Case ID: ohio-st_48/html/0324-01.html
Source: Caselaw Access Project
Author: {"author": "Speak, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Steinau v. Gas Company.
    
      Injunction — When not allowed, to prevent breach of contract.
    
    The Cincinnati Gas-Light & Colne Co. entered into a written contract with S., whereby, in consideration of the promise of the company that it would furnish him all the gas he might require to illuminate his place of business for a period of ten years at a reduced price, S. bound himself to receive from the company, during the period, all the gas necessary for the purpose named, to be paid for at the expiration of each month, and the amount of gas consumed not to fall below a certain specified amount each month; and further stipulated that he would not, during the term, introduce into or on said premises electric lights, or other material or power for general illuminating purposes.
    In a suit brought by the company against S., the contract is set forth in the petition, and it is alleged that the company has performed all of its stipulations, and is ready, able and willing to continue to do so, but that S. has refused and is refusing to receive from the company all the gas necessary for the proper illumination of the premises, and has introduced electric lights for the general lighting of the place, whereby the amount of gas consumed has been, and will continue to be, largely reduced below the amount stipulated to be used, if not wholly done away with, “ and the company will lose the benefit of said contract, and the gain and profit it is entitled to therefrom, and will suffer irreparable damage.” A perpetual injunction is asked against using the electric light, or any light other than the company’s gas.
    
      Held: That the petition does not show that the company may not have full, adequate relief in damages by a suit at law, and hence no case is made entitling the company to an injunction.
    (Decided May 5, 1891.)
    Ekkob to the Circuit Court of Hamilton county.
    Action was brought in the court of common pleas by the gas company against the plaintiff in error to obtain an injunction. In its petition the company alleged the execution of the following contract:
    “ This contract, entered into this 16th day of March, 1886 by and between The Cincinnati Gas-Light & Coke Company and Chas. J. Steinau, proprietor and occupant of the premises known as “The Palace,” and situated No. 80 West Fourth street, between Walnut and Vine streets, witnesseth:
    “ First. — The said The Cincinnati Gas-Light & Coke Company for and in consideration of the continued use of not less than three fourths the present average consumption of gas on said premises, or other premises which the party of the second part may occupy or remove to, hereby agrees and binds itself to supply, under existing rules and regulations, at the premises above described — except in eases of unavoidable accident, — all the gas which may be required to properly illuminate the same, for a period of ten years next ensuing. The gas so furnished shall at no time be of less power or purity than the present legal standard. That it will accept in full payment for gas so furnished in accordance with the terms of this contract the sum of one dollar and thirty cents per thousand cubic feet, if paid at the office of said gas company within the first three business days after presentation of bill for gas supplied during the period covered by said bill, but in case such payment is not made within the time specified, then the price shall be .one dollar and forty cents per thousand cubic feet.”
    “ Second. — That the said Charles J. Steinau for himself, his heirs, or assigns, for and in consideration of the reduction in price above specified, hereby agrees to receive from the said The Cincinnati Gas-Light & Coke Company all the gas necessary for the proper illumination of the premises above described, or of other premises to which he may remove, in quantity not less than three fourths of the present average consumption ; and that he will not, during the period above named, introduce into or use on said premises oil lamps, electric lights, or other material or power for general illuminating purposes, or any other gas than that supplied by the said The Cincinnati Gas-Light & Coke Company.”
    “ Third. — It is further agreed and understood by both parties to this contract, that if during the period above named, the city council shall pass, and the gas company accept, any ordinance by virtue of which the price of gas to all private consumers in said city is reduced below the price above specified, then in that case the said Chas. J. Steinau shall not thereafter be required to pay any price in excess of that named in said ordinance, but in all other respects this contract shall continue in force during the period aforesaid.”
    It further alleged, in substance, that at the date of the contract the regular price for gas to private consumers was one dollar and seventy cents per thousand cubic feet, with a discount of ten cents per thousand on monthly bills paid within five days after presentation. That price continued until February 28, 1887, when the price was fixed by the city council at one dollar and twenty-five cents, with same rate of discount as before.
    The average monthly consumption of gas for the current year on the premises would be over eighteen thousand cubic feet, if the defendant fulfilled his contract. The plaintiff duly performed all the stipulations and conditions of the contract on its part, and was ready, able and willing to continue to do so. But the defendant, disregarding his obligation under the contract, refused to receive all the gas necessary for the proper illumination of the premises, and has introduced and is using for general illuminating purposes, material or power other than the gas supplied by plaintiff, viz.: the Edison incandescent light. “ By means of the light so created the consumption of gas for illuminating purposes will be and has been largely reduced below the quantity agreed to be consumed on said premises, as stated in said contract, if not wholly done away with, and the company will lose the benefit of said contract and the gain and profit it is entitled to therefrom, and will suffer irreparable damage.” Wherefore plaintiff asks that defendant be enjoined from using said electric light, or any material other than gas supplied by plaintiff for general illuminating purposes on said premises, and for such other and further relief as the nature of the case may require.
    A demurrer to the petition was overruled and final decree of injunction entered against the defendant. This judgment was affirmed by the circuit court. To reverse both judgments this error proceeding is brought.
    
