Lake Shore & M.S. Ry. Co. v. Richards

• Decision Date: 31 October 1892
• Citation: 32 N.E. 402
• Court: Illinois Supreme Court
• Parties: LAKE SHORE & M. S. RY. CO. v. RICHARDS.

32 N.E. 402

LAKE SHORE & M. S. RY. CO.

v.RICHARDS.¹

Supreme Court of Illinois.

Oct. 31, 1892.

Appeal from appellate court, first district.

Assumpsit by Edward S. Richards, surviving partner of the firm of Richards, Maynard & Co., against the Lake Shore & Michigan Southern Railway Company. Plaintiff obtained judgment, which was affirmed by the appellate court. Defendant appeals. Reversed.Pliny B. Smith, (Jas. I. Best and John N. Jewett, of counsel,) for appellant.

A. M. Pence, (Wm. A. Gardner, of counsel,) for appellee.

The other facts fully appear in the following statement by BAILEY, C. J.:

This was a suit in assumpsit, brought by Edward S. Richards, surviving partner of the firm of Richards, Maynard & Co., against the Lake Shore & Michigan Southern Railway Company, to recover damages for breaches of a contract, the material provisions of which will be stated presently. Prior to the execution of said contract, grain, brought by western railroads to Chicago, and destined, either before or upon its arrival in that city, for transportation by rail to the east, was delivered by the western to the eastern railroads, and was by the latter weighed and transferred from western to eastern cars. At that time the transfer of such grain was accomplished by placing the loaded and empty cars side by side on parallel tracks, and by shoveling the grain from one car to the other by hand. The weighing was done on tracks scales, by first weighing the loaded car, and then weighing it after it was unloaded, the difference between such weights being the weight of the grain. This process was expensive, and the weights thus obtained, as the evidence tends to show, were, owing to a variety of causes, liable to be inaccurate. Richards, the plaintiff, was the inventor and patentee of a new process for weighing and transferring grain in bulk, which was claimed to be cheaper than the old method, and which furnished more accurate weights than could be had by the existing mode of weighting. By this process, the loaded cars of grain were run up onto an elevated track in a transfer house, and empty cars were placed alongside of them on a lower track. The grain was then shoveled by steam shovels from the loaded cars into hoppers, where it was weighed, and then allowed to run by force of gravity into the empty cars below. Negotiations were thereupon entered into between Richards and the defendant company with a view to the adoption by the latter of this new mode of weighing and transferring grain, and these negotiations resulted in a written contract between the company, of the first part, and Richards, of the second part, bearing date January 2, 1884, which contract was afterwards assigned by Richards to the firm of Richards, Maynard & Co., consisting of Richards and John W. Maynard.

