This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In cases in which the parties do not contemplate a permanent obligation, the nature of the subject-matter and the surrounding circumstances may show that it was not intended that either party should have the right to discharge such contract at his option.1 A, an employer, took an employe who was seriously injured, to a hospital, and left him there, promising to pay for his care. No provision was made as to the length of time which he was to remain. It was held that this implied an agreement on A's part to pay for such care until at least such time as he could be moved without great danger to his health. Accordingly, where A gave such notice before such time, and it was not shown that the employe had means of his own to pay for such care, such notice does not discharge A's liability to the hospital.2 A contract to drive logs, for the termination of which no time is designated, may appear from the surrounding circumstances to be intended to last until all the timber has been cut off the land of the owner thereof. Such contract can not be terminated by notice before the timber is exhausted.3
Washington. Hewson v. Peterman Mfg. Co., 76 Wash. COO, .11 L. R. A. (N.S.) 398, 136 Pac. 1158.
Wisconsin. Irish v. Dean, 39 Wis. 562.
2 Howard v. East Tenn., Va. & Ga. By. Co., 91 Ala. 268, 8 So. 868; Bates Machinery Co. v. Bates, 192 Ill. 138, 61 N. E. 518; Quin v. Bay State Distilling Co., 171 Mass. 283, 50 N. E. 637; Star-oske v. Pulitzer Publishing Co., 235 Mo. 67, 138 S. W. 36.
3 Howard v. Ry., 91 Ala. 268, 8 So. 868.
See also, Coffin v. Landis, 46 Pa. St. 426.
4 Quin v. Distilling Co., 171 Mass. 283, 50 X. E. 637.
5 Long v. Kee, 42 La. Ann. 899, 8 So. 610.
6 Marble v. Standard Oil Co., 169 Mass. 553, 48 N. E. 783; Echols v. New Orleans, Jackson & Great Northern Ry., 52 Miss. 610; Turtle Creek v. Pennsylvania Water Co., 243 Pa. St. 401, 90 Atl. 194; Bellevue v. Ohio Valley Water Co., 245 Pa. St. 114, 91 Atl. 236; Irish v. Dean, 39 Wis. 562.
7 Marble v. Standard Oil Co., 169 Mass. 553, 48 N. E. 783.
8 Kenderdine Hydro-Carbon Fuel Co. v. Plumb, 182 Pa. St. 463, 38 Atl. 480.
1 Mississippi River Logging Co. v. Robson, 69 Fed. 773, 16 C. C. A. 400
A question upon which there has been a serious" conflict of authority as to the right of either party to terminate the contract at his option, arises in cases in which a railway company has agreed to construct a switch so as to furnish service to certain property, in consideration of which the owner of such property agrees to make use of it in a certain specified manner, so as to furnish goods or property for transportation by such railway. It has been held, on the one hand, that such a contract is permanent at least as long as such land is used in the manner provided for by the contract.4 In other jurisdictions, however, and by the greater weight of numerical authority, it has been held that such a contract may be terminated by either party if reasonable notice is given.5
Another question upon which a similar conflict of authority has arisen, is found in cases in which the state or a public corporation has granted a franchise to a public utility, such as a street railway company, without specifying the length of time for which such franchise is to last. A question of this sort is contemplated by the general rule that ambiguous or uncertain contracts which involve the public interest are so construed as to protect the public interest.1 In accordance with this principle it has been held by the great weight of numerical authority among the states of the Union that a franchise of this sort was not perpetual and that it could be ended in a reasonable time in view of all the facts and circumstances of the case.7 In a few states, however, the fact that the public utility frequently expends large sums of money in the performance of such contracts, has induced the courts to ignore the well-settled, rule that construction must always favor the public interest in case of doubt; and it has been held that such franchise was to be regarded as perpetual.8 This last view has been adopted by the supreme court of the United States;9 and since cases of this sort ordinarily present the question of the impairment of the obligation of contracts, and since the supreme court of the United States in such cases decides whether a contract existed or not,10 these decisions of the supreme court of the United States will force the state courts to modify their views so as to conform to those of the supreme court of the United States under penalty of reversal.
[same case, 43 Fed 364]; St. Barnabas Hospital v. Minneapolis International Electric Co., 68 Minn. 254, 40 L R. A. 388, 70 N. W. 1126: Stonega Coke & Coal Co. v. Louisville & N. R. Co., 106 Va. 223, 9 L. R. A. (X.S.) 1184, 55 S. E. 551.