      Kramer Kramer, for plaintiff in error.
    1. Courts of equity will not grant injunctions to restrain breach of negative covenants, where 'the affirmative stipulations cannot be enforced specifically against the complaining party.
    2. There is no reported case in England or America where a breach of negative covenants in contracts for the sale of chattels has been enjoined, and there are several cases contra.
    3. In no case will a court of equity enjoixr the breach of covenant where the damages, by reasoxi of such breach, can be accurately estimated in money; in other words, whei’e the remedy at law is complete and adequate, axxd this is such a case.
    4. The cases where injunctions to restrain breach of covenants in executory contracts have been sustained, are cases where peculiar personal skill and labor are involved. They form a marked, well-defined exception to the general rule, and should be, and are restricted to that small class of cases where the element of personal and artistic skill renders the chances of damages at law uncertain and coxxjectural.
    5. The remedy by injunction against the breach of negative covenants is equivalent to a decree of specific performance, and equity never decrees specific performance unless there is a mutuality of remedy.
    These propositions are supported by the following authorities : Lumley v. Wagner, 1 De Gex, M. & G. 604; Kimberly v. Jennings, 6 Sim. 340; Kemble v. Keene, 6 Sim. 333; Baldwin v. Society, D. U. K. 9 Sim. 393; De Rivafinoti v. Corsetti, 4 Paige, 262; San Quirico v. Beneditti, 1 Barbour, 314; Hamblin v. Dinneford, 2 Edward Chancery, 529; Burton v. Marshall, 4 Gill, 487; De Pohl v. Sohlke, 7 Robt. 280; Ger vaise v. Edwards, 2 Dru. & War. 80; Hill v. Croll, 2 Phillips 60; Montague v. Flocton, 16 L. E. Eq. 189; Tipping v. Eckersly, 2 K. & J. 264; Leech v. Schweder, L. R. Chancery Appeals, 467-8; Dietrichsen v. Cabburn, 2 Phillips, 52; Bailey v. Collins, 59 N. H. 459; Chicago & Alton R. R. v. New York, Lake Erie & Western R. R., 24 Fed. Rep. 516; The Diamond Match Co. v. Roeber, 35 Hun. 421; Williams v. Western Union Telegraph Co., 49 N. Y. Superior Court, 149; Stewart v. Winters, 4 Sanford Chancery, 590; Singer Co. v. Union Co., 1 Holmes, 353; Bickford v. Davis, 11 Fed. Rep. 549; Stines v. Dorman, 25 Ohio St. 590; Fethergill v. Rowland, L. R. 17 Eq. 132; Heathcote v. The North Staffordshire R. R. Co., 2 Mack & G. 112; R. R. Co. v. R. R. Co., 16 L. R. Eq. 440; Pomeroy on Specific Perf., secs. 310, 311; Hahn v. The Concordis Society, 42 Md. 465; Acriel v. Sel den, 1 Barb. 316; Vincent v. King, 13 Howard Practice, 238; Burton v. Marshall, 4 Gill. 492; Parkhurst v. Kinsman, 6 New Jersey Eq. 608; Nessle v. Reese, 29 Howard Prac tice, 383; Mapleson v. Del Puente, 13 Abbott, New Cases, 144; Allegheny Base Ball Club v. Bennett, 14 Fed. Rep. 257; Stafford v. Hartreed, 62 Iowa, 526; Fredericks v. Meyer, 13 Howard Practice, 566; McCall v. Braham, 16 Fed. Rep. 38; Bickford v. Davis et al, 11 Fed. Rep., 549; Port Clinton R. R. Co. v. Cleveland & Toledo R. R. Co., 13 Ohio St. 544; Bourbon Cent. Sugar Refining Co. v. Leveritch, 37 Fed. Rep. 67; Pingle v. Connor, 66 Mich. 189; Pomeroy on Contracts, secs. 162 to 165; see cases cited in note 1, p. 231; Ib., pp. 231 and 232, and notes; Meason v. Kain, 63 Pa. St. 335; Fry oil Specific Performance, sec. 286; Richmond v. R. R. Co., 33 Iowa, 423; Luce v. Deitz, 46 Iowa, 205; Irwin v. Bailey, 72 Iowa, 467; Tyson v. Watts, 1 Md. Ch. 13; Duval v. Myers, 2 Md. Ch. 401; Broomly v. Jeffires, 2 Verm. 415; Benedict v. Lynch, 1 Johns. Ch. 370; Iron Age Publishing Co. v. Western Union Telegraph Co., 83 Ala. 498; 26 Cent. L. J. 129; Pullman Car Co. v. T. & P. R. R. Co., 4 Woods, Circuit Court Reports, 417; James v. Commissioner of Allen Co., 44 Ohio St. 226; Buzard v. Houston, 119 U. S. 347; Thompson v. Allen County, 115 U. S. 550.
    
