Brunswick Gaslight Co. v. United Gas, Fuel & Light Co.

• Decision Date: 11 August 1893
• Citation: 85 Me. 532,27 A. 525
• Parties: BRUNSWICK GASLIGHT CO. v. UNITED GAS, FUEL & LIGHT CO.
• Court: Maine Supreme Court

27 A. 525

85 Me. 532

BRUNSWICK GASLIGHT CO.

v. UNITED GAS, FUEL & LIGHT CO.

Supreme Judicial Court of Maine.

Aug. 11, 1893.

(Official.)

Exceptions from superior, court, Cumberland county.

Action by the Brunswick Gaslight Company against the United Gas, Fuel & Light Company for breach of covenants in a lease. Plaintiff had judgment, and defendant brings exceptions. Exceptions sustained.

From the bill of exceptions it appeared that the plaintiff was incorporated by special act of the legislature, in 1854, to carry on the manufacture, distribution, and sale of gas for street lighting, the laying of pipes in the streets, etc.

The defendant was incorporated under the general laws of Maine in 1888, and its purposes, under the articles of association, were to operate "a gas process for manufacturing fuel and illuminating gas from oil and other raw products; to light by gas the streets, parks, grounds, buildings, and business places of persons and corporations; to manufacture, use, supply, distribute, and furnish light, heat, and motive power by gas for heating and manufacturing purposes deemed for the interest of the corporation; to erect and maintain posts and other fixtures; to lay down and maintain such underground pipes and other appurtenances as may be deemed necessary for the objects of the corporation, wherever the same may be lawfully done; to manufacture, lease, purchase, and otherwise acquire, deal in, manage, use, and sell any and all machinery, fixtures, appurtenances, appliances, and plants for using and furnishing light, heat, and power, and for any and all purposes for which gas is now used or may hereafter be used; to lease, purchase, or otherwise acquire, manage, control, use, and sell real and personal estate, patents, patent rights, inventions, and processes and improvements thereon, and interests therein and rights thereunder, and any and all other property, privileges, and easements, rights and things, whatsoever deemed necessary or convenient for carrying on the business of the corporation, with power to authorize other corporations and persons to manufacture, use, sell, and operate thereunder, and to do any and all acts and things connected with or deemed necessary for carrying on the business of the corporation and the general business of furnishing and supplying heat, light, and power by means of gas; to issue bonds secured by mortgage on the property and franchise of said company for the purpose of raising money for the use of the company; and to have and exercise all the rights and powers and privileges appertaining to corporations under the general laws of the state of Maine."

For several years prior to April, 1889, the plaintiff corporation under its charter had supplied the citizens of Brunswick with gas. Its operations had not been financially successful. At that time it was heavily in debt, not only on account of bonds which it had issued, secured by a mortgage on its real estate and other property, but a considerable floating debt existed as well. Some of the bonds at that time were overdue, and the holders were threatening foreclosure. At this time B. G. Dennison was the president of the Brunswick Gaslight Company, and Marcus R. Williams was president of the United Gas, Fuel & Light Company.

At the time of the execution of the lease of the Brunswick property, all the directors of the defendant company, including its president, were residents of New York city and its vicinity.

This defendant was the owner of what is known as the "Avery process for the manufacture of gas." Not long after the election of these directors, President Williams came to Maine for the purpose of introducing that process in this state.

For some time prior to said 1st day of April negotiations had been pending between these two officers relating to a lease of the plaintiff's property by the defendant company; the defendant company prior to this time having entered into possession of the gas plant in Bath, under some kind of an arrangement with the company originally operating the Bath plant These negotiations terminated on the 1st day of April, 1889, by the execution of a lease.

Under this lease, and on the day of its execution, the defendant company entered into possession of the plaintiff's gas plant at Brunswick.

The case does not show that prior to the execution of the lease, the directors of the defendant company expressly authorized by formal vote their president Williams, to execute the lease in their behalf. The defendant company at the trial denied the authority of Williams to execute the lease of the Brunswick plant but it appeared as facts in the case that the works at Brunswick and at Bath, which the defendant company admitted were operated by its authority, had a common manager, whose salary was not apportioned between them, kept common books of account, and bought supplies in common; and, further, that both works at times used the Avery process for the manufacture of gas, which the defendant company alone had the right to use.

From these facts and other testimony in the case the court found that Williams was the agent of the defendant company to arrange with different gas companies in the state for the introduction of the Avery process; that the directors of the defendant company had full knowledge that the works at Brunswick were operated by their company; that they acquiesced in the same, and ratified the action of Williams in the premises,—no disavowal of the authority of President Williams to execute the Brunswick lease ever having been communicated to the plaintiff company prior to the commencement of this suit.

The defendant company continued to operate the Brunswick works until September 15, 1890, when voluntarily, and without the fault of the plaintiff company, they abandoned the works, and ceased to operate them.

Upon these facts the court ruled as matter of law that the plaintiff company and the defendant company had power to execute the lease in question, and that the defendant company was liable in damages for the breach of the covenants contained in said lease.

The defendant company did not indorse any guaranty upon the outstanding bonds of the plaintiff company, nor did it give any guaranty to the holders of the same, further than is contained in the provisions of the lease itself. The damage sustained by the plaintiff on this account is of such an uncertain character that the court allowed the plaintiff nothing for the failure of the defendant to fulfill those covenants contained in the lease.

For prospective damages on account of the breach of covenants of the lease the court awarded the plaintiff the sum of $4,500, less $300, the value of defendant's improvements while in possession, the plaintiff having expressed a willingness to make a deduction equal to the difference between the value of the plant April 1, 1889, when the defendant took possession, and its value September 15, 1890, when it abandoned possession.

After hearing the evidence and arguments of each party, and considering the same, the court decided that the said indenture is the defendant's deed in manner and form as the plaintiff in its writ has declared against it, and awarded damages in the sum of $4,986.56.

Among other provisions the lease contains the following:

"The lessee covenants and agrees to guaranty during the term of this lease the present bonded indebtedness of the lessor, and its renewal, and a further issue of bonds to liquidate any or...