Leroy & C.V. Air-Line R. Co. v. Sidell

• Decision Date: 11 February 1895
• Citation: 66 F. 27
• Parties: LEROY & C.V. AIR-LINE R. CO. et al. v. SIDELL.
• Court: U.S. Court of Appeals — Second Circuit

66 F. 27

LEROY & C.V. AIR-LINE R. CO. et al. v. SIDELL.

United States Court of Appeals, Second Circuit.

February 11, 1895

Winslow S. Pierce (Rush Taggart and D. D. Duncan, of counsel), for plaintiffs in error.

Chas D. Ingersoll (Albert Stickney, of counsel), for defendant in error.

Before WALLACE and LACOMBE, Circuit Judges.

WALLACE Circuit Judge.

This is a writ of error by both defendants in the court below to review a several judgment for the plaintiff against each entered upon the verdict of a jury. By the verdict the jury found against the defendant the Leroy & Caney Valley Air-Line Railroad Company in the sum of $23,414, exclusive of interest, and against the defendant the Missouri Pacific Railway Company in the sum of $41,233, exclusive of interest and thereupon judgment in favor of the plaintiff was entered against each defendant for the amount of the verdict against each. The action was founded on a written contract made by one Loss, and assigned by him to Sidell & Simmons, with the two companies. Under this contract, Sidell & Simmons became contractors to build a railway for the 'Leroy Company') from a point in Wilson county, Kan., to or near Elgin, Chautauqua county, near the south line of the state. By the terms of the contract, the railroad was to be a single-track road, with grades to be not over 56 feet per mile, and curves not less than 6 degree curvature; and all work was to be subject to the approval of the engineer of the Missouri Pacific Railway Company. The Leroy Company, on its part, agreed to execute bonds to the amount of $10,000 per mile, to be secured by a first mortgage on its property, and pay over the same and all its capital stock, together with all township local-aid bonds received by it, to the contractors, as a consideration for the construction of the railroad, the payment of first mortgage bonds to be made in full for each five miles of road, as the same should be completed, and payments of the township aid bonds to be made as soon as the conditions upon which they were voted should be complied with. The Missouri Pacific Railway Company agreed on its part to execute a guaranty upon the back of all the first mortgage bonds, as each lot thereof should be issued at the completion of each five miles of road, for the payment of the principal and interest of said bonds. The contract also required the contractors to deliver to the Missouri Pacific Railway Company all the stock of the Leroy Company received by them under the contract, except so much, not exceeding in amount $250,000, as it might be necessary for them to deliver to townships for local aid granted by them. It reserved to the Missouri Pacific Railway Company the right to complete the railroad in case of failure of the contractors to do so seasonably, and in that event to receive in payment all first mortgage bonds, capital stock, and local-aid bonds which would otherwise be due to the contractors.

The complaint is framed upon the legal theory that both defendants were liable for extra work done by Sidell & Simmons in laying side tracks upon a portion of the railway which had been built by the contractors, and accepted the defendants; and also for damages for a breach of the contract, whereby Sidell & Simmons were prevented from completing the unfinished part of the railroad. The complaint also alleged that the Leroy Company had refused to deliver to the contractors certain township aid bonds, those of Washington township, in the sum of $18,000, which had been earned under the terms of the contract. Upon the trial the court ruled that the Missouri Pacific Railway Company was not liable for the claim in respect to the Washington township bonds, nor for the extra work done in the construction of side tracks, and instructed the jury that any recovery upon these items was to be included in a separate verdict against the Leroy Company. The verdict against that company seems to have been based exclusively upon these claims. In respect to the cause of action for breach of contract whereby Sidell & Simmons were prevented from completing a part of the railroad, evidence was given upon the trial that in October, 1886, while the first 52 miles of the railroad were in process of construction, the remaining portion of the road having been located and graded in places, Mr. Gould, the president of the Missouri Pacific Railway Company, notified them that the road must stop at Peru Junction, and that the Missouri Pacific Railway Company would guaranty no bonds deliverable for construction beyond that place; that thereupon the contractors had a conference with the directors of the Leroy Company, and the result was a notification from them to the contractors that they would have to abide by the orders of Mr. Gould in reference to the completion of the road; and that thereupon, inasmuch as the contractors were to be deprived of the benefit of the guaranty of the bonds by the Missouri Pacific Railway Company, they abandoned the building of the road beyond Peru Junction. Evidence was also given to show what it would have cost the contractors to build the road to the original terminus, and of the market value of the township aid bonds which they would have received had it been completed pursuant to contract. The verdict against the Missouri Pacific Railway Company was based exclusively upon this cause of action.

We are not called upon by any exceptions taken at the trial to consider the question whether there was any liability on the part of the Missouri Pacific Railway Company to the plaintiff, under the contract, for the profits which would have inured to the contractors if the contract had been fully performed; nor the further question whether it was proper to...