Court Opinion

ID: 3518654
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:30:17.216192+00
Date Added: 2024-06-11T14:19:27.124813
License: Public Domain

PARTIALLY DISSENTING OPINION.
The principal question presented for decision in this case, which is unaffected by some of the conclusions of law set forth in the controlling opinions herein on suggestion of error, is whether or not the City of Jackson has offered to do that which, in equity and good conscience, is required to be done as a condition precedent to its alleged right to obtain from a court of equity the cancellation of the two assignments in controversy which were executed by the City in favor of the defendants for a one-half interest in four producing gas wells, which were located and brought into being mainly through the efforts of the assignees under such assignments, even if we were justified in holding that the municipal authorities were without power to execute the same.
The authority of the municipality to drill or purchase these gas wells for the purpose of supplying its inhabitants with gas is expressly conferred by Chapter 280, Laws of 1940, if the conditions set forth therein are complied with, and the constitutionality of which is being upheld by the vote of all of the judges in the decision now being rendered herein. Moreover, the general rule is that unless a statute contains some express or implied restraint, the municipality has a reasonable discretion in the choice of the means or methods for exercising the power given it for a public purpose. 19 R.C.L., p. 770; 43 C.J., p. 249; 1 McQuillin, Municipal Corp. (2 Ed.), pp. 964, 965.
If the municipality has the power to drill or purchase gas wells for the purpose authorized by said Chapter 280, Laws of 1940, supra, then it necessarily follows that *Page 741 
it has the right to cause such wells to be located and drilled by others experienced and skilled in the business of drilling gas wells. This being true, it also follows that the municipality in the exercise of the power conferred by this statute may either assume all the risk and procure the wells to be located and drilled at a fixed price or compensation for such services or cause a part of the risk to be assumed by others who are to give of their time, labor, and expense to the success of the project in consideration of an assignment of an interest in the wells if and when the production of gas is obtained, and with the right on the part of such municipality to then re-acquire such interest at fair value. Most assuredly, if it has the power to purchase a well or wells, as authorized by this statute, it would be authorized to acquire an outstanding one-half interest in them in order to carry out the purposes of this legislation. And, it is especially true that the municipality could have procured the drilling of these wells in consideration of the execution of the assignments involved, where the other contracting parties were to receive nothing for their time, labor, and expense in the event no production of gas was had. That which could have, therefore, been lawfully done — the reacquirement of the outstanding one-half interest assigned — equity will require an offer on the part of a complainant to do when seeking affirmative relief against this solemn agreement here under consideration, which may, in some respects, be ultra vires, before the court will lend its aid to an attempt by the municipality to appropriate and sell the entire output of the properties without doing what is right, just and equitable under the circumstances.
There is no difference of opinion among the judges on the proposition that the complainant is required to do equity as a condition precedent to obtaining the relief sought in this case, but we are not in accord as to what should be deemed just and equitable under the circumstances here involved. The municipality in asking a cancellation of the assignments on the ground that it *Page 742 
was without power to engage in a joint enterprise with the assignees for marketing the gas and dividing the profits of such a business undertaking, like unto a partnership venture — involving the sharing of a responsibility by its public officials with other persons in supplying gas to its inhabitants and requiring the consent of the assignees to the various steps necessary to be taken in the proper conduct of the business — has not offered either to account to the assignees for one-half of the proceeds derived from the sale of gas to the local public utility each month up to the date of the decree herein appealed from and pay the value of their one-half interest in the wells as to the time of rendition of such decree or the value thereof as of the date when the municipality took complete charge of the common property and began to appropriate the entire output of such wells to its own use. Nor has it asked that those wells which the municipality owns as a tenant in common with the assignees shall be sold for a partition of the proceeds in order that it may legally acquire such outstanding one-half interest so as to be able to sell such gas as its own property to the public utility now engaged in the distribution thereof to the public. And this is true notwithstanding the fact that the municipality is receiving and retaining a very considerable revenue each month from the sale of the gas, under the claim of sole ownership thereof, contrary to the doctrine against the allowance of an unjust enrichment under such circumstances.
