Gibbs v. Consolidated Gas Co. of Baltimore

delivered the opinion of the court.

The plaintiff sought to recover compensation for services alleged to have been rendered by him to the defendant in securing the contract in question between' the defendant and the Equitable Gas-Light Company of Baltimore, it is objected, that the court erred in giving the instruction that the plaintiff was not entitled to recover, because it assumed a- material fact

We do not feel called upon, under such circumstances, to reverse the judgment, upon the ground that the court assumed, in the instruction a matter of fact which should have been left to the jury to determine.

According to the evidence given by the plaintiff, he informed the defendant “ that he was employed and would be paid by the. Equitable Gas-Light Company, if he made an arrangement satisfactory to that company, and that if he should be successful in bringing about a settlement satisfactory to the

Since he had thus entered upon the enterprise under a specific agreement with the Equitable Gas Company, it is somewhat difficult to understand upon this record how, in carrying such an express contract out, hé could impose the obligation on the defendant to pay him for doing so, upon a mere notification that he should expect from it compensation for the services he had expressly agreed to render the other •company, because the result might be satisfactory to the defendant —a result necessarily to be assumed if any contract was arrived at. The defendant could not in that view be held to have laid by and accepted services which the plaintiff would otherwise not have been obliged to perform or could assert that he did' perform only upon the expectation of being also paid by the defendant. ‘ The hypotheses of fact set up by the plaintiff in the instructions he asked, and which were refused, contain nothing in respect Of which testimony tending to sup-' port and establish such hypotheses would add to the mere fact of the notification of plaintiff’s expectation, and the evidence on defendant’s part tended to show a denial of any obligation to. pay. But apart from this, the real question submitted to us for decisión is whether, even if there were no other objection to plaintiff’s recovery, such recovery could be allowed in view of the nature of the. alleged services.

In Irwin v. Williar, 110 U. S. 499 , 510, it was held that where a contract, void on account of the illegal intent of the principal parties to it, had been negotiated by a person ignorant of such intent, and innocent of any violation of law, the latter might have a meritorious ground for the recovery of compensation for services and advances, buh'when such agent “is privy to the unlawful design of the"parties, and brings them together for the very purpose of- entering into an illegal agreement, he is particeps criminis, and cannot recover for services rendered or losses incurred by himself on behalf of. either in forwarding the transaction.” It is clear from the evidence adduced by the plaintiff that he falls within the category last described; and he makes, profert of the fact that

By this contract it is recited that active competition between the two companies had resulted in expense, annoyance and loss of profits, and it was therefore provided that the price of gas to consumers should be placed at one dollar and seventy-five cents per thousand cubic feet, with a rebate of fifteen cents a thousand feet for payment within seven days, “.unless the rate shall be changed by mutual agreement of the parties hereto in writing; ” but as the defendant had much the larger interest, it might, in case of competition on the part of any other gas company, reduce the rate at which gas should be sold “by either or both of the parties hereto, from time to time' so long' as such competition shall continue,” provided it should not be put at less than one dollar per thousand feet without the written consent of both parties; that the entire net receipts from the sale of gas should be pooled and divided between the companies in a fixed ratio without regard to the amount of gas actually supplied by either; that- one of the companies should lay no more pipes or mains for the supply of gas in the city; that all future pipes or mains should be laid by and remain the property of the other company; and that either party which violated any of the covenants in the contract should pay to the other the sum of $250,000 as liquidated damages. It will be perceived that this was an agreement for the abandonment by one of the companies of the discharge of its duties to the public, and that the price'- of gas as fixed thereby should not be changed except that, in case of competition, the rate might be lowered by one, but not below a certain specified rate, without the consent of the other. And m the case in hand -the Equitable Gas-Light Company was expressly forbidden to enter into such a contract. That company was incorporated by an act of the General Assembly of Maryland, passed March 6, 1867, with a capital of two millions of dollars, which might be increased to three millions, and with

Reference to the act and ordinance of 1816, Maryland Laws, 1813-1817, c. 251, 1816; Ordinances, Baltimore, .1813-1822, p. 95, does not contribute to the argument here save as indi-. eating the design of the General Assembly to give equal powers to a competing company. Said act of March 6,. 1867, § 14, further provided that “the General Assembly hereby reserves the right to alter, amend, or repeal this act at pleasure.” Laws of Maryland, 1867, 207, 214.

On the 3d of May, 1882, an act supplementary to the act incorporating the Equitable Gas-Light Company of Baltimore City was approved, (Laws of Maryland, 1882, 551, e. 337,) authorizing and empowering said company to' manufacture and sell gas in Baltimore County as well as in Baltimore City, and to exercise all the powers and rights conferred upon it by the acts of assembly and any amendments thereto, including. the right to lay all necessary and convenient pipes, etc., in the county as well as in the city, and the fourth section of this act was as follows:

“ That the said company be, and hereby is, prohibited from entering into any consolidation, combinations, or contract with any.other gas company whatever; and any attempt to

do so, or to make such combinations or' contracts as herein .prohibited, shall be utterly null and void.”

In Greenwood v. Freight Co., 105 U. S. 13 , the right to repeal the charter of a street railroad company was sustained under a provision of the.General Statutes of Massachusetts declaring “every act of incorporation passed after the 11th day of March, in the year 1831, shall be subject to amendment, alteration, or repeal at the pleasure of the legislature.”

