National Fire Alarm Co. v. City of Portland

Mr. Justice Burnett delivered the opinion of the court. The principal question to be determined is whether the acts hereinbefore related amount to a license in favor of the plaintiff which the courts should sustain by perpetual injunction. It is contended on behalf of the plaintiff that it relied -upon the action of the board of fire commissioners and in pursuance thereof expended large sums of money amounting to upwards of $15,000 in the prosecution of its business and the installation of its system, and that on account of this it acquired a license which is irrevocable and cannot be disturbed by any action of the city. It is beyond question that there were negotiations looking to the end sought by the plaintiff. In Falls City Lumber Company v. Watkins, 53 Or. 212 (99 Pac. 884), Mr. Justice Eakin says: “If there were negotiations pending for a way, between Smith and the lumber company, and the flume was constructed before the consummation of the agreement, this was not sufficient to constitute a parol license. When both parties act with knowledge that a license is sought, and the improvement is made before the license is obtained, it will be at the risk of the party making it; but no license can be implied therefrom. The irrevocability of a parol license or the application of equitable estoppel proceeds upon the ground of preventing fraud and depends upon some conduct of the licensor which, if permitted to deny, will amount to fraud upon the licensee. This court has frequently defined an irrevocable license, recognizing three essential elements, viz.: The license must be upon some consideration paid by the licensee or some benefit accruing to the licensor; there must be an oral agreement therefor; and improvements or expenditure in reliance thereon.” — 414 — We will first inquire whether a consideration was paid by plaintiff or passed between it and the city for the alleged license. Leaving out of the question the fact that there is no record evidence of the acceptance by the city of the boxes, we will examine the oral testimony on that subject. This tends to show that in negotiations about the subject the chief of the fire department argued that the boxes when established in the streets should become the property of the city, and that officers of the plaintiff company acceded to that element of the negotiations. In support of its contention that the city accepted the boxes as its property, the plaintiff introduced in evidence certain pages of the municipal reports of the city of Portland for several years, beginning with the year 1903, showing that the superintendent of the fire alarm telegraph furnished a list of signal boxes which gives “auxiliary fire alarm numbers that are sent in by the Portland Automatic Fire Alarm Company,” and the numbers and locations of certain boxes. The plaintiff maintains that this proves that the property in the boxes in question passed to the city, and that it also shows that the city accepted, the boxes as such consideration. However, in the same list of signal boxes are sundry others, said to be owned by the Portland Consolidated Railway Company, the George Ainslie Company, Multnomah County, the Hotel Portland, the Oregon Water Power & Railway Company, and Standard Oil Company. Moreover, the boxes referred to in the report are those of the Portland Automatic Fire Alarm Company, and not the National Automatic Fire Alarm Company. The evident purpose of the reports in question was to give information of places where fire alarms might be turned in, and does not constitute an admission that any of the boxes are the property of the city of Portland. Still further, without reference to the city, it was necessary for the plaintiff company to establish those very boxes for the prosecu — 415 — tion of its business, and they were quite as much for its own convenience as for the convenience of the city. 1. It cannot be said, therefore, that the action of the plaintiff in establishing the boxes constituted any consideration for the alleged license. No other consideration is even intimated in any of the testimony. Was there an oral agreement for any license? Laying aside the question that the board of fire commissioners had no authority to make a contract, also disregarding the requirement of the charter that the board should keep a record of its proceedings, and considering the plaintiff on the one hand and the city on the other as natural persons doing the same acts before mentioned, it is plain that they contemplated further action before a contract was established, and that nothing more has been shown than mere negotiations. 