Case ID: monaghan_1/html/0097-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ohio Valley Gas Co.’s Appeal.
    A preliminary injunction will not be decreed against a natural gas company} incorporated under the Act of May 39,1885, at the suit of a borough and customers of the company, to restrain it from increasing its charges from 50 to 100 per cent, over the rates established when it began business, although the ordinance granting to the company the right to lay pipes in the borough and giving to it an exclusive privilege to supply gas, provided that the “ rates and charges for the supply of natural gas to consumers shall, at no time and in no event, exceed an average of 20 per cent, less than the cost of coal in any given year,” and the bill alleged that the new rates would be in excess of the price of coal.
    Nov. 6, 1888.
    Appeal, No. 235, Oct. T. 1888, from O. P. No. 2, Allegheny; Co., to review a decree awarding a preliminary injunction on a bill in equity, at Oct. T. 1888, No. 431. Sterbett, J., absent.
    Bill in equity by the borough of Sewickley and fifteen taxpayers and householders thereof, against the Ohio Valley Gas Co., to restrain the defendant from enforcing an increased charge for gas.
    The bill, in substance, averred: 1. The plaintiff, the borough of Sewickley, is a corporation organized under the Act of April 3, 1851, and the other plaintiffs are citizens, householders and consumers of natural gas furnished by defendant. 2. The defendant is a corporation organized under the Act of May 29, 1885. 3. The defendant has availed itself of its rights and privileges under the Act of May 29, 1885, and connected its pipes with the houses and buildings of its consumers. The transportation and supply of natural gas is, by the Act aforesaid, declared to be a public use, and it is the duty of the defendant to furnish consumers natural gas at a fair and reasonable price, and also at a uniform price to all consumers. 4. In November, 1885, defendant made application to the council of plaintiff borough for an ordinance granting to it the right to lay pipes in the streets. Defendant offered to supply natural gas upon terms and conditions as advantageous as any other parties or company would do, and an ordinance was passed acceptable to the offers made by defendant. The ordinance was accepted by defendant and its bond was given for $25,000 faithfully to comply with the same. 5. The ordinance and powers above mentioned constitute a contract and agreement between the borough of Sewickley and the defendant granting to the defendant the exclusive right to open and lay pipes in the streets of said borough from April 1, 1886, to April 1, 1887, and securing to the plaintiffs, resident within its corporate limits, a guarantee that its “ rates and charges for the supply of natural gas to consumers shall, at no time and in no event, exceed an average of 20 per cent, less than the cost of coal in any given year.” 6. The defendant has laid its pipes through the streets of the borough; and, on or about Oct. 1, 1886, entered into contracts with plaintiffs, and others, to take gas from defendant at rates which were fair and reasonable, but which were fully up to, if not higher than, the rates and charges provided for in the ordinance, and such as would enable the defendant to realize large profits. 7. Plaintiffs, relying on said contract, have fitted np their houses and stores with fixtures and appliances for the use of natural gas, and such fixtures are useless for any other purpose.
    10. The rates and charges fixed by defendant company have continued for the past two years, but, within the past thirty days, notices have been sent out claiming the right to terminate subsisting contracts between it and consumers, and requiring them to make new contracts if they desire to continue the use of natural gas. Consumers have been notified of an increase from October 1, 1888, in the rates and charges for natural gas, of from 50 to 100 per cent. Said rates and charges will be greatly in excess of the rates provided in said ordinance and contracts aforesaid, and in excess of the price of coal. Defendant has threatened to turn off the gas from October 1, 1888, from the houses of the plaintiffs, and the houses of other consumers, unless new contracts are entered into.
    11. Turning off the gas will work great and irreparable injury to plaintiffs and other consumers.
    . 12. The rates and charges demanded are in direct violation of the regulations of said ordinance, and of the contract in reference thereto, and are unreasonable, unjust and excessive.
    13. Defendant company is supplying, or intends to supply, other consumers with gas at the old rates and charges, unjustly discriminating in its prices against plaintiffs.
    14. There are many other citizens and residents in said borough having similar complaints, who are not named because unknown to your orators, and too numerous to be named, but the bill is filed in their behalf, as well as that of plaintiffs.
    The prayers were : 1. Á preliminary injunction restraining defendant from turning off the gas upon payment or tender of old rates, and that said preliminary injunction be afterward made perpetual. 2. That the court fix a fair rate, and enjoin defendant from, charging any higher rate, and also from turning off the gas or molesting consumers as long as the rates and charges so fixed shall be paid. 3. General relief.
    Section 6 of the ordinance referred to in the bill is as follows :
    
