Court Opinion

ID: 6905655
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:59:56.199708+00
Date Added: 2024-06-11T16:06:20.277952
License: Public Domain

*549Modified and rehearing denied March 27, 1917.
On Petition eor Rehearing.
(163 Pac. 989.)
On petition for rehearing. Original opinion withdrawn in one particular and otherwise adhered to. Rehearing denied.
Messrs. Carey & Kerr, for the petition.
Mr. William W. Cotton, Mr. Arthur C. Spencer, Mr. Charles E. Cochran and Mr. Ralph E. Moody, contra.
In Banc.
Mr. Justice McCamant
delivered the opin-
ion of the court.
13. The defendant in a petition for rehearing has attacked the correctness of our conclusions and is entitled to an answer to the propositions discussed in its petition. Our attention is directed to the objection reserved by the defendant to the admissibility in evidence of the testimony taken before the arbitrators. We are asked to rule on this objection. It is true, as contended, that defendant did not waive this objection by cross-examining the witness who identified it. We think this evidence was competent and material to the determination of the issues raised by the pleadings and that the lower court did not err in receiving it: Thompson v. Blanchard, 2 Iowa, 44, 49; Thrasher v. Overby, 51 Ga. 91; Bean v. Wendell, 20 N. H. 213, 219.
14. The direct examination of Mr. Aitchison was confined to the identification of the testimony which was considered by him and his associates. The defendant on cross-examination drew out testimony as to the award and what the arbitrators intended to decide *550thereby. This cross-examination was beyond the scope of the direct examination; it justified redirect examination of the witness on the same subject and forecloses any objection which might otherwise be urged to the competency of the evidence: Willis v. Abraham, 31 Or. 562, 565 (51 Pac. 79).
15. Complaint is made that no notice was taken in the previous opinion of three contracts- offered in evidence by the defendant, defining the terms under which different railway companies are operating over the Northern Pacific bridge at Kennewick, Washington, defendant’s bridge across the Willamette at North Portland and the Columbia Eiver bridge at Vancouver owned jointly by defendant and the Northern Pacific. If it had been shown that there is a uniform practice among railroad companies to determine in a certain way the compensation to be paid by a junior company for use of the facilities of the senior company, this would have been material as bearing on some of the questions discussed in our former opinion. But the testimony fails to show any such uniform practice; the inference to be drawn from this sort of testimony is adverse to the defendant’s contention. In the three contracts above referred to the junior company is chargeable with such share of the interest on the investment as its traffic bears to the entire traffic carried over the bridge. In the Vancouver bridge contract the plaintiff is also charged with the expense of reconstructing the bridge, in such proportion as the plaintiff’s traffic during a five-year period bears to the entire traffic on the bridge during the same period. It appears that plaintiff offered to pay defendant a third of the interest charge on the cost of the bridge when it was expected that three railroads would use it, and a fourth of this charge when it was ascertained that four *551railroads would operate over it. At defendant’s suggestion the contract was drawn as above and in practice plaintiff is paying more than a fourth of the interest charge.
The evidentiary value of the other contracts offered by the defendant is impaired by the circumstance that they are contracts made by the defendant with the Northern Pacific and the Great Northern, and the evidence shows that these latter companies own the stock of the defendant, share and share alike. The contracts are therefore little more than a convenient form of bookkeeping which the common owners have elected to adopt.
Plaintiff, on the other hand, has offered in evidence seven contracts all providing for the use of railway' facilities by competing lines, and in all these cases the junior company makes a substantial contribution to the charge for interest on the investment, regardless of the volume of its traffic. In most of these cases the junior company pays a share of the interest charge based wholly on the number of users and without regard to the relative volume of traffic. In one of the contracts, that under which the plaintiff secures access to a traffic-producing territory in West Seattle by use of the facilities of the Northern Pacific, the conditions are closely akin to those in this case. All these contracts have to do with facilities in this part of the union; plaintiff or one of its subsidiary companies is a party to all of them and some part of the Hill system of roads to which defendant belongs is also a party to each of them.
