Montgomery Light & Power Co. v. Montgomery Traction Co.

• Decision Date: 16 October 1911
• Docket Number: 303.
• Citation: 191 F. 657
• Court: U.S. District Court — Middle District of Alabama
• Parties: MONTGOMERY LIGHT & POWER CO. v. MONTGOMERY TRACTION CO.

191 F. 657

MONTGOMERY LIGHT & POWER CO. v. MONTGOMERY TRACTION CO.

No. 303.

United States Circuit Court, M.D. Alabama, Northern Division.

October 16, 1911

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Steiner Crum & Weil and John R. Tyson, for complainant.

Ray Rushton and Gregory L. Smith, for defendant.

JONES District Judge (after stating the facts as above).

The demurrer, of course, admits the truth of all the facts well pleaded in the bill. We have then this case: The complainant, a quasi public corporation, engaged in the business of generating and supplying electrical current for lighting and power purposes to individuals and the public here, has a contract with the Traction Company, another quasi public corporation, engaged in the street car business, whereby the Power Company agrees, in substance, to sell and deliver for a certain price, and the Traction Company agrees to purchase and receive from it exclusively, for a period of 15 years, 7 of which have not expired, such direct electrical current as may be required for propelling its cars and those of any other corporation which it may operate or permit to use its tracks, and for lights for parks, places of amusement, offices, etc.

The complainant, immediately upon the execution of the contract, began to furnish, and the Traction Company to receive, the electrical current contracted for, and has expended some $200,000 in machinery and apparatus to enable it the better to carry out the terms of the contract, and has at all times faithfully lived up to the terms and provisions of the contract, and is ready, able, and desirous to carry out every stipulation of the contract until it expires, as required by its terms. The defendant Traction Company is about to discontinue receiving electrical current from the complainant and to take it from another source, in disregard of its contractual obligation, and without excuse for its breach.

If the Traction Company is permitted to do this, complainant will have no adequate remedy at law for the recovery of the damages it will suffer from the respondent's causeless breach of the contract. The extent of defendant's business, the lines it would construct or operate, the number of cars it would use, the conditions under which it would run them, the places of amusement it would operate, and the quantity of electrical energy it would consume, during the ensuing seven years of the life of the contract, are uncertain and speculative, and could not be recovered in an action at law. Irreparable injury would therefore be inflicted upon the complainant if the defendant be permitted to breach the contract without just cause, by refusing to take electrical power exclusively from the complainant. It would be a reproach to justice, under such circumstances, if a court of equity were powerless to intervene and charge the conscience of the defendant with the duty of not wantonly inflicting such irreparable injury upon the other party to the contract, and the court ought to prevent it, if it can give any relief, consistent with the settled principles of equity and the rights of the parties under the contract, as they themselves have therein measured and determined them.

Although counsel for respondent necessarily admit, in the present posture of the case, that there is no excuse for defendant's refusal to receive electricity from the complainant, they insist, notwithstanding, that there is no equity in the bill, as the relief sought practically amounts to specific performance of the contract, extending over a term of years, requiring the exertion of skill and the performance of personal services, which the court would be compelled to supervise, and defendant could not have a decree against the complainant for the specific performance of the contract on its part; and further that the court cannot grant an injunction against the refusal to carry out the contract, for its unexpired term, when by its terms the acts of the parties might lawfully terminate it before the date fixed in the contract for its expiration.

They further insist under the term of the contract, 'that should said Power Company fail, from any cause whatever, to carry out the terms of this contract or to furnish the current required hereunder from any other source for a period of ten days, said Street Railway may, at its election, thereupon either terminate this contract or await the making of such repairs'; that the parties deliberately contracted that the Traction Company (the successor of the Street Railway Company) might judge for itself whether the contract had been violated, and has the right at its peril, if it judges wrongfully, to refuse to carry it out, and subject itself only to such damages as may be recoverable in a court of law; and that by preventing defendant from refusing to receive the current, in the face of the provisions of the contract, pending an investigation whether its refusal was wrongful, would be adding a term to the contract, and give the complainant a right against the defendant which the contract did not secure to it.

It suffices to say of this objection that, on demurrer, it is admitted that there has been no breach of the contract, and that the condition subsequent, upon which the defendant would have the right to terminate it, has not happened. Compelling the defendant to continue receiving the electrical current, therefore, could not possibly violate any legal or equitable right belonging to it. Besides, a court will not adopt any construction of a contract which permits a contracting party to take advantage of his own wrong to terminate it, or to inflict irreparable injury on the other party to the contract by wrongfully refusing to perform it, unless the terms of the contract are so plain and explicit to that effect that the court, in view of the situation of the parties and the subject-matter of the contract, is driven to the conclusion that such was the intention of the parties. It is apparent, from reading this carefully drawn contract with its numerous mutual covenants and stipulations, which go to the consideration of the contract as an entirety, that it was not contemplated that either party might terminate it, unless the facts occurred, upon the happening of which it was stipulated that the aggrieved party should have a right to put an end to the contract. It does not disclose any purpose that either of them, in the event the other attempted a wrongful breach of the contract, should be precluded from asserting any right, it might otherwise have, to resort to a court of equity to compel performance of the contract, and thus prevent the infliction of irreparable injury on the other party by a causeless breach of it.

It is true that the bill prays for a temporary injunction, and for a final decree preventing defendant from accepting or using electrical power from any other source than complainant pending the unexpired term of the contract, and that upon final hearing the injunction be made perpetual.

Obviously no court could grant such relief, regarding the performance of a contract which is liable to be terminated at any time by the default of the complainant. It could never be known, until the date the contract fixed for its expiration arrived, whether it would continue in force for the full term thus fixed, since it is liable to be terminated at any time by the default in its performance and the election given the defendant, in that event, to terminate it. There is, however, a prayer for general relief, as to the irreparable injury the complainant would suffer, if the court of equity...