In Close v. Greenwood Cemetery, 107 U. S. 466 , 476, it was. said that “ a power reserved to the legislature to alter, amend, or repeal a charter authorizes it to make any alteration or amendment of. a charter granted subject to it, which will not defeat or substantially impair the object of the grant, or any -rights vested under it, and which the legislature may deem necessary to.seeure either that object or any public right.”

Similar views were expressed in Spring Valley Water Works v. Schottler, 110 U. S. 347 ; County of Callaway v. Foster, 93 U. S. 567 , and other cases.

The consent of the corporation was not required to the operation of such a provision as that embodied in the -fourth section of .the act of 1882, but if acceptance were necessary, the exercise of corporate action by this gas company after'the passage of the amendment was sufficient evidence of such acceptance.

The supplying of illuminating gas is a business of a public nature to meet a public necessity. It is not a business like that of an- ordinary corporation engaged in the manufacture of articles that may be furnished by individual effort. New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650 ; Louisville Gas Co. v. Citizens' Gas Co., 115 U. S. 683 ; Shepard v. Milwaukee Gas Co., 6 Wisconsin, 539; Chicago Gas-Light & Coke Co. v. Peoples' Gas-Light & Coke Co., 121 Illinois, 530; St. Louis v. St. Louis Gas-Light Co., 70 Missouri, 69. Hence, while it is justly urged that those rules which say that-a“given contract, is against public policy, should not be arbitrarily extended so as to interfere with the freedom of contract, Printing &c. Registering Co. v. Sampson, L. R. 19 Eq. 462, yet in the instance of- business of such character that

The decision in Mitchel v. Reynolds, 1. P. Wms. 181; S. C. Smith’s Leading Cases, 407, 7th Eng. Ed.; 8th Am. Ed. 756, is the foundation of the rule in relation to the invalidity of contracts in restraint of trade; but as it was made under a condition of things, and a state of society, different' from those which now prevail, the rule laid down is not regarded as inflexible, and has been considerably modified. Public welfare is first considered, and if it be not involved, and the restraint upon one party is not greater than protection to the other party requires, the contract may be sustained. The question is, whether, under the particular circumstances of the case and the nature of the particular contract involved in it, the contract is, or is not, unreasonable. Rousillon v. Rousillon, 14 Ch. D. 351 ; Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 345.

“ Oases must be judged according to their circumstances,” remarked Mr. Justice Bradley in Oregon Steam Navigation Co. v. Winsor, 20 Wall. 64 , 68, “and can only be rightly judged when the reason and grounds of the rule are carefully considered. There are two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against public policy. One is, the injury to the public by being deprived of the restricted party’s industry; the other is, the injury to.the party himself by being precluded, from- pursuing his occupation, and thus being prevented from supporting himself and his family. It is evident that both these evils occur when the contract is general, not to pursue one’s trade at all, or not to pursue it in the entire realm or country. . The country suffers the loss in both cases;"and Jthe party is deprived of his occupation, or is obliged to expatriate himself in

It is also too well settled to admit of doubt that a corporation cannot disable itself by contract from performing the public duties which it. has undertaken, and' by agreement compel itself to make public accommodation or convenience subservient to its private interests.

“ Where,” says Mr. Justice Miller, delivering the opinion of the court in Thomas v. Railroad Co., 101 U. S. 71 , 83, “a corporation, like a railroad company, has granted to it by char

These gas companies entered the streets of Baltimorej under their charters, in the exercise of the equivalent' of the power of eminent domain, and are to be held as having assumed an obligation to fulfil the public purposes to subserve which they were incorporated. At common law corporations formed merely for the pecuniary benefit of their shareholders,'could, by a vote of the majority thereof, part with their property and wind up their business, but corporations to. which privileges are granted in order to enable them to accommodate'the public, and in the proper discharge of whose duties the public are interested, do not come within the rule. But we are not concerned here with the question when, if ever, a corporation can cease to operate .without forfeiture of its franchises, upon the excuse-that it cannot go forward because of expense and want of • remuneration. There is no evidence in this record of any such state of case, and, on the contrary, it appears that the cost of. the manufacture of gas was largely below ’the price'to be charged named in the stipulation between the parties. There is nothing upon which to' rest the suggestion that the .companies were unable to serve the consumers, while the record shows, on the other hand, that they simply desired to make larger profits on whatever gas they might furnish.. Nor aip we called upon to pass upon the validity generally of pooling agreements. Here the contract was directly in the teeth of the statute, which expressly forbade the Equitable Gas-Light Company from entering into it. That prohibition declared the policy of the State as well as restrained the particular corporation. ■

The distinction between malum m se and malum prohibí

The question is not one involving want of authority to contract on account of irregularity of organization or lack of affirmative grant of power in the charter of a corporation, but a question of the absolute want of power to do that which is inhibited by statute, and, if attempted, is in positive terms declared “ utterly null and void.”

“ The rule of law,” said Parker, C. J., in Russell v. DeGrand, 15 Mass. 35 , 39, “ is of universal operation, that none shall, by the aid of a court of justice, obtain the fruits of. an unlawful bargain.”

We cannot assist the plaintiff to get payment for efforts to accomplish what the law declared should not be done, and the judgment must be •

Affirmed.