Illinois Cent. R. Co. v. Indianapolis Union Ry. Co.

• Decision Date: 03 June 1925
• Docket Number: No. 3394.,3394.
• Citation: 6 F.2d 830
• Parties: ILLINOIS CENT. R. CO. v. INDIANAPOLIS UNION RY. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

6 F.2d 830 (1925)

ILLINOIS CENT. R. CO. v. INDIANAPOLIS UNION RY. CO.

No. 3394.

Circuit Court of Appeals, Seventh Circuit.

March 4, 1925.

Rehearing Denied June 3, 1925.

COPYRIGHT MATERIAL OMITTED

H. M. Dowling, of Indianapolis, Ind., for appellant.

Joseph J. Daniels, of Indianapolis, Ind., for appellee.

Before ALSCHULER, EVANS, and PAGE, Circuit Judges.

Classification of Expenses.

ALSCHULER, Circuit Judge (after stating the facts as above).

The main controversy revolves about the method of apportioning among the several tenant companies (meaning all the companies using these facilities) the expense of the service. As to the freight service of the Belt Line, it was appellee's long practice to classify mainly into such traffic as employed appellee's track facilities, making no use of appellee's locomotives and trainmen, and such as was moved by appellee's locomotives and employees, making the proportion of expense to be borne by the latter traffic larger than the former. Appellant insists that this is not a compliance with the provision of section 8 of the contract of 1883 that "such expense shall be paid by the several companies using each system, in proportion to such use, on the basis of wheelage." As to this, the master found that the apportionment was in fact made upon the basis of wheelage. In a sense this finding is justified by the evidence, since the apportionment within the different classifications is made upon the basis of the car and engine mileage of each tenant road. Appellant, which did not send over the Belt Line freight trains propelled by their own power, was at some disadvantage in the classifications which have been set up, as against a division of expense made wholly upon the car mileage of each tenant road, regardless of whether appellee's motive facilities were employed for moving some of it.

That cars, moved over appellee's road by the carrier's own power, should bear the same proportion of expense as an equal number of cars moved by appellee's power does not appeal to one's sense of fairness. If appellee, instead of being a carrier for the particular roads that use it, was operating a railroad in the ordinary sense, it would doubtless charge less for trains moving over its tracks by their own power than for similar trains which it powered and manned. While section 8 does not fix any classification, it is fair to assume that some classification as would with approximate fairness distribute the expense of this service, with some reference to its actual cost, was contemplated, and that the term "wheelage" meant the wheelage basis as to all traffic falling within such classifications, as would quite obviously be necessary for equitable distribution of the expense. That such classification was well understood and assented to by all the users before this entrant of 1906 began its use is abundantly manifest from the fact that, ever since the contract of 1883 became operative, the distribution of expense was made by this same method of classification. And for nearly a quarter century the mileage reports of the companies were weekly made, and monthly expense bills rendered and paid. And for yet another decade after the contract of 1906 this was without objection the method followed, until in 1916, when appellant was the first to complain.

For appellant it is explained that these accounts are exceedingly complicated, whereas the accounting without classification would be comparatively simple. Surely appellant is not less efficiently equipped than appellee for dealing with all manner of railroad accounts, simple or complicated, and it has been at no disadvantage in this respect. The influence of its long practice of settling on this basis is not to be minimized by the complicated nature of the classified expense accounts. Without entering into discussion of the very numerous authorities on the proposition, we think this case fairly falls within those which establish that long and uniform operation under a contract by its parties, under no disability or disadvantage, gives to the contract such a practical construction as may not be departed from at the behest of any one of such parties.

What has been said upon this subject is alike applicable to various other propositions urged on behalf of appellant, depending upon the contention that the classification is not warranted by the contract. We do not find any of the classifications now objected to, such as might not have been fairly contemplated by the parties. The correspondence referred to in discussion of the next proposition has likewise direct bearing on this.

Train Basis for Division of Station Expense.

