; that most
It is next urged that the bill shows that the complainant had failed to make payments for the crude oil delivered to it by the Central Company in compliance with the terms of the contract, and this failure, it is insisted, was such a breach of the contract as justifies the defendant to treat it as no longer in force, and denies complainant's entrance into a court of equity to demand specific enforcement or any other equitable relief. It is true the bill shows complainant had not paid for all the crude oil receivéd by it from the Central Company, but it also shows that the reason therefor was the failure of the Central Company to furnish, as a condition precedent to receiving, the division orders, and the abstracts or other evidence of title to some of the lands, or execute satisfactory indemnity as required by the supplemental agreement executed on January 6, 1911, and that complainant “stands ready and willing to pay the balance due and owing by it as soon as the proper division orders are filed and good title showings are made, or it is determined said defendant has good title to the oil and is entitled to payment, or, if necessary, it will deposit the money in court or pay the same over to a receiver.” As courts of equity may prescribe terms upon which temporary injunctions are granted the court below had the right to require, and as shown by the record it did require, complainant to pay the moneys for which proper abstracts had been filed before the hearing, and it did pay the same. ' Upon these allegations, which the demurrer admits to be true, the failure of complainant to pay the money was justified, and not a breach of the contract; and is no reason for refusing any equitable relief it may otherwise be entitled to.
In the Marble Company Case the contract, as stated by the court, required of the owners a perpetual supply of marble and involved “skill, personal labor and cultivated judgment.” Upon these facts it was held:
“If performance be decreed the case must remain in court forever, and the court to the end of time may be called upon to determine, not only whether*15 the prescribed quantity of marble has been delivered, but whether every block was from the right place, whether it was sound, whether it was of suitable size, or shape, or proportions.”
The contract sought to be enforced in this case runs for 10 years only, and involves no “skill, personal labor, and cultivated judgment.” What it does require is easily ascertainable, and, if carried out in good faith, ought not to give rise to any disputes requiring the interposition of the court. During the time it was complied with by ap-pellee no disputes arose, and there is no reason for anticipating any now if good faith will control the actions of both parties. That some differences may occur is true, but they are not likely to be of a nature requiring much consideration. No one will question for a moment the duty of a court of equity specifically to enforce a lease of ground for a term of ten years or even a term of 99 years because the lessee is bound by certain covenants such as paying rents, taxes, and assessments, keeping the buildings in repair or erecting buildings according to certain specifications, keeping the buildings insured and other conditions usually inserted in such contracts of lease, and which may give rise to as many or more disputes than the contract in the case at bar.
Texas Pacific Ry. Co. v. City of Marshall was in effect determined upon the ground that, under the circumstances of that case, the word “permanent” in the contract was complied with by the establishment of the terminus and the offices and shops contracted for and not mentioned at the time of removing and abandoning them at a later day, and having kept them there for eight years, until the interests of the railway company and of the public demanded their removal to some more suitable place. Another reason assigned by the court for its judgment was that the city had a complete and adequate remedy at law for damages which could be determined in one action. As to the supervision necessary, if specific performance were decreed, the opinion of the court shows clearly why a court could not undertake it in that case by saying:
“If the court bad rendered a decree restoring all the offices and machinery and appurtenances of the road which had been removed from Marshall to other places, it must necessarily superintend the execution of this decree. It must be making constant inquiry as to whether every one of the subjects of the contract which has been removed has been restored. It must consider whether this has been done perfectly or in good faith or only in an evasive manner. It must be liable to perpetual calls in the future for like enforcement of the contract, and it assumes, in this way, an endless duty, inappropriate to the functions of the court which is as ill-calculated to do this as it is to supervise and enforce a contract for building a house or building- a railroad, both of which have in this country been declared to be ouiside of its proper function, and not within its powers of specific performance.”
