author: Mr. Justice Thomson

text:
    Armour Grain Company, Appellee, v. United States Grain Corporation, Appellant.
    Gen. No. 30,457.
    1. Equity — basis of jurisdiction in matter of accounting. The jurisdiction of equity in matters of account does not depend upon the existence of a remedy at law, but upon the adequacy and practicability of such remedy and upon the discretion of the court.
    2. Equity — possible necessity for examination of books and reo ords of foreign corporations completely to state account as basis for retention of equitable jurisdiction. It was not error to overrule a demurrer to a bill in equity, based upon the contention that complainant had an adequate remedy at law, where it appeared that the suit involved a complicated account, for the complete statement of which it might become necessary to examine the books and records of foreign corporations beyond the jurisdiction of a subpoena duces tecum.

    3. Contracts — burden of proof as to applicability of trade custom in wheat market to sale by federal licensee under Food Control Act to United States Grain Corporation. Where wheat was sold to the United States Grain Corporation by a licensee under the Food Administration after the enactment of the Food Control Act and the issuance of regulations thereunder, the burden was upon the seller, in a suit for an accounting in respect of freight refunds collected by the buyer upon reshipment of the wheat, to show that the sale was subject to a trade custom whereby such refunds belonged to the seller.
    4. Contracts — sufficiency of evidence to show sale of wheat by licensee under Food Administration to United States Grain Corporation made subject to trade custom of wheat market. Sales of wheat to the United States Grain Corporation by a licensee under the Food Administration held not shown to have been made subject to a custom, prevalent prior to the enactment of the Food Control Act and the issuance of regulations thereunder, giving the seller the benefit of freight refunds collectible upon reshipment of the wheat.
    5. Contracts — when United States Grain Corporation not es-topped to deny applicability of trade custom of wheat market to sale of wheat by licensee under Food Administration. United States Grain Corporation held not estopped to deny that it purchased wheat from complainant, a licensee under the Food Administration, without reference to a custom prevalent prior to the enactment of the Food Control Act and the issuance of regulations thereunder, whereby the seller was entitled to the benefit of freight refunds collectible upon reshipment of the wheat, by reason of the fact that in selling wheat itself it retained such refunds, its conduct in so doing being referable to its announced policy in maintaining the fixed price basis which it was the purpose of the statute tq establish.
    6. Licenses — binding effect of federal regulations governing sale of wheat upon licensee under Food Administration. Where a sale ef wheat to the United States Grain Corporation was made after the enactment of the Food Control Act and the adoption of regulations thereunder, by a seller who, as a condition to receiving a license from the Food Administration to deal in wheat, agreed to transact all of its business in accordance with any such regulations then existing or thereafter adopted, such sale was not subject to customs of the wheat trade in existence prior to the enactment of the Food Control Act, the effect of such enactment and the regulations thereunder being to abolish such customs.
    7. Contbacts — when seller of wheat to United States Grain Corporation without right to equitable relief on ground transaction in violation of terms of Food Control Act. Where the United States Grain Corporation purchased wheat from a licensee under the Food Administration at the price fixed by presidential proclamation, no ground for equitable relief to the seller was afforded by the fact that, on reshipments of such wheat made within one year the buyer was in a position to collect a freight refund, that fact having no bearing upon the price payable for the wheat.
    8. Equity — jurisdiction to review reasonableness of federal administrative order abrogating trade custom, governing sales' of wheat by licensee under Food Administration to United States Grain Corporation. A court of equity is without jurisdiction, in a suit to secure an accounting by the United States Grain Corporation in respect of a freight refund collected upon reshipment of wheat purchased from a licensee under the Food Administration, to determine the reasonableness of a ruling of the Food Administration whereby such refund could be retained by the buyer, contrary to a trade custom prevalent prior to the enactment of the Food Control Act and the issuance of regulations thereunder, the question whether such ruling was “essential effectively to carry out the provisions of” the Food Control Act being a matter exclusively for the determination of the executive branch of the government.
    Appeal by defendant from the Superior Court of Cook county; the Hon. Charles M. Foell, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1925.
    Reversed and cause remanded with directions.
    Opinion filed June 23, 1926.
    Shattuck, Bangs & Winant and Defress, Buckingham & Eaton, for appellant; Edwin P. Shattuck, George B. Francis and Don Kenneth Jones, of counsel.
    Townley, Wild, Campbell & Clark, for appellee; Morris Townley, of counsel.
   Mr. Justice Thomson

delivered the opinion of the court.

