Southern Ry. Co. v. Atlantic Coast Line R. Co.

• Decision Date: 08 December 1961
• Citation: 209 Tenn. 177,352 S.W.2d 217,13 McCanless 177
• Parties: SOUTHERN RAILWAY COMPANY v. ATLANTIC COAST LINE RAILROAD COMPANY and Louisville and Nashville Railroad Company, D/B/A Clinchfield Railroad Company. 13 McCanless 177, 209 Tenn. 177, 352 S.W.2d 217
• Court: Tennessee Supreme Court

Page 217

352 S.W.2d 217

SOUTHERN RAILWAY COMPANY v. ATLANTIC COAST LINE RAILROAD COMPANY and Louisville and Nashville Railroad Company, D/B/A Clinchfield

Railroad Company.

13 McCanless 177, 209 Tenn. 177, 352 S.W.2d 217

Supreme Court of Tennessee.

Dec. 8, 1961.

Simmonds, Bowman & Herndon, Johnson City, for appellant.

Wilson, Worley & Gamble, Kingsport, A. K. McIntyre, Erwin, for appellee.

BURNETT, Justice.

For convenience we will hereinafter designate the parties, complainant-appellant as 'Southern' and the defendants-appellees as 'Clinchfield'.

This suit was brought by Southern to obtain a construction of a contract entered into between the parties on August 24, 1960, under which Clinchfield granted Southern the right to joint use of Clinchfield's trackage from a point some seven miles west of Kingsport, known as Frisco, to the manufacturing plant of Tennessee Eastman Company at Kingsport, and points on Long Island and the House Creek area, at or near Kingsport. The controversy arose between the parties over Southern's announced intention to operate what it considered these switching operations with a crew of three railroad operators, and Clinchfield's refusal to permit such operations with a crew of less than four men. The bill was filed for a declaratory judgment, seeking to declare the rights of these parties under this contract.

The original bill was sworn to by one of the solicitors for Southern 'on information and belief', while the answer of Clinchfield was sworn to by the General Manager of this railroad 'upon personal knowledge' of the affiant.

To the bill Clinchfield filed a demurrer coupled with the sworn answer as above indicated. The demurrer is based on three grounds, to-wit, (1) there is no equity on the face of the bill; (2) no irreparable damage done to Southern was shown on the face of the bill; and (3) the bill, along with the contract between the parties as exhibited thereto, shows that the parties were engaged in interstate commerce and that paragraph nine of the contract provides for arbitration of any controversy between the parties, and since no arbitration had been had Southern had not exhausted its administrative remedy and therefore had no right to judicial aid for construction of the contract.

In its answer Clinchfield admitted the execution of the contract and alleged that the operations of the trains involved in this joint trackage agreement involved interstate commerce and admitted that as alleged in the contract the agreement between the parties had the approval of the Interstate Commerce Commission. Clinchfield admitted that Southern was insisting on a right to operate its trains with a three-man crew while Clinchfield was insisting on a minimum of a four-man crew. Clinchfield further alleged that the contract specifically provided that it 'shall have the entire control of operation of its * * * facilities' and further provided, 'If, at any time, in the judgment of Clinchfield additional forces are needed * * * on the jointly used facilities * * *, Southern will reimburse Clinchfield 100% of such additional expenses * * *' Clinchfield further answered in this sworn answer on the personal knowledge of the General Manager that the standard crew required for such movements as here involved in the United States was a crew consisting of five members; that it (Clinchfield) used a five-man crew; that Clinchfield knew of no instance in which Southern used only a tree-man crew for such an operation; and that a four-man crew was necessary for the safety of the operations and also for expediting the movement of trains in these yards where Clinchfield used a five-man crew.

It was also alleged by Clinchfield that while citing under a temporary injunction which was granted herein Southern in attempting to operate its train by use of only a three-man crew one of Southern's engines ran over a derail, resulting in the derailment of a Southern engine and causing substantial delay and a revision of the clearances for the operation of the Southern train over the Clinchfield tracks. It was likewise denied by Clinchfield that the administrative remedies provided in the contract for arbitration had been exhausted.

The matter came on to be heard upon motion of Clinchfield which was based on the bill and sworn answer of Clinchfield (sworn to by its General Manager on personal knowledge) and also upon lack of equity upon the face of the bill. The Chancellor held: (1) that the issue of whether or not Southern should be permitted to use a three-man crew or a four-man crew in its operations under said trackage agreement presented a dispute 'involving disputed questions of fact' and for that reason the court in the exercise of its discretion refused to entertain the original bill for declaratory judgment; (2) that Clinchfield's motion to dissolve the injunction should be sustained both upon the facts in the original bill and the sworn answer as well as upon the lack of equity on the face of the bill; and (3) that the contract executed between the parties was a contract involving interstate commerce which contained an arbitration clause and that said contract was subject to the provisions of the Federal Arbitration Act which had not been exhausted by Southern and therefore since its administrative remedies had not been exhausted under the provisions of the contract, which the court held were binding upon the parties, that the court in the exercise of its discretion should likewise refuse to entertain the suit for declaratory judgment. From this judgment Southern has appealed and assigned errors which are primarily...