In the Javierre Case the decree of the lower court was reversed upon two grounds, neither of which exists in this case. The, court held that an action at law for damages would have granted all the relief complainant was entitled to, and also that there was a want of mutuality as no injunction could have been granted against the ap-pellee.
The Shubert Case was decided mainly upon two grounds: First, that thepe was a want of mutuality; and, second, that the terms of the contract would necessarily entail upon the court through many 3'ears the supervision and direction of a continuous series of acts, many of them requiring skill and cultivated judgment. As enumerated by the court, some of these were:
“What bookings for a theater should be approved or disapproved: how many and what persons should be employed to operate the theater; how the intricate details of the theater should be conducted; how its operation should be advertised, and many other unforeseen issues which the complicated performances contemplated cannot fail to raise.”
But the court took occasion to say further:
“It is conceded that a court of equity has ample power to determine all these questions and to conduct this business by its receiver, or master, and that it will sometimes enforce the performance of contracts where the performance involves more intricate details or longer periods of time where the other equities of the complainant in the ease, or the public interest are controlling.”
In the Lone Star Salt Company Case the contract was one which made special provision for compensation in case of a breach, and it was held that specific performance should therefore not be decreed as there was a complete remedy at law. The court then proceeded:
“While we have thought it proper to put the decision upon the construction of the contract, which is held to be the true one, we may say that the same result will follow either construction. The injunction to the defendant to deliver the freight as it accrues finally settles nothing, amounting to nothing more than a command to carry out the contract, leaving undetermined the particular acts to be done to constitute performance. In what quantities and at what interval of time is the tonnage to be furnished as it accrues? How is the defendant’s action in executing the order to be affected by the condition of plaintiff’s business, existing at different times, in respect to its readiness or unreadiness to receive and promptly transport? How will the defendant at any given time be enabled to determine how much of its outgoing freight must be delivered, as it accrues, to compensate for any deficiency in percentage of incoming freight received and carried by plaintiff? These and many other questions that might be presented expose the futility of the attempt to define in advance the course of conduct the defendant must pursue in order to obey the mandate of the court. The truth is, the contract is of such a nature that, under any construction, the remedy of specific performance cannot specifically be applied to it. What would constitute a violation of the decree could only be determined by future actions of the court in further proceedings to define its scope and meaning, and to enforce it.”
No such obstacles are to be surmounted in this case. Defendants contracted for all the oil, not exceeding 540,000 barrels for any one month of 30 days. It had the pipe lines to carry that amount, and there was no -question of any incoming freight.
In Edelen v. Samuels & Co. the contract was of such a nature that,
“In order to make the whisky contemplated by the terms of the instrument before us, the court will be forced to purchase a large quantity of grain and other material necessary to the distillation of the spirits to he delivered; also to erect a bottling works, and be prepared to bottle the whisky after it is made.”
There are no such facts in this case. The court, in the same case, speaking of the distinction said to exist between contracts involving realty and that involving personal property, so far as the remedy of specific performance is concerned, said:
“The right to a decree of specific performance of a contract is based upon the equitable principle that the ordinary common-law remedy of damages for a breach will not afford defendant an adequate remedy from the injury arising from the failure to carry out its terms. It is true that generally mere damages will more uniformly he found to fail as an adequate remedy in contracts relating to realty than those relating to personalty; yet, where the specific enforcement of a contract concerning personalty is practicable, and the remedy sounding in damages is found to be inadequate, the chancellor would just as readily enter a decree for its specific performance as he would in a contract concerning real property. And, while the remedy of specific performance is generally spoken of as issuing in the discretion or grace of the chancellor, this is more a form of expression than of actual definition of the rights of the injured party as to his remedy by specific performance. In oilier words, while the chancellor has a discretion, it is not an arbitrary but a legal discretion.”