By this appeal the defendant, United States Grain Corporation, seeks to reverse a decree by which the complainant, Armour Grain Company, was awarded an accounting. Originally, the complainant brought an action at law against the defendant and filed a declaration. Later, conceiving its action to be in equity, it procured an order transferring the cause to the equity side of the court. The order transferring the cause was entered after issue had been joined on the common law pleadings and the motion of complainant to transfer was not objected to by the defendant. After the case had been transferred to the equity side of the court, the complainant filed its bill of complaint, and the defendant filed a general demurrer, which was overruled, and the defendant was ordered to plead. A number of special pleas were then filed by the defendant. On motion of complainant, these pleas were overruled and defendant was ordered to answer the bill and, within the time fixed, the answer of the defendant was duly filed.

We are of the opinion that the defendant’s contention that the complainant had an adequate remedy at law is without merit. Not only was a complicated account involved, but the defendant’s officers and records were beyond the jurisdiction of a subpoena duces tecum. The defendant was a Delaware corporation with its principal office in New York. While such records may not have been essential, they might be very valuable in showing the account, if an account was awarded. If the complainant might have proven the items of the account by its own records, plus certain railroad records, the fact remains that ten different railroads were involved, three of which were nonresident corporations. The jurisdiction of equity in matters of account does not depend upon the existence of a remedy at law, but upon the adequacy and practicability of such remedy and upon the discretion of the court. In our opinion, the situation presented in this case clearly brings it within the rule giving the equity side of the court jurisdiction. Kirby v. Lake Shore & M. S. R. Co., 120 U. S. 130; Miller v. Russell, 224 Ill. 68; Townsend v. Equitable Life Assur. Soc. of United States, 263 Ill. 432; Ely v. King-Richardson Co., 265 Ill. 148; People v. Small, 319 Ill. 437, 444-445; Mayr v. Nelson Chesman & Co., 195 Ill. App. 587, 602.

The record discloses the following facts: In 1918, and for many years prior thereto, the complainant was a corporation engaged in the grain business in Chicago. Most of the grain produced in the United States comes from the west and is transported eastward for consumption in this country or export to foreign countries. Between the time of production and the consumption of a large part of each annual crop of grain, considerable time elapses, during which the grain must be stored. Large facilities for such storage are furnished by elevators and warehouses in Chicago, through which point much of this grain passes. The interval of storage is from one to twelve months. Grain in storage in these elevators and warehouses, having come from various points of production south and west, and destined for points east, is considered in transit during the period of storage, provided it does not continue in storage for a period longer than 12 months. This privilege of storage in transit is known as the transit privilege and by reason of this privilege, grain may be shipped to Chicago from the point of production, and, after an interval of storage there, that grain or other grain, of equal amount, may be shipped to eastern points, at the through freight rate which obtains from the point of original shipment to the point of destination, which through rate is generally less than the sum of the two local rates from the point of original shipment to Chicago and from Chicago to the point of destination, which would apply if the privilege of storage in transit were not available. Prior to the World War, the established custom of handling these grain shipments was that the shipper of the grain, from the point of production to Chicago, paid the western carrier the local freight rate from that point to Chicago and received the usual form of receipted freight bill. After the interval of storage (less than 12 months), when the grain was to be shipped east, the receipted freight bill was presented by the owner of the grain to a joint agency of western and eastern carriers, known as the Transit Bureau, located in Chicago, and that Bureau placed a notation on the receipt, authorizing the eastern carrier to move the grain to its point of destination in the east, on the basis of the through rate to that point from the original point of shipment. In all such cases there was an agreed division of the through rate between the western and eastern carriers. The proportion of the through rate due the western carrier was known as the “specific” and the proportion due the eastern carrier was known as the “reshipping rate.” When the shipper presented a receipted freight bill issued by a western carrier, to the Transit Bureau, for authorization of further carriage east, at the reshipping rate, that bureau would note upon the bill the amount of the refund due the shipper from the western carrier, that refund being the difference between the local rate from the original point of shipment to Chicago and the specific, above referred to.

Where grain, having the transit privilege, changed hands in Chicago, the custom was for the seller to furnish the buyer a receipted freight bill, so that the latter might thereby obtain the reshipping rate thereon, from Chicago to the point of destination, after which, the custom required the buyer to return the bill to the seller, so that the latter might collect the refund due on the bill, from the western carrier.

