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Railway Exchange Bldg. v. Light Devel. Co.

Supreme Court of Missouri, Division One
Jun 30, 1937
341 Mo. 334 (Mo. 1937)


June 30, 1937.

NOTE: Opinion filed at September Term, 1936, April 21, 1937: motion for rehearing filed; motion overruled at May Term, 1937, June 30, 1937.

1. PUBLIC SERVICE COMMISSION: Utility Contracts. Prior to the enactment of the Public Service Commission Law the only protection consumers had as to rates and service was the right to make the best contract they could with the utilities. Since the enactment of that law, based upon the police power of the State, the power of the Public Service Commission overrides all contracts contrary to its purpose of uniformity.

Such a contract did not bind the utility to furnish special preferential service to any consumer.

2. PUBLIC SERVICE COMMISSION: Utility Contracts. Where a contract between a consumer and a utility company requiring the latter to install, operate and maintain in space leased by the consumer, a first-class power, lighting and heating plant and upon the termination of the contract, or upon the termination of the lease to the consumer, or other contingency, then the consumer should have the exclusive option to purchase the entire plant and equipment at a price to be agreed upon, or on failure to agree, at an appraised value as fixed by appraisers, an action by the consumer to enforce specific performance of the power contract to sell at appraisement price and transfer plant to consumer, without first having secured permission from the Public Service Commission, and would require a transfer in violation of Section 5195, Revised Statutes 1929.

Specific performance must always rest in the sound discretion of the court.

Appeal from Circuit Court of City of St. Louis. — Hon. Harry A. Hamilton, Judge.


Edward A. Haid, Sullivan, Reeder Finley and Lewis, Rice, Tucker, Allen Chubb for appellants.

