Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353 (1931)

Twin City Pipe Line Co. v. Harding Glass Co.

No. 330

Argued March 17, 18, 1931
Decided May 4, 1931
283 U.S. 353

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

1. The principle that contracts in contravention of public policy are not enforceable should be applied with caution and only in cases plainly within the reasons on which that doctrine rests. P. 356.

2. It is only because of the dominant public interest that one who has had the benefit of performance by the other party will be permitted to avoid his own promise. Id.

3. In determining whether a contract contravenes the public policy of Arkansas, the constitution, laws and judicial decisions of that state, and the principles of the common law, are to be considered. P. 357.

4. Public utilities may enter into reasonable arrangements with their customers when warranted by special circumstances. P. 358.

5. In settlement of litigation involving a pipeline company, which supplied gas to domestic and industrial consumers in Arkansas, and one of its customers, a manufacturing concern which consumed much gas at its plant, it was agreed that the pipeline company, although it had been adjudged not bound to do so, would build an additional service line to the manufacturer’s plant, and that the manufacturer would take all its requirements of gas from the pipeline company, so long as that company could adequately supply them, and would pay the rates then in effect or thereafter fixed by public authority, and that, in the event of a shortage of gas, so that there was not enough to supply adequately the domestic consumers, the pipeline company might discontinue serving the manufacturer upon condition that the same character of service be given to it as was given to other industries. The pipeline company performed the agreement on its part, but the manufacturer, after several years, sought to repudiate it as contrary to public policy, having provided other means for obtaining gas.

Held:

That, as the contract was upon adequate consideration and was not arbitrary or unfair, and was not shown to have any tendency to injure the public, it was enforceable according to its terms. Pp. 355-357.

39 F.2d 408, reversed.

Certiorari, 282 U.S. 825, to review a decision which reversed a decree of the district court for the specific performance of a contract.