Minnetonka Oil Co. v. Cleveland Vitrified Brick Co.

• Decision Date: 13 September 1910
• Docket Number: Case Number: 2212
• Citation: 27 Okla. 180,1910 OK 279,111 P. 326
• Parties: MINNETONKA OIL CO. v. CLEVELAND VITRIFIED BRICK CO.
• Court: Oklahoma Supreme Court

1910 OK 279

111 P. 326

27 Okla. 180

MINNETONKA OIL CO. v. CLEVELAND VITRIFIED BRICK CO.

Case Number: 2212

Supreme Court of Oklahoma

Decided: September 13, 1910

Syllabus

¶0 1. EQUITY--Jurisdiction--Multiplicity of Suits. The rule that the prevention of a multiplicity of suits is a ground for equitable jurisdiction applies where one party may be required to sue several times in relation to the same subject-matter in its entirety, or in respect to some element thereof, or where to secure proper redress of the continuous breach of a contract by the other party a great number of suits at law for damages growing out of such breach may be necessitated.

2. CORPORATIONS--Officers--Acts Within Apparent Authority. Where one of the purposes for which a corporation is organized under the laws of Pennsylvania is the furnishing of gas for fuel and light purposes, and all of its directors reside in said state, with the exception of one, who resides in Oklahoma, where the corporation has its plant, and who, having practically the sole management of its business in the latter state and having at different times made various contracts for the supplying of gas at different prices, as general manager and having executed a contract in the name of said corporation, in connection with its president, obligating said corporation to furnish gas for a certain period free, and thereafter for an additional period at a designated price; it further appearing that said concession in the supplying of free gas and the price of the other gas to be furnished was made in order to induce a brick manufacturing concern to establish a brick plant in the town where the gas company was located; and further, under the terms of said contract, after the establishment and beginning of the operation of said brick plant, said gas company furnished to said brick company gas free for a period of six months, said contract not being questioned--held, that said officers acted within the apparent scope of their authority, and the finding of the court that the gas corporation was bound by said contract is without error.

3. ESTOPPEL--Contracts--Rescission--Grounds. The contract requiring the brick company to erect a brick plant within one mile of a depot in a certain place, at the time the contract was entered into the general manager of the gas company having designated the point where the same should be located, it being assumed by all parties that such point was within one mile of said depot, and thereafter said plant having been constructed at such designated point, in all other respects complying with the contract, the gas company will be estopped from thereafter setting up that said plant was not located within the prescribed limits.

(a) The contract further providing that the brick plant when completed and ready for operation shall be of such extent and capacity as to regularly and permanently employ not less than 25 adult employees in the conduct of its manufacturing operations, and that if at any time the brick plant should be found operating its plant with less than 25 bona fide adult employees, then the gas company may charge 3 cents per 1,000 cubic feet for gas used and not be held to furnish the same free until said brick plant should have at least the full number of adult employees on its pay roll, is not ground for the rescinding of such contract, but upon the happening of such contingency entitles the gas company to collect for the gas supplied at the price named.

4. ASSIGNMENTS--Contracts Assignable. A contract, providing that H. shall erect and complete a brick plant at a designated point near the city of C., commencing within a certain time and completing it with reasonable dispatch, of such capacity as to afford bona fide employment to 25 adult employees, and as consideration therefor M. Company shall furnish gas for both fuel and light purposes for said plant for a certain period free, the meter and gas pipe lines to be installed at the expense of H., and thereafter for a certain period at a stipulated price and also for the employees and their families at a certain stipulated price, during a certain period, all except the free gas to be paid for monthly and the latter in advance by the brick plant, H. to be reimbursed for the outlay for the meter and pipe line when the period began for paying for the gas for the brick plant, the plant having been installed and operated in accordance with the contract for a period of six months, the M. Company then notifying H. that said contract was rescinded, he having sold, said plant and assigned said contract to C. Company, not receiving said notice until after the sale and assignment to C. Company, when he notified said M. Company of said sale and assignment, M. Company receiving knowledge of said sale and assignment again notified both H. and C. Company that said contract should be considered as rescinded, not intimating or indicating that it considered said contract to be nonassignable,--Held, that when the contract is considered on its face, in connection with the contemporaneous construction placed upon it by the parties and their actions thereunder, it was assignable.