      “ The rates and charges for the supply of said natural gas to consumers shall at no time and in no event exceed an average of twenty (20) per cent, less than the cost of coal in any given year, and, after due notice and proper investigation, should council decide that said rates and charges were in excess of said average, this ordinance, and all rights and privileges herein conveyed, can, from that fact, be declared null and void.”
    Section 7 provided that defendant should furnish gas free to the police and fire departments and to the public buildings of the borough.
    On December 30, 1885, defendant filed an acceptance of the ordinance, agreeing to accept the grant of the rights of way and the exclusive right to supply gas; also binding itself to perform the services as required by § 7 and agreeing to begin operations on a test-well in tlie vicinity of the borough. The acceptance did nothin express terms refer to § 6 of the ordinance.
    The company filed a bond conditioned to perform all the legal provisions of the ordinance.
    Numerous affidavits were filed by plaintiffs and defendant in support or denial of the averments of the bill. The defendant’s affidavits averred that the exhaustion of the gas fields had been very rapid and that this necessitated the laying of larger pipes and an-extension to new gas fields, which greatly increased the cost of furnishing gas to consumers.
    The court below granted the injunction, in an opinion by White, J., with a concurring opinion by Magee, J., both reported in 6 Pa. C. O. E. 99.
    The following decree was entered :
    “And now, viz.: October llth, 1888, this cause came on to be heard, on motion for preliminary injunction, and bill and affidavits filed at this term, and was argued by counsel, and thereupon, upon consideration thereof, it is ordered, adjudged and decreed :
    “That, upon the plaintiffs’ filing bonds as hereinafter directed, the defendant, the Ohio Valley Gas Co., its officers, agents and employees, and each of them, be and hereby are enjoined and restrained from shutting off the gas supplied through and by defendant’s pipes and mains, from plaintiffs’ houses and fires in the borough of Sewiekley, or .from interfering with, or disturbing in anyway, the said supply of natural gas to plaintiffs, so long as plaintiffs shall pay or tender payment to the said defendant of the same rates and charges, and in the same installments, as heretofore paid for said supply of gas, until further order of court.
    “ That the plaintiffs severally give bond to said defendant company, with sureties, satisfactory to defendant company or approved by court, in a sum equal to the amount of one year’s gas bill of each several plaintiff, conditioned to pay whatever increased price, if any,, over the rates existing between the several plaintiffs and the defendant prior to October 1st, 1888, as may be finally determined, with the right in defendant company, if an increase is finally allowed, and the arrears of increase be not paid within thirty days, to shut off the gas and proceed on the bonds for the arrears.”
    
      The assignments of error specified, the action of the court, 1, in entering the decree, as above, quoting it; 2, 8, in the opinion and concurring opinion ; 4, in granting the preliminary injunction ; and, 5, in not refusing to grant the preliminary injunction.
    
