Chicago Railway Company v. Denver Railroad & G. Railroad Company
STATEMENT BY MR. JUSTICE BROWN.
This was a bill in equity brought by the Chicago, Rock Island & Pacific Railway Company, (hereafter designated as the Rock Island Company,) against the Denver & Rio Grande Railroad Company, (hereinafter designated as the Denver Company,) to enforce an alleged right to certain terminal facilities at the city of Denver, and for certain incidental purposes, hereinafter stated in the opinion. There was also a cross-bill filed to enjoin the plaintiff from making use of such facilities, and for other purposes, which was subsequently dismissed by stipulation of the parties.
The litigation arose out of a contract entered into on the 15th day of February, 1888, between the Denver Company and the Chicago, Rock Island & Colorado Company, (hereinafter designated as the Chicago Company,) for the joint use and possession of the Denver road between Denver and Pueblo, the material portions of which are printed in the margin. 
Pursuant to article 3, § 10, of this contract, the president of the Chicago Company, on March 17, 1888, gave written notice to the defendant company that the Chicago Company elected, as provided by the contract of February 15, 1888, 'to build its railway from the western boundary of the state of Kansas to Colorado Springs, and that it will have the same ready for operation on or before the 31st day of December, in the year 1889.' Soon after this the Chicago Company completed its connection with the Denver Company's line at Colorado Springs, and thereafter for some time brought all its trains by the way of Colorado Springs to Denver and Pueblo over the defendant's line. The distance from Denver to Pueblo is about 120 miles; Colorado Springs being an intermediate station, nearly midway between the termini.
In April, 1889, the Rock Island Company, claiming to be the successor in interest of the Chicago Company under the contract, assumed the operation of that company's line, and about the same time entered into a contract with the Union Pacific Company, by the terms of which the Rock Island Company acquired the right to connect its railway with that of the Union Pacific at Limon, about 90 miles east of Denver, and to run its trains over the track of the Union Pacific from that point to Denver, which was 64 miles shorter than that by Colorado Springs, and over a road the maximum grade of which was much less than the other. From that time to the present the plaintiff has transacted most of its business to and from Denver over the Union Pacific line, bringing the same over no portion of the Denver Company's line; but at the same time has sought to utilize the defendant's terminal facilities at Denver for the handling of its business. It has still continued, however, to send its Pueblo traffic by way of Colorado Springs, and over the line of the defendant's road.
Immediately after its Denver business began to be thus diverted, and on May 10, 1889, the general manager of the Denver Company telegraphed Mr. Cable, the president of the plaintiff company, as follows: 'I have just seen Mr. Allen, general superintendent, and have notified him that, although we are not required by our contract to handle or care for your trains and equipment brought to Denver over the Union Pacific line, we do so temporarily, and with the understanding that the compensation for such service, as also for the use of our tracks for such trains, will be made at an early date.' To this Mr. Cable replied the next day as follows: 'Your telegram received. Of course, any service performed for us, not covered by contract, will be paid for by our company. When I come out in June I will spend time enough with you to take up matters between us that may require attention. I have no doubt that everything can be satisfactorily arranged.'
No payment for the use of such terminal facilities appears, however, to have been made; the plaintiff asserting its right to use these terminals, for its business brought over the Union Pacific tracks, under the contract made with Chicago Company. The parties being unable to agree upon a proper construction of the contract, the defendant gave notice that it would on August 1, 1890, exclude from its Denver terminals all business brought over the Union Pacific tracks. Thereupon the Rock Island Company filed this bill, and applied for a restraining order, which was granted. By amendments and supplemental bill there were brought into the controversy other matters of difference which had arisen between the two companies. Upon the hearing in the circuit court a decree1 was made, settling the rights of the two companies to this constract, (45 Fed.Rep. 304,) from which both parties appealed to this court.
Thos. F. Withrow, for Chicago, R. I. & P. Ry. Co.
E. O. Wolcott, for Denver & R. G. R. Co.
Mr. Justice BROWN, after stating the facts in the foregoing language, delivered the opinion of the court.
^1 Material portions of the contract of February 15, 1888.
