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PENNSYLVANIA R. CO. V. ST. L., A. & T.H. R. CO., 118 U. S. 630 (1886)

U.S. Supreme Court

Pennsylvania R. Co. v. St. L., A. & T.H. R. Co., 118 U.S. 630 (1886)

Pennsylvania Railroad Company v. St. Louis,

Alton & Terre Haute Railroad Company

Petition for rehearing

Submitted May 10, 1886

Decided November 8, 1886

118 U.S. 630


No authority is found in the Statutes of Indiana for the lease of an entire railroad, property, and franchise for a period of ninety-nine years. The Court adheres to its views on the other questions involved in this case. See ante, 118 U. S. 290-318.

This was a petition for rehearing the cause reported ante, 118 U. S. 290. The petition was submitted on the closing day of the sitting

Page 118 U. S. 631

of the Court at the last term. The grounds set forth were the following:

"FIRST. Your petitioner avers that there is manifest error in the opinion and decree of this Court in the above causes, in this: in holding that the contract made by your petitioner with the Indianapolis and St. Louis Railroad Company for the use of its railroad by the last-named company in the manner set out in said contract as the same appears of record, is void and of no effect for want of authority in said Indianapolis and St. Louis Railroad Company to enter into the same. Your petitioner claims and insists that said Indianapolis and St. Louis Railroad Company, a corporation of the Indiana, was expressly authorized by the laws of that state to make such contract or agreement with your petitioner 'for the use of its road as to the board of directors of said company might seem proper,' and that said contract, so declared void in the opinion rendered in this case, was fairly entered into and fully ratified and approved by the boards of directors of each of said companies."

"SECOND. It further avers that there is manifest error in the opinion and decree of this Court in this: that it is held by this Court that the guarantor companies are not bound by their several contracts of guarantee, first, by reason of the original contract's being, in the opinion of this Court, void, and secondly for want of authority on the part of the said companies to enter into such guarantee contracts. The objection to the first point has been sufficiently stated. With regard to the second, your petitioner submits that it is erroneous in this, that this Honorable Court has wholly failed to take into consideration the fact that the guarantor companies were the promoters of the original contract, and that they organized the Indianapolis and St. Louis Company as their agent and as an instrumentality to secure to them and each of them the use and benefit of said operating contract for the control of the through business passing from St. Louis eastward over your petitioner's road; that the contract of guarantee is not separable from the operating contract to which it is attached, but with said operating contract forms one entire contract, in which the guarantor

Page 118 U. S. 632

companies were the chief parties in interest. It is not in the nature of a mere guarantee for the debt, default, or miscarriage of a third party, and it is not just and equitable to your petitioner to treat it as such, as that view leaves entirely out of sight the chief causes which led to its being executed, and entirely ignores the direct interest which the guarantor companies had in it and the consideration which moved directly to the guarantor companies in support of it."

"THIRD. It further avers that in said opinion and decree there is manifest error, in this: that, holding said contracts of guarantee to be void, this Court also holds that said guarantors are not in any manner bound for the benefits which they and each of them derived from the said contracts during the time the road of your petitioner was being operated under their agent for their use and benefit. The rule, as stated in the opinion of this Court, is not founded on the facts, and is not consistent with the principles of equity as applied to the facts. "

Page 118 U. S. 633

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