2. The last utterance of the board was that it enter into and make a contract with the plaintiff for a system of auxiliary fire alarm boxes; “said contract to be satisfactory when submitted.” No contract, however, was ever submitted. It is plain from that language that the minds of the parties had not fully and finally met upon any distinct proposition. The plaintiff was not bound to do anything. For that matter, it was left at liberty to withdraw its system of auxiliary fire alarms at its pleasure. No time was specified for the life of such a contract, no terms were agreed upon as to when or in what manner the wires could be connected with the system of the city or how it should be managed or controlled, whether by the city or by the plaintiff. The oral testimony of the witnesses Fliedner, Everding, and Campbell, the two former being fire commissioners and the latter the chief of the fire department, all shows that it was understood and agreed that a written contract should be prepared and submitted by the plaintiff before the transaction should be considered closed. — 416 — “Where parties are merely negotiating as to the terms of an agreement to be entered into between them, there is no meeting of minds while such agreement is incomplete. Thus, where they intend that their verbal negotiations shall be reduced to writing as the evidence of the terms of their agreement, there is nothing binding upon them until the writing is executed.” 9 Cyc. 280; Wills v. Carpenter, 75 Md. 80 (25 Atl. 415); Shepard v. Carpenter, 54 Minn. 153 (55 N. W. 906); Sibley v. Felton, 156 Mass. 273 (31 N. E. 10); Hodges v. Sublett, 91 Ala. 588 (8 South. 800); Spinney v. Downing, 108 Cal. 666 (41 Pac. 797); Ferre Canal Co. v. Burgin, 106 La. 309 (30 South. 863); Edge Moor Bridge Works v. County of Bristol, 170 Mass. 528 (49 N. E. 918 ); McDonald v. Bewick, 51 Mich. 79 (16 N. W. 240); People’s R. R. v. Memphis R. R., 10 Wall. 38 (19 L. Ed. 844). Within the doctrine of Falls City Lumber Company v. Watkins, 53 Or. 212 (99 Pac. 884), whatever the plaintiff did, under these circumstances, in establishing its fire alarm system, it did at its own risk. The validity of its license depends upon the act of the superintendent of the city’s fire alarm telegraph, afterwards its own superintendent, in connecting the city system with the boxes of the plaintiff. If he had been the agent of some private party with whom the plaintiff had dealt, this act might have been set down as within the apparent scope of his authority, although in excess of his real authority and so have bound his principal; but this rule does not apply to municipal corporations in its unconfined significance. 3. A person dealing with the agent of a public corporation must know the bounds of the authority of such agent, for it is provided by the law establishing the corporation. Moreover, the officers of the plaintiff were present at the meeting of the board of fire commissioners and knew what had transpired. They knew also, or should have known, what the record of the commissioners disclosed on that subject. They had no right, therefore, to rely upon the act of the city’s employee in connecting up the — 417 — city system -with its boxes, an act which was more for the benefit of the plaintiff than of the city. 4. It is claimed that the plaintiff had the same right as any citizen of Portland to spring an alarm in case of fire, using the city’s fire alarm telegraph for that purpose; but a citizen has no vested right to use the appliances of the city to send an alarm of fire. The city has the police power to regulate the manner in which fire alarms may be given so far as the appliances organized by the city are concerned. It is the same authority which is exercised by the city in keeping the streets clear adjacent to a fire and giving the right of way to fire engines proceeding to a fire. No right of the plaintiff analogous to the privilege given to a citizen to send in an alarm is violated by any act of the city alleged in the complaint. 5. At best, under all the testimony, all that is shown is a mere acquiescence on the part of the city authorities in the act of the plaintiff in establishing its possession of and using the city telegraph as an adjunct of its business. Within the meaning of Hallock v. Suitor, 37 Or. 9 (60 Pac. 384), and Ewing v. Rhea, 37 Or. 583 (62 Pac. 790: 52 L. R. A. 140: 82 Am. St. Rep. 783), such acquiescence will not support a license. The conclusion, therefore, is that the alleged license upon which plaintiff relies is not supported by any consideration or an oral agreement therefor within the rule already laid down by this court; and, generally, equity will not interfere by the drastic remedy of injunction unless the right sought to be protected is clearly proven. In view of the many elements of uncertainty disclosed by the plaintiff’s case, this rule, if no other, would prevent the relief sought by the remedy of injunction. The decree will be reversed, and the suit dismissed. Reversed : Suit Dismissed. — 418 — [117 Pac. 289.]