Michigan Central Railroad v. Pere Marquette Railroad

Grant, J. (after stating the facts). 1. It is first urged on behalf of defendant that by the contract of April — 343 — 2, 1878, that portion of the Jackson, Lansing & Saginaw Railroad covered by it was made a part of the road of the Saginaw Valley & St. Louis Railroad Company, and that it was the design and intent of said contract to make that portion of the Jackson, Lansing & Saginaw Railroad take the place and stand in the stead of the road which, by its articles of association, the Saginaw Valley & St. Louis Railroad Company was to construct between St. Louis and East Saginaw. Whether the Saginaw Valley & St. Louis Railroad Company had complied with its charter by making this arrangement is a question not before us. This question cannot be raised in a collateral proceeding. It could be raised and determined only in a proceeding brought by the State to determine whether that railroad corporation had complied with its charter. The State has not seen fit to raise the question, and very naturally, because probably the rights of the public have been as well subserved by the contract made between the two roads as they would have been by the construction of a separate road. The rights of the parties must, therefore, be determined by the contract which they voluntarily made. The situation was this: The Saginaw Valley & St. Louis Railroad Company desired to avoid the construction and maintenance of a separate road for a distance of five miles, and as well the construction of separate depots and the purchase of depot grounds. It must do this or make a contract with the Jackson, Lansing & Saginaw Railroad Company. The former could not compel the use of the latter’s road and depots. The latter was willing to grant a permanent use of its road to the former for certain considerations. These were agreed to. The Jackson road did not sell to the Saginaw Valley road any of its real estate, but granted only a permanent lease. To hold otherwise would be doing violence to the meaning of the plainest terms. The Saginaw Valley road was under no obligation to continue the arrangement, but might at any time construct its own road; and there is nothing in the contract to prevent it. — 344 — The relation between the parties was simply that of lessor and lessee, and not that of tenants in common of the right of way. The right conveyed was that of user, and not that of ownership. 2. It is next urged that the defendant complied with the terms of the contract by the purchase of the Saginaw Valley & St. Louis Railroad; that the extension of the Saginaw Valley road was the main thing provided for in the contract; and that the purchase was equivalent to a construction. Such an interpretation would also do violence to the plain meaning of language. The persons who prepared and executed this contract on behalf of their respective corporations were men of education and intelligence. They are presumed to have used words in their ordinary and popular sense. Merrick v. Webster, 3 Mich. 274. Words may sometimes acquire a particular meaning according to the usages of trade, or the peculiar context in which they are used. Such is the case of Seymour v. City of Tacoma, 6 Wash. 138 (32 Pac. 1077), where “An act authorizing cities and towns to construct internal improvements, and to issue bonds to pay therefor,” was held to include the purchase of waterworks and light plants which had been erected by private enterprise. The ordinary definition of the word “construct” is there recognized; but, when the object to be attained and the language of the act were considered, it was held that the legislature intended something more than the construction of waterworks, and conveyed the right to municipalities to purchase waterworks already in existence, and necessary to carry out the purpose of the law. It is impossible to read this contract without reaching the conclusion that the word “construct” was used in its ordinary and popular sense. The contract referred to the road of the Saginaw Valley & St. Louis Railroad Company “as now constructed, or as it may be hereafter constructed.” It was clearly understood that the road was only constructed from St. Louis to its junction with the Jackson, Lansing & Saginaw Railroad, five miles from — 345 — Saginaw. If the Saginaw Valley & St. Louis Railroad Company had let a contract for the construction of its roadbed from St. Louis to Saginaw, paralleling the roadbed of the Jackson, Lansing & Saginaw Railroad from its junction to Saginaw, would the contractor have complied with his contract for its construction by making an agreement with the Jackson, Lansing & Saginaw Railroad Company by which its roadbed could be used in the same manner, and for the same purposes, and to the same effect as if it constructed its own roadbed? Or would the contractor have performed his contract by purchasing this five miles of road from the Jackson, Lansing & Saginaw Railroad Company, and turning it over to the Saginaw Valley & St. Louis Railroad Company ? If the owner of a manufacturing plant buys an adjoining plant used in the same business, does he, by his purchase, construct the plant purchased ? To purchase does not mean to construct. This case falls rather within that of Lamb v. Anderson, 54 Iowa, 190 (3 N. W. 416, 6 N. W. 268), where it was held that the purchase of another