Barron G. Collier, Inc. v. Paddock
| Decision Date | 03 October 1930 |
| Docket Number | Civil 2885 |
| Parties | BARRON G. COLLIER, INCORPORATED, a Corporation, Appellant, v. FRED J. PADDOCK, JAMES A. GODWIN, WILLIAM ROER, DAVID P. KIMBALL and O. B. MARSTON, Members of and Comprising the City Commission of the City of Phoenix, JOSEPH C. FURST, City Clerk of the City of Phoenix, GEORGE H. TODD, City Manager of the City of Phoenix, and CITY OF PHOENIX, a Municipal Corporation, Appellees |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Maricopa. Lee N. Stratton, Judge. Judgment affirmed.
Messrs Cunningham & Carson, for Appellant.
Mr Henry J. Sullivan, City Attorney, and Mr. William C. Eliot Mr. Leon S. Jacobs, and Mr. Austin O'Brien, for Appellees.
Barron G. Collier, Incorporated, filed an action against the City of Phoenix and its officers praying that they be restrained from interfering with its advertising rights upon the street-cars owned by the City, and from orders sustaining a general demurrer to its complaint and dismissing the action, the plaintiff prosecutes this appeal.
It appears from the record that on July 29, 1924, the plaintiff and the Phoenix Railway Company of Arizona, a corporation then owning and operating the street-car system of Phoenix, entered into a written contract by which the plaintiff was granted for a period of ten years from July 1, 1924, for a consideration of $600 a year for the first three years and $700 a year for the last seven the sole and exclusive advertising rights and privileges upon all the street-cars and busses then or thereafter to be owned, controlled or operated by the Company; that the latter carried out its contract until November 1, 1925, when it sold its street railway system to the City of Phoenix, which has since owned and operated it, including the cars upon which plaintiff had been granted the exclusive advertising rights; that at the time the City purchased this property its attorneys knew of the existence of this contract and its terms and upon information and belief the plaintiff alleges that the Company sold and assigned said contract to the City together with all of its rights and privileges and delivered a duplicate copy thereof to the City which, with the approval of the latter's attorney, adopted and accepted an assignment thereof.
It is further alleged that from November 1, 1925, to July 1, 1929, the City, with full knowledge of the contract and the terms thereof, accepted from plaintiff and placed in the street-cars in accordance with this agreement all the advertising cards and matter sent it by plaintiff and received and retained for this service the monthly payments sent by plaintiff during this period; that by performing these acts it made the contract its own and led the plaintiff not only to believe it had done so but in reliance thereon to enter into various and numerous agreements with national advertisers engaged in interstate commerce to display their advertising cards and matter in the street-cars in various cities of the United States, including those of Phoenix, to incur obligations to said national advertisers which it would otherwise not have done and to pay money to the City of Phoenix; that plaintiff will suffer great financial loss by reason of the obligation so incurred should the City be permitted to deny the contract and escape performance of its obligations thereunder, and, hence, that it ought to be and is estopped from denying the validity or binding effect of said contract, or that it made the same its own.
It further appears that on June 25, 1929, the City notified the plaintiff that it was proceeding to call for bids and enter into a contract as of July 1, 1929, for the privileges theretofore enjoyed by plaintiff, and that the latter's rights would end as of that date; that thereupon the plaintiff notified the City that it had a valid and existing contract with the City for the exclusive street-car advertising privileges up to and including June 30, 1934, and demanded that it continue to perform its part of this contract; that notwithstanding this notification the City proceeded to issue a call for bids for these advertising privileges and, on July 17, 1929, opened those submitted in response thereto; that the bid found to be the apparent high one was referred to the proper officers for checking, with instructions that a contract for the exclusive advertising privileges upon the street-cars within the City of Phoenix be entered into with said bidder, provided its bid was in proper forms; that the City threatens to and will, unless restrained by an order of the court, enter into said contract, and should this be done and the plaintiff denied the exclusive advertising privileges thereon as agreed the plaintiff would be forced to breach its contract with said national advertisers and compelled to face a multiplicity of suits and suffer irreparable damage.
To this amended complaint defendants filed a general demurrer and upon its being sustained and the plaintiff's announcing that it would stand upon the cause of action as alleged the case was dismissed. Thereupon the plaintiff brought the matter here for review and assigns these two rulings as error. They present only one question, however, and that is the sufficiency of the amended complaint to state a cause of action.
In the prosecution of its case appellant has proceeded upon the theory that when the City purchased the street-car system from the Phoenix Railway Company it took with it the contract appellant had made with the company relative to the advertising rights and privileges on the street-cars and made the same its own. There is no allegation, except upon information and belief, that this contract was assigned to and accepted by the City, but it is averred as a fact that it was so accepted, and this, it is claimed, is shown by the City's behavior in performing for nearly four years subsequent to the taking over of the street-car system the obligations imposed upon the Company by the contract and the acceptance by it during this period of all the payments due thereunder. Such action on the part of the City, it is contended, led appellant to believe that it had adopted the contract and intended to carry it out and, hence, justified appellant in entering into agreements with national advertisers to place their cards and other advertising matter in the street-cars of Phoenix. This conduct, it is contended, estops the City from denying that it made the contract its own.
It is true that one who takes over a contract or deliberately enters into relations with one of the parties thereto that are inconsistent with any theory except the adoption of it and then acts in such a way "as to lead such party to believe that he has made the contract his own . . . will not be permitted afterward to repudiate it." 13 C.J. 243. See Chicago & A.R.R. Co. v. Chicago, V. & W. Coal Co., 79 Ill. 121; Wiggins Ferry Co. v. Ohio & Mississippi Ry. Co., 142 U.S. 396, 35 L.Ed. 1055, 12 S.Ct. 188. However, before this result may follow it is necessary not only that the party taking over the contract or entering into such relations with the other party to it have the right to accept or reject it, (21 C.J. 1206), but it must also be true, when the person it is claimed has accepted is a municipality whose charter contains provisions governing its action in this particular, that the contract has been entered into in the manner prescribed by that instrument. White v. City of Seaside, 107 Or. 330, 213 P. 892; Philadelphia Co. v. City of Pittsburgh, 253 Pa. 147, 97 A. 1083; Paul v. City of Seattle, 40 Wash. 294, 82 P. 601; Moseley Hospital v. Hall, 207 Ky. 644, 269 S.W. 1004; McDonald v. Price, 45 Utah 464, 146 P. 550; City of Mobile v. Mobile Electric Co., 203 Ala. 574, 84 So. 816; Forrest City v. Orgill, 87 Ark. 389, 112 S.W. 891; Frisbie Co. v. City of East Cleveland, 98 Ohio St. 266, 120 N.E. 309. The following statement of the rule is found in volume 3 of McQuillin on Municipal Corporations, page 836 (second edition):
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