      F. A. Ferguson, for defendant in error.
    I. The decision of the circuit court is amply sustained by the following authorities. Cincinnati Gas Light and Coke Company v. Steinau, 2 C. C. R. 286; Bispham’s Equity, secs. 461, 463; 2 Story’s Equity, 13th ed., note to sec. 861; Tipping v. Eckersly, 2 Kay and Johnson, 264, 273; Peto v. Railway Co., 32 L. J. (Eq.) n. s. 677; Dietrichsen v. Cabburn, 2 Phillip’s Chan. Rep. 52-60; Stimes v. Darmon, 25 Ohio St. 530-534; Stewart v. Winters, 4 Sandford’s Chan. Rep. 587-591; Singer Co. v. Union Co., 1 Holmes, 253-25; Chicago and Alt. R. R. Co. v. New York and L. E. R. R. Co., 24 Fed. Rep. 516; Diamond Match Co. v. Roeber, 35 Hun (N. Y.) 412; Bailey v. Collins, 59 N. H. 459, 462; Williams v. W. U. Tel. Co., 49 N. Y. Superior Ct. 140.
    II. The contention of the plaintiff in error that there is no mutuality of remedy between the parties in this case, even if it were the law of the case, is not well founded. The gas company was legally bound to furnish gas to Steinau, upon his complying with its reasonable rules and regulations, at the price fixed by an ordinance of the city. The company could not shut off the supply as long as he paid the ordinance price and complied with the rules. What he bargained for was a less price than the ordinance price, in consideration for which he covenanted that he would not during the period named in the contract introduce into or use on his premises oil lamps, electric lights, or other material for general illuminating purposes, or any other gas than that supplied by the Cincinnati Gas Light and Coke Company. Revised Statutes, secs. 2478, 2479, 2482, 3559; Shepard v. Milwaukee Gas Light Co., 6 Wis. 539; Same v. Same, 15 Wis. 318; Sickles v. Manhattan Gas Light Co., 64 How. (N. Y.) Practice, 33; Same v. Same, 66 How. (N. Y.) Practice, 305, 314; Williams v. Mutual Gas Co., 52 Mich. 499; Hayword v. The East London Water Works, L. R. 28 Ch. D. 138; McCrary v. Beaudry, 67 Cal. 120; The People v. Manhattan Gas Light Co., 45 Barb. 137; Louisville Gas Co. v. Citizens Gas Co., 115 U. S. 683, 692; The State ex rel. v. The Cincinnati Gas Light & Coke Co., 18 Ohio St. 262, 289.
    III. In this case, Steinau was using gas and electricity. In other words, he was seeking to hold on to the benefit of the contract without bearing its burden. The cause of action against him was continuous and the nature of the damages such as not to be' susceptible of proper assessment by a jury. The remedy at law was, therefore, not adequate. Cin. Gas, etc., Co. v. Steinau, 2 C. C. R. 286; Stines v. Dorman, 25 Ohio St. 580, 584; 3 Pomeroy’s Equity, secs. 1343, 1344, and notes.
   Speak, J.

