Sholl Bros. v. Peoria & Pekin Union Railway Co.

Mr. Chiee Justice Craig

delivered the opinion of the court:

This case has been brought to this court by writ of certiorari issued to review the, judgment of the Appellate Court for the Second District which affirmed a decree of the circuit court of Peoria county enjoining the plaintiff in error, the Peoria and Pekin Union Railway Company, from moving on or over tracks located on a certain right of way described in the decree, any coal or coal mine products not mined and produced on the lands or by virtue of the coal and mineral rights of Sholl Bros., the defendants in error. The cause was heard upon pleadings and evidence, but there is no disputed question of fact.

The plaintiff in error is a railroad corporation and has operated a railway between the cities of Peoria and Pekin since the year 1880. Sholl Bros, is a co-partnership, which at the time of making the contract with plaintiff in error hereinafter mentioned was, and since then has been, engaged in the business of mining coal. In 1896 they were the owners of coal lands near Bartonville, on the west side of the right of way of the plaintiff in error and about three-quarters of a mile away. The coal lay in a hill which rose very abruptly 100 to 150 feet above the level of the railway. On July 16, 1896, the railway company entered into a contract in writing with Sholl Bros, whereby it agreed to put in a side-track for them from its main track to their coal mine near Bartonville about to be opened and operated by them. By the terms of the contract it was agreed that Sholl Bros, should furnish the right of way, grading and bridging from the main track to the mine, do all the grading and bridging necessary for the track at the mine, and pay $300 as their proportion of the first cost of the ties to be used in constructing such side-track. The railway company agreed to furnish the balance of the ties and other material necessary for laying the side-track and necessary mine tracks and to maintain such tracks at its own expense. The contract contained the following stipulation: “In consideration of so doing the said first party [the railway company] is to have at all times exclusive use of said tracks and right of way. It shall also have the right to use said right of way and tracks in handling the business of or for the purpose of making connections with any other industry, except coal mine, that may hereafter be located adjacent to said right of way or reached from said right of way, provided said first party shall always do such other business in a manner which shall not interfere with said second party.” The contract was to extend for twenty-five years from its date and thereafter until either party gave sixty days’ notice of its desire to terminate it. Sholl Bros, secured the right of way, constructed the grade, built bridges and performed their part of the contract at an expense to them of upwards of $30,000 and the railway company built the track. There were then no other mines in operation adjacent to the said right of way, and there is now no other coal mine reached by it except the Collier’s Co-operative Coal Mine, owned by James M. Sholl. There was no railroad running near the mines of the defendants in error, which were situated in a ravine which was not very accessible. The right of way was over the most accessible route and furnished the only means of marketing the coal from those lands by railroad tracks. There were no industries other than the Sholl Bros.’ mine adjacent to or reached by this right of way at the time of its construction. Before this track was laid a site for a State asylum for the insane had been chosen just beyond the land of defendants in error, and afterwards the Asylum for the Incurable Insane at Bartonville was established by the State on the site, chosen, adjoining the property of Sholl Bros. The commissioners of the asylum constructed railway tracks on the asylum grounds which they connected with the track on Sholl Bros.’ land, and the latter track has since been used for the transportation of freight to the asylum. The defendants in error furnished coal to the asylum, which was delivered over the track in question, and in some instances coal was delivered to the asylum which was produced at some mine other than that of the defendants in error. In each case of such delivery the plaintiff in error requested and received from the defendants in error special permission to move the coal over the Sholl Bros.’ track to the asylum, and this practice continued uniformly until 1911, when the railway company issued a tariff showing a rate for the delivery of coal over the track in question to the asylum and announced that such service was open to all persons who might demand it. Afterward the railway company did deliver over said track to the asylum cars loaded with coal from mines other than those on the lands of the defendants in error, one of such mines being that of the Wolschlag Co-operative Coal Company, located on the main line of plaintiff in error. Thereupon the defendants in error filed the bill in this case and secured an injunction against the transportation over such track and right of way of coal not mined on their lands or under their coal rights.

