Fowler Utilities Company v. Gray

• Decision Date: 18 January 1907
• Docket Number: 20,643
• Citation: 79 N.E. 897,168 Ind. 1
• Parties: Fowler Utilities Company v. Gray
• Court: Indiana Supreme Court

79 N.E. 897

168 Ind. 1

Fowler Utilities Company v. Gray

No. 20,643

Supreme Court of Indiana

January 18, 1907

From Benton Circuit Court; Joseph M. Rabb, Judge.

Suit by George H. Gray against the Fowler Utilities Company. From a decree for plaintiff, defendant appeals. Transferred from Appellate Court under § 1337u Burns 1901, Acts 1901, p 590.

Reversed.

Charles M. Snyder, for appellant.

Fraser & Isham, B. B. Berry and Dawson Smith, for appellee.

Montgomery C. J. Gillett, J., absent.

OPINION

Montgomery, C. J.

This is a suit for an injunction to prevent the violation of an oral agreement made about September 1, 1902, wherein appellant promised to install in appellee's building a heating plant with sufficient capacity to heat said building to seventy-eight degrees Fahrenheit, and to connect the same with a central hot water heating plant, in consideration of the sum of $ 200 payable upon the installation of such plant and $ 50 per year payable as long as appellee desired heat to be so supplied and appellant was operating its central plant under a franchise granted by the board of trustees of the town of Fowler. The annual payments were to be made in two installments--$ 25 on January 1, and $ 25 on October 1, of each year--and no greater charge for heating the building was to be made so long as appellee desired the same to be so heated. The complaint further alleged that the plant had been completed and heat supplied as agreed, and that appellee had paid said sum of $ 200, and all other payments as they accrued under said agreement, but that appellant is now demanding an increased price for heating said building, and threatening to cut off the hot water supply from the same unless said increased demand is paid. A demurrer to the complaint was overruled, and appellant answered (1) by denial, and (2) by affirmatively setting up the statute of frauds. To the latter answer appellee replied in denial. A trial resulted in a finding and decree in favor of appellee, enjoining appellant from doing any act tending to violate or terminate the agreement to furnish heat for appellee's building at the rate of $ 50 per year so long as he may desire such heat, and pay therefor, within the term of appellant's franchise.

The assignment of errors properly challenges the sufficiency of the complaint. The right to a future supply of hot water heat at a special price, which appellee claims and is seeking to enforce by this suit, rests wholly upon contract. The theory of the suit, as clearly manifest from the record, is that appellant is bound to supply such heat for an indefinite time, to be determined solely by the arbitrary discretion and will of appellee. It is admitted that appellee is not bound to accept such heat for any particular period, and his only obligation is an implied promise to pay at the stipulated rate for such time as he may suffer the heat to be supplied.

"The general rule is that an injunction will not be granted to restrain a breach of contract by a defendant when the complainant's promises are of such a nature that they could not be specifically enforced, unless they have already been performed." 22 Cyc. Law and Proc., 850. This rule is founded upon a want of mutuality. The term "contract" implies mutual obligations, and, in general, contracts, other than options, are not enforceable unless both parties thereto are bound, so that an action could be maintained by each against the other, for a breach. Bishop, Contracts (2d ed.), § 78; Lawson, Contracts, § 97; Henry School Tp. v. Meredith (1904), 32 Ind.App. 607, 70 N.E. 393. There are many unilateral contracts which constitute an exception to this rule, including the right to exercise certain options, but the contract in suit has been executed in part and does not belong to that class.

The principle applicable to the contract under consideration is stated in the following paragraph, quoted from the case of Marble Co. v. Ripley (1870), 10 Wall. 339, 359, 19 L.Ed. 955: "Another reason why specific performance should not be decreed in this case is found in the want of mutuality. Such performance by Ripley could not be decreed or enforced at the suit of the marble company, for the contract expressly stipulates that he may relinquish the business and abandon the contract at any time on giving one year's notice. And it is a general principle that when, from personal incapacity, the nature of the contract, or any other cause, a contract is incapable of being enforced against one party, that party is equally incapable of enforcing it specifically against the other, though its execution in the latter way might in itself be free from the difficulty attending its execution in the former."

This is not an action for specific performance, but the contract is to be enforced negatively by an injunction prohibiting its breach, and the general rules governing such actions apply. In the case of Iron Age Pub. Co. v. Western Union Tel. Co. (1887), 83 Ala. 498, 3 So. 449, 3 Am. St. 758, involving a contract determinable at will, the court said: "We can tie the hands of the Associated Press and the other defendants by injunction, forbidding the delivery of the press dispatches to any one else than the complainant, as prayed for, and leave the complainant free to terminate the contract at its will without limitation of time or circumstances, or to perform its duties as correspondent as negligently or diligently as discretion may dictate. * * * The first decree suggested, would be entirely opposed to all equity precedents and practice, the settled rule being, that the courts will not interfere by injunction in cases of this kind, if, indeed, in any case where defendant cannot be made secure in his rights and remedies for violation of the duties imposed on the complainant by the contract sought to be enforced. Bromley v. Jefferies [1700], 2 Vern. 415; Richmond v. Dubuque, etc., R. Co. [1871], 33 Iowa 422, and cases cited on page 486."

The application of the rule to cases of this class is concisely stated by Judge Sanborn in Cold Blast Trans. Co. v Kansas City, etc., Co. (1902), 114 F. 77, 52 C. C. A. 25, 57 L. R. A. 696, 699, as follows: "A contract for the future delivery of personal property is void, for...