Stewart v. Erie & Western Transp. Co.

• Decision Date: 01 January 1872
• Parties: JACOB H. STEWART v. ERIE & WESTERN TRANSP. CO. and others.
• Court: Minnesota Supreme Court

17 Minn. 348

JACOB H. STEWART

v. ERIE & WESTERN TRANSP. CO. and others.

Supreme Court of Minnesota.

Appeal by the defendant, the Erie & Western Transportation Company, from a judgment of the district court, Ramsey county.

Brisbin & Palmer, for appellants.

COPYRIGHT MATERIAL OMITTED

Masterton & Simons, for respondent.

BERRY, J.

The Lake Superior & Mississippi Railroad Company is a corporation created under the laws of this state, and owning and operating a railway from St. Paul to Duluth. The appellant (the Erie & Western Transportation Company) is a corporation created by the laws of Pennsylvania and engaged in the business of transporting, by steam-boats and other craft, passengers and freight upon Lakes Erie, Huron, and Superior, and connecting waters, and running boats to and from the harbor of Duluth. The appellant entered into a contract with certain persons assuming to act for and on behalf of and in the name of the Lake Superior & Mississippi Railroad Company, by the terms of which an arrangement is made (to continue in force for the period of 20 years) in reference to through transportation of passengers and freight on the boats of the former and the railway of the latter.

Respondent is a stockholder in the Lake Superior & Mississippi Railroad Company, and the object of this action by him brought is to have the contract mentioned adjudged void and canceled, and to have the defendants (being both of said companies) perpetually enjoined from transacting any business under the same. The appellant alone answered. Respondent moved for judgment upon the pleadings, and from the order granting such motion the present appeal is taken.

The familiar rule, and one of much importonce in this case, is that a motion of this character admits whatever is well pleaded in the answer. The application of this rule will dispose of several objections which are made by respondent to the agencies by which and the manner in which the contract was executed; for while the complaint alleges that such agencies were unauthorized, and such manner insufficient, the answer not only denies these allegations, and affirmatively avers that such agencies were authorized, and such manner sufficient, but it goes further, alleging, in terms, that the contract was lawfully made on behalf of said railroad company, by its executive committee thereto lawfully authorized, and that the same long prior to the commencement of this action, with the knowledge and consent of all the officers and stockholders thereof, was fully and lawfully adopted ratified, and confirmed by said Lake Superior & Mississippi Railroad Company.

These allegations of the answer are certainly sufficiently comprehensive to meet the allegations of the complaint; and if they are somewhat general and indefinite, that does not render them insufficient as against a motion for judgment on the pleadings any more than it would against a demurrer.

The statute provides another way in which a pleading is to be attacked for indefiniteness and uncertainty. Aside from these objections to the contract, (objections which were very little argued, and do not appear to be strenuously insisted upon,) the respondent contends that the contract was void: (1) because it was ultra vires of the railroad company, and therefore illegal and void; and (2) because it creates and tends to create a monopoly, and is therefore illegal and void as being against public policy.

The particular clauses of the contract to which exception is taken by the plaintiff form but a small portion of its entire text; but as the general scope of the contract appears to us to be involved in the present inquiry, we deem it desirable, if not indispensable, (notwithstanding the space required,) to quote from it at sufficient length to present all such portions as tend to show what its real character and purpose are. The contract, then, so far as we deem it material in this view, reads as follows:

"Memorandum of an agreement made this twenty-fourth day of May, in the year of our Lord one thousand eight hundred and seventy, (1870,) by and between the Lake Superior & Mississippi Railroad Company, a corporation of the state of Minnesota, hereinafter designated as the party of the first part, and the Erie & Western Transportation Company, a corporation of the state of Pennsylvania, hereinafter designated as the party of the second part.

