Chicago & North Western Railway Co. v. Peoria & Pekin Union Railway Co.

360 N.E.2d 404, 46 Ill. App. 3d 95, 4 Ill. Dec. 468, 1977 Ill. App. LEXIS 2113
CourtAppellate Court of Illinois
DecidedJanuary 20, 1977
Docket75-38
StatusPublished
Cited by16 cases

This text of 360 N.E.2d 404 (Chicago & North Western Railway Co. v. Peoria & Pekin Union Railway Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chicago & North Western Railway Co. v. Peoria & Pekin Union Railway Co., 360 N.E.2d 404, 46 Ill. App. 3d 95, 4 Ill. Dec. 468, 1977 Ill. App. LEXIS 2113 (Ill. Ct. App. 1977).

Opinion

Mr. JUSTICE BARRY

delivered the opinion of the court:

The action underlying this appeal was brought by the Chicago and North Western Railway Company (C&NW) charging the defendant, Peoria and Pekin Union Railway Company (P&PU) with breach of contract. Both parties filed motions for summary judgment. The trial court denied the motion of P&PU and granted that of C&NW. Subsequently, the trial court awarded C&NW damages in the amount of $487,349.26. P&PU now appeals.

The September 12, 1946, contract, which is the basis of this action, recites that the “same provisions, stipulations and conditions of * * * [an] * * * original contract of December 1,1911 as interpreted, modified and extended” would be binding on the parties until February 1,1981. This agreement was approved by the Interstate Commerce Commission as just and reasonable and consistent with the public interest. I.C.C. Finance Docket No. 15354 (August 26, 1946).

These contracts gave the plaintiff the nonexclusive right to use the defendant’s terminal facilities at Peoria and the defendant’s connecting facilities through Peoria and Pekin to other railroads and the local industries, including the use of a railroad bridge across the Illinois River. For this right, the plaintiff agreed to pay rent and maintenance charges on the facilities it utilizes. To determine the maintenance charges, the entire area, commonly known as the Peoria-Pekin Switching District, was divided into districts. The contracting or “tenant” railroads agreed to pay that proportion of the maintenance for each district equal to that ratio of each railroad’s cars passing through any one district to the total cars passing through any one district. However, this contract also stated that cars “switched” by P&PU were not to be included in the total for the purpose of determining maintenance charges.

In addition, these contracts provided that each tenant railroad should contribute a just proportion of the dispatching expenses of P&PU. This proportion was to be determined by the ratio of the number of “trains” of the tenant railroad dispatched to the total number of “trains” dispatched. An engine plus a tender car, even without other cars, was to be considered a “train.”

The C&NW was a party to this contract. However three railroads using the P&PU facilities also used by C&NW were not tenant railroads. These railroads are the Rock Island and Pacific Railroad Company (Rock Island), the Burlington Northern, Inc. (Burlington), and the Peoria Terminal. The Interstate Commerce Commission has previously approved of the P&PU decision to allow nontenant railroads to operate over P&PU properties (Rates, Regs. & Practices of Peoria & Pekin Union Ry., 93 I.C.C. 3 (1924)), and established the charges to be levied for the transfer or switching services provided to these railroads (Rates, Regs. & Practices of Peoria & Pekin Union Ry., 115 I.C.C. 469 (1926); Rates, Regs. & Practices of Peoria & Pekin Union Ry., 118 I.C.C. 127 (1926)).

In its third amended complaint, C&NW alleged that P&PU collected overpayments from the plaintiff for the 10 years 1 preceding the filing of the complaint because the defendant wrongfully failed to count the cars and trains of all other railroad (nontenants and P&PU movements) using the same P&PU facilities as used by the plaintiff when billing and collecting the plaintiffs pro rata contributions toward the maintenance and dispatching expenses. The plaintiff estimated the overpayments as *3,500 per month for maintenance and *300 per month for dispatching. The judgment sought was the aggregate amount of the estimated overpayments plus 6% interest.

The defendant’s answer admits that its method of computing the maintenance and dispatching expenses was as the plaintiff described, but the answer denied that this is a breach of contract. The factual bases for this contention by P&PU are several. First, this practice of computing the maintenance and dispatching expenses was utilized by P&PU for over 50 years. Secondly, all the C&NW accounts for the preceding 10 years had been stated and settled. Thirdly, since 1948, the defendant’s method of apportioning expenses has been reviewed and approved, from time to time, by a “Joint Facility Audit Committee” established by the defendant and all the tenant railroads. That committee always included a representative of C&NW. Nevertheless, no exceptions or objections were ever made to the defendant’s method of apportionment. Furthermore, on at least one occasion, a C&NW auditor was assigned by the “Joint Facility Audit Committee” to review the P&PU apportionment of maintenance expenses. Fourthly, the plaintiff has been a shareholder of the defendant since 1902 and has had a representative on P&PU’s board of directors since before 1911. During this entire period, the record of P&PU were available to C&NW for inspection.

At the outset the defendant-appellant argues that the circuit court was without jurisdiction to enter summary judgment in favor of plaintiff. P&PU contends that the question of altering contractual relationships between railroads must first be resolved by the I.C.C. We disagree. The question presented in the instant case does not relate to transportation policy or to the reasonableness of tariffs but involves only a matter of pure contract construction. The United States Supreme Court in holding that when the issues of construction and reasonableness of tariffs are so intertwined that the same facts are determinative of both issues the matter should initially be determined by the I.C.C. stated, “By no means do we imply that matters of tariff construction are never cognizable in the courts.” (United States v. Western Pacific R.R. Co., 352 U.S. 59, 69, 1 L. Ed. 2d 126, 135, 77 S. Ct. 161, 167-68 (1956).) The I.C.C., in fact, approved the contract involved as reasonable here (the 1946 supplemental agreement) which will continue in effect until 1981. The I.C.C.’s view that the applicable Federal statute (49 U.S.C. § 5(2)) does not authorize it to interpret contracts which it formerly approved finds additional judicial acknowledgment and approval in Texas & New Oreleans R.R. Co. v. Brotherhood of Railroad Trainmen, 307 F.2d 151 (5th Cir. 1962), cert. denied, 371 U.S. 952, 9 L. Ed. 2d 500, 83 S. Ct. 508 (1963), which reaffirmed that carriers must rely upon applicable contract and corporate law to resolve questions of interpretation and enforcibility of contracts. P&PU also claims lack of jurisdiction in the circuit court because the claim involves a collateral attack upon I.C.C. earlier rulings in earlier disputes between parties with similar interests charging unfair discrimination by P&PU between tenants and nontenants. The pleadings, however, do not disclose any allegation of discrimination and in fact the P&PU does charge for services rendered to nontenants.

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Cite This Page — Counsel Stack

Bluebook (online)
360 N.E.2d 404, 46 Ill. App. 3d 95, 4 Ill. Dec. 468, 1977 Ill. App. LEXIS 2113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chicago-north-western-railway-co-v-peoria-pekin-union-railway-co-illappct-1977.