Bryant Lumber Company v. Fourche River Lumber Company

• Decision Date: 29 May 1916
• Docket Number: 20
• Citation: 187 S.W. 455,124 Ark. 313
• Parties: BRYANT LUMBER COMPANY v. FOURCHE RIVER LUMBER COMPANY
• Court: Arkansas Supreme Court

187 S.W. 455

124 Ark. 313

BRYANT LUMBER COMPANY v. FOURCHE RIVER LUMBER COMPANY

No. 20

Supreme Court of Arkansas

May 29, 1916

Appeal from Pulaski Circuit Court, Second Division; Guy Fulk, Judge affirmed.

STATEMENT BY THE COURT.

Appellant and appellee are lumber corporations organized under the laws of the State of Arkansas. Appellant had its principal place of business at Fourche, and the appellee its principal place of business at Bigelow, in Perry County.

Appellant instituted this suit against the appellee in the Perry Circuit Court to recover damages growing out of an alleged violation by the appellee of a written contract between appellant and appellee entered into on the 3d day of August 1905. The complaint is based on the contract, and the contract is set out in full and made an exhibit to the complaint.

The appellant alleged substantially that it owned a saw mill plant and was engaged in the manufacture of lumber at Fourche, Arkansas; that it owned large bodies of timbered lands that were situated several miles from its plant; that the removal of the timber from these lands to the mill of appellant was necessary in the operation of its business that the appellee desired to build a railroad running through the timbered lands owned by appellant and entered into a contract with appellant whereby it was agreed that the appellant should convey a right-of-way over its lands to the appellee, and in consideration therefor the appellee was to build and have built a railroad over this right-of-way. It was alleged that the railroad was to be built thirty-four miles from a point ten miles south of Bigelow; that certain specified distances were to be completed within specified times and the whole to be completed by August 3, 1910. Appellant also alleged that by the terms of the contract appellee was to haul and carry all timber equally and impartially for the appellant over its railroad when constructed; that the appellee changed the route of the railroad and ran the same into timbered lands which were owned solely by the appellee, and that by the failure of the appellee to construct the road as required by the contract and to have the timber of appellant carried on equal terms with that of the appellee, appellant was damaged.

The complaint alleged that appellant had complied with all the terms and provisions of the written contract on its part, and alleged that the appellee had violated the contract in the particulars above mentioned, which were set forth in detail together with the various amounts constituting the damages claimed by appellant, which, in the aggregate, were alleged to be over four hundred thousand dollars, for which the appellant prayed judgment.

The appellee demurred to the complaint, setting up that the obligations on the part of the appellee were based upon reciprocal obligations of the appellant which constituted an entire consideration; that by the terms of the contract appellant had obligated itself to join with the incorporators of the Fourche River Valley & Indian Territory Railroad Co., in their efforts to secure a charter in accordance with the articles of association and map presented to the board of railroad incorporation; that in consideration of the obligations on the part of the appellant, as set up in the contract, the appellee had agreed on its part that the railroad company, when it was incorporated and its road built, would haul the timber then owned by the appellant at a rate specified, and that the price for hauling timber acquired in the future should be fixed by a board of arbitrators.

The appellee set up that the contract, in the particulars named, was contrary to public policy and in violation of the acts of Congress and of the State of Arkansas regulating the conduct of business of railroad companies.

It is unnecessary to set out the complaint and the contract at length. Both parties have treated the contract as a part of the complaint, and such portions of the contract as may be necessary will be set out and commented on in the opinion. The above are substantially the issues. The court sustained the demurrer and entered a judgment dismissing appellant's cause, from which judgment this appeal has been duly prosecuted.

Judgment affirmed.

W. M. Lewis, C. C. Reid, and Sam Frauenthal, for appellant.

1. The contract is not against public policy. It was merely an agreement to convey the right-of-way. It does not suggest or contemplate any improper or sinister influence with the Board of Railroad Incorporation. 71 Ark. 189; 97 Id. 86; 75 Id. 89; 86 Id. 309; Kirby's Digest, § 6546; Acts 1907, p. 194.

2. It is not void because rates are fixed for hauling timber in violation of the requirement that uniform rates shall be fixed. Appellee was not a railroad company at the time. But if so, this provision was separable and could be stricken out and the remainder of the contract upheld. 230 U.S. 316; 25 Ark. 351; 64 Id. 398; 96 Id. 105; 26 L. R. A. (N. S.) 106; 94 Ark. 461; 9 Cyc. 569; 1 Page on Contracts, § 510; 7 A. & E. Enc. L. 95; 6 L. R. A. (N. S.) 547; 32 L. R. A. 494; 77 U.S. 395; 6 R. C. L. 815, § 119.