16. The petition challenges the correctness of the statement in the opinion that there was no evidence before the arbitrators bearing on the number of defendant’s locomotives and cars which would use the *552bridge. We are referred to Respondent’s Exhibits 25, 26, 16 and 17. These exhibits were not overlooked in preparing the former opinion.
It appeared by the testimony offered before the arbitrators that plaintiff had pnt in effect a tariff for the switching of cars from the west to the east side of the Willamette at Portland and that a number of defendant’s cars had been so switched. Exhibit 16 was a table showing that in the two years ending March 31, 1913, 21,395 cars had been’so switched by plaintiff for the Hill lines, of which defendant is one; Exhibit 17 segregated the loaded cars in this list from the empty cars and segregated the loaded cars switched for defendant from the loaded cars switched for the Northern Pacific. There was no such segregation of the empty car's. Exhibit 25 was a table showing the engines and trains of plaintiff and the Southern Pacific using the bridge from May 4, 1912, to July 25, 1912. Exhibit 26 was a table of the Hill line cars switched across the bridge from July, 1912, to March, 1913. This table showed that 8,780 of. defendant’s cars had been so switched during this period. Some of the cars tabulated in these exhibits had been switched over the bridge with which we are concerned in this case, but most of them used' the old bridge- which it replaced.
The evidence showed that a large part of the traffic switched across the bridge was destined to. Albina. We are not concerned with that traffic in this case because the defendant has no terminal in Albina and could not avail itself of a common user of the bridge to reach Albina. The testimony further shows that the period covered by these tabulations was the period when the defendant was acquiring its terminal facilities in East Portland. Defendant’s expenditures for this purpose during the two-year period covered by *553Exhibit 16 exceeded $1,400,000. It has since made large additional expenditures and is now the owner of extensive terminal facilities in East Portland.
The evidence further shows that the defendant was unable to move certain classes of its traffic under these switching tariffs. Freight in less than carload lots and team freight could not be so handled. We think it clear that these tabulations are no basis on which to figure the probable traffic of the defendant under the common user clause involved in this case, and that the arbitrators could not have come to a different conclusion. It appears upon the face of the award that they were uncertain as to the volume of the defendant’s traffic. The testimony in the Circuit Court shows that the tabulations used before the arbitrators throw no light on the volume of defendant’s traffic under the common user clause because of the large share of defendant’s business which is destined to Albina, which is still handled under plaintiff’s switching tariff and which nevertheless entered into these tabulations.
In examining Mr. J. D. Farrell, president of plaintiff, counsel for the defendant suggested that defendant’s traffic would be possibly one tenth of the entire use of the bridge. This suggestion was of course not evidence, but if it were accepted as such it would convincingly prove the mistake in the award. The annual charge for operating and maintaining the bridge could not have been figured by the arbitrators at less than $90,000; the minimum rental, to which alone Mr. Aitchison’s testimony is referable, was $6,000. It is apparent therefore that if the arbitrators figured on these lines their award did not insure to plaintiff a profit over and above defendant’s share of the annual charges and did not conform to their decision.
*55417. The petition contains an'argument in defense of the provision in the award fixing the compensation at eighty-five cents a car. The award fixing this car toll might be upheld if the minimum rental provided were adequate and in conformity with the conclusions of the arbitrators. Plaintiff is entitled to receive from every carrier using its bridge a fair share of the annual charge for operation and maintenance and a fair proportion of the interest on its investment. Plaintiff is entitled to be assured of this revenue through all the fluctuations of railway traffic. Mr. Aitchison testifies that the arbitrators decided to provide such return and to allow a profit besides.
The petition argues that the award contains no mistake, but the argument is based wholly on the assumption that there was evidence before the arbitrators as to the volume of defendant’s business which would move over the bridge under the award. There being no such evidence, the argument is not convincing.
18. A re-examination of the record confirms the conclusion that the award must be set aside. The petition for rehearing complains that we have substituted “the judgment of the chancellor” for that of the arbitrators. A long line of authorities holds that this should not be done. "What is meant by these decisions is that courts should not set aside awards because their judgment on the matters submitted differs from that of the arbitrators. The latter are usually empowered by the agreement of submission to decide erroneously as well as correctly and by the terms of their contract parties will be held bound by the award.