This right to refund on receipted freight bills of western carriers, where grain had been shipped east on the reshipping rate after the exercise of the privilege of storage in transit, is referred to in the record as “billing.” Two types of sales of grain in the Chicago market were customary — sales “on track” and sales “in store. ” Sales on track were made either on a “local rate basis,” the price paid being for both grain and billing, or on an “Illinois proportional basis,” the buyer paying a stipulated price for the grain and another stipulated price for the billing, but in either case, all sales on track, according to the custom, involved the transfer of both grain and billing to the buyer. But where grain was sold in store, the transaction involved the transfer only of the grain, the custom requiring the seller to deliver the receipted freight bill to the buyer, only to enable the latter to obtain the benefit of the reshipping rate from Chicago, east, and thereupon requiring the buyer to return the bill to the seller, so that the latter might obtain the refund from the western carrier.

The United States entered the World War in April, 1917. In August of that year, the Act of Congress known as the Food Control Act, became effective. The enacting clause of that act recited that “by reason of the existence of a state of war, it is essential to the national security and defense, for the successful prosecution of the war, and for the support and maintenance of the Army and Navy, to assure an adequate supply and equitable distribution, and to facilitate the movement of foods;” (and other things which were determined to be necessaries) “to prevent, locally or generally, scarcity, monopolization, hoarding, injurious speculation, manipulations, and private controls, affecting such supply, distribution, and movement; and to establish and maintain governmental control of such necessaries during the war. For such purpose the instrumentalities, means, methods, powers, authorities, duties, obligations, and prohibitions hereinafter set forth are created, established, conferred and prescribed. The President is authorized to make such regulations and to issue such orders as are essential effectively to carry out the provisions of this Act.”

Pursuant to this act, the President of the United States created the Food Administration. He also made various executive orders and issued various proclamations, the effect of which was to require all persons and corporations engaged in the grain business to operate under a license from the government and subject to the rules and regulations of the Food Administration. Pursuant to these requirements, the complainant, Armour Grain Company, applied to and received from the Food Administration licenses to engage in the storage, sale and distribution of grain, and, in so doing, it agreed to abide by all the laws relating to food control, and proclamations, rules and regulations that might then exist or thereafter be adopted in respect thereto. Thereafter, throughout the remaining period of the war, and during the time the transactions involved in this case were had, the complainant conducted its business under said governmental license and subject to the control prescribed by the Food Control Laws of the United States, the proclamations of the President, relating thereto, and to the rules and regulations adopted pursuant to those laws and proclamations.

Under the authority of the Food Control Act, the President directed the Food Administration to form the defendant corporation. In August, 1917, the defendant was created a corporation under the laws of Delaware. It was first called the Food Administration Grain Corporation, but the name was later changed to the United States Grain Corporation, with a capital stock of $500,000,000, all of which was subscribed, paid for and owned by the United States Government.

By a proclamation issued on August 30, 1917, the President fixed the price of wheat at Chicago, for the crop of 1917, at $2.20 per bushel. In the statement issued by the President in that connection, he called attention to the fact that “the purchase of wheat and flour for our Allies, and to a considerable degree for neutral countries also, has been placed under the control of the Food Administration.” He then stated that the price of $2.20 per bushel at Chicago, adopted pursuant to the recommendation of a committee which had been appointed to determine a fair price, would “be rigidly adhered to by the Food Administration,” with the expectation that this would “at once stabilize and keep within moderate bounds the price of wheat for all transactions throughout the present crop year, and in consequence the prices of flour and bread also. The Food Act has given large powers for the control of storage and exchange operations, and these powers will be fully exercised. An inevitable consequence will be that financial dealings cannot follow their usual course. Whatever the advantages and disadvantages of the ordinary machinery of trade, it cannot function well under such disturbed and abnormal conditions as now exist. In its place (that is, in place of the ordinary machinery of trade) the Food Administration now fixes for its purchases a fair price, as recommended unanimously by a committee representative of all interests and all sections and believes that thereby it will eliminate speculation, make possible the conduct of every operation in the full light of day, maintain the publicly stated price for all, and through economies made possible by stabilization and control, better the position of consumers also.” At the same time, the price of wheat at New York was fixed at $2.30 per bushel and a month later this was changed to $2.28 per bushel.