It may be conceded, for the purpose of this decision, that after the defendants, as assignees under the assignment, had acquired a one-half interest in the four producing wells in consideration of the risk assumed and the time, labor, and money expended both in locating and drilling the same, the municipal authorities were without power to engage in the alleged partnership relation that would be involved in the business venture of marketing the gas and dividing the proceeds derived from these properties. But such fact would only relieve the municipality *Page 743 
from the performance of the ultra vires acts contemplated in such an undertaking, and would not entitle it to take over the complete control of the property and appropriate the fruits of its bargain to its own use in the manner shown in this case without any offer on its part to do equity in the premises. "It is one of the oldest of equity principles, that when a party seeks the interposition and aid of a court of chancery as against his adversary, the court in extending its aid will require as a condition thereof that the complaining party shall accord and render unto the adversary party all the equitable rights to which the latter is entitled in respect directly to the subject matter of that suit, and this is true even as to many of those things which the defendant could not compel by an independent suit" (Griffith Chan. Prac. Sec. 43, p. 46), wherein the maxim, "He who seeks equity must do equity," is discussed. Again, it was said in this text, Section 522, that if a party shall "seek to set aside or cancel any contract or other transaction, or to restrain any proceedings thereunder, he shall not have relief unless he restore to the defendant the fruits that have been gathered by complainant from that transaction; and ordinarily this is true even if the transaction be illegal."
It cannot be said that the municipality could have thought that a proposal in the outset of its negotiations with the defendants could be deemed just and equitable that involved the suggestion that the wells be located and drilled with the understanding that in the event gas was produced in commercial quantities the latter should receive a bare reimbursement for their time, labor, and expense, and that, on the other hand, they should receive nothing. Yet, the municipality now insists that equity requires the doing of just that thing as the full measure of the rights of the defendants, and that only. The contrary principle was announced in 14a C.J. 586, Sec. 2529, when it was stated: "So where an equity court sets aside as ultra vires a railroad construction contract, it does so on the principle of compelling the corporation to account for *Page 744 
what it has received in partial performance, not on the basis of a bare reimbursement, but on a fair compensation, such as any other railroad contractor would receive under similar contract, if it were within the power of the corporation to make." See also 9 C.J.S., Corporations, Sec. 976.
Because of the alleged unconstitutionality of said Chapter 280, Laws of 1940, supra, the municipality contends that it was without authority, in the first instance, to drill the wells or cause the same to be drilled, and that, therefore, the assignments of a one-half interest therein to the appellants is ultra vires and void, as well as the undertaking on the part of the municipality to contract with the assignees for the future conduct of the business of marketing the gas and dividing the profits between the municipality and the said assignees. But I am of the opinion that, without regard to whether or not the municipality has the right to go forward with the performance of the alleged partnership relation for the marketing of gas and dividing the profits of such an undertaking, it was, nevertheless, vested with full power and authority — since we are holding the act in question to be constitutional — to procure the drilling of the gas wells here involved, and to convey or assign a one-half interest therein in payment for the services rendered by the assignees in locating and drilling the same.
The court below in requiring the complainant municipality to refund to the defendants only the actual expenses incurred for the labor expended and the equipment furnished, did not require the doing of complete equity between the parties. The decree in that behalf utterly ignores the risk taken by the defendants of receiving nothing for their time, labor, and expense in the production of gas if no gas had been obtained in this field where the gas supply was then thought to be practically exhausted. In other words, that which is sought to be done here by the municipality brings to mind the story of the white man and the Indian, who, during the pioneer days, *Page 745 
had gone hunting together and killed four wild turkeys and one crow. When the time came for a division of the game, the white man proposed to the Indian: "Now, I will take the turkeys and you take the crow, or you take the crow and I will take the turkeys." And thus it was that there came into use the saying, "He never did say turkey to me."
Neither the state nor any of its governmental subdivisions can either afford or be permitted in a court of equity to do less than full and complete justice in its dealings with the citizen in regard to the fruits of its ultra vires contracts thus solemnly and freely entered into. If it be said that the defendants entered into the undertaking here involved at a time when they were charged with knowledge under the law as to the extent of the power and authority vested in the officials of the municipality, then it is also true that the municipality was charged with knowledge of such extent and limitations of its authority in the premises, and, as a matter of fact, was in better position to be familiar with the limitations of its power in the instant case than were the defendants who were residents of a distant state.
There are other rights claimed on behalf of the appellants which, in my opinion, they are entitled to assert in this proceeding, such as the reformation of the assignments so as to include all the wells located and drilled and intended to be embraced therein; but it is unnecessary to discuss that feature of the case since the decree of the court below is being in all respects affirmed anyway by the controlling opinion herein.
From the foregoing views, it follows that I am of the opinion that the bill of complaint should have been dismissed unless it was amended so as to contain an offer to do full and complete equity in accordance with the views hereinbefore expressed, and that thereupon the crosscomplainants should have been granted such relief as in law and equity they were entitled to have and receive.
Griffith, J., and Smith, C.J., concur in this opinion. *Page 746