Many other cases are cited by the learned counsel for appellees to this point. All of them have been carefully examined, and are as distinguishable upon the facts as those above cited. Some of them apply to construction contracts requiring skill and judgment. In others the parties can be compensated in an action at law; while some, sustaining appellee’s contention to some extent rely upon cases determined long ago, overlooking the fact that equitable remedies have steadily been expanded by the court to meet the increased complexities of modern business relations. The leading cases in the national courts sustaining the right of having specific performance decreed in cases of this nature, although it may necessarily-result in the court retaining the cause to settle questions which may arise under the contract thereafter, are Joy v. St. Louis, 138 U. S. 1, 11 Sup. Ct. 243, 34 L. Ed. 843, affirming the decision of Judge, afterwards Mr. Justice Brewer, in Central Trust Co. v. Wabash, St. L. & P. Ry. Co. (C. C.) 29 Fed. 546; Union Pacific Railway Co. v. Chicago, etc., Ry. Co., 163 U. S. 564, 16 Sup. Ct. 1173, 41 L. Ed. 265, affirming the decision of the Circuit Court of Appeals tor this Circuit in 51 Fed. 309, 2 C. C. A. 174, which had affirmed Mr. Justice Brewer’s decision in Chicago, R. I. & P. Ry. Co. v. Union Pac. Ry. Co. (C. C.) 47 Fed. 15.
In the Joy Case Mr. Justice Blatchford, who delivered the unanimous opinion of the court, in reply to a contention similar to that of the instant case, said:
“In the present case it is urged that the court will he called upon to determine from time to time what are reasonable regulations to be made by the Wabash Company for the running of its trains upon its tracks by the Colorado Company. But this is no more than a court of equity is called upon to*18 do whenever it takes charge of the running of a railroad by means of a receiver. Irrespective of this, the decree is complete in itself and disposes of the controversy; and it is not unusual for a court of equity to take supplemental proceedings to carry out its decree and make it effective under altered circumstances.”
In Union Pacific Railway Co. v. Chicago, etc., Ry. Co., where the contract sought to be enforced was for 999 years, Mr. Chief Justice Puller, speaking for the court sustaining a decree for specific performance, said:
“But it is objected that equity will not decree specific performance of a contract requiring continuous action involving skill, judgment, and technical knowledge, nor enforce agreements to arbitrate, and that this case occupies this 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 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 wrong are constantly committed.’ Pom-eroy, Eq. Jur. § 111.”
Judge Brewer, in his opinion in the Circuit Court in Central Trust Company v. Wabash, etc., R. R. Co., said on that subject:
“It is true that such a decree cannot be executed by the performance of a single act. It is continuous in its operation. It requires the constant exercise of judgment and skill by the officers of the corporation defendant; and therefore, in a qualified sense, it may be true that the case never is ended, but remains a permanent case in the court, performance of whose decree may be the subject of repeated inquiry by proceedings in the nature of contempt. It is also true that in the changing conditions of business the details of the use may require change. The time may come when the respondents’ business may demand the entire use of its tracks and the intervener’s rights wholly cease. But other decrees are subject to modification and change, as in decrees for alimony. The courts are not infrequently called upon to modify them by reason of the changed condition of the parties thereto. So, when a decree passes in a case of this kind, it remains as a permanent determination of the respective rights of the parties, subject only to the further right of either party to apply for a modification upon any changed condition of affairs; and, so far as any matter of supervision of the personal skill and judgment of the officers of the respondent corporation, the contract, in terms, provides that the regulations of the running of trains shall be subject to the control of the officers of the respondent. While I concede that there is force in the objection that this must remain, in a qualified sense, a continuing case in the courts, with a constant duty of supervising the acts of the respondent, yet it seems to me that, where there is a right, there must be a remedy, and that the mere machinery of court procedure is flexible enough to adapt itself to the necessity of protecting a right. Clearly a mere action for damages would be a grossly inadequate remedy.” 29 Fed. 558.