(1) Courts of equity assume full responsibility for both the law and the fact. Jackson v. Phalen, 237 Mo. 149; Davies v. Keiser, 297 Mo. 11; Derry v. Fielder, 216 Mo. 195; Seested v. Dickey, 318 Mo. 217; Fendler v. Roy, 331 Mo. 1095. (a) For this reason all the evidence is required to be brought up on appeal. Pitts v. Pitts, 201 Mo. 359; Maplegreen v. Trust Co., 237 Mo. 362; Aulgur v. Strodtman, 329 Mo. 741. (2) Courts do not make, but enforce contracts as the parties themselves have made them. Realty Co. v. Surety Co., 297 Mo. 54; Martin v. Insurance Co., 310 Mo. 416; Monticello Bldg. Co. v. Inv. Co., 330 Mo. 1141. (a) In construing a document, effect is to be given to all the language used. Donovan v. Boeck, 217 Mo. 70; Webb v. Insurance Co., 134 Mo. App. 580; Lovelace v. Association, 126 Mo. 105; Calloway v. Henderson, 130 Mo. 77. (b) The language used is to be given its ordinary and usual significance. Mo. Athletic Assn. v. Inv. Corp., 323 Mo. 765; Fulkerson v. Great Lakes, etc., Co., 335 Mo. 1063. (c) The intention of the parties is to be gathered from the language used — their possible secret and unexpressed intentions not being of consequence. Strauss v. Land Co., 327 Mo. 211; Koehring v. Muemminghoff, 61 Mo. 407. (d) The words "construct," "repair" and "maintain" are not synonymous. Verdin v. St. Louis, 131 Mo. 87; Lucas v. Ry. Co., 174 Mo. 276; State ex rel. Chillicothe v. Wilder, 200 Mo. 97. (e) To "operate" means to continue in activity. State ex rel. v. Pub. Serv. Comm., 270 Mo. 439; McChesney v. Hyde Park, 37 N.E. 858; Union Tank Line Co. v. Richardson, 191 P. 697; State v. Wooley, 92 A. 662; Florida E.C. Ry. Co. v. Miami, 79 So. 682; State v. Ry. Co., 134 A. 59. (f) Where the language of a contract is ambiguous, resort may be had to contemporaneous agreements to aid, but not to control, the interpretation of the contract in question. 13 C.J. 528. (3) The language of the contract in question clearly requires substantially continuous working of all machinery in the plant in question. (4) In the absence of a provision against subletting a landlord cannot object thereto. Moore v. Guardian Trust Co., 173 Mo. 218; Jones v. Board of Trade, 99 Mo. App. 433; Guthrie v. Hartman, 226 S.W. 593; 35 C.J., p. 975, sec. 54. (a) There can be no waiver without full knowledge of the facts. Callies v. Modern Woodmen, 98 Mo. App. 521; Henderson v. Koenig, 192 Mo. 714; Burke v. Adams, 80 Mo. 504; Oldham v. Wade, 273 Mo. 231. (b) There can be no estoppel where the facts are equally known to both parties. Grafeman Dairy Co. v. Northwestern Bank, 290 Mo. 336; Laughlin v. Wells, 314 Mo. 481; Wilkinson v. Lieberman, 327 Mo. 427. (c) A continuous covenant is co-terminous with the lease and a waiver of performance thereof on one or more occasions is no waiver of the right to insist on performance in future. Farwell v. Easton, 63 Mo. 446; Big Six Dev. Co. v. Mitchell, 138 F. 284: Granite, etc., Co. v. Greene, 54 A. 794; Gluck v. Elkan, 36 Minn. 80; Schultz v. Cardwell, 253 P. 824; 11 L.R.A. (N.S.) 405. (5) The courts will specifically enforce a contract to purchase, although it results from a forfeiture. Met. Land Co. v. Manning, 98 Mo. App. 266; Big Six Dev. Co. v. Mitchell, 138 F. 284; Lang v. Hedenberg, 115 N.E. 569; Ross v. Sanderson, L.R.A. 1917C, 881; Grandville v. Railroad Co., 34 A.L.R. 1411. (6) Contracts are subject to the exercise of the police power of the State. State ex rel. v. Eastin, 270 Mo. 202; State ex rel. v. Pub. Serv. Comm., 275 Mo. 209; Kansas City B. N. Co. v. Light Power Co., 275 Mo. 532. (a) Contracts of public utilities covering any of their activities are subject to this rule. State ex rel. v. Kansas City Gas Co., 254 Mo. 541; State ex rel. v. Railroad Co., 279 Mo. 455; State ex rel. v. Pub. Serv. Comm., 259 Mo. 722; State ex rel. v. Pub. Serv. Comm., 275 Mo. 495. (7) A contract of a public utility to render a special service not published and open to the public, although entered into prior to the Public Service Commission Law, is nullified by the passage thereof. Rosenberger v. Pacific Express Co., 258 Mo. 97; Stratford v. Brewing Co., L.R.A. 1917 C, 931; Adler v. Miles, 136 N.Y.S. 135; Christopher v. Blum Co., 82 So. 767; Restatement of the Law of Contracts, secs. 274, 454, 458. (a) A contract which has become impossible of performance, through supervening illegality, excuses both parties from performance. Bell v. Traction Co., 83 W. Va. 640, 98 S.E. 885; Heart v. Brewery Co., 121 Tenn. 70, 113 S.W. 364; Rooks v. Henry Seaton, 1 Pa. 106; Am. Merc. Exch. v. Blunt, 102 Me. 128, 66 A. 212.

McCammon Sandison, Taylor Sandison and John P. McCammon for respondents.