Articles of agreement made and entered into this fifteenth (15th) day of February, in the year eighteen hundered and eighty-eight, by and between the Denver and Rio Grande Railroad Company, a corporation organized and existing under the laws of the state of Colorado, hereinafter referred to as the Denver Company, and the Chicago, Rock Island and Colorado Railway Company, a corporation organized and existing under the laws of the same state, hereinafter referred to as the Chicago Company, witnesseth:
First. The Denver Company owns and operates a railway with appurtenant property, a portion of the main line of which extends from Denver through Colorado Springs to South Pueblo, all in the state of Colorado; and the Chicago Company owns a railway which is being constructed from the western boundary of the state of Kansas, at which point it will connect with the Chicago, Kansas and Nebraska Railway to the city of Colorado Springs, above mentioned.
Second. The interest of both parties and of the public will be promoted by the establishment and operation of a through line of railway between all the points of the railway of the Denver Company between and including Denver and South Pueblo, and all points on the line of railway which will be operated by the Chicago Company, and on the system of railways of which the Chicago Company will form a part.
Therefore, in consideration of the premises and of the several covenants, promises, and agreements hereinafter set out, the parties do covenant, promise, and agree to and with each other as follows:
The Denver Company covenants, promises, and agrees to and with the Chicago Company:
Section 1. It hereby lets the Chicago Company into the full, equal, joint, and perpetual possession and use of all its tracks, buildings, stations, sidings, and switches on and along its line of railway between and including Denver and South Pueblo, excluding its shops at Burnham, meaning and intending hereby to include in the description aforesaid all and every portion of its railway, and appurtenant property, between and at the points aforesaid, and all improvements and betterments thereof and additions thereto, which may be jointly use by the parties, as hereinafter provided.
Sec. 2. It will maintain and keep in good repair the property described in the preceding section, during the term of this contract, and will comply with all regulations prescribed by law for the safety of the public.
Sec. 3. It will, if required by the Chicago Company, provide the necessary housing and care of the locomotives which said party may have from time to time at Denver and South Pueblo, upon reasonable terms, which shall be agreed to by the general managers or other authorized officers of the two companies. It will, upon like requisition, furnish, in the same manner it provides its own locomotives on its tracks above described, all water and coal which the Chicago Company will need for the operation of its trains over the railway of the Denver Company. The compensation which shall be paid for the water supply shall be ascertained on the basis of wheelage as hereinafter provided for expenses of maintenance and repairs; and the compensation for coal so furnished shall be the actual cost thereof in the shutes and platforms from which it is transferred to the locomotives of the Chicago Company. * * *
Sec. 4. It will pay all taxes and assessments which shall be levied or assessed directly or indirectly upon or against the property described in article 1, section 1, hereof, or upon either the gross or not earnings thereof during the term of this indenture.
Sec. 5. It will at the commencement of said term, if so required by the Chicago Company, provide, and, during the continuance thereof maintain, at Denver and South Pueblo, for the exclusive use and control of said Chicago Company, engine-houses, conveniently located, and having the necessary fixtures and sufficient capacity to properly and safely shelter all locomotive engines which said company may have occasion to use on the railway of the Denver Company. * * *
The Chicage Company covenants, promises, and agrees with the Denver Company as follows:
Section 1. It hereby accepts the covenants, promises, and agreements made and entered into by the Denver Company.
See. 2. It will, from after the completion of its railway from the boundary line of the state of Kansas to a connection with the railway of
the Denver Company at or near Colorado Springs, while this agreement remains in force, pay monthly for the use of the premises described in article 1, section 1, hereof, the sum of the following amounts:
First. An amount equal to a one-twelfth part of two and one-half per centum of the value of the property described in article 1, section 1, hereof, and which value it is agreed is three million dollars. * * *
Second. An amount equal to a one-twelfth part of two and one-half per centum per annum upon all sums which the Denver Company shall from time to time pay for the construction or acquisition of additional tracks, facilities, and conveniences, under section 1, article 3, hereof, except round-houses at Denver and Pueblo.
Third. An amount equal to a one-twelfth part of five per centum upon the cost of constructing, and in addition thereto the cost of repairing round houses which the Denver Company may erect and maintain at Denver and South Pueblo, for the exclusive use of the Chicage Company, as provided in section 5, article 1, hereof.
