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

• Decision Date: 15 November 1888
• Citation: 18 N.E. 794,126 Ill. 448
• Court: Illinois Supreme Court
• Parties: LAKE SHORE & M. S. RY. CO. v. RICHARDS.

126 Ill. 448

18 N.E. 794

LAKE SHORE & M. S. RY. CO.

v.RICHARDS.

Supreme Court of Illinois.

November 15, 1888.

Appeal from appellate court, First district.

Pliny B. Smith, for appellant.

William A. Gardner, for appellee.

MAGRUDER, J.

This is a bill filed on June 5, 1886, in the superior court of Cook county, by Edward S. Richards and John W. Maynard, then composing the firm of Richards, Maynard & Co., against the Lake Shore & Michigan Southern Railway Company, for an accounting and for the reformation of a contract. The cause was referred to a master in chancery, who took evidence, and stated the account, finding that there was due from the defendant to the complainants the sum of $9,686.68. The trial court refused to reform the contract, but confirmed the master's report as to the amount due, and decreed a recovery of said amount against the appellant company. This decree has been affirmed by the appellate court, and is brought here by appeal from the latter court. After the cause reached the appellate court, Maynard died, and, upon suggestion of his death, leave was granted to Richards to prosecute this appear, as surviving partner. Large quantities of grain, brought to Chicago from the west, and designed, either before or after its arrival in that city, for transportation to the east, is delivered in the cars from the western to the eastern railroads, and by the latter is weighed and transferred from the western to the eastern cars. The work of transferring had formerly been done by placing the loaded and empty cars side by side on parallel tracks, and shovelling the grain from one to the other by hand. The weighing had been done on track scales, by first weighing the loaded car, and then weighing the car after the grain was removed; the difference between the two weights constituting the net weight of the grain. This process was expensive, and, owing to various causes, the weights thus obtained were not strictly accurate. The appellee, Richards, was the inventor and patentee of a new process for weighing and transferring grain, which was claimed to be cheaper than the old method, and which did in fact furnish more accurate weights than could be had under the former system. By this new device, loaded cars of grain were shoved up upon an elevated track in a transfer-house, and corresponding empty cars were placed on a track in the house below the loaded ones. The grain was then shoveled by steam-shovels from the cars into hoppers, where it was weighed, and then allowed to run by force of gravity to the lower cars. Negotiations were entered into between appellee and the appellant company with a view to the adoption by the latter of the former's invention. These negotiations resulted in a written contract, dated January 2, 1884, between the railroad company, as party of the first part, and Richards, as party of the second part, which contract was afterwards assigned to the firm of Richards, Maynard & Co. By the terms of this agreement, the railroad company leased to Richards, for 10 years, at a nominal rent, a piece of ground, upon which he was to erect the necessary transfer-house, and the approaches thereto, and the hopper scales; and the company was to build and maintain on the approaches and through the house the necessary tracks, and to do all switching of loaded and empty cars to and from the transfer-house, at its own expense: provided, that the actual cost thereof should be taken into account in determining the fair amount to be paid to the second party, as provided in covenant third, hereinafter mentioned, of the first party. Richards AGREED TO RECEIVE, WEIGH, AND TRANSFER All grain, seed, etc., which might be delivered to his transfer-house by the company, with promptness and dispatch, etc. Appellee built the transfer-house, with the scales and attachments, etc., at a cost of over $20,000. It was completed by June 24, 1884, and business was done in it under the contract from that date up to June 16, 1886. The controversy between the parties arises out of this contract, and out of the transactions under it. It is very lengthy, and only those provisions will be noticed which are material to the determination of the points in dispute. Covenant ‘third’ of the first party is as follows: ‘ Third. Said first party further covenants and agrees that in case there shall be any saving to it in the 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.' Covenants ‘third’ and ‘fourth’ of the ‘mutual covenants' are as follows: ‘ Third. And it is further mutually covenanted and agreed that all shipment 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 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 for collecting his charges as provided in following mutual covenant. 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 the property to destination; but, upon 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.'

The first objection made by appellant to the decree of the court below is that the defendant is required to pay for the weights given to western railroads. The master, in his report, found that ‘weights were given to western railroads on 12,357 cars, for which said defendant was to pay to said complainants at the rate of 70 cents per car, making the sum of $8,649.90;’ and this finding was confirmed by the decree of the chancellor. The fact that the defendant below did give the weights on 12,357 cars to western railroads is not disputed. Clearly, this was a violation of the contract. In the fourth ‘mutual covenant,’ the defendant agreed that it would ‘not make use of the weights obtained from said second party in the conduct of its business for any other purpose than billing the property to destination.’ The defendant carried the grain in its cars eastward from Chicago. If it had the exact weight of the grain in each car, it could figure therefrom the amount of freight to be stated in the bill of lading, and to be collected at the end of the route. Richards was willing that the company should use the weights in billing from Chicago to the eastern destination, because it needed such weights in order to fix its own compensation for carrying the grain. But he expressly provided that the company should make no other use of such weights. Why? Because,...