McCullough-Dalzell Crucible Co. v. Philadelphia Co.

• Decision Date: 04 January 1909
• Docket Number: 160
• Citation: 223 Pa. 336,72 A. 633
• Parties: McCullough-Dalzell Crucible Company, Appellant, v. Philadelphia Company
• Court: Pennsylvania Supreme Court

72 A. 633

223 Pa. 336

McCullough-Dalzell Crucible Company, Appellant, v. Philadelphia Company

No. 160

Supreme Court of Pennsylvania

January 4, 1909

Argued November 3, 1908 [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Appeal, No. 160, Oct. T., 1908, by plaintiff, from decree of C.P. No. 2, Allegheny Co., July T., 1907, No. 281, dismissing bill in equity in case of McCullough-Dalzell Crucible Company v. Philadephia Company. Affirmed.

Bill in equity for an injunction.

MILLER, J., specially presiding, filed the following opinion:

The bill alleges, that the plaintiff granted the defendant the right to lay and maintain pipe lines in the bed of Thirty-sixth street and Spruce alley in the city of Pittsburg, title to which the plaintiff claims; in consideration for which the defendant had agreed to furnish gas as fuel to the plaintiff's crucible works free of cost for one year, and thereafter at a rate equal to one-half the cost previously paid for coal, coke and other fuel; that the defendant company now proposes to terminate said contract, to remove the pipe lines remaining and to discontinue service, except upon a new contract based on the present market price; the bill prayed for an injunction and for the specific performance of the contract.

The answer admits the contract, but asserts, first, that it, being without time limit, is revocable upon reasonable notice by either of the parties; second, that the contract itself contains a right of termination; third, that the present condition respecting the cost and supply of gas, was not within the contemplation of the parties when the contract was made; that the present price is inequitably low, less than the cost of production, and far less than that paid by other consumers of the same character.

FINDINGS OF FACT.

1. The plaintiff is a corporation under the laws of Pennsylvania, engaged in the manufacture of crucibles, and other articles containing plumbago; it is the successor of a partnership formerly doing business under the name of McCullough, Dalzell & Company. It is now the owner of a manufacturing plant in the fifteenth ward of the city of Pittsburg, bounded by Thirty-sixth street on the east and by the Allegheny Valley Railroad on the south.

2. Prior to March 13, 1886, Michael McCullough, Jr., a then member of the partnership of McCullough, Dalzell & Company, was the owner of a piece of ground adjoining that described in the first finding of fact, fronting on said Thirty-sixth street, bounded by, and extending across, Spruce alley and said Allegheny Valley Railroad. Said alley had never been an open street, and was owned in fee by said Michael McCullough, Jr., who, with the other members of said partnership, were the then owners in fee of the lot of ground described in the first finding of fact.

3. The Philadelphia Company, defendant, is a corporation under the laws of Pennsylvania and is engaged now and prior to 1885 in the production, transportation and sale of natural gas in the city of Pittsburg and elsewhere.

4. On March 13, 1886, Michael McCullough, of the first part, McCullough, Dalzell & Company, of the second part, and the Philadephia Company, of the third part, entered into the following agreement:

"Whereas, M. McCullough, Jr., is the owner of a certain lot or piece of ground situate in the 15th ward of the City of Pittsburg, fronting on 36th street, and bounded by Spruce alley and the Allegheny Valley R.R.;

"And Whereas, Michael McCullough, Jr., John H. Dalzell, C. C. Arensberg and H. E. Dubarry, partners doing business as McCullough, Dalzell & Company, are the owners of a certain lot or piece of ground situate in the said ward, bounded by the Allegheny Valley R.R., on the south and the Allegheny river on the north, and running from 35th to 36th street;

"And Whereas, The Philadephia Company has already laid its pipe line in the bed of that portion of 36th street which is the property of the said McCullough, and McCullough, Dalzell & Company, and also in Spruce alley upon the property of said M. McCullough, Jr., and is desirous of having its rights to maintain and operate its said pipe line confirmed;

"Now, This Agreement, made this 13th day of March, 1886, between the said M. McCullough, Jr., party of the first part, Michael McCullough, Jr., John H. Dalzell, C. C. Arensberg and H. E. Dubarry, partners doing business as McCullough, Dalzell & Company, parties of the second part, and the Philadelphia Company, party of the third part, witnesseth as follows:

"Said party of the first part, and said parties of the second part in consideration of the sum of one dollar to them in hand paid by the Philadelphia Company, receipt of which is hereby acknowledged, and in further consideration of the agreements hereinafter mentioned to be kept and performed by the said Philadelphia Company, hereby grant and convey unto the said Philadelphia Company, its successors and assigns, the right to maintain and operate and from time to time repair, its pipe line for the conveyance of natural gas, extending from the Allegheny river southward in the bed of 36th street to Spruce alley and through Spruce alley; to have and to hold said right and privilege to the said Philadelphia Company, its successors and assigns forever.

"In consideration of the premises, the Philadelphia Company hereby agrees to furnish to the said McCullough, Dalzell & Company or their successors or grantees occupying same ground gas for fuel at their crucible works, of present size and capacity, situate on said property, according to the terms and conditions of the contract in ordinary use by said Philadelphia Company with its customers, but without cost, for one year from the first day of May, 1885 (five), and thereafter at a rate which shall equal one-half the cost to said McCullough, Dalzell & Company of the coal, coke and other fuel by them used prior to the introduction of natural gas [during the two (2) years previous to the introduction of gas]."

To the foregoing agreement and made part thereof was attached a blank form of agreement then in use between the Philadelphia Company and its consumers, which agreement in full is found in the plaintiff's bill.

Among the provisions of said printed form of agreement, are the following: (a) That the consumer should provide and make all connections and appliances for the purpose of utilizing natural gas from the mains of the Philadelphia Company; (b) that it would exercise all due care so as to prevent any waste in the use of gas; (c) that, if it violated said provisions and any of the others contained in the agreement, the supply might be cut off on five days' notice.

Among the mutual covenants in said agreement are the following: (a) That if the company's supply of gas should fail, whether from natural causes or otherwise, its obligations under the agreement should cease and determine, and (b) "This agreement shall continue in force after the expiration of the term named until either party gives days' notice of the desire to terminate the same, at the expiration of which time the agreement shall cease."

5. On April 9, 1886, Michael McCullough, Jr., party to the agreement set forth in the fourth finding of fact, executed and delivered an assignment of it to said McCullough, Dalzell & Company.

6. In pursuance of the foregoing contracts and assignment, the plaintiff company at a considerable expense equipped and fitted out its plant for the use of natural gas, and the defendant company continued to furnish gas to the plaintiff in accordance with said contracts and assignment, from May 1, 1885, until March 15, 1907, when it served the following notice upon the plaintiff company:

"Whereas, by an agreement dated March 13th, 1886, between M. McCullough, Jr., Michael McCullough, John H. Dalzell, C. C. Arensberg, H. E. Dubarry and the Philadelphia Company, there was granted to the said Philadelphia Company, a right of way over which to maintain and operate a pipe line for the conveyance of natural gas, extending from the Allegheny river southward in the bed of 36th street to Spruce alley, and through Spruce alley, and in consideration therefor the Philadelphia Company agreed to furnish to the said McCullough, Dalzell & Company, or their successors, gas for fuel at their crucible works, without cost, for one year from the first day of May, 1885, and thereafter at a rate which shall equal one-half the cost to said McCullough, Dalzell & Company of the coal, coke and other fuel by them used prior to the introduction of natural gas (during the two years previous to the introduction of gas); and

"Whereas, it is the intention of the said Philadelphia Company to abandon said right of way and to reclaim therefrom as much pipe as it is practicable for it to reclaim, and to be thereupon released from its obligation to furnish gas at the above mentioned rate.

"Therefore, Notice is hereby given, that the Philadelphia Company will, on April 30th, 1907, terminate said contract; will permanently abandon and remove said pipe line, and will not thereafter furnish gas to the said McCullough, Dalzell & Company or McCullough-Dalzell Crucible Company, its successors, except at the present market price and under a new contract."

7. The defendant has a sufficient supply of gas to meet plaintiff's needs, which supply, however, comes from fields and wells and under circumstances almost wholly different from those in operation and used at the time the contract was made, and which will be fully set forth in another finding of fact. The defendant can supply the plaintiff's needs from its mains located in the public streets, without using any of the lands or easements formerly belonging to Michael McCullough, Jr., or to the plaintiff's predecessor...