Fourth. An amount equal to the proportion of the cost or expenses actually incurred and paid during the month for keeping the railway and appurtenant property described in the first section of article 1 hereof in repair, and supplying it (the Chicage Company) with water, as the number of wheels per mile run by it, the Chicago Company, over said railway, or any part thereof, bears to the whole number of wheels per mile run over the same during the same period.
Fifth. An amount equal to the actual cost of the coal delivered during the month to the engines of the Chicago Company under this contract.
Sixth. An amount equal to a proportional share of the expenses actually incurred in paying proper salaries to the general superintendent and subordinate employes, including switchmen, telegraph operators, train dispatchers, and others, necessarily employed in the performance of the duties incident to the joint use and occupation of said railway, not including trainmen, which proportion shall be ascertained in the manner provided in paragraph number four, above set out.
Seventh. An amount equal to one-half of all taxes and assessments lawfully levied and actually paid during the month upon the property described in article 1, section 1, hereof; that is, that portion of the railway and appurtenant property used by the Chicago Company under this contract, excluding shops at Burnham, and equipments, facilities, and conveniences not intended for joint use by the parties hereto. * * *
Tenth. No compensation will accrue or be paid to the Denver Company, from or by the Chicago Company, for the use and occupation of said premises, before the railway of the Chicago Company shall be completed from its initial point or the western boundary of the state of Kansas to a connection of the railway of the Denver Company within the time hereinafter specified.
Eleventh. The cost of operating and maintaining all tracks, structures, and facilities used jointly by the Denver Company and the Chicago Company shall be apportioned between said companies on a wheelage basis. * * * Said Denver Company shall receive from the Chicago Company such a portion of the expenses incurred by the Denver Company in operating and maintaining the railway between Denver and Pueblo, operated and maintained by the Denver Company, which shall be as the entire wheelage of the Chicago Company is to the entire wheelage on said railway between Denver and Pueblo.
Sec. 3. It is legally incorporated, and has power to construct, maintain, and operate a railway which will extend from the western boundary of the state of Kansas to Colorado Springs, in the state of Colorado, and to make and perform on its part the several covenants, promises and agreements in these articles contained. * * *
Section 1. If the Chicago Company shall at any time during the continuance of the term of this indenture deem any additional side tracks or double tracks between said Denver and South Pueblo, or along any portion of the line of railway between said points, essential or necessary, it shall call upon the Denver Company to construct the same upon reasonable notice. * * *
The Chicago Company shall pay monthly, as compensation for the use of the same, one-twelfth of two and a half per centum per annum of the cost of such construction, as is provided in article 2, section 2, and its share of maintenance thereof based on wheelage, as provided in said section.
If additions are made by the Denver Company to its terminal facilities at Denver or South Pueblo, by the building of additional tracks, the Chicago Company shall have the right and privilege to accupy and enjoy equal use of the same, if it shall so elect, and if it shall so elect then it shall, from the time of such election, pay monthly to the Denver Company, as compensation for such use, one-twelfth of two and one-half per centum upon the cost thereof, plus interest at two and one-half per centum per annum upon such cost from the time of construction until the date of such election, in the manner provided in#e facilities appears, however, to have been made; the plaintiff asserting its right to use these terminals, for its business brought over the Union Pacific tracks, under the contract made with the Chicago Company. The parties being unable to agree upon a proper construction of the contract, the defendant gave notice that it would on August 1, 1890, exclude from its Denver terminals all business brought over the Union Pacific tracks. Thereupon the Rock Island Company filed this bill, and applied for a restraining order, which was granted. By amendments and supplemental bill there were brought into the controversy other matters of difference which had arisen between the two companies. Upon the hearing in the circuit court a decree was made, setting the rights of the two companies to this contract, (45 Fed. Rep. 304), from which both parties appealed to this court.
