Clark v. Pittsburg Natural Gas Co.

Opinion by

Mb. Justice Fell,

As the relief granted is under the prayers of the amended bill the objection to the allowance of the amendment should he considered first. If it was improperly allowed the decree must be set aside. The averments of the original bill are : tlrat the Pittsburg Natural Gas Co. was incorporated mainly for the purpose of supplying natural gas to tlie works of the plaintiffs, William Clark’s Son & Co. and those of Park, Bro. & Co., one of tlie defendants; tbat each of the said parties contracted with the company for a supply of gas at its works for three years ; that since the gas company had become unable to furnish a full supply to both, Park & Co. had, by the use of their power as owners of |-9 of the stock, obtained more than their proportionate-share of gas; that they were mismanaging tlie company and making fictitious charges against it, and intended by fraudulent contrivances to obtain a judgment against it, sell its property and become the sole owners thereof. Tlie prayers were for the appointment of a receiver to manage the affairs of the company, to defend the threatened suit, to secure a proper apportionment of the gas to the parties, for an injunction, etc. After an answer and replication had been filed, and but seven pages of the twelve hundred of testimony had been taken, an amendment was allowed by the court in which, it is alleged that the accounts between the Gas Co. and Park & Co. were incorrect and fraudulent; that Park & Co. had been using the entire supply of gas without making compensation therefor, and that a large sum was due by them to the gas company. The additional prayers were for the appointment of a receiver to sell the property, and for an account.

The subject-matter of the amendment was germane to and in enlargement of the substantial purpose of the bill, and there was no abuse of discretion in its allowance. It was based mainly on knowledge acquired after the filing of the bill, and it was asked for in accordance with the rules of court. The prayer for an accounting might have been added to those of the original bill. The Act of May 4, 1864, sec. 2, P. L. 775, permits amendments in proceedings in equity, at the discretion of the court, which affect the merits of the matter in controversy and expedite justice, in the same manner as obtains in common law cases and practice. Referring to this act, Sucajrswood, J., in the opinion in Wilhelm’s Ap'p., 79 Pa. 120 said: “We are thus by legislative mandate for rules as to amendments in equity proceedings, referred to those which prevail in ‘ common-law cases and practice,’ intending no doubt to incorporate all of the provisions of the acts of assembly, and to make one uniform system for both classes of suits,” and that while the limit of the power of amendment is that no new cause of action can be introduced, “ the true criterion is, as all the authorities show, did the plaintiff so state his cause of action originally as to show that he had a legal right to recover what he subsequently claims.”

The most important subject of controversy before the master was the charge of $324,380.46 made by Park & Go. for fuel purchased by them to supply their works after the supply of gas received from the gas company became insufficient. This extraordinary charge was made at a time when Park & Co., by reason of their ownership of seventy eighty-fifths of the stock, were in absolute control of the management of the gas company. A part of the time they were receiving the entire product of gas, and at no time were they charged with more than one fourth or one third of the market value of the gas. In the first year of their absolute control, during five months of which they received all of the gas the company was able to furnish, they credited it with $111,294.05 for gas used, and charged it with $262,467.80 as damages for a failure to furnish a full supply. If this charge rested on a lawful agreement, clear and distinct in its terms, it would have to be sustained, ruinous as it would be to the company. The plaintiffs are not in a position to contest the legality of such an agreement, if made. They are not innocent stockholders of a corporation whose officers have made improvident and unlawful contracts with themselves. They were parties to whatever agreement was made with Park & Co. and secured a like agreement for themselves; and in a proceeding to secure their individual rights only, in which no question of public rights or duties is involved, they are estopped. They claim however that no such agreement was made, and this claim is sustained by the testimony. No formal contract was made, no resolution was passed by the board of directors, and the minutes and books show no such agreement. It is extremely doubtful whether there was any understanding except for a division of the gas between the parties in proportion to the interest which they had as stockholders. The company was not organized or conducted with the intention that it should perform any public duty. Its franchises were obtained and used solely to serve the private interests of the stockholders. They agreed upon a division of the gas proportionate to their holdings of stock, and in all contracts with other parties they carefully provided against claims for damages by reserving the right to cancel the contracts. When the supply had been cut off from others, and became insufficient to supply their works they for a time lield out to eaob other the promise of a fair division. That this method of adjustment was considered by them is some indication of their understanding of their rights at the time, and that the unsigned memoranda now set up as evidence of an agreement to furnish a full supply were intended only to provide for a division of the supply. In fact, the only force these memoranda have as evidence of any understanding is that the parties apparently acted under them in making a division. After July, 1892, there is no pretense of a contract except such as was made by the officers of tbe company with themselves as members of a copartnership.

With what amount Park, Bro. & Co. should be charged for gas used by them after July 1, 1892, is a question by no means free of difficulty. The difficulty results in part from their failure to use means to ascertain the amount tliey consumed when they were dealing with the property of the gas company as if it were their own. We find no reason however which would justify us in setting aside the finding of the court upon the subject, and it is unnecessary to enter upon a discussion of it. By a motion to amend the decree attention has been called to an error in calculation made by the learned judge. In reducing the sum of $285,609.28 charged by the master for the use of gas from July 1,1892, to June 1,1896, one third, the amount of the charge is fixed at $170,406.19 instead of $190,406.19. This is clearly an error of calculation, and has been carried into the decree.

The decree is now corrected by fixing the sum to be paid by Park, Bro. & Co. at $252,719.03 instead of $232,719.03.

With this correction the decree is affirmed at the cost of the appellant.