In consideration of the continued use of not less than three fourths the present average consumption of gas by Steinau, the company stipulated that it would furnish him, for ten years, all the gas necessary for the lighting of his place of business, at a price much lower than the then regular price, to be paid monthly. Steinau stipulated to receive the gas in quantity not less than three fourths of the then average monthly consumption, for the time named, and further stipulated not to introduce or use electric lights or material for general illuminating purposes other than gas to be furnished by the company. No past consideration appears. The obligations of each party are wholly in covenant, and are wholly executory. In other words, they are promises merely. The prayer is for injunction to restrain Steinau from using the electric light, or any material for general illuminating purposes other than the gas to be furnished by the company.

Injunction is frequently resorted to as a means of obtaining specific performance. In this case the purpose intended is to prevent the use of electric lights in order that Steinau shall thus be compelled to comply with his contract, and use the company’s gas. The object thus sought is specific performance.

Against the demand of the company it is insisted that a court of equity will not grant an injunction to restrain a breach of negative covenants where the result will be to effect specific performance of affirmative covenants, unless the affirmative stipulations of the complaining party can be specifically enforced against him, and that the petition does not show but that the company has an adequate remedy at law. If either proposition is sound, the demurrer was improperly overruled.

As already stated, the object of the proceeding is, and the result reached, if it is successful, will be, to specifically enforce the contract as against Steinau. It seems plain that, if the situation of the parties were reversed, and specific performance were sought against the company, the court would have no power to compel a full compliance by the company with its stipulations to furnish all the gas needed for the period provided for in the contract. It might be in the power of the court to enjoin the company from turning the gas off from Steinau’s service pipes so long as he complied with its reasonable rules and regulations, and it is possible that the company could, by mandamus, be compelled to furnish gas to Steinau while it continued to use the franchises and privileges accorded it as a corporation by virtue of the statute and the ordinances of Cincinnati. But these partial remedies, if they might be available, would be wholly apart from the contract. And, be this as it may, it admits of no question that, upon any state of facts appearing by the allegations of this petition, it is beyond the power of any court to compel the company to manufacture and supply gas for a period of ten years. How can the court order the company to continue the manufacture of gas for the purpose of supplying this consumer ? How can it prevent this company from dissolving and going out of business, or from selling out to another which would not be bound by its personal contracts ? The inquiry, then, is, if the contract could not be specifically enforced against the company, may it be specifically enforced in its favor ?

The authorities on the point are numerous, and, to some extent, conflicting. Mr. Pomeroy, in his work on contracts, section 163, observes: “ The peculiarly distinctive feature of the equitable doctrine is, that the remedial right to a specific performance must be mutual. If, therefore, from the nature or from the contract itself, from the relations of the parties, from the personal incapacity of one of them, or from any other cause, the agreement devolves no obligation at all upon one of the parties, or if it cannot be specifically enforced against him, then and for that reason, he is not in general entitled to remedy of a specific performance against his adversary party, although otherwise there may be no obstacle arising, either from the terms of the contract or from his personal status and relations, to an enforcement of the relief against the latter individually.” Again, section 165, he says that “ it is a familiar doctrine that if the right to the specific performance of a contract exists at all, it must be mutual; the remedy must be alike attainable by both parties to the agreement.”

To this general rule the courts have made an exception where peculiar skill and labor are involved, and' this, apparently, upon the ground that the element of personal and artistic skill renders the chances of damages at law uucertain and conjectural. Of this class the case of Lumley v. Wagner, 1 De Gex M. & G. 604, is, perhaps, the leading case. The defendant was a celebrated singer. She was under contract to sing for a certain period at the plaintiff’s theatre, and not to sing at any other. The court restrained her from the threatened breach of this negative covenant. Later cases have followed this, and the exception appears to be quite well established.

