Court Opinion

ID: 8827144
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:50:46.283747+00
Date Added: 2024-06-11T17:04:48.974623
License: Public Domain

ALSCHULER, Circuit Judge
(after stating the facts as above). The main contention here is that the so-called notice of cancellation was not authorized by the contract, because up to that time the Public Utilities Commission had not authorized the issue of securities as specified in section 7. The other conditions in the contract all existed — the franchises from the two cities, and the permission from the State Utilities Commission to construct the road. Permission to issue securities had not been obtained, but it was definitely learned that progress in the actual work would have to be made before the commission would grant this,'and of this Fiad was advised, and he well knew this was the situation for about 2 years, and what work he did thereafter was with knowledge of this fact. While he was not under obligation to procure the capital, he was nevertheless, under the contract, the financial consultant and assistant in its procurement. While it was not likely securities could ultimately be issued without such authorization, this would not prevent negotiation for the placing of securities at such time when they might be issued; indeed, section 7 of the contract contemplated the possibility of the money being raised even without the authorization of the commission to build the road, in which no commission was to be paid.
Defendant in error contends that the evidence shows an abandonment of the contract by Fiad, but we cannot find that the evidence warrants this conclusion. The long inaction of Fiad with reference to the financing of the railroad, while not necessarily showing abandonment of the contract, would have a bearing on the proposition whether hi-s conduct after the giving of the notice would indicate an acquiescence in the terms of the notice, as a sufficient cancellation of the contract under section 8. Far more than the 90 days had passed since the coming into existence of the conditions referred to, and the funds to construct the line had not been raised under section 8. After the giving of the notice, 30 days yet remained in which to raise it before the cancellation would become effective; but Fiad, with his attention sharply challenged to the situation, appears to have made no move whatever within that period, either to raise the money or to make any claim or contention respecting the notice, and nearly another month passed after the expiration of these 30 days before he took any definite stand with reference to the notice. There is evidence that he knew others were working on the proposition, and there was evidence that, shortly after expiration of the 30-day period following the notice, the contract was entered into for the construction of the roadbed.
It thus became an important question in the case whether or not, under the circumstances, with the knowledge of Fiad that the projectors were extremely anxious to build this road, and Flad’s inability to render assistance in financing it had long been manifest, Flad’s conduct did not indicate acquiescence in the terms of the letter and notice of September 20, 1916, both of which may be considered as constituting *390the notice. This was in effect an issue before the jury, whereon they found against Fiad, and we cannot say there was no evidence to support such a finding. While section 8 refers to a cancellation of the contract, it would not be a cancellation under the terms of the section, but rather a termination of one phase of it, and the bringing into existence another, viz. those parts of the section which fix the rights of the parties in the event of the giving of the notice.
Concluding, as we must, under the record, that the jury was not unwarranted in finding that Fiad acquiesced in the notice, we are brought to a consideration of the then contractual relations of the parties. Subsequent parts of section 8 provide that, in case of exercise of the “right to cancel,” Fiad shall retain the $350, and other payments to him to cover expenses as provided in the contract, and that, if “the line of railway between Murphysboro and Carbondale is within 5 years from the date hereof constructed by the party of the first part, * * * then the party of the first, part shall pay to the party of the second part within 90 days after completion of said line of railway the sum of $2,500 * * * in full compensation for services rendered by it * * * under this contract.” Flad’s right to the $2,500 is thus made dependent on building the line of road between the two cities within 5 years from the date of the contract, viz. by May 16, 1919. Defendant in error asserts that the line was not so completed at the time suit was commenced April 13, 1918, and upon the evidence submitted it may be said the jury’s verdict would indicate that the jury found as a fact it had not been completed.
If the finding reached was upon contradictory evidence upon that subject, we would have no right to disturb it. But it seems there was no controversy as to the facts bearing on this question, and we are at liberty to take the uncontroverted facts and from them determine whether there was such completion as was contemplated by the contract. The road was in continuous operation between its contemplated termini over 7 months before the suit was begun. It was regularly serving the public and discharging its duties as a common carrier. As in the 'case with all such utilities, new or old, but particularly new, there is always something yet to be done whereby the service may be improved. It is contended that the ordinances of the two cities required the construction of depots. But may it be said that “the line of railway” is not constructed between the cities because these depots had not yet been built? The terminal facilities necessarily in actual use may be crude, and far from such as "are ultimately contemplated; but they are terminal facilities just the same, and the fact that at some time in the future, either through obligation or choice, the company will erect depots, more imposing and commodious than such as were in fact serving the public, does not warrant the conclusion that the line of railway is not completed and in operation. It is said, also, that there were fences yet to be built in order to comply with the state law; but this does not indicate that the line of railway was not constructed “by the party of the first part” within the meaning of the contract. It is said there is no building to hold the cars when not in use. But how many railroads there are, long in operation, whose passenger cars, when not *391in use, remain in the open? It is a common sight. And the lack of ballast in parts of the road evidently is not such as to interfere with regular operation. No doubt every new road, and many old ones for that matter, require ballast, either initially or by way of renewal.
As against this contract, all such things are unimportant in the face of the controlling fact that the road was in actual operation as a public carrier of passengers, which presumably would not be permitted by the public authorities if it were lacking in any substantial respects whereby the traffic would not be reasonably safe or proper. As to this insistence of defendant in error, no fine line can be drawn in its favor to relieve it from such a liability whereby in its very operation of the road It holds itself out to have constructed a line of railway between the two cities sufficiently complete to serve the public, and receive the remuneration resulting from the service. If this road was sufficiently complete to be operated and receive revenue, it was sufficiently complete to raise an obligation to make the payment in the contract provided to be made upon the contingency of" the completion of the line.
Giving defendant in error the benefit of all its contentions of fact on this subject, it would follow as a matter of law that plaintiff in error was entitled to this amount, unless, as is further contended, he is in this action barred by the contract proviso:
“Should the party of the second part die within said 5 years, then the party of the first part shall he discharged from the payment of said $2,500.”
The “said 5 years” refers to the 5 years following the making of the contract in 1914, and it is the contention of defendant In error that in ho event would this become due until the expiration of such 5 years, and that this suit, brought in 1918, was premature as to any demand for the $2,500. The provision is a peculiar one, and it is not entirely clear what was intended by it. But under it, if Fiad died within the 5-year period, and before the road was constructed, no right to the $2,500 would accrue, notwithstanding the road was in fact constructed within the 5 years. This would give effect to the clause, but in case the road is completed In Flad’s lifetime and within the 5-year period, we do not regard the clause as postponing the maturity of the $2,500 until the 5-year period has ended, to await the contingency of Fiad then living. While this seems to us the proper construction to be given that clause, nevertheless, if it is uncertain and ambiguous In this respect, we are justified in adopting the construction which defendant in error1 placed upon it in its letter of September 20, 1916, wherein it was unqualifiedly stated that the $2,500 was to be paid within 90 days after completion of the road, if done within 5 years.
If Flad is held to acquiescence in the cancellation claimed to have been effected by the letter and notice, surely his acquiescence was upon the terms therein stated. Respecting this part of the contract it was error to charge the jury, as was done, that if the contract was canceled according to its terms suit for the $2,500 would be premature if brought less than 5 years from the date of the contract, and to submit to the jury the question of whether the road had been constructed at time suit was brought. As to this issue, the court, upon the facts of *392this record, should have directed a verdict for appellant for $2,500, with interest at 5 per cent, per annum from date of suit, and on like state of facts thereon such will be its duty.
The judgment is reversed, and the cause remanded.