Error from District Court, Pawnee County; Bayard T. Hainer, Judge.

Action by the Cleveland Vitrified Brick Company against the Minnetonka Oil Company. Judgment for plaintiff, and defendant brings error. Affirmed.

E. M. Clark and Fred S. Liscum, for plaintiff in error.

Flynn, Ames & Chambers, for defendant in error.--On question of equitable jurisdiction: Xenia Real Estate Co. v. Macy (Ind.) 47 N.E. 147; School Dist. v. Ohio Gas. Co. (Pa.) 25 Atl. 868; Graves v. Gas. Co. (Iowa) 50 N.W. 283; Williams v. Neely, 134 F. 1. On assignability of contract: Am. Bonding & Trust Co. v. Railroad Co., 124 F. 866; Edmonds v. Railroad Co., 80 F. 78; Horst v. Roehm, 84 F. 565; Larne v. Goezinger (Cal.) 24 P. 42; Leader Printing Co. v. Lowery, 9 Okla. 89.

WILLIAMS, J.

¶1 The following questions are raised by the plaintiff in error in this case: (1) That injunction is not the proper remedy; (2) that the parties executing the contract on the part of the plaintiff in error, a corporation, did not act within the scope of their authority; (3) that the contract had not been complied with by the Hammar Brick Company before the same was assigned to the defendant in error; (4) that the contract was not assignable.

¶2 1. The aid of equity may be invoked to stay a wrong, when relief at law would occasion a multiplicity of suits. In Johnson et al. v. Swanke, 128 Wis. 68, 107 N.W. 481, 8 Am. & Eng. Ann. Cas. 544, this rule is stated that the prevention of a multiplicity of suits as a ground for equitable jurisdiction applies where one party may be sued several times in relation to the same subject-matter in its entirety, or in respect to some element or elements thereof. See, also, Threlkeld v. Steward et al., 24 Okla. 403, 103 P. 630. The ultimate criterion is in the utter inadequacy of the legal remedy. With said contract rescinded, the gas bills for both fuel and light would have to be paid monthly, running over a period of years, necessitating the plaintiffs bringing a multiplicity of suits to recover the money paid therefor as to the time the gas was to be furnished free, and the excess for the period it was to be supplied at a reduced price. Other cases have been cited by defendant in error, wherein manufacturing plants have successfully invoked the aid of equity in enjoining gas companies from cutting off the gas under a contract to supply same for fuel and light purposes. In those cases the proof showed that the manufacturing plants could not reasonably secure or procure gas for fuel and light from other sources, and the decisions in such cases seem to be based on that point. In the case at bar, it appears. from the record that the plaintiff in error demanded, as a condition precedent, that the defendant in error should acquiesce in the canceling of the contract in order to have gas furnished the brick plant for fuel and light purposes, and under such circumstances gas would not have been reasonably available from the plaintiff in error. But there is evidence in the record tending to show that there were other gas companies operating in and near Cleveland from which gas was available to the defendant in error; but, as before stated, it is not necessary to determine whether an injunction was the proper remedy on this theory, for it is clearly invokable to prevent a multiplicity of suits to redress, you might say, monthly breaches of a contract extending over a period of years.

¶3 2. This contract, on its face, is within the scope of the power of the corporation, and it is presumed so to be. Ohio & Mississippi Ry. Co. v. McCarthy, 96 U.S. 258 at 258-268, 24 L. Ed. 693. It is executed in the name of the corporation by P. O. Laughner, its president, and J. E. Schell, its manager. The proof shows that all the directors of said corporation, except Schell, resided in the state of Pennsylvania, he remaining the most of the time in Oklahoma and having practically the entire management of said corporation, making contracts for the sale and supplying of gas at different prices in accordance with the amount consumed. Said officer, in the name of plaintiff in error, had made various contracts at different prices for supplying gas, among which was the contract involved in this controversy. Under said contract gas had been furnished extending over a continuous period of about six months, from about the 1st of May, 1905, until about the 1st of December, 1905, the time said notice was served on the officers of the plaintiff. The court found that at the time the officers of said corporation executed said contract they were acting within the apparent scope of their authority, and that they had the authority to execute the same and to bind the defendant. The evidence reasonably tends to support such finding. There appears to be no error in this action of the court. Jack v....