Lehigh Valley R. Co. v. United Lead Co.

• Decision Date: 14 May 1926
• Docket Number: No. 406.,406.
• Parties: LEHIGH VALLEY R. CO. v. UNITED LEAD CO.
• Court: New Jersey Supreme Court

133 A. 290

LEHIGH VALLEY R. CO.

v. UNITED LEAD CO.

No. 406.

Supreme Court of New Jersey.

May 14, 1926.

(Syllabus by the Court.)

Action by the Lehigh Valley Railroad Company against the United Lead Company, in which defendant presented a counterclaim. Judgment for defendant on plaintiff's claim, and for plaintiff on defendant's counterclaim.

Argued January term, 1926, before PARKER, MINTURN, and BLACK, JJ.

Hobart & Minard, of Newark, for plaintiff.

Wall, Haight, Carey & Hartpence, of Jersey City, for defendant.

BLACK, J. The questions of law presented for decision in this case arise out of a motion on the pleadings, under P. L. 1912, p. 389, rule 26, and rule No. 40 of the Supreme Court, which takes the place of a demurrer to a pleading.

The questions involved stated broadly are: First. Is the contract sued on illegal as being in violation of statutes? Second. If so is the legal part separable from the illegal part, so that the illegality of the one does not affect the validity of the other?

The suit was brought by the plaintiff to recover $1,726.59 money expended by the plaintiff in making repairs to damaged cars caused by a fire on May 16, 1922, while the cars were standing on one of the sidings built pursuant to an agreement between the parties dated February 27, 1904. The agreement is Exhibit A attached to the complaint. It covers 10 pages of the printed paper book and it is somewhat complicated. It provides for the selling by the plaintiff to the defendant a tract of land located in the city of Perth Amboy, N. J., of 33.26 acres. It contains 16 clauses or convenants of which the twelfth and sixth are the ones pertinent to this inquiry. The plaintiff's suit is brought under the twelfth clause, which is as follows:

"The said lead company hereby covenants and agrees to indemnify and save harmless the said Lehigh Company from and against all loss of or damage to cars and the contents thereof by fire, explosion, or other causes whatsoever, while standing on the siding or sidings aforesaid or (if the shifting is done by the employees of the lead company) while being shifted to or from the same: Provided, the cause of such loss or damage does not directly arise by reason of the negligence of the said Lehigh Company or its employees."

The pertinent parts of the sixth clause provide: The Lehigh Company will build track connection from its own tracks to the lead company's property; the Lehigh Company furnishing all necessary track material and labor. Such tracks shall remain the property of the Lehigh Company. The maintenance of such tracks shall be at the expense of the Lehigh Company during the life of the agreement, proper gates will be provided at the entrance of the Lehigh Company's tracks into the grounds, keys will be furnished to the Lehigh Company. Construction to commence of track connections upon 30 days' written notice between its present rails and the lead company's property and to complete the same at the earliest practicable date. Relocation of the tracks already constructed to be at the expense of the lead company. Lehigh Company to furnish the material for any temporary tracks on the lead company's grounds based upon a nominal rental for the material during the time the tracks are in such temporary use.

The agreement further provides: The lead company shall have the right to purchase the sidings, etc. The Lehigh Company shall have exclusive track connection to the lead company's works, and no other railroad company shall be permitted to lay or maintain tracks thereto or within the same. The Lehigh Company will perform switching service for the lead company to and from said premises. Th'e lead company will ship or cause to be shipped over the railroad of the Lehigh Company all its freight, etc. The lead company will give preference to the lighterage lines connected with the Lehigh Valley System, etc.

The record shows a complaint, as stated, alleging there is due the plaintiff $1,726.59, with interest from May 16, 1922, under the twelfth clause of the agreement above recited. The agreement, Exhibit A, is attached. Answer and counterclaim. The counterclaim demands the sum of $31,844.18 expended under the sixth clause of the agreement above recited, containing an itemized schedule attached, A. Then a reply to the answer and an answer to the counterclaim by the plaintiff setting up the fact that, under the agreement of February 27, 1904, such services, or any of them, as set up in the counterclaim, are illegal and void and contrary to public policy, because in violation of certain statutes enacted by the Congress of the United States, to wit: "An Act to Regulate Commerce" approved February 4, 1887 (24 Stat. 379); an act entitled "An Act to Further Regulate Commerce with Foreign Nations and Among the States," approved February 19, 1903, known as the Elkins Act (32 Stat. 847); an act entitled "An act to amend an act entitled 'An Act to Regulate Commerce,' approved February, fourth, eighteen hundred and eighty-seven, and all acts amendatory thereof and to enlarge the powers of the Interstate Commerce Commission," approved June 29, 1906, known as the Hepburn Act (Comp St. § 8563 et seq.); because, such services would be an unjust discrimination, and undue and unreasonable preference or advantage ami a rebate or concession in favor of the defendant, as defined by the Supreme Court of the United States. It is also, in violation of an act of the Legislature of New Jersey entitled "An act concerning public utilities, to create a Board of Public Utility Commissioners and to prescribe its duties and powers" approved April 21, 1911 (P. L. 1911, p. 374).

The contract is also in violation of the proclamation of the President of the United States dated December 26, 1917, taking possession and...