      P. C. Knox, with him J. H. Reed, for appellant.
    The defendant never accepted § 6 of the ordinance and never contracted to furnish gas for all time át 20 per cent, less than the cost of coal. Where; terms of a contract are proposed and not accepted as proposed, but. in a qualified form, and the parties proceed to execute the contract,, they do so upon the basis of the acceptance.
    There was an adequate remedy at law, and equity wall not entertain jurisdiction. Nestul v. Knickerbocker Life Ins. Co., 34 Leg. Int. 240; Hewitt’s Ap., 88 Pa. 55; Koch’s Ap., 93 Pa. 434; Pitts. & Connellsville R. R. Co.’s Ap., 39 Leg. Int. 414; Weiss v. Mauch Chunk Iron Co., 58 Pa. 295; Bispham’s Eq., §§ 329, 368, 375; 2 Jones, 56; 3 Parsons on Cont. 364.
    The alleged contract is vague and uncertain. The kind of coal is not mentioned; and the manner of its consumption is not designated. Such a contract will not be enforced. South Waverley Borough’s Ap., 20 W. N. C. 213; Brown’s Ap., 62 Pa. 17; Mammoth Vein Consolidated Coal Co.’s Ap., 54 Pa. 183; Hilliard on Inj.§§2-23.
    The alleged contract is illegal. This case is an attempt upon the part of the borough, assuming that we have accepted § 6 of the ordinance, to force the gas company to concede, not to the borough, but to certain individuals, privileges and rights which the borough had no legal authority to exact or the company to accede to.
    The question of the power of the court to establish reasonable rates is not involved in this case.
    The question of reasonableness depends on many contingencies, among others, the copiousness of the supply, the distance carried, the size, cost and character of the conduits, the cost of labor, the price of all materials entering into the plant, the possible duration of the supply from particular fields, the distance to, and cost of reaching other fields, the number of consumers, the manner of consumption, whether wasteful or economical; in short, a thousand considerations, constantly changing. Courts of equity will not enter into such matters. Pullman Palace Car Co. v. Texas Pacific R. R. Co., 11 Fed. R. 625; Marble Co. v. Ripley, 10 Wall. 358; Pomeroy Spec. Perf. § 307 et seq.; Port Clinton R. R. Co. v. Cleveland & Toledo R. R. Co., 13 Ohio St. 544; Stocker v. Brocklebank, 3 Mac. & G. 250 ; Chinnock v. Sainsbury, 30 L. J. C. 409; Wolverhampton & W. R. R. v. L. & N. W. R. R., L. R., 16 Eq. 439; Johnson v. Shrewsbury, etc., R. R., 3 D., M. & G. 914. Thus, the court has refused to -interfere to this effect with a contract to write reports of eases in Tthe law courts for publication, Clarke v. Price, 2 Wilson, C. C. 157; with a contract to furnish drawings for maps, Baldwin v. Useful Knowledge Society, 9 Sim. 393; with the contract of a theatrical ■performer to sing or act at a theatre, Kemble v. Kean, 6 Sim. 333; Burnley v. Wagner, 1 D., M. & G. 604; 21 L. J. C. 898. See, also, Webb v. England, 29 Beav. 44, 30 L. J. C. 222; Mair v. Himalaya Tea Co., L. R., 1 Eq. 411; Ogden v. Fossick, 32 L. J. C. 73; Wilkinson v. Clements, L. R., 8 Ch. 96, 42 L. J. C. 38; Soames v. Edge, Johns. 669; City of London v. Southgate, 38 L. J. C. 141; Mosely v. Virgin, 3 Ves. 184; Brace v. Wehnert, 25 Beav. 348, 27 L. J. C. 572; South Wales Ry. v. Wythes, 5 D., M. & G. 880, 24 L. J. C. 87; Peto v. Brighton & Tunbridge Ry., 1 H. & M. 468, 32 L. J. C. 677; Johnson v. Shrewsbury & B. Ry., 3 D., M. & G. 914, 22 L. J. C. 921; Powell, Duffryn Coal Co. v. Taff Vale Ry., L. R., 9 Ch. 331, 43 L. J. C. 575; Wilson v. West Hartlepool Ry., 2 D., J. & S. 475, 34 L. J. C, 241; Blackett v. Bates, L. R., 1 Ch. 117, 35 L. J. C. 324; Wheatley v. Westminster Coal Co., L. R., 9 Eq. 538, 39 L. J. C. 175; Lord Abinger v. Ashton, L. R., 17 Eq. 358; Booth v. Pollard, 4 Y. & C. Ex. 61; Rayner v. Stone, 2 Eden, 128; Merchants’ Trading Co. v. Banner, L. R., 12 Eq. 18, 40 L. J. C. 515; De Mattos r. Gibson, 4 D. & J. 276, 28 L. J. C. 498; Wood v. Silcock, 50 L.T. R., N. S. 251.
    The bill is defective in form. It is multifarious as to parties and cause of action.
    There is no evidence that the company has, and will not, furnish, gas at the rates agreed upon.
    