(1) Appellants' brief does not relate the errors assigned to their "Points and Authorities," and each and all of the "Points and Authorities" are mere abstract statements of law. This constitutes a noncompliance with the statute and rules of this court, so that there is nothing presented for review by said brief. Sec. 1060, R.S. 1929; Sup. Ct. Rules 15, 16; Aulgur v. Strodtman, 46 S.W.2d 172; Hunt v. Hunt, 307 Mo. 375, 270 S.W. 369; Rexford v. Phillippi, 84 S.W.2d 632; Scott v. Mo. Pac. Ry. Co., 62 S.W.2d 840; Huber v. Jones, 85 S.W.2d 418; Homan v. Mo. Pac. Ry. Co., 64 S.W.2d 621; Burch v. Ry. Co., 40 S.W.2d 693; Pence v. K.C. Laundry Service, 59 S.W.2d 639; Johnston v. Johnston, 16 S.W.2d 91. (2) There has not been and cannot be a forfeiture of defendant Cupples Company's lease of the Railway Plant premises because: (a) Construing the lease by its own terms, it does not require continuous plant operation. 13 C.J., pp. 525, 527, 537; Henry v. Bottling Co., 277 Mo. 515, 211 S.W. 9. (b) Construing the lease by aid of contemporaneous documents it will be seen that continuous and uninterrupted plant operation was not required. 13 C.J., pp. 528-30; Houck v. Frisbee, 66 Mo. App. 16; Expansion Realty Co. v. Geren, 185 Mo. App. 440, 170 S.W. 928; Bank of Commerce v. Flanagan Mill Elec. Co., 268 Mo. 571, 288 S.W. 117. (c) It was not the intention of the parties that the plant be continuously operated, their intention was that continuous and uninterrupted service be required and rendered. 13 C.J. 521; Bank of Commerce v. Flanagan Mill Elec. Co., 268 Mo. 571, 188 S.W. 117; Bell v. Fayette, 296 S.W. 1048; Metropolitan Pav. Co. v. Investment Co., 309 Mo. 658, 274 S.W. 815; 35 C.J. 1175; Ritchie v. State Board of Ag., 219 Mo. App. 94, 266 S.W. 492. (d) Employing the acts of the parties as an aid to construction, it appears that service and not plant operation was their interpretation of the lease requirement. Attorney General ex rel. v. Drummond, 1 Dru. War. 368; Laclede Const. Co. v. Moss Tie Co., 185 Mo. 73, 84 S.W. 76; State v. Christopher, 2 S.W.2d 626; Page on Contracts, sec. 2034, p. 1387; Bell v. Fayette, 296 S.W. 1048; Tetley v. McElmurry, 201 Mo. 393, 100 S.W. 37. (3) The proof abundantly showed that the plant had been continuously operated, and plaintiffs have received the service for which they contracted. 35 C.J. 1062; Funk and Wagnalls' Standard Dictionary; Century Dictionary; Webster's New International Dictionary. (4) Under the facts here shown as to operation, equity will not decree a forfeiture of defendant Cupples Company's lease. McCormick v. Stephany, 41 A. 840; Dougan v. Grell Co., 182 N.W. 353; Goldberg v. Pearl, 306 Ill. 436, 138 N.E. 142; Rahr's Sons Co. v. Buckley, 150 N.W. 994; Taylor, Landlord Tenant (Tiffany's Ed.), p. 1366; Carbonetti v. Elms, 261 S.W. 750; Tetley v. McElmurry, 201 Mo. 394, 100 S.W. 37; 21 C.J. 104; Sease v. Cleveland Foundry Co., 141 Mo. 488; 13 C.J. 566; 35 C.J. 1189.

This is an action in equity seeking (on the theory that defendants' lease had been terminated because of default) specific performance of certain provisions in a contract, for sale and conveyance of the electric light, power, and steam plant, which under this contract was to be maintained and operated to supply plaintiffs' needs. Appraisal of the reasonable value of the plant, a mandatory order to compel the removal of certain machinery (owned by Union), as well as an injunction against removal of certain other equipment and machinery therefrom was also sought. It appears that the value of the plant was at least $206,632, and that defendants' valuation is more than double that amount. Judgment was entered dismissing plaintiffs' bill and plaintiffs have appealed therefrom.

Most facts material to the decision of this case may be found in the statement made in May Department Stores Co. v. Union Electric Light Power Co., 341 Mo. 299, 107 S.W.2d 41, decided concurrently herewith. We will refer to the parties herein by the designations therein used. The May case is based on the proposition that the original contracts as to rates and service became void when the Public Service Commission Act went into effect. This case is based upon exactly the opposite theory that the contract is valid and its enforcement is sought. Thus defendants were between two fires. After the May case had been commenced because of the controversy over rates therein described, May wrote to Development and Cupples, on June 30, 1930, notifying them to, within thirty days, put the plant in operation and keep it in continuous operation thereafter, to cancel any subletting to Union, and to disassociate the ownership and operation of the plant from any public utility company; and that failure to do so would be regarded as a forfeiture of their lease of the plant premises from May. Cupples answered this letter stating that it was "not required to put the plant in operation" but only to "keep it in condition ready to operate immediately when necessary." Railway also wrote both companies that, in case of forfeiture of the lease from May because of failure to comply with the requirements of its letter, it demanded "the right and privilege to purchase said plant at the appraised value thereof" as provided in its service contract. Cupples answered that it denied the right of May to declare a forfeiture. Development did not answer either letter.

The provision of the lease, which May claimed was violated so that forfeiture could be declared was the agreement by the lessee to "install, operate and maintain in said leased space, a new, modern, first-class power, lighting and heating plant of capacity sufficient to supply all of the electric current for light and power and steam for heat and for heating hot water, which may be required by the Railway Exchange Building, and by any of its tenants, in addition to the requirements of all other customers of the Plant Company, said plant to have a sufficient reserve or excess in capacity to provide such reasonable security against suspensions in service as will conform to good engineering practice; and . . . at all times during the life of this lease maintain in said plant premises a plant equipment of the character and capacity above described."