In the Rock Island Case the same learned justice said:
"I know to one who is only familiar with the narrow limits and the strict lines within and along which courts of law proceed the act of a court of equity in taking possession of a contract running for 999 years, and decreeing its specific performance through all those years seems a strange exercise*19 of power; but I believe most thoroughly that the powers of a court of equity are as vast and its process and procedure as elastic as all the changing’ emergencies of increasingly complex business relations and the protection of lights can demand.” 47 Fed. 26.
While it is true, as contended by counsel for appellees, that these cases relate to contracts between railroads and therefore might have been sustained upon the ground of the interests of the public, there are other cases in no wise affected by public exigency, especially where violations of the decree could only occur infrequently and each violation would be a single complete act. Franklin Telegraph Co. v. Harrison, 145 U. S. 459, 12 Sup. Ct. 900, 36 L. Ed. 776; Hackett v. Hackett, 67 N. H. 424, 40 Atl. 434; Chubb v. Peckham, 13 N. J. Eq. 207; Livesley v. Johnston, 45 Or. 30, 76 Pac. 13, 746, 65 L. R. A. 783, 106 Am. St. Rep. 647; St. Regis Paper Co. v. Santa Clara Cumber Co., 173 N. Y. 149, 65 N. E. 967.
Prof. Pomeroy, the editor of the last edition of Pomeroy’s Equity jurisprudence, in his article on the subject of specific performance, published in the Encyclopedia of Law & Procedure, after discussing this subject and referring to the authorities, says:
"But in a remarkable series of eases, beginning with the year .1890, contracts involving the operation of railroads, oi'ten of the utmost complexity and extending over a long term of years, or perpetual, have been enforced specifically. In the leading ease of the series a controlling reason for the decision was that the interests of the general public would have been injuriously affected by a failure to make the decree; but this reason appears to have dropped out of sight in the eases following this precedent” — citing numerous cases sustaining this last proposition. 36 Cyc. 587.
"In its arbitrary, whimsical will, but in the sound, judicial discretion, informed and directed by the established principles, rules, and practices of equity jurisprudence. Hennessey v. Woolworth, 128 U. S. 438, 9 Sup. Ct. 109, 32 L. Ed. 500. Nor are these principles and rules and this practice hard, fast, or without exception. They are rather advisory than mandatory, and the application, of the rules and of the exceptions to each particular case as it arises is still intrusted to the conscience of the chancellor, for these principles and rules and this practice serve to inform the' intellect and to en*20 lighten the conscience and by them the judicial discretion of the court must be guided.”
Applying these rules to the facts in this case, the question is, In what respect is the contract unconscionable, and will a decree work a great hardship and injustice, unforeseen when the contract was made? It is argued:
“That the agreement to pay appellant the monthly toll of $70,000 in consideration of the construction of a pipe line and related facilities by the appellant, for carrying the .oil produced by the Central Company, on the representations made and the mistaken belief engendered by the appellant that to supply these transportation facilities it would incur an expense of $3,000,000, whereas the bill of complaint admits that the total amount expended was but $700,000.”
But there is not a line or word in the bill nor the contract warranting this statement. All the contract contains on that subject is found in paragraph 6b, and is as follows:
“The Central Company shall be charged and shall pay to the Texas Company for each month of the life of this contract the sum of $70,000.”
And the bill charges that this was to pay the cost of transportation from the oil fields to Miller’s Switch Station south of Dallas, Texas, on the Houston & Central Railroad. The demurrer admits the truth of these allegations. What, if anything, is unconscionable in this charge, counsel for appellees have failed to explain, nor can we find anything in the record which would justify us in so finding. From the terms of the contract it appears that appellees at that time expected to produce at least 540,000 barrels every month, for otherwise why should the contract provide that appellant “shall not be required to receive more than 20,000 barrels in any one day nor more than 540,000 barrels in any one month of thirty days and on the same basis as to other months ?”
