Village of Long Beach v. Long Beach Power Co.

Benedict, J. This is an application for an injunction, pendente lite, restraining the defendant from demanding or collecting more than fifteen cents per kilowatt hour for electrical lighting current furnished by the defendant to private consumers in Long Beach, Nassau county, N. Y., and for other relief. At the threshold of the controversy there is presented a question which, as I view it, is determinative of the rights of the parties to this action, or at least which is controlling in so far as the right of the plaintiffs to injunctive relief pending the action and until the trial is concerned. Were it not for the fact presently to be stated I should be disposed to agree with the contention of the learned counsel for the defendant in point five of his able and exhaustive brief that the defendant, being a public service corporation and subject to the jurisdiction of the public- service commission, any consumer aggrieved by its schedule rates established as provided by the Public Service Commissions Law has an adequate remedy under that statute, which should be exhausted before application to a court — 339 — of equity for the extraordinary relief by injunction pendente lite. The fact which interferes with the application of the rule just stated to the present situation springs from the contract entered into on April 12, 1910, between the Estates of Long Beach, a corporation, and the defendant. At the time when the agreement was entered into the Estates of Long Beach, one of the plaintiffs in this action, was the owner of a considerable tract of land on the island of Long Beach, Nassau county, N. Y., which included the present village of Long Beach. It had, in order to enable it to develop and sell lots and parcels of its property, filed a map upon which its property was divided into blocks or plots with intersecting streets laid down thereon. It was its purpose in making the said contract with the defendant to secure the introduction of electricity upon its property for electric light, heat and power both to the Estates of Long Beach and to persons and corporations within the limit of the company’s said property and elsewhere. To this end the Estates of Long Beach granted to the defendant the exclusive right and franchise for the term of 999 years from the date of the agreement “ to erect, construct, maintain and operate under the streets, avenues, boulevards, and boardwalk laid out over the company’s property at Long Beach and over the property of residents and other consumers, in accordance with the easements reserved through said property by the said Estates of Long Beach, a conduit or conduits, and all appropriate and proper ducts, mains, pipes, cables, feeders, manholes, poles, wires, fixtures, transformers, and all other appropriate apparatus and equipment of every kind and nature for the conducting, transmitting, furnishing and selling electricity for electric light, heat and power, and other purposes, through, over and under the said property of residents and other consumers in — 340 — accordance with the easements reserved through said property by the said Estates of Long Beach for the purpose of lighting the same and other property, within the limits of said Estates of Long Beach, and any and all residences, stores, hotels, places of amusement or other buildings erected or to be erected and situate upon the property of said Estates of Long Beach, or to furnish such light, heat and power to other consumers, including both property to be used or developed in connection with the property aforesaid, upon the terms and conditions herein set forth.” It will thus be seen that this provides for something more than a simple franchise granted by a municipality to use its streets. It is a grant of an exclusive right or franchise which is connected with private rights of property and creates an easement in perpetuity over private property. This agreement further provided, among other things, that it was made subject to certain provisions and conditions therein mentioned which were stated to be of the essence of and conditions of the said grant. Among these conditions was the following: “ XIII. The cost to any and all consumers of electric current except as hereinabove provided shall not -be in excess of fifteen cents (15c.) per kilowatt hour. Consumers where meters are not installed shall be classified upon some reasonable and sufficient basis of classification, or in accordance with the amount and kind of service appliances installed, and the charges for electric current to consumers in each of such classes shall be uniform. The Power Company shall have the right, however, to charge an annual minimum rate of twelve Dollars ($12.00) to any and all consumers. The Power Company shall have the right as a prerequisite to the installation of service to demand a deposit by a consumer of a reasonable sum as an evidence of good — 341 — faith, and to guarantee the performance of his contract. Such deposits shall be uniform and in accordance with the prices to be charged for furnishing electricity, and shall be returned to the consumer upon the compliance by him with the terms of his contract. ’ ’ Thereafter the Estates of Long Beach sold numerous lots or plots of land shown upon the map, reserving in every case an easement for the benefit of the defendant as mentioned in the agreement; and under the terms of the said agreement and in pursuance of the easement so granted the defendant has entered upon and made use of its easements over the lands shown upon the map above referred to. Under this state of facts I am of the opinion that the defendant cannot increase the rate at which it will supply consumers of its electrical product in the territory referred to over the maximum rate specified in the said contract, even if the advance in such rate be authorized and approved by the public service commission for the second district. The agreement having been entered into for the benefit of all persons who should purchase land from the Estates of Long Beach subject to the easement mentioned, the defendant cannot be heard to repudiate the contract so entered into as to -the rate at which it will supply electric light to such consumers and at the same time be permitted to retain the benefits, property rights, easements and franchise conferred upon it by the contract. In my judgment the defendant does not present to a court of equity very clean hands when it seeks to hold the benefits of the agreement and repudiates the burdens which the agreement imposes. The fact that the defendant has filed a new schedule of rates to be charged by it to private consumers of twenty-five cents per kilowatt hour in certain cases, or even that the public service commission for the second — 342 — district has approved of that increase in the rate, does not justify the defendant’s action. It is, of course, true that contracts which violate the positive legislation of the state by being contrary to its Constitution or statutory enactments will not be enforced, and it is also true as a general rule that contracts which violate the fixed public policy of the state will also not be enforced by the courts. It would, however, be both illogical and unjust to permit a public service corporation, which had accepted and enjoyed the benefit of an exclusive right or easement over private property in aid of the franchise granted upon condition that it would render a certain service at a certain rate of compensation for a definite period of time, to repudiate the condition and still claim the benefit of the property rights, easements and franchise so granted. I am not aware of any principle of equity which would justify one party to a contract in refusing performance of its conditions and at the same time holding on to its benefits. Even in a court of law such a rule would not be recognized, and, surely, a court of equity is not less powerful to do justice. Where the equities are clear the court should not be slow in furnishing the remedy. In the words of Sir R. Pepper Arden, Master of the Rolls, afterward Lord Alvany: “ I must forget the name of the Court in which I sit, if I were to refuse to grant relief.” See Lord Cranstown v. Johnston, 3 Ves., Jr., 170. It is not necessary now to inquire into or determine the collateral question which presents itself by the defendant’s action as to whether it has not forfeited the exclusive property rights, easements and franchise conferred upon it by the agreement of April 12, 1912, by reason of its breach of the condition as to the rate upon which the grant was predicated. That question may properly be reserved for consideration at a later stage of this case or in some other action. — 343 — In conclusion, I think that the individual plaintiffs have shown facts such as to require this court to continue the preliminary injunction until the trial of this action, but such injunction should be conditioned upon their furnishing to the defendant security in the form of an undertaking in the sum of $3,000 in the usual form, to be approved by a justice of this court. As the injunction is to be held for the benefit of the individual plaintiffs, it will also be held for the benefit of the plaintiff, the village of Long Beach, but as this is a municipal corporation no undertaking will be required to be given by it. Ordered accordingly.