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

• Decision Date: 07 February 1916
• Docket Number: 2797.
• Citation: 229 F. 672
• Parties: MONTGOMERY TRACTION CO. v. MONTGOMERY LIGHT & WATER POWER CO. [1]
• Court: U.S. Court of Appeals — Fifth Circuit

229 F. 672

MONTGOMERY TRACTION CO. v. MONTGOMERY LIGHT & WATER POWER CO. ^[1]

No. 2797.

United States Court of Appeals, Fifth Circuit.

February 7, 1916

[Copyrighted Material Omitted]

Ray Rushton, of Montgomery, Ala., and Gregory L. Smith, of Mobile, Ala. (Rushton, Williams & Crenshaw, of Montgomery Ala., on the brief), for appellant.

B. P Crum and John R. Tyson, both of Montgomery, Ala. (Steiner, Crum & Weil, of Montgomery, Al., and Frueauff & Robinson, of New York City, on the brief), for appellee.

Before PARDEE and WALKER, Circuit Judges, and FOSTER, District Judge.

WALKER Circuit Judge.

The averments of the bill in this case show that at the time it was filed, in September, 1911, the defendant (the appellant here), was receiving from the plaintiff and using electrical current for the operation of its railway under a contract then existing between them, providing for the supply by the plaintiff and the use by the defendant of such current for a period of 15 years from February 1, 1903; that the plaintiff had complied with its obligations under said contract, and was ready, able, and willing to carry out and perform every term or stipulation thereof required of it, and was desirous of so doing; and that the defendant, in utter disregard of its contractual obligations to the plaintiff, was about to violate the terms of said contract on its part by discontinuing the use of the electrical current supplied by the plaintiff, and obtaining from another source the power required for the operation of its railway. The bill contained a prayer for the specific relief of an injunction restraining the defendant from disconnecting its wires or lines from the plaintiff's power plant and from receiving or using electrical current from any person or party whomsoever other than the plaintiff under and in accordance with the alleged existing contract.

The right of the plaintiff to have the relief sought was contested upon a number of grounds, some presented by demurrers to the bill, and others presented by issues of fact tendered by the answer, which was filed after the demurrers to the bill were overruled. By the final decree now presented for review the appellant was 'perpetually enjoined and restrained from taking direct electrical current from any person, firm, or corporation other than the complainant, during the period covered by the contract involved here, as prayed for, so long as complainant performs the obligations imposed upon it by the terms of said contract. ' Opinions accompanied the overruling of the demurrers to the bill and the rendition of the final decree. Montgomery Light & Water Power Company v. Montgomery Traction Company, 191 F. 657; Id., 219 F. 963.

According to the averments of the bill, the alleged existing contract between the parties was in part evidenced by a written instrument, signed by each of them and dated January 30, 1909. It is insisted that that instrument was without legal validity because, at the time of its purported execution, the plaintiff, a New Jersey corporation, had not complied with the Alabama constitutional and statutory requirements which are made prerequisites to the existence of any power in such a corporation to transact any business in Alabama. Constitution of Alabama, Sec. 232; Code of Alabama 1907, Sec. 3642. It was disclosed by the evidence that, because of these provisions, the plaintiff, on January 30, 1909, was not qualified to transact business or to make a valid contract in Alabama, but that on June 11, 1909, this disqualification was removed by a compliance with the prescribed requirements. The averments of the bill show that, up to the time it was filed in September, 1911, there was a continuing recognition by each of the parties of the existence of the alleged contract, evidenced in part by the instrument of January 30, 1909, and the evidence adduced as to the dealings between the parties subsequent to June 11, 1909, after which date there was no disability to contract, evinces a mutual understanding or agreement between the parties to conform their dealings to the terms of the contract expressed in the instrument dated January 30, 1909. The conduct of the parties after the removal of the only legal obstacle standing in the way of the making of a valid contract between them had the effect of an adoption by them of the contract expressed in the instrument dated January 30, 1909. While the parties could not by any act of ratification make a void contract a valid one from the time it was undertaken to be made, they could, when each of them was duly qualified to contract, elect to adopt as the whole or a part of the contract by which their dealings were to be governed what was expressed in an instrument which was ineffectual at the time it was signed. Turner Construction Company v. Union Terminal Company, 229 F. 702, . . . C.C.A. . . . (January 18, 1916, U.S.C.C.A., 5th Circuit). This is what the evidence shows was done.

It is insisted that the lack of mutuality in the remedies available to the respective parties to the contract relied on required a denial of the relief which was granted...