If the Chicago Company shall at any time during the continuance of the term of this indenture desire any side, spur, or other tracks, other than those above specified, connecting any track described in article 1, section 1, hereof, with its own tracks, or with the tracks of any other railway company, or to any industry, or shall desire any facilities or conveniences which do not now exist, it shall give to said Denver Company notice of
such desire, and the said Denver Company may, within thirty days after receiving said notice, proceed to cnstruct such tracks or acquire such facilities and conveniences; and the Chicago Company will pay for the use of the same, in monthly installments, as provided in article 2, section 2, hereof, a sum equal to a one-twelfth part of two and one-half per centum per annum from the date of such construction or acquisition, upon the cost of constructing or acquiring such tracks, facilities, and conveniences, and shall pay in addition thereto its share of the cost of the maintenance thereof, based on wheelage, as herein provided. If the Denver Company shall neglect or refuse to construct such tracks or acquire such facilities and conveniences within a reasonable time, the Chicago Company, at its own expense, in its own name, or in the name of some third person or corporation, as it may be advised, may construct or acquire the same, and it shall be the sole owner, and have the right to use and remove the same, or any part thereof, during the term of this indenture. * * *
Sec. 2. Schedules of rules and regulations for the movement of engines and trains over the railway described in article 1, section 1, hereof, shall be made from time to time by officers duly authorized by the parties. Such schedule shall, as nearly as may be practicable, accord equality of right, privilege, and advantage to trains of the same class operated by both parties, and to trains of a superior class operated by either party, and a preference over trains of an inferior class operated by the other. All schedules of rules and regulations shall be reasonable and just to both parties, and shall secure to neither any unfair preference or discrimination against the other. They shall be executed, and all trains shall be moved, under the immediate direction of the superintendent, or other officer duly authorized, of the Denver Company. * * *
Sec. 3. Any employe of one company, engaged in the operation of any part of the railway jointly occupied and used under this contract, shall be removed from that portion of said line upon the request of the other.
Sec. 4. The Chicago Company will do no business as a carrier of persons or property between intermediate stations between Denver and Colorado Springs, or between intermediate stations between Colorado Springs ans Pueblo, or between any such intermediate station and Denver, Colorado Spring, or Pueblo; but it shall have the right to rransport persons and property between stations on its railway and connecting lines and all points between and including Denver and South Pueblo: provided, however, that if the Chicago Company shall at any time acquire by purchase, construction, or otherwise, a railway extending not less than fifty (50) miles from Pueblo, it shall have the right to transfer persons and property between any point on such line and Denver. * * *
The Chicago Company will not permit any express company to do business on its trains to or from stations on the line of the Denver Company
between South Pueblo and Colorado Springs, or between stations between Colorado Springs and Denver, or from Denver to South Pueblo, or from South Pueblo to Denver. It may permit such a company or companies to carry property on its trains from Denver to Colorado Springs, from Pueblo to Colorado Springs, and to and from stations on its own railway and connecting lines to and from all points between and including Denver and South Pueblo. * * *
In the division between the parties hereto of joint rates on through traffic, including all transported by each party which shall pass through Pueblo or Denver to or from the railway of the Chicago Company at Colorado Springs, no difference between the hauls made by the parties, respectively, on the railway of the Denver Company between Denver and Pueblo, shall be considered. For example, if the Denver Company receives through traffic from points beyond Denver or South Pueblo, and hauls the same to Colorado Springs, and there delivers it to the Chicago Company, it will receive no greater division of the through rate than it will receive for like traffic delivered at Denver and South Pueblo; and if the Chicago Company hauls through traffic destined to points beyond Denver or South Pueblo to said points, instead of delivering it to the Denver Company at Colorado Springs, it will receive no larger division of the through rate because of such additional haul. * * *
Sec. 9. This contract shall attach to and run with the railways of the respective parties during the corporate existence of each, and of all extensions of such existence, by renewal or otherwise, and shall be binding upon the lessees, assigns, grantees, and successors of each during the continuance of their several corporate existences: provided, however, that the Chicago Company can assign its interests in this contract only by a sale, lease, or consolidation of its own property. * * *
Sec. 10. The Chicago Company shall, on or before the first day of April, in the year one thousand eight hundred and eighty-eight, notify the Denver Company whether or not it elects to build its line aforesaid from said point on the western boundary line of the state of Kansas to said Colorado Springs. If it shall elect to build said line, it agrees to complete the same, and to occupy the line of the Denver Company, and to be bound by the terms of this contract, on or before the 31st day of December, in the year 1889. If it shall elect not to build said line, this contract shall, on the said 1st day of April, in the year 1888, become void and of no effect. . . .