Had the Central Company tendered the quantity the Texas Company was bound to receive and pay for, the charge for the transportation to Miller’s Switch would have been not quite 13 cents per barrel. That this is not an exorbitant charge is shown by1 the fact that paragraph 4 of the contract provides that for all deliveries made at Houston or Humble, Tex., the appellant shall pay an additional allowance of 12J4 cents per barrel. If the parties considered 121/3 cents per barrel a fair remuneration for transporting the oil from Miller’s Switch to Houston or Humble, the court would not be justified in finding that 13 cents per barrel from Bartlesville, Okl., to Miller’s Switch, Tex., would be so unreasonable that it should be treated as unconscionable. But, even if the charge of 13 cents a barrel is a higher charge than is usitally made for like services, the excess is balanced by the obligation of the Texas Company to pay for the oil a higher price than the prevailing market at that time required. True, if the production greatly diminishes, the price for the transportation rises, and it becomes a hard contract for the Central Company, but, if the production increases and the price of oil decreases, it'will be a hard contract for appellant, as the contract provides for no reduction of the price to be paid by the Texas Company in such case, while it does make provision for a 'higher
“Nor is it any reason for rescinding the contract that It has become more burdensome In its operation upon the complainants than was anticipated.”
And further on the court said:
"It is not unconscionable because Ripley obtains a larger profit from it than was at first expected, or because the other party obtained less. Those were contingencies, the possibilities of which might have been foreseen. It could not have escaped the thought of the contracting parties that the expense of (marrying might possibly increase, and that the expense of sawing and preparing for market might either increase or diminish in the progress of time. C>t' that they took their chances. Besides, it is by no means clear that a court of equity will refuse to decree the specific performance of a contract. fair when it was made, but which has become a hard one by the force of subsequent circumstances or changing events.”
Other authorities to the same effect: are Franklin Telegraph Co. v. Harrison, supra; Bradley v. Heyward (C. C.) 164 Fed. 107, affirmed 179 Fed. 325, 102 C. C. A. 509; Schmidtz v. Louisville & N. R. R. Co., 101 Ky. 441, 41 S. W. 1015, 19 Ky. Law Rep. 666, 38 L. R. A. 809; Southern Ry. Co. v. Franklin & P. Ry. Co., 96 Va. 693, 32 S. E. 485, 44 L. R. A. 297.
The cost of the pipe lines and other facilities constructed by the Texas Company is a matter which, so far as the Central Company is concerned, is immaterial. What the Central Company was interested in, and what induced it to make the contract, was the opportunity to reach competitive markets for its oils, and thus avoid being compelled to sell all its products to the Prairie Oil & Gas Company without competition, that being the only company whose pipe lines, at that time, reached its fields. The appellant has fully complied with its part of the contract. It has built the pipe lines to the Central Company’s oil fields, established adequate gathering stations and related facilities which enable it to perform all its obligations under the contract, and has been ever since, and is now, able to handle all the oil the Central Company may tender under the contract. No damage then can possibly result to the Central Company by reason of the fact that the Texas Company was able to construct these facilities at a less cost than was anticipated. The Central Company would not be benefited if the cost, of furnishing these facilities had been four or ten times as much as it really was, and the converse is equally trite. We can see nothing unconscionable or inequitable in this. There would be just as much merit in the contention that one who has contracted for the erection of a building or the construction of a railroad has the right to refuse to carry out his contract and pay for the same because the contractor was able to perform the contract at a much less cost than was anticipated
“In view of these principles, which we think are founded on wisdom, we are of opinion that the fact that the appellants could, at the commencement of this suit, or since, sell at an increased price the privilege for which the ap-pellees paid by relinquishing a valuable contract and advancing a large sum of money,, and which privilege they now enjoy for the stipulated price of $600 per annum, is not sufficient to justify the court in withholding the relief asked.”
