Oil Creek Railroad v. the Atlantic & Great Western Railroad

The opinion of the court was delivered, by Sharswood, J. A bill for the special enforcement of a contract is an appeal to the conscience of the chancellor. He exercises, upon the question presented, a sound discretion, under all the circumstances of the case, for the most part untrammelled by rule or precedent. If the bargain is a hard or unconscionable one, if the terms are unequal, if the party calling for his aid is seeking an undue advantage, he declines to interfere. Therefore it is that although a court of equity will not in general relieve against a forfeiture, unless it be in the case of non-payment of rent, where an exact and just compensation can be made by decreeing to the landlord the arrears of his rent with interest and costs, yet they never lend their assistance- in the enforcement of one, but leave the party to his legal remedies. More especially is this the case where the contract has been substantially carried out, but its literal fulfilment has been-prevented by uncontrollable circumstances. It is unnecessary to cite authorities in support of these positions. They underlie all the cases which abound on the subject, and have been canonized in the standard elementary works: Jeremy’s Eq. 425, 471; Adams’ Eq. 77, note; 2 Story’s Eq., § 742, 750,1319, 1323. They commend themselves to every man’s common sense of reason and justice, in view of the special objects which courts of equity have been constituted to effectuate. They would otherwise become engines of oppression and injustice. Perhaps there could be no clearer illustration of the value and importance of these principles than in the circumstances of the case now presented for decision. The defendants, the Atlantic and Great Western Railroad Company, on the 14th January 1864, entered into a contract with the Oil Creek Railroad Company, by which they agreed, at their own expense, to furnish the iron and all other materials, and grade, construct and complete in a good a,nd workmanlike manner, a railroad from Oil City to Franklin, the work to be commenced within thirty days of date, and be completed on or before the 1st day of January 1865. As the consideration for this work, the plaintiffs agreed that when the said road from Oil Creek to Franklin should be so constructed, to lease, and thereby did lease the same to the defendants, for the term of ninety-nine years from the date of the covenant at the nominal rent of $1 per annum, and with certain stipulations as to the tariff of charges for freights and other matters for the advantage of the plaintiffs. The seventh article provides that “ a violation of or failure to perform any of the stipulations of this contract to be performed and kept on the part of the party of the second part (the defendants), shall operate as a forfeiture of this [73] lease, and the party of the first part (the plaintiffs), may at once take possession of and use and occupy the road Avith all its fixtures and appurtenances as fully and completely as though it had been constructed by itself and without any liability over to the party of the second part.” It is sometimes a question what is or is not a forfeiture ? That question does not arise here, as the parties have explicitly settled it by their OAvn language. The railroad was not completely finished and equipped on the 1st of January 1865. The defendants had progressed to Avithin two or three miles of Oil City, which seems to be a place of somewhat extensive and unascertained boundaries. The season was a severe one, and the difficulties of the construction much increased in the approach to its terminus. According to the plaintiffs’ OAvn testimony it could have been finished within a month. An examination was made of the road by the chief engineer of the plaintiffs on the 1st day of January 1865, although the defendants had the Avhole of that day before a forfeiture could accrue, and might have made some progress, if it had not been, as it appears, Sunday. On the 3d of January 1865 the plaintiffs, by resolution of their board of directors, declared the road to be forfeited. On the 6th of January formal notice was given to the engineer and foreman of the defendants of this action, and possession was taken of the unfinished part of the road by placing some cars on it. The defendants went on, however, and completed the road by the early part of spring. The plaintiffs pray that the lease may be declared forfeited, that they may be protected in the possession of that part of the roadway of Avhich they have possession, that an account be taken of the cost of the road, and that upon payment thereof the contract may be delivered up to be cancelled, and that defendants be enjoined from interfering with or preventing the plaintiffs from taking peaceable possession of the said road, or from claiming or exercising any right as lessees. Thus distinctly is this court asked to enforce what the parties themselves agreed to be and denominated a forfeiture; to deprive the defendants of the entire benefit of their contract and lease, and that on the ground that a partial failure of performance has occurred, not productive of serious loss to the plaintiffs, and for Avhich in all probability it would be difficult to persuade'any jury to give them more than nominal damages. The judge at Nisi Prius was clearly right in dismissing the bill with costs, and the decree is affirmed at the costs of the appellants. Decree affirmed with costs.