Central Trust Co. of New York v. Colorado Midland Ry. Co.

• Decision Date: 11 October 1898
• Citation: 89 F. 560
• Parties: CENTRAL TRUST CO. OF NEW YORK v. COLORADO MIDLAND RY. CO. (DENVER & R.G.R. CO., Intervener .
• Court: U.S. District Court — District of Colorado

89 F. 560

CENTRAL TRUST CO. OF NEW YORK v. COLORADO MIDLAND RY. CO.

(DENVER & R.G.R. CO., Intervener .

United States Circuit Court, D. Colorado.

October 11, 1898

Henry T. Rogers, for Colorado Midland Ry. Co.

Grove &amp N. Ristine, for receiver.

Henry T. May, for intervener.

Before BREWER, Circuit Justice, and CALDWELL, Circuit Judge.

BREWER Circuit Justice.

We have carefully considered the elaborate arguments of counsel, and have come to a conclusion in which we both agree. I have not had time to fully explain to my Brother CALDWELL the line of thought I have pursued, and so, after hearing my statement perhaps he may desire to add to or subtract from it.

The status of the case is, briefly, this: The Rio Grande Company and the Midland Company each had a line of road extending from the eastern part of the state westward to Newcastle. The Rio Grande Company (called the 'Denver Company' hereafter) also owned a track from Newcastle to Rifle Creek. The Midland Company owned nothing west of Newcastle. Neither had a road west of Rifle. Each wanted to reach Grand Junction. In that state of the case the Junction Company was organized to build a road from Rifle to Grand Junction. A contract was made between the Denver and the Midland Companies for the joint use of the track from Newcastle to Rifle. Contemporaneous with it was a contract between the Denver and the Midland Companies on the one side and the Junction Company on the other. Yet the contracts and the rights created by each are separate. The accident which is the foundation of this litigation took place on the track between Newcastle and Rifle, on the track covered by the first contract. And I may premise that the question is not what rights or liabilities might have resulted if this accident had happened west of Rifle, on the track covered by the last contract; nor are we put to an inquiry as to what would be the respective liabilities if the negligence causing this accident had been that of the joint superintendent, for it was, as clearly shown, the negligence of those who were the special employes of the Midland neither employed nor paid on joint account, but employed and paid by the Midland Company alone.

What was the contract between the Denver and the Midland Companies as to this track? It is denominated by the parties a lease. It recites that the Denver Company owns a railroad extending from Newcastle to Rifle Creek, and provides that the Midland Company 'hath this day leased and demised an equal undivided moiety in and to all the right of way and railroad of the Denver Company, * * * not including, however, any rolling stock. ' The promise and agreement of The midland Company was to pay as rental for this physical structure a certain amount, and also a certain proportion of the expense of maintenance. Stopping right there, the contract was not one for merging the business of the two companies, but simply an ordinary lease of trackage rights; that is, the joint use of the physical structure. The character of such a contract, called by the parties a lease,-- in effect a lease,-- is not affected by the way the rental may be fixed, whether a gross sum, a per cent. of the gross receipts, on the wheelage basis, or in any other way. The contract is simply one of lease of the physical structure, and not a merger of the business of the two companies.

The contract provides that the 'said railroad (that is, the line between Newcastle and Rifle) shall be operated by the parties hereto jointly. ' What meaning is to be given to the term 'railroad'? The word may include all that is involved in the business of moving passengers and freight over a physical structure, and it is urged that it here has that broad significance. But the language of the lease plainly limits it. There was no merger of the business of the two carriers of passengers and freight. Each fixed its own tariff; each employed and paid its own trainmen; each discharged them as it saw fit. All that was included within the term 'railroad' was the physical structure. And the stipulation amounts simply to this: that that physical structure shall be used jointly under such methods and modes as may thereafter be agreed upon between the parties. With that as a basis, the companies, according to the usage as shown, and not according to the terms of any written agreement, arranged that the movement of the trains, the use of this physical structure, should be under the control of a single superintendent selected by the two-- paid by the two-- companies. The particular method of use is immaterial,-- whether under the direction of a joint superintendent named by the two parties for this particular track, or of the general superintendent of the one road, or in obedience to certain fixed and prescribed rules. All these ways mean simply this: that, having regard to the possibility of accident, to prevent any conflict in the operation of the trains of the two companies, there should be either some fixed rule, or some single officer whose decisions and orders should control. Such operation by the two roads of the single track is not thereby lifted into a partnership or other joint proprietary interest. And it makes no difference that, for purposes of economy, the station agents along this single track may have served both companies. The telegraph operators and certain other officials, the trackmen engaged in keeping up the physical structure, may have been paid by the two companies jointly, and upon an agreed basis. It still remains the fact that the case is one of a lease by the owner of a track of partial use of that track to another, and the details agreed upon are simply each as common prudence suggests in order that the use by the two companies of the single track may be without danger to either. The trainmen employed by either company and operating its train never become the servants or employes of any other master than the company which hires and pays them. If a company, sole owner of a track, says to its employes that within certain limits ...