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CHICAGO v. HOYT.

decided: April 17, 1893.

CHICAGO, MILWAUKEE AND ST. PAUL RAILWAY COMPANY
v.
HOYT.



ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS.

Author: Jackson

[ 149 U.S. Page 2]

 MR. JUSTICE JACKSON delivered the opinion of the court.

This action was brought by defendants in error against the plaintiff in error to recover a designated sum of money alleged to be due under the terms of a covenant contained in a certain indenture of lease made and entered into between the parties. The cause was tried by the court below under a written stipulation of the parties waiving a jury, and resulted in a judgment for the plaintiffs below for the sum of $33,783.83, to reverse which, for errors of law claimed to have been committed by the court in its construction of the covenant and in the legal conclusions it reached from the facts specially found, this writ of error is prosecuted.

[ 149 U.S. Page 3]

     On February 18, 1880, the Chicago, Milwaukee and St. Paul Railway Company, (hereafter called the railway company,) being the owner thereof, leased and demised to the defendants in error lots 3, 4 and 5, of block K, of the original town of Chicago, for a term of ten years from the first day of January, 1881, at an annual rental of $3850, to be paid quarterly by the lessees, who were also to pay all taxes and assessments that might be levied upon the premises during the term. At the date of the lease the lessees were the owners of the adjoining lots 1 and 2 of the same block, upon which was located an elevator or warehouse, used for receiving, storing and handling grain, and having a capacity for about 350,000 bushels. The lease was executed under seal of the respective parties thereto, and the material provisions thereof, so far as they relate to the present controversy, are as follows:

By the second article, Hoyt and his associates agreed to erect on said lots 3, 4 and 5 a grain elevator "of a storage capacity of 700,000 bushels or more during the year 1880." The article provided that the elevator should have all modern improvements and should be constructed to the satisfaction of the railway company. No question is raised upon this article. The case admits that it was fully executed.

By the third article, the railway company "agrees to lay all necessary tracks adjacent to said elevator, to connect its railway therewith for the purpose of delivering grain in cars thereto, and keep the same in repair during the time of this lease, and agrees to deliver on said tracks in cars, at said elevator, to the parties of the second part, all the grain that may be brought by its railway consigned to parties in the city of Chicago, so far as the party of the first part can legally control the same, for handling and storage in said elevator." The case involves no breach of this article.

By the fourth article it is provided as follows: "The said parties of the second part [Hoyt and his associates] agree to receive, handle and store said grain as delivered in the usual manner of handling grain in the city of Chicago to the extent and capacity of said elevator to be constructed, and in addition agree that they will use for the same purpose, so far as their

[ 149 U.S. Page 4]

     other engagements will allow, the elevator now standing on lots 1 and 2 of said block, and the said party of the first part shall at all times be entitled to storage for its grain to the extent of at least 1,000,000 bushels. The parties of the second part, with the consent of the party of the first part, may receive grain for storage from other parties and from river and canal craft, but in case such grain is so received so as to reduce the capacity of the parties of the second part to accommodate the party of the first part to the extent of 1,000,000 bushels in said elevators, the said parties of the second part agree to furnish storage in other elevators to the party of the first part to the extent that their capacity is so reduced, without expense to the said party of the first part for switching or otherwise." The case involves no violation of this article by either of the parties.

The fifth, sixth and seventh articles, taking them in their order, relate, 1st, to the charges to be made for the storage and handling of grain -- certain elevators accommodating the grain business of competing railways being referred to as a standard; 2d, to the rebuilding of the elevator in case of its destruction by fire or other casualty, and that the "parties of the second part will save the said party of the first part free and harmless from all loss or damage by fire to said elevator or contents during the continuance of this lease"; and, 3d, to the weighing of the grain received into the elevator, and the appointment of weighers. In all these respects the case presents no question of controversy.

The last clause of the seventh article reads as follows: "It is further agreed that the parties of the second part will, at all times, keep a force at said elevators sufficient to transact all business that may be offered by said party of the first part, and that cars of grain will be received and unloaded, when the business of the party of the first part requires it, in the night time or on Sundays, and that said business shall be dispatched with equal and as great facility in that respect as at any of the elevators in the city of Chicago above mentioned, so as not to delay the cars of the party of the first part unreasonably or unnecessarily."

[ 149 U.S. Page 5]

     It is upon the alleged breach of the eighth article of the contract that this suit is brought. That article reads as follows:

"In consideration of the agreement aforesaid the said party of the first part agrees that the total amount of grain received at said elevator shall be at least five million bushels on an average for each year during the term of this lease; and in case it shall fall short of that amount the said party of the first part agrees to pay to the said parties of the second part one cent per bushel on the amount of such deficiency, settlements to be made at the close of each year; and whenever it shall appear at the close of any year that the total grain received during so much of this lease as shall then have elapsed does not amount to an average of five million bushels for each year, the party of the first part shall pay to the parties of the second part one cent per bushel for the amount of such deficiency; but in case it shall afterwards appear that the total amount received up to that time equals or exceeds the average amount of five million bushels per annum, the amount so paid to the parties of the second part shall be refunded or so much thereof as the receipts of the year shall have exceeded five million bushels, so that the whole amount paid on account of deficiency shall be refunded should the total receipts for the entire term equal or exceed fifty million bushels in all on an average of five million bushels for each year."

The remaining articles of the contract, including the supplement thereto, are comparatively unimportant.

In May, 1888, the defendants in error brought their action of covenant against the railway company in the Superior Court of Cook County, Illinois, for the alleged breach of the contract and agreement embodied in said article 8 of the lease. The railway company, being a citizen of Wisconsin, removed the cause to the United States Circuit Court for the Northern District of Illinois. The declaration contained two special counts, and the same breaches are assigned in each count. In the first count the contract is set out in hoec verba; the second, according to its tenor and effect.

The first breach assigned was that the grain received for

[ 149 U.S. Page 6]

     storage from the railway company during the year 1886 was less by 1,740,194 bushels than the 5,000,000 bushels covenanted to be received, and, therefore, the railway company became bound at the close of the year 1886 to pay the plaintiffs, (defendants in error,) on account of the deficiency, the sum of $17,401.94.

The second breach averred that the grain received for storage from the railway company during the year 1887 was less by 2,042,408 bushels than the 5,000,000 bushels covenanted to be received, and, therefore, the railway company became liable at the close of the year 1887 to pay to the plaintiffs, (defendants in error,) on account of the deficiency, the sum of $20,424.08.

The main breach specially set up and relied on is the third, which comprehends the other two, and is ...


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