The same courts which announce these doctrines hold that it is the duty of courts of equity to set aside awards for fraud or mistake. One of the best established branches of the jurisdiction is that which requires the *555setting aside of an award which through mistake of the arbitrators fails to express their real decision. The duty is as clear as that which requires this court on rehearing to correct an opinion which through inaccuracy of expression fails to state the decision intended to be rendered. A failure to set aside- the award in this case would work manifest injustice. It would impose on plaintiff for a period of nearly twenty years a measure of compensation for the use of the bridge which the arbitrators did not intend to impose.
Defendant is entitled to use the bridge for the purpose desired and plaintiff is entitled to reasonable compensation for such use. The award being set aside, the machinery provided for the determination of the compensation has failed. It would be a reproach to the law if the rights of the parties should thereby lapse. It is the province of courts of equity to provide remedies in such cases and it is in this view of the case that we have fixed a measure of reasonable compensation for the use of the bridge sought by the defendant.
19. The petition is supported by an affidavit setting up the amounts paid by defendant during the year 1916 for use of the bridge, and the number of cars operating thereover. These facts can have no bearing on the question of whether the award should be set aside, but they may be considered on the hearing in the Circuit Court hereinafter provided for.
20. Strenuous objection is offered to the provision in our former opinion that defendant should pay twenty per cent of the interest charge on the cost of the bridge. Plaintiff cited a number of authorities to the effect that when a court is called on to determine compensation for a common user the junior company will be charged with half the cost or interest charge if but two carriers are using the-facilities, or with one third thereof if *556there are three users. This was squarely held in Central Trust Co. v. Wabash etc. Ry. Co., 29 Fed. 546, a case twice before the Federal Supreme Court under different titles: Joy v. St. Louis, 138 U. S. 1 (34 L. Ed. 843, 11 Sup. Ct. Rep. 243), and St. Louis etc. R. Co. v. Wabash R. Co., 217 U. S. 247 (54 L. Ed. 752, 30 Sup. Ct. Rep. 510. The same principle is announced in Grand Avenue Ry. Co. v. People’s R. Co., 132 Mo. 34 (33 S. W. 472); Grand Ave. Ry. Co. v. Citizens’ Ry. Co., 148 Mo. 665 (50 S. W. 305); Grand Ave. Ry. Co. v. Lindell Ry. Co., 148 Mo. 637 (50 S. W. 302); Toledo Consol. St. Ry. Co. v. Toledo Electric St. Ry. Co., 6 Ohio C. C. 362; 3 Ohio C. D. 493, 511. The last case is approved and followed in Toledo Elec. St. R. Co. v. Toledo and Maumee etc. R. Co., 6 Ohio C. D. 578. For the reasons stated in our former opinion we do not think that the rule announced in these authorities should be applied' rigidly in this case, but the above authorities should be followed to the extent of imposing on the defendant a substantial share of the capital charge. In the Omaha bridge cases the federal courts charged each user of the bridge an annual rental of $45,000 without investigation into the volume of the traffic. As was pointed out on the argument, plaintiff is chargeable with interest on its investment in this bridge even though through flood or strike the railroads cease to operate over it. If defendant is to use this facility in order to reach a traffic-producing territory it should bear a substantial portion of the interest charge on the capital invested. These are the reasons why it seemed to us that defendant should be charged with twenty per cent of the interest charge in this case. The petition makes the point that there has been no argument on this particular question. It may be that argument could throw further light upon it. The question is so im*557portant that we are disposed to give every opportunity to the parties to present their views. So much of the opinion as fixes this particular charge will therefore be withdrawn and the cause remanded to the lower court with instructions to hear argument and determine the share of the interest charge to he imposed on defendant on the principles announced in this and the former opinion. In other respects the former opinion is adhered to and the petition for rehearing is denied.
Modified and Remanded.
Further Modified on Petition for Rehearing and Rehearing Denied.