Appellant complains that the apportionment of expense of maintaining the Union tracks and depot among the tenant roads has been on the basis of the number of passenger trains entering or leaving the station instead of wheelage as provided in section 8. Appellant contends that its passenger trains entering and leaving this station are usually much shorter than those of the other roads, and that the arbitrary train basis requires it to pay considerably larger proportion than on the basis of wheelage, or car and engine mileage. To those not deeply versed in the intricacies of railroading there would seem to be equitable merit in this complaint, though possibly neutralized in part when it is considered that the short train monopolizes a station track the same as the long, since none other can occupy it when it is there; and the short train requires very much the same depot service in the matter of light, heat, gatemen, train callers, waiting rooms, baggagemen, ticket sellers, and the like, though in some respects perhaps not in the same proportion.

If this were a matter unmixed with conditions other than the contract itself, it might well be concluded that expense distribution on the train basis could not prevail since clearly not complying with the contractual specification of wheelage. There appears as to this the same long-continued practice as has just been considered, but with the rule of practical construction less applicable where the practice has been more definitely in conflict with the contract. Appellant is the thirteenth and last admitted of these cotenant roads. The proprietary roads, five in number, signed the agreement of 1883. Shortly thereafter seven others entered. The twelve tenant roads had by a long and uniform practice fixed a status as between themselves which any of the tenants had power to impose upon any newcomer as well, who could be admitted to fellowship only by unanimous consent of the board of managers. With the evident purpose of preserving such status, whether or not in strict compliance with the written contract of 1883, appellee, in sending to appellant's predecessor the contract of April 30, 1906, wrote it that, "in entering into the proposed agreement, the Indianapolis Southern Railway Company agrees to do its share of all that is being done by the other companies, regardless of whether specific mention has been made of the same either in the agreement or in this letter," and to which it was replied that the matters mentioned in the letters are understood, and "this letter is an acceptance of them." This indicates a definite purpose and understanding that whatever was theretofore customarily being done by the then tenant companies, whether of benefit or burden, would be shared with them by the new tenant. While such an arrangement may be open to the objection of informality, it surely is not wanting in scope. The new tenant was apparently willing to take the chance of being bound by customs and practices between the tenants which the written words did not reveal. If it was interested to know what the cost of the service would be, it had only to examine some of the regular monthly statements from which would definitely appear "all that is being done by the other companies" — including the "train" instead of "wheelage" basis, as well as all of the "classifications" which are here in issue. That this was then known and understood and assented to by this tenant finds strong corroboration in the fact that the succeeding reports upon which its monthly settlements were made continued uninterruptedly on the same basis, unquestioned for ten years more. This correspondence is likewise applicable to all other of those usages and practices long existing between appellee and the tenant roads before this tenant was admitted, and not specifically covered in the contracts.

Lake Erie & Western Railway Company's Proportion of Fixed Rental.

Appellant objects that the Lake Erie & Western Railway Company, one of the tenant roads, instead of paying the full proportion of the fixed rental which all the other companies pay, is paying only 78.3 per cent. of its equal share. It seems that the predecessor of the Lake Erie & Western Company, in 1859, conveyed to the other proprietary interests or their predecessors, a certain interest it had in the Union tracks, and it was provided that its annual rental of the Union property then in use should be 78.3 per cent. of what was charged to the other users, and that ever since that time this has been the proportion which it has paid, both long before and ever since the agreement of 1883. For some reason this was not carried into that agreement. There appears a sufficient reason wherefor an understanding for a reduced proportion on the part of this interest would have been proper, and this was followed by about 23 years' acknowledgment of it by all those concerned, up to the making of the contract of 1883, and a similar course after that contract was entered into, for about 23 years more, without objection from any of those theretofore interested. From this it may be reasonably inferred that there was an understanding between these parties whereunder this reduced percentage of fixed rental in favor of this company existed, and that this should be regarded as one of those ...