The provision of the contract, upon which Railway claimed the right to purchase the plant and to enforce which this suit is brought, is as follows:

"Upon the termination in any manner of this contract, or upon the termination in any manner of the lease of the plant premises to the Plant Company, or upon the termination in any manner of the lease from the Kingston Investment Company to the May Company covering the premises in which the plant is situated, or upon the termination in any manner of the lease from the Building Company to the May Company covering the store premises in the Railway Exchange Building, then the Building Company shall have and is hereby granted an exclusive option or first right during the period of ninety (90) days thereafter, to purchase the entire plant, tools and equipment, including pipes, tunnels and connecting lines, together with said lease from the May Company to the Plant Company, at a price to be agreed upon by the parties hereto, or upon failure of the parties hereto to agree on the price to be paid, then at the appraised value as fixed by a board of three appraisers."

There was also a provision in the original contract between May, Railway, and Kingston, before the plant premises were built, that "in case the Building Company shall, pursuant to the provisions hereof, purchase said plant from any Plant Company during the life of the Building Company's lease to the May Company, such purchase shall (unless the Building Company has the right to and does pursuant to the provisions hereof, make such purchase for its own sole account) be treated as made for the joint account of itself and the May Company, respectively." It is because of this provision as well as because May was the lessor of the plant premises that May is one of the plaintiffs herein.

As we pointed out in the May case, within a year after these leases and contracts were made the Missouri Public Service Commission Law was enacted (Chap. 33, R.S. 1929), and prior to its enactment, the only protection to consumers as to rates and service was their right to make the best contract they could with utilities in competition with each other for their business. Since this law was based upon the police power of the State, the power of the Public Service Commission, established by it, overrides all contracts contrary to its purposes of uniformity. Just as we held the contract did not bind May to pay higher rates than the commission authorized to be collected from all consumers similarly situated for the service authorized to be rendered, so must we also hold that it did not bind the Utility to furnish special preferential service to any consumer. The rights of May and Railway are those fixed by law; that is only to receive the kind of service authorized to be rendered to all consumers similarly situated for the rate authorized to be collected therefor. In other words, a contract provision for a preferential kind of service is just as void (against regulation under the police power of the State to secure uniform, safe and adequate service to all consumers), as a contract provision for a preferential rate. The impossibility of maintaining and operating a complete separate plant, sufficient to supply all requirements, across the street from every large consumer without making someone pay more than adequate efficient service is reasonably worth, from a modern central or interconnected system, seems apparent for the reasons stated in the May case. [2] The maintenance and operation of such a separate plant is really recognized as unnecessary for the service required by May's contention in its case that it is entitled to rates authorized by the commission for service through Union's present modern interconnected system and by the further contention that the Railway plant has been for several years maintained for standby service for the Union system rather than for any purpose of providing service for plaintiffs. If this latter contention is true enforcement of the contract provision for appraisement and transfer of the Railway plant to plaintiffs would directly violate Section 5195, Revised Statutes 1929, prohibiting the "transfer . . . of . . . any part of its . . . works or system . . . without having first secured from the commission an order authorizing it so to do," and providing that "every such . . . transfer . . . made other than in accordance with the order of the commission authorizing same shall be void." [See, also, Section 5205, R.S. 1929.] In any case, specific performance must always rest in the sound discretion of the court. [Rockhill Tennis Club v. Volker, 331 Mo. 947, 56 S.W.2d 9, and cases cited.] Moreover, if plaintiffs do not get adequate service guaranteed to them by the Public Service Commission Act, they are given by that act a full, complete, and adequate method for obtaining relief. Many other questions are discussed in the briefs, but we hold that the trial court properly dismissed plaintiffs' bill for the reasons discussed herein and in the May case.

The judgment is affirmed. Ferguson and Bradley, CC., concur.

The foregoing opinion by HYDE, C., is adopted as the opinion of the court. All the judges concur, except Douglas, J., not voting because not a member of the court when cause was submitted.

Summaries of

Railway Exchange Bldg. v. Light Devel. Co.

Supreme Court of Missouri, Division One
Jun 30, 1937
341 Mo. 334 (Mo. 1937)
Case details for

Railway Exchange Bldg. v. Light Devel. Co.

Case Details


Court:Supreme Court of Missouri, Division One

Date published: Jun 30, 1937


341 Mo. 334 (Mo. 1937)
107 S.W.2d 59

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