Baltimore & Ohio Railroad v. Potomac Coal Co.

Robinson, J., delivered the opinion of the Court. This suit was brought to recover freight claimed to be due by the appellee, on account, of coal transported over the road of the appellant. . On March 1st, 1864, the following letter was sent to. the appellee: “Newell Clark, Esq. “Dear Sir:- — The President directs me to reply to your communication of yesterday, and to state that provided you will place your own cars upon the Baltimore and Ohio Railroad, to be used in the transportation of coal from Piedmont to Baltimore, we will agree to the following conditions: “ 1st. To allow one-fourth of one per cent, per ton per mile for cars so used. “ 2nd. To make good any damage to the cars caused hy accidents, the fault of the Baltimore and Ohio Railroad Company. This obligation does not include any damages which may he done by the military forces either of the United States or of the Confederates. “ 3rd. To keep the cars in repair, and to charge for this service the actual cost thereof as charged in first class shops. “ 4th. We can make no actual agreement to give your cars prompt transit over our road. We are now increasing our motive power, and hope to he able to move promptly all cars used in coal trade, but in the event of our inability to do so, we will furnish to your .cars a proportion of the whole amount of power used in the general coal business. We cannot agree to give you a number of cars equal to that you furnish. “Yours, respectfully, “ Jno. King, Jr., Auditor.” — 339 — After the receipt of this letter, the appellee provided one hundred coal cars, at an expense of about seventy-five thousand dollars, and these cars have been used ever since by the appellant for the transportation of the appellee’s coal, and have been kept in repair by the appellant at the expense of the appellee. On the 6th March, 1874, the appellee sent the following letter to the appellant. “Office Potomac Coal Co. “No. 60 Devonshire St., “Boston, 6th March, 1874. “Jno. Kins, Jr. “Vice-President of the Balt. & Ohio R. R. Co., Baltimore. “Dear Sir: — The Potomac Coal Company contemplates the purchase of some additional coal land, and may therefore wish to increase their business, I would therefore request for our company the privilege of putting on some additional hoppers on same conditions as agreed to in your letter of March, 1864, to Mr. Newell Clark, acting director of Potomac Coal Company at that time. Copy of that agreement please find enclosed. As we are to have a meeting on Wednesday next, your reply previous to that will much oblige “ Respectfully, yours, “Gilman Currier, Prest., “per C. Chadbourne.” To this letter the appellant sent the following reply : “Baltimore, March 11th, 1874. “Gilman Currier, Esq. “Dear Sir: — Referring to your favor of 6th inst: President King directs me to reply, that we will extend to your company the privilege of placing some additional hopper cars upon our line, upon the same conditions agreed to in his letter of March 1st, 1864, to Mr. Newell Clark. “Tours, truly, “N. Guilford, G. F. A.” — 340 — After - the receipt of this letter, the appellee made further purchases of valuable coal lands, and erected upon them valuable improvements, and excavated and raised from said lands some of the coal transported by the appellant, for which tolls are demanded in this suit. In April, 1816, the appellant notified the appellee, that the allowance for the use of its coal cars, would he reduced to one-eighth of one per cent, per ton per mile. The appellee contends that the letters of March 1st, 1864, and March 11th, 1814, constitute a perpetual contract, by which the railroad company is obliged to use for all time, the cars furnished by the appellee, and to allow therefor one-fourth of one per cent, per ton per mile. On the other hand, it is contended that the privilege granted to the appellee, is a mere license revocable at the will of the appellant. It strikes us at the outset, as it did the counsel for the appellant, that if this is to be considered, a contract binding for all time, it is strange that it should take the form of a letter written by the auditor of one company, in reply to an oral communication made by the managing director of the other. Contracts of so much, importance and of such magnitude are not usually made in this loose and informal manner. Yet it was competent nevertheless, for the parties to make a contract even of this character by letter, and if such appears to have been their intention, it is as binding as if it had been made in a more formal and solemn manner. The true interpretation of all instruments is to make them speak the common intention of the parties at the time they were made. If this intention is expressed in plain and unambiguous terms, there is no room for construction, and the parties must he presumed to have intended what they have expressed. On the other hand, if the language is somewhat obscure and ambiguous, we may look not only to the face of the instrument itself, hut also to the circumstances under — 341 — which it was made, and the motives that led to its adoption. It is not contended that the railroad company has in express terms, agreed to use the cars furnished by the appellee for all time, at a certain stipulated price. There is nothing in the letter of March 1st, 1864, to justify this contention, because although the appellant does agree to allow the appellee to provide cars for the transportation of its own coal, and to allow a certain sum per ton per mile, for the use of the cars, there is not a word to be found in the letter about the duration of the agreement or privilege, or the terms upon which it is to be terminated. But the argument is, the appellee being the owner of large and valuable coal mines, and being permanently engaged in the business of mining coal for market, it is unreasonable to suppose that it would have incurred the expense of providing cars to be used in the transportation of its coal, under privilege or license revocable at the will of the railroad company. On the other hand, it may be said that the letter of March, 1864, was written during the late civil war, and although the appellant might be willing under the then existing circumstances to grant or extend to the appellee the privilege requested, it is equally unreasonable to suppose that the railroad company intended thereby to