The principal controversy is over the proper construction and meaning of the contract, and in particular the clause hereinbefore set out. The principal assignments of error are to the effect that the circuit and Appellate Courts erred in construing the contract in question contrary to its clear and unambiguous provisions; that the court erred in not finding and decreeing that the practical construction given said contract by the parties was against its clear, positive and unambiguous provisions and was void as against public policy. It is the contention of plaintiff in error that the contract by its plain terms gave the railway company the right to serve all industries, except coal mines, that might after the making of the contract be located adjacent to the switch track in question or reached by a connection therefrom, and it is the contention of the defendants in error that by the terms of the contract coal mines, generally, are excepted from the industries whose business plaintiff in error could handle or make connections with, and that plaintiff in error is precluded by the terms of the contract from transporting any coal over the track except the coal from the mines of Sholl Bros.

It is only necessary to refer to the interpretation and construction of the contract as contended for by the respective parties. Does it mean, as insisted by plaintiff in error, that the railway company has the right to use said right of way and tracks in handling the business of any. other industry, except a coal mine, that might after the. making of the contract be located adjacent to the right of way? Or does it mean that the railway company has the right to use said right of way and tracks in handling the business of or for the purpose of making connections with any other industry, except any coal mine, wherever situated, or any coal mine that might after the making of the contract either be located adjacent to said right of way or that could be reached therefrom or by means thereof? It must be remembered in this connection that the railway company does not own this right of way. The fee in the land and right of way is owned by the defendants in error, and the right of the railway company to use the tracks and right of way is restricted to whatever rights it has by the terms of the contract.

It is true, as a matter of law, that the construction of the parties themselves of a contract cannot avail in construing the contract where its terms are plain and the meaning clear and unambiguous, (Gibbs v. People’s Nat. Bank, 198 Ill. 307,) but where there is an ambiguity in the contract and the intention is not clear, rules of construction are useful. As stated in Slack v. Knox, 213 Ill. 190: “It is permissible in construing a contract to look to the interpretation that the parties thereto have placed thereon, in its performance, for assistance in ascertaining its true meaning. ‘No extrinsic aid can be more valuable.’—Vermont Street M. E. Church v. Brose, 104 Ill. 206; Storey v. Storey, 125 id. 608.” The reason and wisdom of this rule are apparent from the definition of the word “contract,” which is an agreement or a meeting of the minds of the parties thereto. The parties themselves are supposed to know best what they meant, and if, in reducing such agreement to writing, words or terms have been used that render the contract ambiguous or uncertain as to its true meaning, the construction by the parties thereto, as shown by their acceptance and acts thereunder, cannot help but be of value in ascertaining the true intent and meaning of such contract if it becomes necessary for the court to consider the situation and surroundings of the parties or put itself in the place of the parties at the time of entering into the contract, and such construction should be upheld by the courts.

We are unable to say that the contract in question is so perfectly clear and unambiguous as to leave no question as to its meaning and the intent that existed in the minds of the respective parties when the contract was entered into. We have been furnished with plausible and reasonable arguments of counsel for the respective parties in support of their contentions and each side has invoked the consideration of extrinsic circumstances. The ambiguity is contained in the sentence: “It [the railway company] shall also have the right to use said right of way and tracks in handling the business of' or for the purpose of making connections with any other industry, except coal mine, that may hereafter be located adjacent to said right of way or reached from said right of way, provided said first party shall always do such other business in a manner which shall not interfere with said second party.” To sustain the contention of plaintiff in error it would be necessary to disregard the words “or reached from said right of way,” as it is the principal contention of plaintiff in error that it is only prohibited from handling coal from a mine that might after the making of the contract be located adjacent to or reached immediately from said right of way, and is not prohibited from hauling coal from mines that are located along the main line or coal that is shipped in from other roads reached by the main line, although such products, in being hauled over the track in question and delivered to the State asylum, are reached from said right of way and tracks in question or by means thereof. If this contention is to be sustained, then plaintiff in error is to be allowed to haul coal in from its main line on said track but cannot haul any out except it be the product of defendants in error’s mines. From the entire contract and the surroundings and situation of the parties when the contract was made, it is apparent that it was the intention of the parties that defendants in error were to. have a monopoly of the use of said track, so far as coal mine products were concerned, in return for the large amount of money they expended in its construction, and plaintiff in error was to have exclusive use of the track, or a monopoly of its use, for all other purposes except a coal mine. Circumstances might arise, and in fact have arisen owing to the location and construction of the asylum, by reason of which it would make no difference to defendants in error, as far as interfering with their monopoly is concerned, whether the coal ■ hauled over the track would come from a mine adjacent thereto or a mine adjacent to the main line of the plaintiff in error’s road, or by means of a connection from the main line and the track in question. It is shown by the evidence, and not disputed, that for many years after the contract was made and the track used, and after the insane asylum was occupied, the officers of plaintiff in error refused shipments of coal over said track from any mine except that of defendants in error without their consent, thus showing their construction of the contract. This construction and interpretation of the contract by the parties thereto must now be considered, and we think, under the circumstances, must be upheld as the proper construction and meaning thereof.

