East St. Louis Connecting Ry. Co. v. Jarvis

• Decision Date: 28 March 1899
• Docket Number: 377.
• Citation: 92 F. 735
• Parties: EAST ST. LOUIS CONNECTING RY. CO. et al. v. JARVIS.
• Court: U.S. Court of Appeals — Seventh Circuit

92 F. 735

EAST ST. LOUIS CONNECTING RY. CO. et al. v. JARVIS.

No. 377.

United States Court of Appeals, Seventh Circuit.

March 28, 1899

The facts of this case are voluminous, and somew for an understanding of the grounds upon which the opinion proceeds may be summarized as follows:

The East St. Louis Connecting Railway was organized under the general railroad law of Illinois, in the year 1877, to construct a railroad from Venice, in Madison county, to the track of the Illinois & St. Louis Railroad & Coal Company, in St. Clair county, a distance of about four miles, with power to connect its track with intersecting railroads, with adjacent industries, and with river transfer tracks and landings. Its railway, as it was constructed on July 1, 1885 the date of the leases hereinafter mentioned, did not reach either of the termini named in its charter. It was a north and south line, constructed on Front street, in East St Louis, from the head of the island to the north side of Cahokia creek, connecting the Wiggins Ferry Transfer with the several lines of railroad terminating on the river front of the city of East St. Louis. It did not reach Venice on the north, and it had no connection at the south with the railway of the Illinois & St. Louis Railroad & Coal Company, or its river transfer to St. Louis from the dyke south of Cahokia creek. Soon after the date of the leases this southerly connection was completed, and about 1890 the road was extended north to Venice. In the year 1880 the Venice &amp Carondelet Railroad Company was organized, under the laws of the state of Illinois, to construct a railroad from Venice to the village of East Carondelet, in St. Clair county, and to connect with all railroad lines which terminate at or pass through the city of East St. Louis, and to connect with the bridge of the St. Louis Bridge Company across the Mississippi river, with power to extend its railway to the relay station in East St. Louis. Its railway was constructed on a circuitous route from Venice, on the north, around the northern, eastern, and southern boundaries of East St. Louis, to a junction on the south with the track of the Illinois & St. Louis Railroad & Coal Company, but it did not at that time have any independent connection with the river or river transfers; connecting, however, with the Madison Ferry on the north by means of the Chicago & Alton Railway, and at the south with the ferry at the dyke by means of the railway tracks of the Illinois & St. Louis Railroad & Coal Company.

The situation, then, was this: Prior to the leases the Venice & Carondelet Railway intercepted all railways leading to the river, and was able to transfer traffic from such railways over its tracks to the tracks of the Illinois & St. Louis Railroad & Coal Company, and to its ferry over the Mississippi river at the south. The East St. Louis Connecting Railway intercepted the lines of railway north of Cahokia creek, and was able to transfer the traffic upon such railways from their termini to the Wiggins Ferry Company, and so effect the transfer to the city of St. Louis. The completion of the southern extension of the St. Louis Connecting Railway to the tracks south of Cahokia creek allowed the transfer of cars across the Mississippi river by means of the ferry of the Illinois & St. Louis Railroad & Coal Company, which was at the dyke. The track of the Venice & Carondelet Railway, in connection with the track of the Illinois & St. Louis Railroad & Coal Company from the junction of the two roads to the river, made a belt around East St. Louis from Venice on the north to the dyke on the south, and this belt crossed and connected with every railroad terminating at East St. Louis, with transfer from the dyke to the city of St. Louis by means of the ferry of the Illinois & St. Louis Railroad & Coal Company. The extension of the East St Louis Connecting Railway north to Venice, taken in connection with its southerly extension, and with the Venice & Carondelet Railway, made a completed girdle around the city of East St. Louis. The Venice & Carondelet Railway was, in fact, constructed by the Illinois & St. Louis Railroad & Coal Company and in its interest, and was leased to the latter company, which held and operated it.

