Kansas City Terminal Ry. Co. v. Atchison, T. & S. F. Ry. Co., KCD

• Decision Date: 04 March 1974
• Docket Number: No. KCD,KCD
• Citation: 512 S.W.2d 415
• Parties: KANSAS CITY TERMINAL RAILWAY COMPANY, Plaintiff-Respondent, v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Defendant-Appellant, Chicago, Rock Island and Pacific Railroad Company, et al., Defendants-Respondents, Burlington Northern Inc. et al., Defendants. 26230.
• Court: Missouri Court of Appeals

Page 415

512 S.W.2d 415

KANSAS CITY TERMINAL RAILWAY COMPANY, Plaintiff-Respondent, v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Defendant-Appellant Chicago, Rock Island and Pacific Railroad Company, et al Defendants-Respondents Burlington Northern Inc. et al., Defendants.

No. KCD 26230.

Missouri Court of Appeals, Kansas City District.

March 4, 1974.

Motion for Rehearing and/or Transfer Denied May 6, 1974.

R. K. Knowlton, Chicago, Ill., Forrest P. Carson, Carson, Inglish, Monaco & Coil, Jefferson City, for appellant.

Stinson, Mag, Thomson, McEvers & Fizzell, Lawrence R. Brown, Robert L. Driscoll, Kansas City, for respondent Kansas City Terminal Railway Co.

Johnson, Lucas, Bush & Snapp, Hilary A. Bush, Kent Snapp, James L. Burgess, James M. Beck, Kansas City, for respondent Missouri Pacific Railroad Co.

James & McCanse, Thad C. McCanse, William Icenogle, Kansas City, for respondent Chicago, Rock Island and Pacific Railroad Co.

Deacy & Deacy, Edward W. Mullen, Kansas City, for respondent St. Louis-San Francisco Railway Co.

Before PRITCHARD, P. J., and SWOFFORD and SOMERVILLE, JJ.

SOMERVILLE, Judge.

This litigation took roots in the heyday of railroad passenger trains and leafed in the advent of private passenger automobiles, commercial buses and commercial airliners.

Kansas City Terminal Railway Company (hereinafter referred to as Terminal), plaintiff-respondent, and the twelve railroad defendants, one of whom is the Atchison, Topeka and Santa Fe Railway Company (hereinafter referred to as Santa Fe) and the sole appellant, are all parties to a written agreement dated June 12, 1909, and captioned 'OPERATING AGREEMENT' (hereinafter referred to as agreement).

The agreement obviously sprang from a mutual desire of the parties to eliminate certain duplicitous passenger and freight train facilities and availability of services for the twelve railroad defendants in Kansas City, Missouri. Terminal, which is owned solely and equally by the twelve railroad defendant, was to and did acquire and operate, and continues to do so, certain common facilities for the use and enjoyment of the twelve railroad defendants, and provided, and continues to provide, certain special services rendered on a direct use basis to the twelve railroad defendants, as envisioned by the agreement.

The agreement, among other things, and particularly germane to the issues on appeal, contractually provides for two methods of determining the allocable share owed by each of the twelve defendants to Terminal for their right and privilege to use the common facilities provided by Terminal.

The Union Passenger Station in Kansas City, Missouri, was and is owned by Terminal and originally constituted, and continues to constitute, one of many facilities falling within the purview of the agreement. The agreement provides that all of the facilities owned and operated by Terminal are to be divided into sections and the section embracing the Union Passenger Station (referred to in the judgment entered by the trial court as Zone 6) takes on particular significance by the terms of the agreement, as well as from a standpoint of practical consideration, as will hereinafter be demonstrated.

As the result of progressive attrition of railroad passenger service and mail carried by railroad passenger trains, differences arose between Terminal and Santa Fe as to the basis employed by Terminal in determining the allocable shares of the twelve railroad defendants for expenses incurred by Terminal with respect to mail handled at Union Passenger Station, telegraph office (located in Union Passenger Station) expense, Union Passenger Station depreciation and cost of exterior repairs, the retirement of certain non-depreciable property in the section embracing Union Passenger Station, and the retirement of certain non-depreciable property in sections other than the section embracing Union Passenger Station. These differences, during the fall of 1969, erupted into total disagreement between Terminal and Santa Fe by Santa Fe's refusal to pay the full amount of certain bills rendered to it by Terminal and by its continuing refusal to pay the full amount of certain subsequent bills rendered to it by Terminal. Terminal, on April 7, 1970, filed suit against the twelve railroad defendants for a declaratory judgment declaring the rights and obligations of the parties under the agreement insofar as they related to the differences mentioned above, and, in addition, for a money judgment against Santa Fe. A jury was waived and the suit proceeded to trial before the court. The trial court made extensive findings of fact and conclusions of law and entered the following judgment, from which Santa Fe appealed:

'WHEREFORE IT IS ORDERED, ADJUDGED AND DECREED that mail handling expenses, depreciation of Union Station, telegraph office expenses, repairs to the exterior of Union Station and retirement of non-depreciable road property are for the common benefit of all proprietor railways within the meaning of the Operating Agreement and have been properly allocated by plaintiff in Zone 6 on the car count basis and in other zones on the car mileage basis.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that plaintiff on Count II ¹ have judgment against defendant Atchison, Topeka & Santa Fe Railway Company for $407,963.92 together with interest thereon as computed through November 1, 1971, in the amount of $36,107.12 and thereafter at the rate of 7% per annum ($78.655 per day) and for its costs herein.'

Certain provisions of the agreement deemed particularly applicable and pertinent to resolution of the differences that arose between Terminal and Santa Fe, which are viably involved in this litigation and to which the judgment entered by the trial court obviously addressed itself, are hereinafter mentioned for a better understanding of the legal positions taken by the parties on appeal.

Section 11 of Article III of the agreement provides that it shall in no way be altered, modified or amended absent the 'consent in writing' of Terminal and each of the twelve railroad defendants. Suffice it to say, no alteration, modification or amendment of the agreement occurred ² and, as to those provisions applicable to and determinative of the issues on appeal, they must be viewed in their primal terms.

It is more than casual or passing importance that the only term defined in the agreement pertinent to any issue herein is 'Terminal Facilities'. In Section 1 of Article I of the agreement, the following definition is found:

'The said Union Passenger Station and the said tracks and other facilities of the Terminal Company, and all additions, betterments, extensions and improvements thereto, and all the facilities appurtenant thereto that are now owned or may be hereafter acquired by the Terminal Company are hereinafter referred to as the 'Terminal Facilities'.'

Terminal, in Section 2 of Article I of the agreement, grants to each of the twelve named railroad defendants 'the right and privilege of running and operating its passenger trains, into said Union Passenger Station and of using and enjoying, for the purpose of its passenger, express and mail business, the said Union Passenger Station and its appurtenances . . . and also the right of running and operating its passenger trains, for the purposes of the passenger traffic of said Railway Company over and upon the railroad and railroad tracks of the Terminal Company . . . and of using and enjoying said railroad and tracks for the purposes of the passenger traffic of such Railway Company . . .'

Terminal, in Section 4 of Article I of the agreement, grants to each of the twelve railroad defendants 'so far only as said right may be exercised without materially interfering with the passenger traffic in this contract provided for, the right and privilege, . . . of running its freight trains, . . . upon and over said Terminal Facilities, or any part thereof.'

Section 10 of Article III of the agreement requires each of the twelve railroad defendants to run into Union Passenger Station all of its 'passenger, mail and express trains' and imposes upon Terminal the obligation that the 'passenger station facilities . . . shall at all times be adequate for the accommodation of the passenger, mail and express business . . .' of each of the twelve railroad defendants.

Section 6 of Article II of the agreement provides the basis for determining, on a monthly basis, the amount each of the twelve railroad defendants contractually agrees to pay for the right and privilege of using the Terminal Facilities. The total amount contractually agreed to be paid by the twelve railroad defendants for the right and privilege of using the Terminal Facilities, and the allocable share thereof owed by each of the twelve individual railroad defendants, respectively, are related to the total expenses incurred by Terminal during a particular month '. . . in the operation, maintenance, renewal and repair of the Terminal Facilities (after applying to such renewal and repair any sums which may have been received on account of fire insurance), including all salaries, cost of labor, supplies, time tables, cost of fire, accident, fidelity and employer's liability insurance, insurance of employes engaged in the operation or maintenance of the Terminal Facilities; and including also all other expenses whatsoever during such month not otherwise herein expressly provided for.'

Section 6 of Article II of the agreement further provides for division of Terminal Facilities, by Terminal's Board of Directors, into sections for the purpose of determining the allocable share of the total expenses, as heretofore delineated, owed by each separate railroad defendant for the right and privilege of using the Terminal Facilities. In this connection, two methods are spelled out. The first method addresses itself to that portion of the total expenses incurred by Terminal in connection with the...