Plaintiff in error also contends that such a construction of the contract would be contrary to public policy and void, for the reason that railroad companies, being quasi public corporations created, for the purpose of performing the duties of common carriers, have no right to contract with a corporation or individual to give exclusive right to transfer any commodity over any part of their lines. The case of Louisville and Nashville Railway Co. v. P. and K. Coal Co. 111 Ky. 960, (55 L. R. A. 601,) is cited as authority. This contention is also based bn the duty of the plaintiff in error as a public railroad, under the constitution and laws of this State, to serve the public and receive freight from all persons who may desire to transport same. The distinction between the case cited and other cases of similar import and the case at bar is, that in those cases the railroads in question were held to be in effect, or actually were, public roads and owned and operated by common carriers. It is true that a railroad corporation cannot make a válid contract limiting the use of its tracks, which are declared to be public highways by section 12 of article 11 of the constitution. But that is not this case. The side-track involved in this case is not a part of the public railway of plaintiff in error. It is connected with said railway but not a part of it, and could not become a part of the railway system of plaintiff in error unless it be purchased or acquired by condemnation proceedings. As hereinbefore pointed out, the right of way on which the track was built is the private property of defendants in error, and the right of the railway company therein is limited and governed by the provision of the contract that has been considered.

A case in point and which arose under similar circumstances is that of Koelle v. Knecht, 99 Ill. 396. In that case the owners of a coal mine located some distance from the right of way of a railroad contracted with the railroad company to run a switch track to the mine. To carry out this purpose the mine owners bought part of the right of way, where the road was not built on their own land, from intermediate land owners, made the bridges and prepared the grade ready to receive the ties and rails. By contract the railroad company put in place the ties and rails. It was held in that case that a railroad to coal lands which is not owned by the railroad company but by individuals for their own private use is not a public highway within the meaning of section 12 of article 11 of the constitution, and therefore is not free to all persons for the transportation of their persons and property thereon. That section applies only to public railroads. It was said on page 404 of the opinion: “It would work monstrous wrong and injustice to compel an individual who had constructed a railroad across his farm to assume the duties and liabilities of a common carrier against his will and transport over his road all commodities that the adjoining land owner or his neighbors might require. Those who made that instrument did not intend to impose such duties and liabilities on private individuals against their will. It was only public railroads they intended to regulate, and this switch is not of that character.” What is said in that case applies to the case at bar. In Litchfield and Madison Railway Co. v. People, 222 Ill. 242, the distinction between public railroads and railroads built for private use, in their duty to serve the pub-lie, was pointed out. It was there held that under, section 12 of article 11 of the constitution, and section 84 of the Railroad act, all railroad corporations incorporated under the general Railroad Incorporation law must engage in carrying both passengers and freight, and cannot engage exclusively in carrying freight except in case of a railroad built by individuals upon their own land for private use or of a railroad built exclusively to afford terminal facilities within or in the vicinity of a large city.

It would doubtless be of advantage to the State to be allowed to ship coal over this side-track to the asylum, but there is nothing in the circumstances of this case which gives the State any greater rights than an individual would have similarly situated.

For the reasons given the judgment of the Appellate Court will be affirmed.

T . Judgment affirmed.