In September, 1917, the defendant corporation opened an office in Chicago and began buying wheat in the Chicago market, and, among others, from complainant. For the first few months, on all sales of wheat from complainant to defendant, the latter paid the complainant the price fixed by the Government for the wheat and, in addition, paid the complainant for the billing involved — that is, the defendant paid the fixed price for the wheat purchased, and, in addition, took the receipted western freight bills, attaching to the quantity of wheat purchased, and paid the complainant an additional price therefor, and later the defendant collected the amount represented by the refund due from the western carriers on those freight bills. During this period, one Obermayer, employed by the complainant company since 1903 as traffic man supervising handling of rates and transit arrangements on inbound and outbound grain, was loaned to the Chicago office of the defendant for the purpose of helping to organize its Traffic Department. The bills from complainant to defendant for these western transit refunds were made out in Obermayer’s department at complainant’s offices, and he testified that at the defendant’s offices he “instructed the man handling that work to pay those bills to Armour, and others as well.”

On December 1,1917, the Food Administration and the defendant, as its representative and agent, discontinued the practice of paying the fixed government price for wheat, and, in addition, permitting the seller to receive an additional amount for the right to the refund due on the western freight bills, and a ruling was made and promulgated that thereafter all purchases of wheat made by the defendant would be at the government fixed price, with the condition that the western freight bills be turned over, by the seller of the wheat, to the defendant, who would itself collect and retain all refunds. This ruling was communicated to the defendant’s Chicago office by telegram dated November 30, 1917, and reading as follows:

“Starting December first all wheat will be handled basis local freight rate into Chicago, shipper absorbing all charges including switching. Expense bills must be furnished Food Administration Grain Corporation, who will secure benefit of all difference inbound rates notify receivers promptly.”

This telegram was followed by a letter signed by Julius H. Barnes, president of the defendant corporation, to Howard B. Jackson, in charge of defendant’s Chicago office:

“Referring to the new ruling by which all wheat sent to Chicago must be delivered on local basis, and any saving in through rate combinations when after-wards forwarded either as. flour or wheat, must go to the Grain Corporation in order to hold the scale fairly between country shipper and miller, each of whom would claim this saving.”

Jackson was instructed to secure a man for his organization familiar enough with the details to protect the defendant “on every car reaching Chicago, even when directed to the mill, without intermediate elevation.” This ruling came to the immediate notice of all Chicago traders in wheat and occasioned a vigorous protest on their part, including complainant, and they all united in an effort to induce those representing the Government in the matter to rescind the rule. Resolutions were passed by the directors of an association known as the Receivers Association of the Board of Trade of the City of Chicago, under date of December 7, 1917, protesting against “the maintenance of this ruling.” The reasons given for this protest, as given in the resolutions, were:

“1. —that it deprives the producer of the right to ship his wheat to the best market.

“2. —that it reduces the price of wheat to the producer so that he does not get the basic price.

“3. —that if the buyer is allowed the difference between the proportionate rate and the local rate, it reduces the price to him below the basic price.”

A copy of these resolutions was forwarded, by one Kempner, the President of the Receivers Association, to one Stream, “c/o Food Administration Grain Corporation, 42 Broadway, New York City,” in a letter dated December 7, 1917, in which the writer also inclosed a statement of one Brown, Manager of the Transportation Department of the Chicago Board of Trade, in regard to the new ruling, and in this letter Kempner requested Stream to “kindly use your best efforts to have this ruling rescinded as it is unquestionably a very pronounced discrimination and must place the Chicago market, as far as wheat is concerned, at a great disadvantage.” The statement of Brown, inclosed in this letter, contained a sentence reading: “So far as we have been able to learn, this ruling has been applied at Chicago only and the Chicago Board of Trade protests against its continuance.” Kempner added a postscript to his letter, however, referring to the foregoing sentence in Brown’s statement, and adding: “I understand now that the ruling applies to all other markets also but, of course, Chicago is the only point that works considerably on a proportional basis and therefore, Chicago is practically the only point affected to any extent.” Brown’s statement was prepared at the suggestion of George E. Marcy, president of the complainant company, and it was also Marcy’s suggestion that Kempner forward it to Stream.