make a contract binding for all time. That under the then existing charges for freight, the appellant might very well afford to allow the appellee one-fourth of one per cent, per ton per mile, yet if freights should in the future decline, arising from the competition of .other roads, or from other causes, the sum thus allowed might in fact be equal to the entire profits earned by the railroad in the transportation of the appellee’s coal. Much may be said therefore on both sides, in regard to the reasonableness or unreasonableness of the different constructions to be put on the letter of March 1st, 1864. — 342 — There is one thing, however, about which there can be no dispute, the basis of the agreement was the self-interests of the respective parties. The appellee was anxious to get its coal to market, and the appellant was unable to furnish the cars necessary for its transportation. Under these circumstances it might he to the interest of the coal company to provide its own cars, and on the other hand it would be to the interest of the railroad company, to allow a certain proportion of the freight for the use of the cars by which the.coal was shipped to market. Nothing was said by either party in regard to the duration of the the agreement, and in the absence of a stipulation of some kind in this respect, it is but fair to presume that it was t'o continue so long, and no longer than their respective interests should require. If the appellee should find one-quarter of one per cent, not enough, or if it could make better terms with another road, it was at liberty to withdraw the cars placed on the road of the appellant, and if the latter should find the rate too much, more than it could afford to pay, it had the right to notify the appellee and thus revoke the license. But be this as it may, there is nothing in the letter of March 1st, 1864, or the circumstances under which it was written, to satisfy us the appellant ever intended to make a perpetual contract. And this view is strengthened by the letter of March 6th, 1874, written subsequently by the appellee, requesting the privilege of putting on some additional cars, and the answer of the appellant saying we will extend the privilege. Not one word about a contract or rights under a contract, the language is "privilege” and the favor asked is the extension of the privilege. This is not certainly the language of parties in making a contract to bind each other forever, and in regard to a matter of so much importance to both. But apart from these views, there is another objection, and one which in our opinion, is fatal to the contention — 343 — of the appellee. It is essential to the validity of every contract of this character, that there should be a mutuality of obligation. A contract is not binding on one of the parties, unless it is binding on the other. Here, there is no obligation of any kind resting upon the appellee, for the breach of which an action would lie at the instance of the appellant. It was not obliged either to furnish the cars, nor to keep them on the road after they were furnished. It might put them on the road one day, and take them off the next, just as its own interests might require. Cases are to be found it is true, of executed contracts, where one has received the benefit of the consideration for which he bargained, and in which it is no answer to an action to say, the plaintiff was not bound by the terms of the original contract to do the act, and that there was therefore no mutuality of obligation. As for instance, in cases put in the books: “ Suppose I say if you will furnish goods to a third person I will guarantee" the payment, there you are not bound to furnish the goods, yet if you do furnish them in pursuance of that contract, you may sue me upon the guaranty.” Fishmonger Co. vs. Robertson, 5 M. & G., 131: Robinson vs. Jones, 17 Law Jour. Ex., 36; Mills vs. Blackall, 11 Q. B., 356. This however^ is not the case of an executed contract, the consideration of which has been received by the railroad company, for although the coal company did furnish cars for the transportation of its own coal, yet it has the right at any time, to withdraw them from the road, and for so doing there is no breach of obligation o.n its part. But it is also argued, that even conceding this to be a license, it cannot now be revoked, because the coal company has upon the faith of it, expended money in providing cars, which were necessary to the enjoyment of the license granted. There is a well recognized distinction between a mere license revocable at will, and a license coupled with am — 344 — interest, which is irrevocable so long as the interest continues. (Decided 26th March, 1879.) Many decisions are to be found, where one has erected buildings or constructed works of a permanent character under a license upon the land of another, in which it has been held, that the license is irrevocable, or that it cannot be revoked without adequate compensation to the licensee. Such are the cases relied on by the appellee, and others of the like character will be found in 2 American Leading Cases, (4th Ed.,) 733, &c. These cases, however, are based upon a contract either express or implied, that the licensee shall be permitted to use and enjoy the buildings erected and works constructed ; or upon the doctrine of estoppel, whereby one will not be permitted to repudiate his own acts or conduct upon the faith of which another has acted. This case,, however, does not come within the operation of these principles. There was no agreement here either express- or implied, that the coal company should enjoy the privilege extended to it, one day longer than the mutual interests of the parties should require. And although the appellee may have expended money in providing coal cars, there is nothing in the record to show, that it was done upon the faith of an irrevocable-license. The cars do not belong to, nor are they in any sense attached to the road of the appellant, and although the appellee might suffer loss to some extent by the revocation of the license, it does not necessarily follow, that the cars would thereby be without any value whatever. It follows from what we have said that the judgment must be reversed, and the cause remanded, to the end that judgment may be entered by the Court below in conformity with this opinion. Judgment reversed, and cause remanded.