J. F. Sellers and Rose, Hemingway, Cantrell, Loughborough & Miles, for appellee.

The contract is void as against public policy. It violates sections 6802 to 6805 of Kirby's Digest. See, also, Ib., § 6813, 6546; 230 U.S. 316; 9 Cyc. 481; 54 Am. Rep. 9; 23 N.J.L. 352, 357; 45 N.E. 507, 509; 13 Am. Rep. 353; 11 A. 264; 26 Id. 981; 93 N.W. 72; 110 Id. 106; 2 Wall. 45; 27 Am. St. 274; 65 P. 263; 61 Am. Dec. 347; 20 S.E. 733; 32 Am. Dec. (7 Watts, Pa.) 753; 82 P. 810; 74 N.E. 469; 14 Hun (N. Y.) 392; 63 Cent. Law, J. 41; 13 So. 107; 118 S.W. 849; 35 Am. St. 801; 130 Id. 754; 17 Am. Dec. 479; 6 R. C. L. 713, 730, 741; 16 So. 516; 67 Ill. 256; 108 Ark. 171; 63 Id. 318; 51 Id. 26, 32; 71 Id. 552; 106 Id. 239; 219 U.S. 467, etc.

2. If void, the whole contract is tainted--every provision is unenforceable. 65 P. 263; 25 Ark. 352; 46 Id. 420; 95 Id. 552; 108 Id. 180; 64 Id. 398, 405; 102 Id. 568, 572; 103 Id. 611; 209 U.S. 56; 219 Id. 478.

WOOD, J. HART and KIRBY, JJ., dissenting.

OPINION

WOOD, J., (after stating the facts).

It appears by the preamble to the contract under review that the appellee had already constructed a railroad across lands belonging to the appellant, and that there was a controversy between appellee and appellant as to whether or not the appellee had any authority to build this railroad, and it was recited that the controversy between the parties was detrimental to the interests of each other, and that in order to settle the same in so far as it affected the future rights of any and all the parties and their successors as to the building, maintaining and operating a railroad, and the granting of rights-of-way, hauling freight, etc., the parties had agreed to settle said controversy by entering into mutual covenants and agreements. The preamble shows, in other words, that the covenants and agreements entered into by one of the parties were in consideration of the covenants and agreements entered into by the other.

Under this contract the appellee bound itself to haul the timber then owned by the appellant, when loaded by it on the cars of the appellee, at the rate of 37 1/2 cents per thousand feet, and also to haul timber thereafter acquired by the appellant, when loaded on the cars of the appellee, at a price to be fixed by arbitration, and to haul afteracquired timber of the appellant for a period of ten years to points on the lines of the Fourche River Valley & Indian Territory Railroad Company, or to the end of its line, if consigned to points beyond it, without transfer of freight from one car to another.

The appellee also bound itself to cause the incorporators of the Fourche River Valley & Indian Territory Railroad Company, to renew its application for a charter, and if a charter was granted, it guaranteed that certain parts of the railroad should be completed within certain specified dates on a definite line specified, and that the whole should be completed within five years from the date of the charter.

In consideration of these obligations on the part of the appellee, the appellant bound itself "to join with the incorporators of the Fourche River Valley & Indian Territory Railroad Company in their effort to secure a charter," for that company in accordance with the articles of association and map that had been presented to the board, and which were then on file in the office of Secretary of State. It also bound itself to allow the appellee to enjoy the right-of-way occupied by it over the lands of the appellant, and to execute a deed for the right-of-way over the lands of appellant to the Fourche River Valley & Indian Territory Railroad Company as soon as that company was incorporated.

The contract contained also the following provision:

"No application shall be made to the board of railroad incorporators for the incorporation of the Fourche River Valley & Indian Territory Railroad Company until this contract is ratified by the respective boards of directors of the Bryant Company and the Fourche Company as above provided for. * * * This contract shall be void unless the charter of the Fourche River Valley & Indian Territory Railroad Company shall be granted by the board of railroad commissioners within sixty days from this date."

By these and other provisions of the contract it appears that appellee and appellant entered into the contract in order that the appellee, under the name of the Fourche River Valley & Indian Territory Railroad Company, might incorporate, build and operate a line of railroad in accordance with certain articles of incorporation, and a map then on file in the office of the Secretary of State, and to enable the...