Under date of December 20,1917, Marcy, as chairman of the Transportation Committee of the Chicago Board of Trade, advised its board of directors that an “argument” on the question of the ruling of the Grain Corporation had been prepared by Brown and turned over to Kempner, who had sent it to Stream, together with the resolution of the Receivers Association “protesting against the rule and asking that it be rescinded.” In this communication Marcy added: “Progress in such matters is quite slow, as the Food Administration does not pay a great deal of attention to complaints on these matters, figuring entirely on its own situation as regards supplies for mills. The matter, however, will be watched most carefully by Mr. Brown.”

A reply to the resolutions of protest of the Beceivers Association was made under date of December 22, 1917, by Julius H. Barnes. In this communication which was addressed to Kempner, Barnes said:

“We have gone over this situation very carefully, so as not to make a ruling which would discriminate against one community and not affect others. We feel our decision as made is sound and logical, and carries no discrimination, nor injustice, against Chicago, while to grant the request you make would introduce variations in the uniform treatment of communities, and be unfair to them.
“What you ask in effect is this, that you shall be allowed to bill wheat to New York on the through rate, and yet market it on a Chicago market price basis, constructed above the New York basis.
“* * * at all points where we have an office, the journey of the wheat is terminated, and the price basis is constructed as terminated at that point. We cannot consent to a trade practice which operated on a different hypothesis.
“To carry out to a logical conclusion what you ask us to do would defeat the stabilized price basis. # * # J ?

Throughout the following year, efforts were continued to induce the defendant and the Food Administration to rescind its ruling and return to a basis of trading. in grain which would recognize the peace time customs of private trading, but all those efforts failed and the order was never rescinded. Under date of January 5, 1918, Brown suggested to Marcy a plan by which the traders would refuse to turn over the freight bills to the Grain Corporation “on the ground that if it is a local shipment, the Grain Corporation is not entitled to the freight bill.” In this letter he went on to say: “I thought this might force them to return to the old practice, but I see where the Grain Corporation could retaliate by instructing that the wheat be consigned to them instead of the commission man. We have not very much to lose by fighting the Grain Corporation; our receipts are practically nil, but we should bear in mind what effect throwing down the gauntlet to them would have upon our business next year, should the war continue.”

Under date of February 21, 1918, the President of the United States issued another proclamation fixing the guaranteed prices of wheat for the 1918 crop. In this proclamation, he referred to the provisions of section 14 of the Food Control Act requiring him to fix the prices of grain whenever he found that an emergency existed requiring it, and also providing that “the President shall from time to time establish and promulgate such regulations as he shall deem wise in connection with such guaranteed prices, and in particular governing conditions of delivery and payment, and differences in price for the several standard grades in the principal primary markets of the United States.” In this proclamation the President announced that he found an emergency did exist, as contemplated in the act, and by virtue of the powers therein granted to him, he fixed the prices of wheat in the 25 primary markets of the country. The price of wheat of the 1918 crop was fixed at $2.20 per bushel in the Chicago market. This price was guaranteed to every producer of wheat, “harvested in the United States during the year 1918, and offered for sale before the first day of June, 1919, to such agent or employee of the United States, or other person as may be hereafter designated.” Thereafter, by executive order of June 21, 1918, the defendant was appointed agent of the United States, to make the Government guarantee as to the 1918 wheat crop effective, and “to purchase, hold, transport, store, provide storage facilities for, sell, dispose of and deliver wheat,” as provided in the Food Control Act. By this order the President directed the defendant to “offer and stand ready to purchase, and * * * purchase to the full extent of its ability and available funds, all wheat tendered to it by any producer thereof at any primary market named in said proclamation of February 21, 1918, at the guaranteed price named therein for such market, provided that, with the approval of the United States Food Administration, the said corporation may pay any higher prices than the guaranteed basis for any grade of wheat in any given market, and may extend its offer to purchase to other holders of wheat on such conditions as it sees fit.”

In April, 1918, a conference of the representatives of the grain trade of the United States was held under the auspices of the defendant corporation at the Chamber of Commerce of the State of New York. Marcy, president of the plaintiff company, as well as Barnes, president of the defendant corporation, were present. Again the question of these refunds was brought up and it was represented that the wheat business had been almost entirely taken away from Chicago, “partly by reason of taking away our proportional billing privileges and by reason of our unfortunate price adjustments.” But no change in the rule was made.

Marcy testified that in the latter part of June or early in July he had a talk with Jackson, second vice-president of the defendant corporation, in charge of the Chicago office, in which the latter said: “Well, we have the transit fixed now so that we are going to buy it in store, and you can do what you please with your transit. We have also changed the differential so as to allow us to do it,” thus implying that thereafter, in buying wheat at the fixed price, the defendant was not going to demand the billing with the wheat. At the time of the trial of this case, Jackson was dead.

