CHICAGO, M., ST. P. & PR CO. v. Chicago & EIR Co., 10578.

• Decision Date: 11 August 1952
• Docket Number: No. 10578.,10578.
• Citation: 198 F.2d 8
• Parties: CHICAGO, M., ST. P. & P. R. CO. v. CHICAGO & E. I. R. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

198 F.2d 8 (1952)

CHICAGO, M., ST. P. & P. R. CO. v. CHICAGO & E. I. R. CO.

No. 10578.

United States Court of Appeals Seventh Circuit.

July 9, 1952.

Rehearing Denied August 11, 1952.

John F. O'Brien, Terre Haute, Ind., Bert Beasley, Indianapolis, Ind., Thomas H. Maguire, M. L. Bluhm, J. E. Goggin, Chicago, Ill., for appellant.

David O. Mathews, Patrick C. Mullen, Chicago, Ill., Homer B. Aikman, Terre Haute, Ind., John T. Hays, Sullivan, Ind. (Hays & Hays, Sullivan, Ind., Aikman, Piety & McPeak, Terre Haute, Ind., of counsel), for appellee.

Before KERNER, FINNEGAN and LINDLEY, Circuit Judges.

FINNEGAN, Circuit Judge.

On May 28, 1951, plaintiff filed its complaint in the United States District Court for the Southern District of Indiana, Terre Haute Division, based on sec. 1 of the Interstate Commerce Act, subparagraphs 18 to 22 inclusive, 49 U.S.C.A. § 1(18-22), including the National Transportation Policy, Act of September 18, 1940, 54 U.S. Statutes at Large 899, 49 U.S.C.A. note preceding section 1, wherein it sought a decree enjoining defendant from proceeding with the construction of an extension of its line of railroad in Vigo County, Indiana, until it obtained from the Interstate Commerce Commission a certificate of public convenience and necessity, as provided in sec. 1(18) of the Interstate Commerce Act. 49 U.S.C.A. § 1(18).

The main issue presented by the pleadings was whether the track to be constructed by defendant was an extension of its line of railroad within the meaning of sec. 1(18) of the Interstate Commerce Act, for which a certificate of public convenience and necessity was required, or whether such track was a "spur", within the meaning of sec. 1(20) of the Act, for which no such certificate was necessary.

Other issues raised by plaintiff's complaint on which evidence was presented by the parties were: (a) whether the industry to be reached was in territory adjacent to, and tributary to plaintiff's line or railroad; (b) whether "such territory" could be more practically and economically afforded carrier service by the plaintiff; (c) whether plaintiff was ready, willing and able to furnish transportation service upon proper request therefor; (d) whether such track construction by defendant would entail the expenditure of large sums of money; and (g) whether such construction would invade plaintiff's territory and deprive it of revenues which would and could normally accrue to plaintiff.

The record discloses that plaintiff's line of railroad runs southeasterly through sections 28 and 33, in Vigo County, Indiana, crossing the Wabash River near the southerly line of section 28. Plaintiff and its predecessors have operated this line of road for about 50 years.

The Wabash River flows in a general southerly direction through Vigo County, Indiana, roughly bisecting sections 28 and 33, Township 13 North, Range 9 West, 2nd Principal Meridian. On or near the westerly bank of the Wabash River, in section 33, the Public Service Company of Indiana is building an electric power plant. In close proximity is the Viking Coal Mine. Prior to the filing of this suit, there was no railroad trackage connecting with any existing railroad in the area in sections 28 and 33 west of the Wabash River and south of plaintiff's railroad. Plaintiff's railroad is the nearest to the area. It is less than a mile from the property line of the power plant. Defendant's railroad extends southerly along the west bank of the Wabash River to a point in section 10, Township 14 North, Range 9 West, nearly nine miles north of plaintiff's rail line, at which point it branches. One branch of said road crosses the Wabash River running southerly at distances of one to three miles easterly of the river. From this branch one track runs westerly to the Saxton Mine, which is east of the river and about one and a quarter miles east of the Viking Mine. The Saxton and Viking Mines are connected underground. An underground conveyor carries coal from the Viking Mine to the Saxton Mine tipple from where it has been shipped over defendant's railroad. Defendant's first contact with the coal is at the tipple of the Saxton Mine.

The second branch of defendant's line extends along the west bank of the Wabash River to a point near the north line of section 16, Township 13 North, Range 9 West, a distance of over two miles north of plaintiff's road. In its annual report to the Public Service Commission of Indiana in 1950, defendant classified this as a branch line. It is known as "Hunt's Spur" or "Hunt's Switch."

For forty years, defendant was the owner of a right of way running about one and one half miles southerly from its existing trackage. In 1936 this trackage was abandoned. Immediately south of this was a strip of right of way about three fourths of a mile long, which defendant purchased in 1902. This strip reverted to the original grantors in 1904. Further south were two disconnected strips of right of way, each about one fourth of a mile long, which were purchased by defendant in 1902 and were sold by it in 1949. At no time was trackage built on any of this right of way south of a mine located between two and three miles north of plaintiff's road. All right of way located south of defendant's existing trackage, except that part abandoned in 1936, was acquired by defendant after it had entered into its agreement with the Power Company, hereinafter discussed.

In 1950, the Power Company discussed with the plaintiff, the defendant and the Pennsylvania Railroad separately the question of the terms and conditions under which these railroads would construct track connections to serve the power plant. The Pennsylvania Railroad offered to construct the necessary trackage for a rental of $72,000 per year, to be paid by the Power Company. Plaintiff, by written memorandum, offered to advance the cost of construction and to accept a non-interest bearing note from the Power Company to cover the cost, subject to credit in specific amounts for each car of freight moving over the trackage, instead of requiring the Power Company to advance the cost of trackage lying outside plaintiff's right of way, subject to refunds for such cars of freight.

The Power Company's vice-president testified that while his company was willing that part of the proposed trackage be used to serve the Viking Mine it could not, because of the anticipated volume of traffic into its own plant, agree to that part of the memorandum providing that plaintiff's easement for the use of the trackage should "include the right to serve any industry from an extension of or connection with such trackage." This offer was rejected by the Power Company.

On December 19, 1950, the defendant agreed with the Power Company to construct the trackage at its own expense as far as the power plant's hopper site. It was also agreed that the defendant should "have the right, at any time, to use the whole or any part of said tracks, for the purpose of serving other industries, or for any other purpose, provided such use shall not unreasonably interfere with the use thereof by the industry."

Shortly after December 2, 1950, defendant had commenced and completed certain trackage on the Power Company property, between a point south of the right of way of plaintiff and the site of the power plant. North of plaintiff's right of way, no work was done in furtherance of the track connection, except to clear away some trees and brush.

On May 4, 1951, the Public Service Commission of Indiana issued an order on defendant's petition under an Indiana Statute authorizing defendant to construct a crossing over plaintiff's track.

It is alleged in the complaint and admitted by defendant that the latter has not obtained a certificate of public convenience and necessity from the Interstate Commerce Commission for the trackage from defendant's existing line to the hopper site of the power plant, a distance of approximately 3.15 miles.

The plaintiff estimated that the cost of constructing the proposed trackage would be about $500,000, while defendant's estimate was $315,000.

Defendant contended in the District Court that the trackage involved is a "spur" track and not under the authority of the Interstate Commerce Commission; that it has for about twenty years held...