Watson Bros. Transp. Co. v. Jaffa, 12816.

Decision Date15 June 1944
Docket NumberNo. 12816.,12816.
Citation143 F.2d 340
PartiesWATSON BROS. TRANSP. CO., Inc., v. JAFFA et al.
CourtU.S. Court of Appeals — Eighth Circuit

Harold M. Kelley, of Omaha, Neb. (Robert J. Webb and Sam Beber, both of Omaha, Neb., on the brief), for appellant.

Stanley B. Houck, of Minneapolis, Minn. (Shull & Marshall, of Sioux City, Ia., on the brief), for appellees.

Before STONE, WOODROUGH, and THOMAS, Circuit Judges.

WOODROUGH, Circuit Judge.

This appeal is from an order of the District Court dismissing a petition in which plaintiff prayed, i. a., that defendant be required to execute certain documents in specific performance of an agreement involving the lease of, and option to purchase, operating rights over certain interstate trucking routes. The order of dismissal was upon the pleadings from which the court found that the plaintiff in the action was "not entitled to the relief prayed in its complaint," and the plaintiff has appealed.

It appears from the pleadings that the defendant, Harry Jaffa, of Minneapolis, Minnesota, entered into the following "Agreement" in writing with the plaintiff, Watson Bros. Transportation Co., Inc., a Nebraska transportation corporation, on July 30, 1942:

"Whereas, the Lessor is the owner of a certain franchise acquired from the Mid-American Truck Lines, Inc., and more particularly described as Certificate No. MC 52822, Sub 5, issued December 12, 1941, covering operating rights between Minneapolis, Minnesota, and Kansas City, Missouri, by way of Sioux City, Iowa, and Omaha, Nebraska.

"Now, Therefore, It Is Agreed By And Between The Parties Hereto:

"1. That the Lessor shall and hereby does lease to the Lessee all rights and privileges under said franchise insofar as the same pertains to operations between Sioux City, Iowa, and Kansas City, Missouri, subject to the terms hereinafter set forth, and it is further agreed that the Lessor by this agreement shall and hereby does give to the Lessee certain options to purchase rights and privileges under said franchise as hereinafter described.

"2. In consideration of the agreement of the Lessor, the Lessee hereby agrees to pay to the Lessor the sum of $50.00 per month as rental for the use of the rights and privileges of the franchise above mentioned insofar as they pertain to that portion of said franchise covering the route from Sioux City, Iowa, to Kansas City, Missouri, such payments to be due the 1st day of each month from and after the time this agreement takes effect.

"3. In further consideration of the agreements of the Lessor, the Lessee agrees to pay to the Lessor a sum equal to one-half of any moneys paid by the Lessor to the Trustee in Bankruptcy of the Mid-American Truck Lines, Inc., in the purchase of the assets of the Mid-American Truck Lines, Inc., by the Lessor, Provided, However, in the event the Lessor is required to pay to the Trustee more than $1500.00 for such assets, the Lessee shall be liable to the Lessor under this agreement in the sum of $750.00 and no more. The Lessor agrees to pay to the Lessee one-half of any sum realized from the sale of such assets.

"4. It is further agreed that the Lessee shall have an option to buy from the Lessor that portion of the franchise covering the route from Sioux City, Iowa to Kansas City, Missouri, at any time during the life of this agreement for the sum of $7,000.00 less any sum which may have been paid to the Lessor either as rental or under the provisions of this agreement concerning the purchase of the assets from the Trustee in Bankruptcy of the Mid-American Truck Lines, Inc. In the event of the exercise of this option to purchase by the Lessee, the purchase price shall be computed without interest either on the purchase price itself or on the payments theretofore made under this agreement.

"5. It is further agreed that in the event the Lessee exercises its option to buy that portion of the franchise rights above described, it shall have the further option of purchasing all rights and privileges under said franchise covering the route from Minneapolis, Minnesota, to Sioux City, Iowa, for the sum of $5,000.00 either at the time of the purchase of that portion of the franchise covering the route from Sioux City, Iowa, to Kansas City, Missouri, or at any time subsequent to such purchase.

"6. This agreement is subject to approval by the Interstate Commerce Commission and shall become effective at the time such approval is obtained. In the event such approval be not obtained, the agreement shall be null and void. It is agreed that the Lessee shall bear the costs and expenses of such proceedings as may be necessary to obtain the approval of the Interstate Commerce Commission.