That the defendant did not, in fact, change its position with regard to these refunds, at this time, is, in our opinion, clearly established by the evidence in the record.

One Hall, who prepared the “relative market structure which was afterwards promulgated by the Food Administration,” and who was “engaged with Mr. Hoover, Mr. Barnes and others in working out a law, rules and regulations and a general structure for the control of food,” sent a telegram to Jackson at Chicago, on July 19, 1918, in which he said that “our operation at Chicago on all sales of wheat to us with respect to inbound proportional rates will be exactly as last year. This matter was discussed with Mr. Brown of the Chicago Board of Trade and with Mr. Barnes and Mr. Brown understands the situation thoroughly. In cases where the grain trade handles the wheat in and out, their usual practices will not be interfered with. ” In a letter from Barnes to Jackson, dated July 23, 1918, he said: “We will not buy and pay for wheat in Chicago, except on the termination of its trip at Chicago, and not pay for it on basis of the balance of a through rate due to deliver it to New York.” He told Jackson in this letter that for the present they wanted to ship by lake, “and we are not going to have wheat costing us money based on an unused rail portion.” He then said that all intermediate points between Chicago and New York wanted the same thing — namely, wanted defendant to “buy wheat on the New York basis, less the unused portion of the freight for the balance of their journey, and they are in exactly the same position in that respect as Chicago is on this New York billed wheat. We have allowed others to deal in wheat, and if they want to buy it that way, they can, we are not going to. Now, please don’t raise this question any more, because it has been carefully considered and decided.”

Complainant contends that these communications could not affect it, as it is not shown that they had any knowledge of them. There is other evidence in the record, to be noted later, which, in our opinion, shows beyond peradventure of reasonable doubt that complainant at all times knew that the defendant at no time receded from the position it took on December 1, 1917, with respect to these refunds. Even if these communications to which we are now referring were not specifically brought to complainant’s notice, •they do show, in our opinion, that the fact was that the position of the defendant on this question, after July 1, 1918, was the same as it had been prior to that date. The communication last referred to shows that the question again being agitated was the same one which had repeatedly been up before, and in closing the letter, Barnes requests his Chicago representative to please not “raise the question any more because it has been carefully considered and decided.”

Barnes testified that shortly after July 1, 1918, Brown called upon him in New York “and wanted to reopen the questioned rule of the ownership of the refund on freight rates,” and that he told Brown “the matter had been carefully considered a dozen of times; that the relation of prices between Chicago and other competitive markets was such that a refund of that sort disturbed the stabilized relation of prices and was therefore unfair and that our proposition was the same as expressed to him several times before and we would make no change from that rule.” Brown, called by complainant, in rebuttal, admitted having a talk with Barnes on this subject, but put the time in June instead of July, 1918. He testified to what he said in that conversation, and that Barnes replied by saying “he did not want the zone agent to go into any billing arrangement and that he did not want to buy the wheat in Chicago in competition with himself in New York.” Brown admitted that he got Hall to arrange this interview with Barnes, telling him that the object of the desired interview “was to try to save the refunds.” He also testified that he “didn’t urge Mr, Barnes very much to change his opinion.”

The sales of wheat from the complainant to the defendant, which are involved in this case, all took place after July 1, 1918, — in the summer and fall of that year. They aggregated over 13,000,000 bushels and the refunds to which the complainant claims it is entitled, and which were collected by the defendant, aggregate over $46,000. Complainant points out that the billing was not demanded at the time the wheat was delivered to the defendant. The record shows the billing was not needed until the wheat was to be shipped on east. Obermayer testified that the practice was not to deliver the billing until that time. When the defendant did request the receipted freight bills on these sales, they were not turned over at first. Hall testified that he came on to Chicago in November or December, 1918, and had a meeting, which had been requested by the grain trade, and that one McDougal, of the complainant company, with others, was present at that meeting, and that “the discussion at the meeting * * * revolved around a formal demand which I had instructed the Chicago office to make on these grain dealers for the Illinois billing which they were retaining and withholding from the Grain Corporation and the discussion was * * * that they were entitled to it, that the Grain Corporation was wrong. They presented the usual arguments * * * I told them that the matter * * * was for decision by Mr. Barnes and that I would refer the matter to him but that as no new argument had been presented other than those that we had considered when that rule was first made, I could see no hope for a change in the ruling.” If any such new arrangement had been made as is claimed to have been indicated by Jackson in the alleged conversation with Marcy, it seems impossible that it would not have been brought up at this meeting. But the record shows that no mention was made either of such an arrangement or of the alleged conversation.

