Louisville & N.R. Co. v. Black Creek Coal & Coke Co.

• Decision Date: 10 October 1946
• Docket Number: 6 Div. 377.
• Citation: 248 Ala. 280,27 So.2d 473
• Court: Alabama Supreme Court
• Parties: LOUISVILLE & N. R. CO. v. BLACK CREEK COAL & COKE CO.

27 So.2d 473

248 Ala. 280

LOUISVILLE & N. R. CO. v. BLACK CREEK COAL & COKE CO.

6 Div. 377.

Supreme Court of Alabama

October 10, 1946

Chas. H. Eyster, of Decatur, and White E. Gibson of Birmingham, for appellant.

Benners, Burr, Stokely & McKamy, of Birmingham for appellee.

LAWSON Justice.

This is a suit by the Louisville & Nashville Railroad Company, a corporation, against the Black Creek Coal & Coke Company a corporation, to recover damages for the alleged breach of a contract, executed on or about November 12, 1925.

The defendant's demurrer to the complaint was sustained by the trial court; in consequence, the plaintiff suffered a nonsuit, and has appealed as authorized by the statute. § 819, Title 7, Code. 1940.

As finally amended, the complaint contained four counts, but for the purposes of this appeal a consideration of Count There and the exhibits thereto will suffice.

In 1902, the Lehigh Coal Company owned coal lands in Blount County, Alabama, which were not served by a railroad, so on January 2nd of that year they entered into a contract with the Long Branch Coal Railroad Company for the construction and operation of a railroad approximately seven miles in length leading from the said coal properties to a certain point on another railroad. In order to pay the Long Branch Coal Railroad Company the cost of preparing the roadbed for the superstructure, the Lehigh Coal Company agreed to pay a rate five cents per ton greater than might be received from the transportation of coal from mines at or in the vicinity of Warrior Station, Alabama, such rate to continue until sufficient tonnage had been so transported as to repay the cost of preparing the roadbed for the superstructure together with interest thereon. The Lehigh Coal Company was given the option of paying each month an amount equal to the number of tons transported during that month, multiplied by five cents. After the cost of preparing the roadbed had been repaid in the manner above stated, the rate for transporting the coal was to be but two cents per ton greater than might at the same time be received for transporting coal from the mines at or in the vicinity of Warrior Station to the same points. It was provided in the said contract that in the event mines should be opened by other parties along the railroad, the owners of such mines should not be given more favorable terms than were granted in the contract to the Lehigh Coal Company.

A railroad was constructed in accordance with the terms and provisions of said contract. It appears that the Louisville & Nashville Railroad Company now owns or controls said railroad and that the Long Branch Coal Railroad Company, prior to November 12, 1925, transferred, assigned and delivered to the Louisville & Nashville Railroad Company all of its rights under the said contract of January 2, 1902, heretofore summarized.

In 1925 the Black Creek Coal & Coke Company owned coal properties at or near Lehigh, in Blount County, Alabama, which were located approximately 1,468 feet distant from the railroad constructed by Long Branch Coal Railroad Company under its 1902 contract with Lehigh Coal Company. On November 12, 1925, the Black Creek Coal & Coke Company entered into a contract with the Louisville & Nashville Railroad Company for the construction of railroad tracks, 1,468 feet in length, leading from its coal properties to the Long Branch Coal Railroad and for the transportation of its coal over the said Long Branch Coal Railroad to points on other railroads. Reference is made in this contract to the rate provisions contained in the 1902 contract of Long Branch Coal Railroad Company and Lehigh Coal Company. The contract contains the following provisions:

'(22) Said Black Creek Coal & Coke Company, second party, will receive like benefit from the construction of the Long Branch Coal Railroad to that enjoyed by the Lehigh Coal Company. It is agreed that the second party shall have the benefit of the same rates as those given the Lehigh Coal Company in said contract of 2nd day of January, 1902 and quoted above.

'Therefore the rates herein quoted of five (5¢) cents per ton greater than may at the same time be received by the first party for transporting coal from the mines in the vicinity of Warrior Station, Alabama, shall continue in effect until the number of tons transported for the second party, multiplied by five (5¢) cents per ton, added to the number of tons transported for the Lehigh Coal Company multiplied by five (5¢) cents per ton, will yield an amount equal to the amount expended in preparing the roadbed of the Long Branch Coal Railroad for the superstructure, together with interest on said amount at six per cent (6%) per annum.'

The plaintiff alleges that at the time of the filing of this suit the cost of preparing the roadbed of the Long Branch Coal Railroad had not been repaid; that during the years 1926 to 1932 the Black Creek Coal and Coke Company had transported over the system of tracks of the Long Branch Coal Railroad Company from its coal mines at or near Lehigh to points named in the contract a total of 53,978.55 tons of coal, 'for which the Black Creek Coal & Coke Company owes the plaintiff as payment on the cost of preparing the superstructure of the Long Branch Coal Railroad the sum of five cents per ton for each ton of coal transported over said system of tracks,' that under the contract the Black Creek Coal & Coke Company became indebted to plaintiff in the sum of $2,698.93 up to December 31, 1932, which said sum of money the said Black Creek Coal & Coke Company owes plaintiff and which remains due and unpaid.

By amendment to Count Three plaintiff alleges that at the time of the execution of the 1925 contract both parties thereto knew that the indebtedness of Lehigh Coal Company to the Louisville & Nashville Railroad Company under and by virtue of the contract of January 2, 1902, was unpaid; and that it was known to both parties that they could not legally contract for a tariff or rate for transporting coal over said railroad at a rate in excess of that fixed and established by the tariff of rates on file with the Alabama Public Service Commission, and that any contract between the parties fixing a different and higher rate for the transportation of coal between said points would be in violation of the statutes of the State of Alabama, and would be illegal and unenforceable; that the Black Creek Coal & Coke Company, in entering into said contract of November 12, 1925, recognized that there was a balance on the...