      F. C. Osburn and Thos. Patterson, with them H. A, Davis, O. S. Richardson and T. H. B. Patterson, for appellees.
    The ordinance, acceptance and bond created a contract. The-acceptance and bond were papers prepared and executed by the-defendant company, and if any doubt arises it is to be resolved most strongly against the party whose language it is. White v. Smith, 33 Pa. 186. See, also, Curtis v. Lady, 2 W. N. C. 393.
    A paper fraudulently drawn so as to mislead will be reformed! to correspond to the true intent of the innocent party. Wiswall v. Hall, 3 Paige Ch. 313.
    The contract was not illegal. The power to supply its citizens with gas and water is distinctly a municipal province. Wheeler v. Phila., 77 Pa. 354; Lehigh Water Co.’s Ap., 102 Pa. 528; Jones v. City of Richmond, 18 Grattan (Va.) 517; N. Cent. R. R. v. Mayor, etc., of Balt., 21 Md. 104.
    There is a clear distinction between a contract which is illegal and one which is merely ultra vires. 1 Waterman on Corps., 96, 604; Wright v. Pipe Line Co., 101 Pa. 204; Allegheny City v. McClurkan, 14 Pa. 81; Pomeroy on Spec. Perf., p. 78.
    Where the conditions and regulations of an ordinance have-been duly accepted by the defendant, and the contract thus made,, all questions of its legality and reasonableness are waived. Fed. St. Pass. R. R. Co. v. City of Allegheny, 31 Pitts. L. J. 259; R. R. Co v. Leavenworth, 1 Dillon, 393; City of Troy v. R. R. Co., 49 N. Y. 657; Indianola v. R. R. Co., 56 Texas, 594; Johnson v. Phila., 60 Pa. 445; Pittsburgh’s Ap., 115 Pa. 4.
    The court has equitable jurisdiction to restrain defendants in this case. The question is not one of speciiic performance, and the* cases cited by appellant under this head have no bearing upon the-subject.
    Where rights are vested under statute or by contract, their proposed violation will be restrained, irrespective of whether irreparable damages would accrue or not. Com. v. P. & C. R. R., 24 Pa. 159; Attorney General v. R. R. Co., 3 L. R., Ch. Ap. 100; St. Andrew’s Church’s Ap., 67 Pa. 512.
    There is no clearer ground of equitable relief by injunction than, that of the restraint of the violation of a negative contract. High on Injunctions, §§ 1135, 1165, and 1166; Bispham’s Eq., 4th ed.,, §§ 46Í, 462.
    
      The remedy at law must be adequate and complete before any question of the equity jurisdiction can be raised. Bierbower’s Ap., 107 Pa. 14; Brush Electric Co.’s Ap., 114 Pa. 574; Harper’s Ap., 109 Pa. 9; Bitting’s Ap., 15 W. N. C. 45. This has been directly held in a case where gas was furnished for lighting purposes.' Sickles v. Gas Light Co., 64 How. Pr. 33.
    The Acts of 1874 and 1885 are in pari materia and are to be construed together. Keelings Road, 59 Pa. 358. The Act of. 1874 expressly provides for the regulation of charges for gas by the ■court.
    In the case of corporations engaged in a business in which the public have an interest, the courts will exercise control over the rates charged upon the failure of the parties to agree as to what is fair and reasonable. Wells, Fargo & Co. v. Oregon R. R. Co., 15 Fed. R. 561; Munn v. Illinois, 94 U. S. 113; Express Co. Cases, 10 Fed. R. 210.
    The contract with the borough being for the benefit of its ■citizens, they are proper parties to the bill. Zell’s Ap., 111 Pa. 532.
    The bill is not multifarious. Cumberland Valley R. R. Co.’s Ap., 62 Pa. 218; Adams v. Manning, 10 W. N. C. 451.
    Jan. 7, 1889.
   Per Curiam,

The decree is reversed at the costs of the appellees, and the injunction dissolved. A. B. W.

See preceding case, and Meadville Fuel Gas Co.’s Ap., 36 Cent. R. 921.