On December 14, 1918, Jackson, “on instructions from the New York office,” made a formal demand in writing on complainant, requesting that it ‘ ‘ surrender to this office immediately, all billing covering wheat paid for by the Food Administration Grain Corporation. ” Barnes had gone to Europe in November, 1918. He returned in January, 1919, and this matter seems to have been raised again, for under date of January 30, 1919, he wrote Jackson saying, “this matter was discussed in our general meeting today and the subject carefully gone over. The conclusion was unanimous that, as to wheat, in which we maintain at Chicago, a stabilized price, we can take no other position than that hitherto maintained.”

This question was again urged upon the attention of the defendant by a personal call of McDougal (of the complainant) and others, on Barnes, on February 17, 1919. In this conversation Barnes again insisted that the complainant should surrender the billing in question. Under date of March 19,1919, he wrote Mc-Dougal saying:

“We have carefully considered in this office, from every angle, the request you recently submitted for a revision of our position as to wheat known as the Illinois Proportional Billing.
“We have not decided hastily, nor slighted the question in its various aspects, but are obliged to say that we cannot see sufficient reason for revising our previous position, that this billing, when surrendered to the Grain Corporation, with wheat which the Grain Corporation buys, belongs to the Grain Corporation, and we cannot agree to account for any refunds or readjustment of billing to private parties * * * you will appreciate that this is one angle of the difficulties which arise in any rigid fixation of the market relations instead of leaving them open to the flexible method of private competition, but this fixation is a vital requirement under a government operation, and being necessary, it becomes also our duty to see that no one point is recognized by us in our purchases in a manner which disturbs the relation fixed by the markets and a recognition of the proportional saving on wheat bought on the fixed Chicago basis would disturb that fair relation. ’ ’

Barnes sent a copy of this McDougal letter to Jackson, his representative in Chicago, saying, “you will note that we maintain the same position as heretofore, and that the correction of freight, if any, belongs to us. ’ ’

Finally, the billing in controversy between complainant and defendant was surrendered to the latter by the former, and on March 25, 1919, McDougal, representing complainant, wrote Barnes acknowledging receipt of Barnes ’ letter of March 19, and saying that it “was presented to those interested at a meeting today, and while all have acquiesced in your decision and have turned over all billing, nevertheless they still feel that by all rules and trade customs, and the contract they have with you, the ownership of this building west of Chicago rests with them. They are, moreover, unanimous in the wish that at some future time, best suited to your convenience, you will reconsider your decision.”

In our opinion, it is significant, as urged by the defendant, that even at this time we find no suggestion being made in behalf of complainant; that all these sales of wheat which took place after July 1,1918, had been made on the basis of the arrangement now claimed to have been made by Jackson, in his alleged conversation with Marcy, It is quite impossible for us to believe that any such arrangement was being retained by Marcy as a secret. On June 1,1920, Marcy wrote a letter to Barnes as the United State Wheat Director, in which he said:

“In handling the wheat crop of 1918, you will no doubt remember, there was quite a lot of controversy on the so-called through billed grain in Chicago. Your Chicago officials took what we felt was an arbitrary stand, and refused to give us the benefit of the through bills. The matter was, we believe, referred to New York, and New York decided they would not allow us to have it.
“We felt that this position was not fair and have made up a bill which we enclose amounting to $44,608.-56. We feel this claim should be allowed. * * *
“We appreciate that there is always a difference of opinion in these matters and would be only too glad to have the subject referred to some disinterested people to be mutually agreed upon.”

In our opinion, this letter from Marcy to Barnes is so wholly inconsistent with the alleged conversation the former claims to have had with Jackson in June or July, 1918, as to make it quite impossible for us to give the latter any serious consideration.