Said contract recited by way of preamble that one of its objects was to provide a cheaper method of transferring grain, mill feed, and seed from one car to another than the one employed by said company, and for that purpose to use the device of Richards, secured to him by letters patent, etc.; and that Richards intended to erect and build a grain transfer house on the land thereinafter described, for the purpose of so handling, weighing, and transferring in bulk such grain, mill feed, and seed as might be delivered to him for that purpose by the company. The company then agreed, in consideration of the nominal rental of $10 per year, and of the covenants in the contract to be kept and performed by Richards, to lease to him, for the term of 10 years, certain land upon which to erect such transfer house and the necessary approaches thereto, and also agreed that, as soon as such transfer house and approaches were constructed, it would build and maintain thereon and through such transfer house such track or tracks as might be necessary to transact the business contemplated by said agreement, and do all switching of loaded and empty cars to and from said transfer house at its own expense, and without cost to Richards, provided that the actual cost thereof should be taken into account in determining the fair amount to be paid Richards, as provided in the following covenant: ‘ Third. Said first party further covenants and agrees that, in case there shall be any saving to it in switching, weighing, and transferring of products in this agreement referred to through the methods and devices adopted by said second party, over and above the actual cost of doing the same work under the ways and methods now in use by said first party, then, and in that event, it will pay to second party one half of said saving, the just and actual amount thereof to be ascertained and determined as provided in covenant ‘First,’ of ‘Mutual Covenants,’ said amounts, if found due, to be paid to said second party on or before the middle of each month for the month preceding.' Richards, on his part, agreed at his own cost and expense to construct and maintain, for the full period of 10 years, on said land, a transfer house and approaches, suitable and proper for carrying out the purpose in said contract expressed, and furnish and supply said house with hopper scales and every other device necessary to properly weigh and transfer said grain, etc. He also covenanted as follows: ‘ Second. That he will receive, weigh, and transfer all products contemplated by this agreement which may be delivered to his said transfer house by or under the direction of said first party with promptness and dispatch, and within such time as to prevent any accumulation of cars or freight, whereby shippers might have just ground of complaint; and, if said second party shall fail to transfer as fast as required, the said first party may transfer by such other method as it deems proper, and said second party shall do all said work in transfer house at his own cost and expense, without cost to said first party: provided, that the actual cost of doing said work shall be taken into account in determining the saving, if any, between the Richards method of transferring grain and the methods in use by the first party at the date of this agreement, and also for the purpose of determining the just amount to be paid to said second party, as provided in covenant ‘Third’ of first party: provided, also, that the cost of weighing such products shall not be considered in determining the actual cost of such transfer.'

Said contract then contained various paragraphs denominated ‘Mutual Covenants,’ the first of which provided the mode for ascertaining and determining the cost of transferring grain, etc., by the new method, and the amount of money thereby saved. The only other provisions of the contract material to the present controversy are the third, fourth, and sixth of said ‘Mutual Covenants,’ which are as follows: ‘ Third. And it is mutually covenanted and agreed that all shipments originating at points west of Chicago, and properly billed through to eastern points, and requiring transfer through said house, shall be classed ‘through shipments,’ and be transferred in the same manner as reconsigned property, and upon the same basis of cost to said first party; it being specially understood and agreed that under no circumstances is said first party to be charged for any weights upon any transfers made through this house, but nothing in this agreement contained shall be so construed as to prevent said second party from charging such fees as may be agreed upon between him and the owner of the property delivered for weights and transfer, and for such other service as he may render in connection therewith, and from collecting his charges as provided in following mutual agreement. Fourth. It is further mutually understood and agreed that said second party is to receive his compensation for his time, labor, and investments employed in building, operating, and maintaining said transfer house entirely from the weighing of property passing through it, and from the owners thereof, and not from said first party, except as provided in covenant third of said first party; and said first party shall not make use of the weights obtained from said second party in the conduct of its business for any other purpose than billing property to destination, but, upon the request of said second party, said first party will collect such weighing charges as he may show are due to him, in the same manner as other advanced charges are collected, and pay the amount so collected to said second party on or before the middle of each and every month.' ‘ Sixth. If at any time differences should arise between the said parties hereto as to its spirit, meaning, or execution, such differences shall be settled by a reference of all matters in dispute to three disinterested arbitrators, each of the parties hereto to select one, and the two so chosen to select a third, and the decision of any two of the court so formed shall be binding between the parties hereto, final, and without appeal.’

The declaration, after setting forth said contract in haec verba, alleges that on the 23d day of January, 1884, the plaintiff assigned all his interest in said contract to the firm of Richards, Maynard & Co., and that said assignment was ratified and confirmed by the defendant; that said firm thereupon erected on the land described in the contract, a grain transfer house and hopper scales, and all machinery pertaining thereto, the same being completed June 24, 1884, when said firm entered upon the business of transferring grain, etc., from car to car, and weighing the same, as provided for in the agreement; that said firm could not conveniently transfer mill feed through their transfer house, and that the right to have such transfer of mill feed and the weighing thereof was waived by the defendant; that said firm continued to transfer and weigh all such grain and seed as was presented to them by the defendant at their transfer house to be transferred and weighed until ...