2 St. Barnabas Hospital v. Electric Co.. 68 Minn. 254, 40 L. R. A. 388, 70 N. W. 1126.
3 Mississippi River Logging Co. v. Robson, 69 Fed. 773, 16 C. C. A. 400, s. c. 43 Fed. 364.
4 McKell v. Chesapeake & O. Ry. Co., 175 Fed. 321 (mine).
(Jones v. Newport News & Mississippi Valley Co., 65 Fed. 736 (switch); Baldwin v. Kansas City M. & B. Ry.,
Ill Ala. 515. 20 So. 340 (sand-pit); Barney v. Indiana Ry. Co.. 137 Ind. 228. 61 N. E. 194 (race-track): Stonega Coal & Coke Co v. Louisville & Nashville Ry., 106 Va. 223, 9 L. R. A. (N S.) 1184, 55 S. E. 551 (coal-mine).
A contract by which a mine owner agrees to construct a switch and a railway company agrees to operate cars over it without any provision as to time, is held to be subject to termination by the railway company whenever it wishes to do so, as long as reasonable notice is given of such intention. Stonega Coke & Coal Co.. v. Louisville & N. R. Co., 106 Va. 223, 9 L. R. A. (N.S.) 1184, 55 S. E. 551.
6 See Sec. 2052.
7 Alabama. Birmingham ft P. Mines Street R. Co. v. Birmingham Street R. Co., 70 Ala: 465, 58 Am. Rep. 615.
Illinois. Chicago Terminal Transfer R. Co. v. Chicago, 203 Ill. 576, 68 N. E. 99; People v. Chicago Teleph. Co., 220 Ill. 238, 77 N. E. 245; People v. Central U. Teleph. Co., 232 Ill. 260, 83 N. E. 829; Venner v. Chicago City R. Co., 236 Ill. 349, 86 N. E. 266; People v. Economy Light ft P. Co., 241 Ill. 290, 89 N. E. 760; People v. Commercial Teleph. & Teleg. Co., 277 Ill. 265, L. R. A. 1917D, 704, 115 N. E. 379.
Iowa. State v. Des Moines City R. Co., 159 Ia. 259, 140 N. W. 437.
Maryland. Westminster Water Co. v. Westminster, .98 Md. 551, 64 L. R. A. 630, 103 Am. St. Rep. 424, 56 Atl. 990.
Michigan. Wyandotte Electric Light Co v. Wyandotte, 124 Mich. 43, 82 N. W. 821.
North Carolina. State v. Atlantic ft N. C. R. Co., 141 N. Car. 736, 53 S. E. 290.
Ohio. Little Miami R. Co. v. Greene County, 31 O. S. 338; Lake Shore ft M.
S. R. Co. v. Elyria, 69 O. S. 414, 69 N. E. 738; East Ohio Gas Co. v. Akron, 81 O. S. 33, 26 L. R. A. (N.S.) 92, 90 N. E. 40.
Oregon. Joseph v. Joseph Water-works Co.., 57 Or. 586, 111 Pac. 864 [rehearing denied, 57 Or. 592, 112 Pac. 1083].
Texas. Houston v. Houston City Street R. Co., 83 Tex. 548, 29 Am. St. Rep. 679, 19 S. W. 127.
8 Dayton v. South Covington ft C. Street R. Co., 177 Ky. 202, L. R. A. 1918B, 476, 197 S. W. 670; Nebraska Teleph. Co. v. Fremont, 72 Neb. 25, 99 N. W. 811; Seattle v. Columbia ft P. S. R. Co., 6 Wash. 379, 33 Pac. 1048.
9 Louisville v. Cumberland Teleph. & Teleg. Co, 224 U. S. 649, 56 L. ed. 934; Grand Trunk Western R. Co. v. South Bend, 227 U. S. 544, 57 L. ed. 633, 44 L. R. A. (N S.) 405; Owensboro v. Cumberland Teleph. & Teleg. Co., 230 U. S. 58, 57 L. ed. 1389; Old Colony Trust Co v. Omaha, 230 U. S. 100, 57 L. ed. 1410; Northern Ohio Traction ft Light Co. v. Ohio, 245 U. S. 574, 62 L. ed. 481, L. R. A. 1918E, 865.