There are cases, besides those above referred to, both in England and in this country, which sustain the holding of the circuit court, (2 O. C. C. R. 286,) that “ where there is a clear and continuing breach of a negative covenant in a contract, and where an injunction against the breach of it will do substantial justice between the parties by obliging the defendant to carry out his contract or lose the benefit of a breach of it, and the remedy at law is not adequate, or the damages for such a breach are not susceptible of proper assessment by a jury, a court of equity may properly restrain the defendant from such a breach, though the court might not be able to enforce a complete specific performance of the contract against the other party.” Singer Co. v. Union Co., 1 Holmes, 253; Railway Co. v. Railway Co., 24 Fed. Rep. 516; The People v. Gas Light Co., 45 Barb. 137; Dietrichsen v. Cabburn, 2 Phillips, 52.

However, after a somewhat careful examination of the numerous cases cited by counsel, and many others, we are inclined to the conclusion that the general doctrine laid down by Mr. Pomeroy is sustained by the apparent weight of authority. Hills v. Croll, 2 Phillips 60; Fothergill v. Rowland, L. R. 17 Eq. 132; Bailey v. Collins, 59 N. H. 459; Pingle v. Conner, 66 Mich. 187; Publishing Co. v. Tel. Co., 83 Ala. 498; Palace Car Co. v. Railway Co., 4 Wood’s C. C. R. 317; Meason v. Kaine, 63 Pa. St. 335; Tyson v. Watts, 1 Md. Chy. 13; Richmond v. Ry. Co., 33 Iowa, 422.

It is important to note that an essential element of the proposition quoted above is that the complaining party has no adequate remedy at law and that his damages are not susceptible of proper assessment by a jury. It goes without saying that if this element is found wanting, the rule laid down cannot apply. On the part of the company it is insisted that the condition referred to is present in the case at bar. Let us see.

The stipulation of Steinau was that he would receive gas in quantity not less than three fourths of the present average consumption. The contract was to continue for ten years. It had been in force at the commencement of the action about one year. The “ present average consumption ” was a quantity easy of ascertainment. So long as Steinau used the quantity of gas specified he was in full performance of his contract. When he ceased taking that quantity he violated the contract, and when he established electric lights in his place and proceeded to illuminate in that way, it was clear that he intended to wholly break and abandon the contract. The company had the right to regard the contract as at an end, and no pretense or claim of Steinau, so long as he refused to perform, could avail to prevent the company from so treating it. All contractual relations between the parties would then be terminated. By force of the ordinance, and at prices fixed bjr the ordinance, and subject to all reasonable regulations, the company might stil'l be bound to furnish gas, but it could not be required to furnish a foot of gas under the contract. The contract being thus, by the action of Steinau, at an end so far as he was concerned, the company’s cause of action was immediate; it could, if the damages were susceptible of proper assessment at any. time, have an action at once for its entire damages for the breach, and this remedy did not involve a multiplicity of suits. James v. Allen County, 44 Ohio St. 226, is a case, in principle, like this one. This court there held that where the offending party had wholly broken and abandoned the contract, the party injured by the breach could bring his action at once and recover his entire damages for the breach, and that one judgment upon such claim would be a bar to a future recovery. That rule, we think, applies to this case.

What would stand in the way of adequate damages being awarded by a jury ? The amount of gas agreed to be used each month, the duration of the time, the price to be paid per thousand, (subject to changes, if any produced by the new ordinance,) Were all shown by the contract. If, added to these facts, the jury should be put in possession of the amount of “ gain and profit ” the company were making per thousand, what would prevent a clear ascertainment of damages upon that basis, reduced, probably, on account of payment in advance ? Fothergill v. Rowland, L. R. 17 Eq. 132; Railway Co. v. Railway Co., 24 Fed. Rep. 516.

It is doubted by some members of the court whether a court of equity, in a case of specific performance, where the granting or refusal of relief may depend so largely upon the court’s discretion, should exercise it in favor of the enforcement of covenants which deprive a party of new and valu- ' able discoveries of science, and, in a measure, tend to create a monopoly by contract.

But a decision of this question is not necessary to a disposition of the case at bar, and that, as well as whether a court of equity should, in any case, where full performance cannot be enforced, decree performance of negative covenants of one party, may properly be left to be determined when a case arises which necessarily requires a decision upon them. We are content to rest the decision of this case upon the ..ground that the remedy of the defendant in error is at law, and not in equity.

Judgment reversed.