line of railroad was not a construction, so as to justify the collection of a tax voted by the township for the construction of a railroad. It is significant that the Saginaw Valley & St. Louis Railroad Company, at the time the contract was made, had obtained no right to construct its road to the eastward. Its eastern terminus was East Saginaw. It could not extend its right of way farther without amending its charter, and establishing that a public necessity existed for the extension and construction of the road eastward. In that proceeding any one interested would have the right to appear and contest such extension. The Jackson, Lansing & Saginaw Railroad Company might well agree to incur the risk of an extension by construction, where it would be totally unwilling to incur the risk of a purchase. Construction is defined to be “the act of building or making; the act of devising and forming; fabrication.” Cent. Diet. It is in that sense that the term was used in this contract. — 346 — 3. It is next urged that, under the complainant’s construction of the contract, it is void as against public policy, in that it illegally restricts the Saginaw Valley & St. Louis Railroad Company from receiving and shipping freight. It would seem a sufficient reply to this to say that there is no restriction by the contract to carry freight over its own road. Its entrance into Saginaw from the junction with the Jackson, Lansing & Saginaw Railroad was one purely of contract. Its own road was in fact constructed only to the junction. It then had two ways open to it, — either to construct its own independent road into Saginaw, or make a contract with the Jackson, Lansing & Saginaw Railroad Company. It chose the latter. The contract which it made must either stand or fall as a whole. Alford v. Railway Co., 3 Interst. Com. R. 519. If the objectionable provisions are absolutely void, then the contract must utterly fail. Without these provisions the Jackson, Lansing & Saginaw Railroad Company would undoubtedly never have made the contract. This court cannot make one for it. If the contract is entirely void for this reason, complainant, as stated by its counsel, has no objection to such a decree; for this would leave the defendant without any right whatever over the complainant’s road. It is conceded that a railroad company cannot enter into a contract to incapacitate' itself from discharging the duties resting upon it. This, however, is far from holding that railroad companies may not enter into such an arrangement as was made in this case. There is not a word in the contract which limits the duty of either of the three roads to receive freight for transportation, or which restricts the right of any shipper to have his freight carried by either road. The Saginaw Valley & St. Louis Railroad Company expressly retained the right to ship eastward if it should construct its road in that direction. It had no connection east of Saginaw, and none was provided by its charter. The restriction in regard to picking up freight for the East was aimed solely at the Flint & Pere — 347 — Marquette road, which was then in existence, and had a line running eastward from East Saginaw. It was the only competing line then in existence. The contract was aimed at it, and nothing else. No public policy and no statute were attacked by this provision. The Elint & Pere Marquette had its own road and station grounds in Saginaw. Any citizen of Saginaw could ship freight from or receive freight at its depot. The same facilities were offered by the Jackson, Lansing & Saginaw Eailroad Company. The public had two competing lines, and could, at its choice, deal with either. That right was not interfered with by this contract. The Saginaw Valley & St. Louis Eailroad Company, by the contract, was permitted to run its cars to the junction of the Flint & Pere Marquette Eailway at the Y north of the city. This was for the accommodation of the former company. It is now claimed that the present defendant, which has bought the Flint & Pere Marquette and other roads, obtained the very right which the Saginaw Valley & St. Louis Eailroad Company contracted not to exercise, and which it did not exercise for a period of 22 years. We think this claim cannot be maintained. The Jackson, Lansing & Saginaw Eailroad Company had the right to stipulate that the other road should not use its depots and grounds to pick up and deliver freight to its only competitor, the Flint & Pere Marquette Eailway Company, and in doing so violated no rule of public policy or statute of this State. Contracts between railroads, more restrictive than this one, have been sustained. Union Pac. R. Co. v. Chicago, etc., R. Co., 163 U. S. 564 (16 Sup. Ct. 1173); Chicago, etc., R. Co. v. Denver, etc., R. Co., 143 U. S. 596 (12 Sup. Ct. 479). As was said in Leslie v. Lorillard, 110 N. Y. 519 (18 N. E. 363, 1 L. R. A. 456): “The apprehension of danger to the public interests should rest on evident grounds, and courts should refrain from the exercise of their equitable powers in interfering with and restraining the conduct of the affairs of individuals or of corporations, unless their conduct, in some tangible form, threatens the welfare of the public.” — 348 — Decree reversed, with costs of both courts, and decree entered for the complainant. Montgomery, O. J., Hooker and Moore, JJ., concurred. Long, J., did not sit.