In Singer Sewing Machine Co. v. Union, etc., Co., Holmes, 253, Fed. Cas. No. 12,904, Judge Lowell held:
If the case is one in which the negative remedy of injunction would do substantial justice between the parties by obligating the defendant either to*23 carry out Ms contract or lose all benefit of the breach, and the remedy at law is inadequate, and there is no reason or policy against it, the court will interfere to restrain conduct which is contrary to the contract, although it may be unable to enforce a specific performance of it.”
But it is earnestly contended that whereas in fact only $900,000 has been expended by the Texas Company in the cost of the construction of the pipe line and the other facilities necessary to be provided by the Texas Company, the affidavits, read on behalf of the appellees' at the hearing of the motion for the temporary injunction, established the fact that the monthly payment of $70,000 assumed by the Central Company was based solely on the estimate that the cost of the construction would amount to $3,000,000, on which sum 28 per cent, per annum was to be allowed. As all of the negotiations were conducted prior to the execution of the contract, that evidence was clearly inadmissible, as its tendency was to vary the written contract, which the law conclusively presumes includes the final agreement, reached when the minds of the parties had finally met. That a court of equity will permit the introduction of parol evidence for the purpose of correcting mistakes in written instruments, or contracts obtained by fraud, either by reforming the instrument or if necessary rescinding it, or refusing a specific enforcement, if such an issue is raised by the pleadings, is no doubt true. But there is no such issue in this case, nor any evidence to establish the fact that there was a mistake as to the amount to be paid. In fact, the contract itself negatives it.
Newton v. Wooley (C. C.) 105 Fed. 541, decided by the writer of this opinion, is among the cases relied upon by counsel for appellees, but an examination of the facts in that case will show how inapplicable it is to the issues in the case at bar. That case was determined upon proofs taken in the usual course of equity procedure, after the issues had! been made up. The answer of the defendant expressly charged that the contract sought to be specifically enforced did not contain all the terms of agreement between the parties, but that the agreement on which the minds of the parties had met required the complainant to procure parties who would sell to defendant on credit, in addition to the rolling stock mentioned in the contract, the rails, bolts, and spikes for the construction of the railroad, and, if credit could not be obtained, the funds necessary to purchase them for cash would be furnished: that these provisions, except as to the rolling stock, which defendant could himself procure on credit, were omitted from the contract by the mistake of the scrivener who prepared it, and was not noticed by either of the parties until shortly before the institution of the suit; that complainant was unable to secure the rails, bolts, and spikes, and did not furnish the money necessary to purchase them. Although there was some conflict in the testimony on that point, the court found those issues in favor of the defendant, and also found as a fact that this omission in the contract was by the mistake of the stenographer who wrote it, and that the contract was signed by the parties in the absence of the attorney who had prepared and dictated it as the attorney for both parties, and without having been read over by him or the parties, both of them being under the impression at the time that the contract contained all the stipulations agreed upon.
"(13) It is mutually acknowledged and agreed that this agreement shall be deemed to have superseded and shall take the place of every and any other instrument purporting to be an agreement between the parties heretofore entered into, or signed or delivered or purporting to have been signed or delivered upon behalf of said parties or either of them.”
To review critically all the citations in the elaborate briefs of counsel would unnecessarily prolong this opinion, lengthy now, and serve no useful purpose, as a careful examination of them discloses that they are distinguishable upon the issues as well as the facts, and therefore inapplicable to the case at bar.
It may be that after the issues are made up and the proofs in complainant will not be entitled to a decree of specific performance upon the final hearing, but upon the allegations of the bill, and a careful examination of the affidavits submitted to the court below on.the hearing of the application for the temporary injunction, we are of the opinion that the equities in this case are so imperative, the remedy at law so inadequate, that a court of equity should exercise its power and grant relief to complainant. The temporary injunction as prayed in the bill should be granted, and, if necessary, a receiver of the property appointed.
The decree of the court below is reversed, with directions to grant a temporary injunction, and proceed in conformity with this opinion.