"7. It is further agreed that the lease and options herein granted shall run for a term of two and one half years from the date of approval by the Interstate Commerce Commission or for the duration of the war and six months thereafter and the Lessee is hereby granted the privilege of determining which of the said terms shall apply hereto. The duration of the war herein referred to shall be fixed as the time of the signing of a treaty of peace between the United States of America on one part and Germany, Italy and Japan on the other part.

"In case option is exercised payment will be made in full at the time and by cash."

The plaintiff alleged:

"The parties to this action, being the parties to said agreement, knew that the Interstate Commerce Commission might request that the application submitted to the Commission should be made in such form and contain such provisions as the members of the Commission desired, and plaintiff and defendant agreed when said agreement was made that anything necessary to obtain the approval of the application by the Commission would be done, and this plaintiff relied upon this promise and representation of the defendant, made at the time said agreement was entered into."

On August 25, 1942, plaintiff and defendant entered into a temporary 180-day lease of the routes covered by the "agreement" which was approved by the Commission, and plaintiff instituted operations thereunder. The parties also joined in making application to the Commission for approval of the "agreement" of July 30, 1942, and after a hearing had been had the Commission made its report, dated March 13, 1943, in Mo. MC-F-1962, as follows:

"Watson Bros. Transportation Co., Inc., of Omaha, Nebr., and Harry Jaffa, doing business as Jaffa Transportation and Jaffa Transit, of Minneapolis, Minn., by joint application filed September 2, 1942, seek authority under section 5, Interstate Commerce Act, for lease by the former of certain operating rights of the latter, at a rental of $50 per month. The application is unopposed.

"Pursuant to temporary authority granted under section 210a(b), lessee leased the considered rights for a period expiring March 28, 1943, at a rental of $50 per month.

"Lessee, a Nebraska corporation, operates in interstate or foreign commerce as a motor-vehicle common carrier of general commodities over regular routes generally converging at Omaha, and reaching Naper, Nebr., and Sioux City, Iowa, on the north, Chicago, Ill., on the east, Topeka, Kansas, and Kansas City, Mo., on the south, and Denver, Colo., on the west, serving most intermediate points; and of certain specified commodities, over irregular routes, within the same general territory, Lessee uses in excess of 20 motor vehicles in its operation.

"Lessor's operations over irregular routes as a motor-vehicle common carrier of property from and to Chicago, Ill., and certain points in Iowa, Minnesota, North Dakota, and Wisconsin are described in Reynolds and Nold — Purchase — Jaffa, 38 M.C.C. 439. Subsequent to submission of that case, lessor acquired1 rights to transport general commodities over regular routes extending from Minneapolis to Kansas City, Mo., the most westerly route being via Sioux City, Iowa, Omaha, Nebr., and Kansas City, Kans., and the most easterly being via Storm Lake and Tenville Junction, Iowa, and St. Joseph, Mo. These routes are connected by a number of other shorter routes. Except over routes between Storm Lake and Tenville Junction, and Storm Lake and Missouri Valley, Iowa, service is authorized to all intermediate points.

"It is proposed that lessee lease from lessor at a rental of $50 per month all of the latter's rights to operate over regular routes lying between Sioux City and Storm Lake on the north, and Kansas City, Mo.Kans., on the south.2 In addition to the monthly rental, lessee would pay lessor a sum equal to one-half of any monies paid by the latter to the trustee in bankruptcy of Mid-American Truck Lines, Inc., in connection with the purchase of its assets, but not more than $750; and lessor would repay to lessee one-half of any sum realized from the sale of such assets. Lessee is given an option during the term of the lease to purchase the considered rights for $7,000, less amounts paid as mentioned above.

"The proposed lease agreement provides that it shall become effective upon our approval of the transaction and remain in effect for two and one-half years from such date, or for the duration of the war and six months thereafter at the option of lessee; and that, for the purpose of such provision, the duration of the war shall be fixed as of the date of the signing of a treaty of peace between the United States, on the one hand, and Germany, Italy, and Japan, on the other. In view of the indefinite nature of the latter alternative, we shall approve lease of the considered operating rights for a term not exceeding two and one-half years.

"The lease agreement submitted with the application, dated July 30, 1942, is ambiguous with respect to the operating rights intended to be covered, and it was necessary to resort to collateral statements to determine the scope of the agreement. Therefore, our findings will be conditioned upon submission of a new lease agreement which shall...

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