On July 1, 1885, the Illinois & St. Louis Railroad & Coal Company leased to the East St. Louis Connecting Railway Company for a term of 10 years the Venice & Carondelet Railway, its spur tracks, and the telegraph lines from Venice to the dyke, with the offices, fixtures, and terminal tracks at the dyke to the river incline, and the joint user of the tracks of The illinois & St. Louis Railroad between its junction with the Venice & Carondelet Railway and the terminal tracks at the dyke. There were also leased three locomotives, and the right to use the lessor's roundhouse at the dyke. The lease provided for rental as follows: 'Sixth. The said party of the second part agrees and covenants to pay to the said party of the first part, as consideration for the leasing of all the railroad property, above mentioned, the sum of eight thousand dollars per annum, payable in monthly installments of six hundred and sixty-six 66/100 dollars at the end of each and every month, at the office of said party of the first part at St. Louis, Missouri. And the said party of the second part shall not be compelled to pay more than said eight thousand dollars per annum for the first three years of the continuance of this lease, but after that time, should the gross earnings of the East St. Louis Connecting Railway Company, from all its business, including the earnings of all lines and privileges hereby leased (but not including the revenue derived by said party of the second part from the river-transfer business this day leased by the party of the first part to the party of the second part), exceed the sum of one hundred and sixty thousand dollars for any one year, then the said party of the second part covenants and agrees that it will pay for such year, in addition to said rental of eight thousand dollars per annum, a further sum equal to eight per cent. of its gross revenue from such sources, less the sum of eight thousand dollars; and, when the gross revenue of said party of the second part shall exceed the sum of one hundred and eighty thousand dollars for any one year, then the said party of the second part covenants to pay to the said party of the first part for such year, in addition to said rental of eight thousand dollars per annum, a sum equal to nine per cent. of its gross revenue, less the sum of eight thousand dollars. And at the end of the fourth year from the date of these presents, and at the termination of each and every year thereafter, an account shall be rendered by said party of the second part to said party of the first part of its gross earnings for said year, and the additional rental hereby provided, if any, over and above the sum of eight thousand dollars, shall be ascertained and paid at the end of each year. ' The lessee, in addition, covenanted to pay all taxes and assessments against the leased property, and an 'equitable proportion' of the taxes upon so much of the main line of the lessor's railroad as was made subject to joint use, and to carry out and perform the agreement made by the lessor with seven railroad companies named, whose lines terminate at the city of East St. Louis, which contracts are not in the record. The lease contained the further clause: 'Fifteenth. It is further stipulated and agreed that the party of the first part, its successors or assigns, will, at no time within the term of this agreement, engage in the business of switching cars from any connecting railway for any purpose whatever, nor shall it permit any one operating their road to engage in such switching for any purpose during the term of this agreement. Any breach of this stipulation to operate as a forfeiture of this lease and agreement, if so determined by the party of the second part.'

On the same day the parties executed a second lease, by which the lessor leased to the East St. Louis Connecting Railway Company for a period of 10 years all of its incline, cradle and equipments used by it in its business in transferring cars across the Mississippi river at St. Louis, with the right to use and operate the same upon the lessor's land, together with certain wharves and wharfage rights in the city of St. Louis, and also a tugboat with two barges, at a rental of $10,000 per annum and the payment of all taxes. This lease contained the following clause:'(6) And the said party of the first part covenants and agrees with the said party of the second part that for the period of ten years from and after the 1st day of July, 1885, it will not engage in or carry on the business of transferring railroad cars in boats or barges across the Mississippi river to or from any point at St. Louis, Missouri. Any breach of this covenant to work a forfeiture of this lease and contract at the option of the party of the second part. ' The lease also provided that, upon the termination of the lease upon the happening of any of the events stated therein, the lessee should have the option to terminate the first lease hereinbefore recited. Under these leases the East St. Louis Connecting Railway Company went into possession, and, as is claimed, the leased property and the property of the East St. Louis Connecting Railway Company were, in fact, managed and operated by the Wiggins Ferry Company, which latter company owned substantially all the stock of the former, and kept all accounts connected with the management of the general business. On September 1, 1890, the East St. Louis Connecting Railway Company sublet the Venice & Carondelet Railway to the Electric City & Illinois...