277 Pa. 227 | Pa. | 1923
Opinion by
In this suit, tried before the learned president judge of the court below without a jury, plaintiff seeks to re
Appellant’s counsel thus state the dispute: “It is contended on behalf of the defendant, and the court has found, that these [certain provisions of the lease] are covenants for freight rates. If so, they were made illegal in 1887, by the Interstate Commerce Act of that year. It is contended in behalf of the plaintiff that when this lease was made in 1884 the parties (who did not foresee the Interstate Commerce Act or the different way of exercising matters which had arisen from it) intended and called for a sliding-scale rental.”
To decide the controversy requires a construction of certain provisions of the lease to determine whether the payments in question are rent or rebates. It is dated April 14, 1884, between the plaintiff, as lessor, and a predecessor of defendant, as lessee, and is for the term of fifty years. It recites that the railroads belonging to the parties are connected with each other by means of an intervening railroad and that the lessor is the owner of certain coal mines, located on the line of its railroad, and that these are not demised; and provides, “First: That the said lessee shall- and will pay to the said lessor, as rent for the premises hereby demised, the sum of thirty-six thousand dollars ($36,000) per annum during the first three (3) years of the term, and the sum of forty thousand dollars ($40,000) per annum during the remaining forty-seven (47) years of the term. The rent shall be payable in equal monthly sums at the office of the said lessor in Philadelphia, and payment shall be made upon the fifteenth day of each month of the sum due for
“The lessor agrees to ship from Bernice, over the railroad demised, in each and every year, at least seventy-five thousand (75,000) gross tons, and if the yearly shipment should be less than seventy-five thousand (75,000) gross tons, but not less than fifty thousand (50,000) gross tons, then the lessor shall pay to the lessee the sum of forty (40) cents for each gross ton shipped, and the sum of
Appellant’s position is, as set forth in its statement of claim, “the lessor was to receive, in addition to the fixed rental above set forth, when the number of tons transported over the railroad exceeded 100,000 gross tons, an additional rental of five cents per gross ton so transported.” These payments were made by defendant to plaintiff until 1910. It appears that the practice pursued by the parties prior to 1910 was, that the plaintiff paid the 40-cent rate on all coal shipped, and, at the end of the year, if the tonnage exceeded 100,000, defendant paid back to plaintiff five cents per ton for each ton transported. In May, 1911, when a payment of rent was
In support of its contention that the freight rate provisions in the lease were intended to be and are a sliding scale rental based on tonnage, plaintiff argues that the parties themselves so regarded them, and acted on this assumption for several years, and, that this construction of the contract by the parties, is binding upon them and upon us. It might be sufficient answer to this to say, that the construction of the parties, or their nomination of what they did, could not change the actual to the supposed or the desired. They certainly could not by calling that which was illegal, or might become so, by a term which implied legality give to it the quality of lawfulness when it was in fact unlawful, and, in an agreement dealing with rates, such as the one before us, the law assumes the parties had in mind and the contract impliedly contemplated the possibility that Congress might at some future time exercise its right of control over the subject-matter: see cases infra. But it is not in all cases that the interpretation which the parties have given to a contract establishes the true construction; it is only when the meaning is uncertain or ambiguous that the parties’ interpretation is followed. “If clear and free from ambiguity, the intention 'shown upon its face, ......must be followed, though contrary to the practical interpretation of the parties, and even if such practical construction has been acquiesced in for a long period of time”: Sternbergh v. Brock, 225 Pa. 279; Bittner v. Quemahoning Coal Co., 271 Pa. 579. In our view, the provisions of the contract with which we are dealing are clear.
Plaintiff’s argument that the presumption in favor of the legality of the contract should be favored, and that where it is susceptible of two constructions, one of which is legal, and the other not, that construction should be followed which makes for legality (Zenatello v. Ham
In its final analysis, plaintiff’s entire argument is based upon the theory that the five cents per ton to be paid by the lessee to the lessor was an additional rental. We cannot follow this even so far as to concede that this was the intent of the parties in the first instance, when they executed the lease. To our minds, the two things, rent and freight rates, are separate, independent subjects, just as separate and distinct as they would have been had they been provided for in two documents instead of one. It is provided that the lessee shall pay “as rent......the sum of $40,000 per annum,” that this “rent shall be payable in equal monthly sums,” that the determination of the agreement “shall not relieve the lessee from liability......for arrears of rent......to be apportioned to the time of such determination”; the paper also speaks of “default in payment of rent or of any payments covenanted as aforesaid to be made.” When the shipment of coal comes to be spoken of, its carriage “at rates” is the thing in contemplation.
The unusual feature of the letting of the railroad is that the company owning the railroad also owned coal mines. They were not leased with the railroad. The provision as to freight rates applied to the coal they produced. The lease says, “the lessor does not demise...... any of its coal lands......The lessee shall and will transport...... the coal to be mined from lands now owned by the lessor, at rates as follows,” and provides that the lessor shall pay the freight rates therefor as fixed in the contract. Nowhere in the writing is the allowance of five cents per ton on the freight rate denominated additional rent. If it had been so regarded, certainly it would have been so termed in a document as carefully drawn as is this one.
That no device to defeat the enactments of Congress relative to discriminatory rates can be upheld has been decided in many cases, of which Armour Packing Co. v. United States, 209 U. S. 56; United States v. Union Stock Yard & Transit Co. of Chicago, 226 U. S. 286; Fourche River Lumber Co. v. Bryant Lumber Co., 230 U. S. 316; Baer Bros. Mercantile Co. v. Denver & R. G. R. R. Co., 233 U. S. 479; and Chicago, I. & L. Ry. Co. v. United States, 219 U. S. 486, are examples. We understand it not to be controverted that even if the contract before us was lawful when made, Congress could by subsequent enactments make it illegal. This is the doctrine laid down in Louisville & Nashville R. R. Co. v. Mottley,
Finally, plaintiff contends that by defendant’s failure to pay the allowance, there was a breach of covenant by it for which damages can be recovered and it relies upon Rooks v. Seaton, 1 Phila. 106, as sustaining this position. There the lessor leased premises to another, who covenanted to erect a frame building, which a subsequent law forbade, and the lessor was permitted to recover from the lessee, who insisted upon'keeping the property, damages for the breach of the covenant he had made. That case might bear upon this if the payment of the five cents per ton was rent, but it was a rebate. Furthermore, no recovery could be had for breach of covenant under the pleadings, which rest plaintiff’s cause of action upon the agreement to pay rent, not upon breach of contract.
Being of opinion, as we are, that the sums of money plaintiff, here claims were rebates and not rental, they cannot be recovered.
The judgment is affirmed.