"Whereas, it is believed that the public convenience, as well as the interests of the parties hereto, will be promoted by the establishment of an efficient line of steam-vessels, to ply between the Lake Superior terminus, at Duluth, of the railroad of the party of the first part, and Detroit and other Lake Erie ports, (Detroit being considered a Lake Erie port for all the purposes of the following agreement,) the parties hereto have, for the purpose of effecting that object, agreed as follows:

"First. That the party of the second part shall provide and have ready for use, whenever and as soon as the railroad of the said party of the first part is open for freight traffic between St. Paul and Duluth, in the state of Minnesota, at least six steam-vessels, of an average capacity of not less than 600 tons each, and shall thereafter, from time to time, provide such additional steam-vessels as may be required for the transportation of freight and passengers between the railroad of the party of the first part and Detroit and the said other Lake Erie ports, and shall keep the said vessels, or so many of them as can be adequately supplied with either freight or passengers, or both, on either their eastward or westward trips, running regularly in connection with the railroad of the party of the first part between Duluth and Detroit and the other Lake Erie ports.

"Second. That the party of the first part shall furnish prompt and suitable transportation from or to Duluth, on the line of its railroad, for all passengers and freight destined for or delivered from the said steam line of the party of the second part, and shall guaranty to the party of the second part that sufficient docks, grain elevators, and warehouses shall be provided and maintained at Duluth to supply the requirements of the interchangeable business under this contract of the parties hereto; the said docks and elevators to be in water of sufficient depth to be accessible to vessels of the deepest draft which can pass between Lake Superior and Lake Erie.

"Third. That the party of the second part shall furnish prompt and suitable transportation to or from Duluth, by its said steam line, for all passengers and freight destined for or delivered from the said railroad of the party of the first part.

"Fourth. That the sums received for transportation of freight and passengers, partly on the railroad of the party of the first part, and partly on the steam line of the party of the second part, shall be divided between the parties hereto, so that the party of the first part shall receive 30 per centum, and the party of the second part 70 per centum thereof, irrespective of the distance over which the said freight or passengers shall have been transported. It being understood and agreed that the through rates on freight and passengers received by the party of the first part for transportation eastward, via the railroad of the party of the first part and via the steam line of the party of the second part, shall be fixed by the party of the first part, and that the through rates on freight and passengers received by the party of the second part for transportation westward via the steam line of the party of the second part and the railroad of the party of the first part, shall be fixed by the party of the second part, and that these through rates shall, so far as the competition of rival lines will permit, be fairly remunerative to both parties. It being understood and agreed, however, that unless by mutual consent of the parties hereto, the rates on such westward-bound freight and passengers shall be rates high enough to yield at least two dollars and twenty-five cents per ton of 2,000 pounds to the party of the first part and four dollars per passenger for full-price first-class passengers, and two-thirds of four dollars per passenger for full-price second-class passengers, and the rates of such eastward-bound freight and passengers shall be rates high enough to yield at least five dollars and twenty-five cents per ton of 2,000 pounds, and nine and one-third dollars per passenger for full-price first-class passengers, and two-thirds of nine and one-third dollars per passenger for full-price second-class passengers to the party of the second part; and that in division, as aforesaid, between the parties hereto, the rates on eastward-bound freight or passengers shall, for the purpose of ascertaining the share thereof to which the said party of the second part may be entitled, be assumed to be rates which will yield to the party of the second part at least five dollars and a quarter per ton of 2,000 pounds, or nine and one-third dollars per passenger for full-price first-class passengers, and two-thirds of nine and one-third dollars per passenger for full-price second-class passengers, as aforesaid; and the rates on westward-bound freight or passengers shall, for the purpose of ascertaining the share thereof to which the said party of the first part may be entitled, be assumed to be rates which will yield to the party of the first part at least two dollars and twenty-five cents per ton of 2,000 pounds, or four dollars per passenger for full-price first-class passengers, and two-thirds of four dollars per passenger for full-price second-class passengers, as aforesaid; and the 30 per cent. of the party of the first part in the one case, and the 70 per cent. of the party of the second part in the other, shall be correspondingly reduced, if such reduction be necessary to secure to the other party the minimum rate per ton or per passenger...