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PITTSBURGH, C. & ST. L. RY. CO. V. KEOKUK & H. BRIDGE CO., 155 U. S. 156 (1894)

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U.S. Supreme Court

Pittsburgh, C. & St. L. Ry. Co. v. Keokuk & H. Bridge Co., 155 U.S. 156 (1894)

Pittsburgh, Cincinnati and St. Louis Railway Company

v. Keokuk and Hamilton Bridge Company

No. 633

Argued October 19, 22, 1894

Decided November 19, 1894

155 U.S. 156


Where the railroad bridge of a bridge company and the railroads of several railroad companies form a continuous line of railway transportation, the liability of two of the railroad companies to pay to the bridge company a certain proportion of tolls upon the bridge, and of deficiencies therein, according to a contract with the bridge company, executed by another of the railroad companies for the benefit and at the request of these two, they undertaking to assume all the liabilities and to be entitled to all the benefits of the bridge contract "as if the same had been specifically named in and made a part of the ninth article of" a lease of its railroad from it to them, by which article they agreed to assume and carry out certain contracts of transportation over railroads of other companies, is not affected by the termination of the lease by eviction or otherwise.

Pittsburgh &c. Railway Co. v. Keokuk & Hamilton Bridge Co., 131 U. S. 371, followed.

This was a bill in equity, filed in the Circuit Court of the United States for the Northern District of Illinois by the Keokuk and Hamilton Bridge Company (hereinafter called the "Bridge Company") against the Pittsburgh, Cincinnati and St. Louis Railway Company (hereinafter called the "Pittsburgh Company") and the Pennsylvania Railroad Company to recover deficiencies in tolls for the use of the plaintiff's bridge since March 1, 1883 under a contract, dated January 19, 1869, and chanroblesvirtualawlibrary

Page 155 U. S. 157

modified June 6, 1871, by the Bridge Company with the Columbus, Chicago and Indiana Central Railway Company (hereinafter called the Indiana Central Company) and three other railroad corporations, by which the Bridge Company agreed to build and maintain a railway bridge across the Mississippi River and granted to these four railroad companies in perpetuity the right to use it for the passage of their trains, and they agreed to pay monthly certain tolls, and, if those should fall below a certain sum, each to pay one-fourth of the deficiency.

This contract was executed by the Indiana Central Company upon the requests in writing of the Presidents of the Pittsburgh Company and of the Pennsylvania Company, by which these two companies agreed to

"assume all the liabilities and obligations, and be entitled to all the benefits, of said bridge contract, the same as if it had been specifically named and made a part of the ninth article of"

a lease of the Indiana Central Company to and with the Pittsburgh Company and the Pennsylvania Company dated January 22, 1869.

By that lease, the Indiana Central Company leased it railroad to the Pittsburgh Company for 99 years, the Pittsburgh Company covenanted to pay a certain proportion of the earnings of that road to the Indiana Central Company, and, by the ninth article, to assume and carry out, receiving and enjoying the benefits thereof, certain existing contracts for transportation over railroads of other companies not mentioned above, and the Pennsylvania Company guaranteed the performance of the covenants of the Pittsburgh Company.

The bridge aforesaid, with the railroads of the Pennsylvania Company, the Pittsburgh Company, the Indiana Central Company, and other railroad companies named in the bridge contract, formed a continuous line of railroad transportation from Philadelphia to Des Moines.

The privisions of the bridge contract and of the lease, and the circumstances attending and following their execution, are more fully set forth in the case between the same parties in 131 U. S. 131 U.S. 371. But the above abstract is sufficient for the purposes of the present case. chanroblesvirtualawlibrary

Page 155 U. S. 158

In June, 1871, immediately after the modification of the bridge contract, the bridge was accepted by the Bridge Company and was opened for use, and thenceforward was used by the Pittsburgh and Pennsylvania Companies in the exercise of the control asserted by them under the contract and lease aforesaid. The Bridge Company demanded payment directly from the Pittsburgh Company, semiannually, of the sums payable by the Indiana Central Company for tolls and deficiencies under the modified bridge contract, and from June, 1871, to September, 1874, the Pittsburgh Company paid to the Bridge Company the amount both of such tolls and of such deficiencies. After that time, like payments were demanded by the Bridge Company of the Pittsburgh Company, and the tolls only paid.

On July 25, 1881, the Bridge Company filed a bill in equity against the Pittsburgh Company and the Pennsylvania Company to recover deficiencies in tolls for the use of the bridge from September 1, 1874.

To that bill the defendants answered that the Indiana Central Company, the Pittsburgh Company, and the Pennsylvania Company never authorized their officers to execute the bridge contract or to bind them by it, and that the contract was beyond the scope of their corporate powers.

The Pittsburgh Company also, by way of supplemental answer, set up that in 1875, the trustees named in a mortgage made by the Indiana Central Company of its railroad, rights, and franchises, before the execution of the bridge contract, brought a bill in equity to foreclose that mortgage, and were thereupon appointed receivers, and, pursuant to decrees of foreclosure, there were conveyed by the Indiana Central Company to the receivers, and by them on January 10, 1883, sold and conveyed to three individuals, as trustees, for a smaller sum then the debt secured by the mortgage, its road, rights, and franchises, with the right to affirm or disaffirm the lease aforesaid, and the purchasers, on February 21, 1883, notified the Pittsburgh Company that they disaffirmed the lease, and further averred

"that in accordance with said decrees, possession of said railway property, rights, and franchises has been

Page 155 U. S. 159

surrendered to the said purchasers, and that it has been wholly ousted and evicted from all and singular the premises, rights, and franchises leased to it as aforesaid, and it relies upon the cancellation of said lease and the ouster and eviction, as aforesaid, as a full and perfect answer to the relief sought in the bill."

To those answers a general replication was filed, and the case was referred to a master, who reported that there was due from the Pittsburgh and Pennsylvania Companies to