In support of the decree appealed from, the complainant contends that “defendant must show that it acquired title to the billing” when it made the purchases of wheat involved in this case. With that proposition, we cannot agree. The whole issue in this case is whether or not the custom under which the billing or refunds on western freight bills would belong to the seller, entered into the sales in question. The burden was on the complainant to show by a preponderance of the evidence that such custom did enter into those sales and that the sales were made under the custom. In our opinion, the complainant failed to establish the affirmative of that proposition. By its bill of complaint the complainant alleged that at various times when the defendant was desirous of making shipments of the wheat which was the subject of the sales in question, it applied to the complainant for receipted freight bills, which would enable defendant to obtain the reshipping rate on the wheat; that this request was made pursuant to the custom referred to and that in recognition of the custom, complainant delivered the receipted freight bills to the defendant, to enable the latter to obtain the reshipping rate upon all wheat sold by complainant to defendant, and that the latter took the receipted bills and obtained the reshipping rates and having received the bills pursuant to the custom, and having obtained the benefit of such custom, defendant became obligated to respect the custom in its entirety, and to return the bills to complainant, so that the latter might collect the refunds due thereon from the western carriers. That these allegations were not supported by the evidence is, in our opinion, entirely clear. The evidence, as above set forth, shows that the complainant not only did not turn the receipted freight bills over to the defendant under the custom which had obtained in the Chicago market before the war, but it refused to turn them over, by reason of the defendant’s position that the custom did not apply to these sales because of the war-time regulations, which had been promulgated to cover sales of wheat to the defendant. The complainant withheld these bills as long as possible, because, as Obermayer put it in his testimony:

“We thought we could ignore it (defendant’s demand for the bills) until it was settled as to what disposition was going to be made of those refunds.”

Complainant contends further that the promulgated ruling of December 1, 1917, did not apply after July 1, 1918, and so did not affect the sales of wheat in question, because that ruling applied only to sales on track; that the defendant initiated the practice of buying grain on track in Chicago on December 1, 1917, and continued to purchase in this way until July 1, 1918, when track buying was discontinued and the practice of buying in store was initiated. In our opinion, that contention is not borne out by the record. Reference is made to a circular to the trade issued by the defendant on July 1, 1918. That circular not only announced that the defendant would buy at the fixed prices “warehouse receipts in approved elevators at the principal primary markets,” as pointed out by complainant, but it also announced that “producers or dealers have the right to ship wheat direct to the Food Administration Grain Corporation at any of the buying points heretofore named. ’ ’ But, in our opinion, the question of whether the defendant was buying on track or in store is not important. The reason why the defendant paid an additional price for the billing up to December 1,1917, and did not do so after that date, is not to be found in the fact that on that date it changed its plan of buying from the Illinois proportional basis to the local rate basis, as complainant contends. All through this controversy, both in conversations and communications, it is shown that on December 1, 1917, the defendant determined to stop paying for billing, not because the form of its purchases after that date were such as not to call for payment for the billing according to the custom, but because that practice was inconsistent with the maintenance of a stabilized price, and that the latter being its object, it would no longer pay for the billing — custom or no custom. It is impossible for us to read those conversations and communications and come to any other conclusion, and also we are led to conclude that the defendant’s position on this question was at all times well known to the complainant. The ruling of the defendant as promulgated December 1,1917, made no distinction as to sales on track or in store. It stated that thereafter “all wheat” would be handled so that the defendant would secure the benefit of all refunds on freight bills. That position was restated repeatedly and while some of these restatements were made in intercorporation correspondence, several of them were directed to representatives of complainant personally and others to Board of Trade officials like Brown, who was engaged in a prolonged effort to induce the defendant to rescind its ruling, and that effort was being augmented and closely followed by the complainant’s president, as chairman of the Board of Trade Transportation Committee. The sole reason for the ruling and for defendant’s repeated refusal to rescind it was that “the relation of prices between Chicago and other competitive markets was such that a refund of that sort disturbed the stabilized relation of prices and was therefore unfair,” in defendant’s judgment, and interfered with the object and purpose of the Food Control Act and prevented the carrying out of its provisions, by the defendant, which had been created under the law for that purpose.

Complainant points out the fact that when the defendant sold the wheat in store, to millers, during the period in question, it furnished billing to its buyers to enable the latter to obtain reshipping rates, but retained for its own benefit the refund claimed, and it is argued from this that “defendant thus knew the custom applicable to sales in store, and observed such custom when it was the seller, but it claims that the custom was non-existent when it was the buyer.” We find nothing in the record indicating that the action of the defendant with regard to these refunds, when it was the seller of wheat, was an observance of the custom referred to, but on the contrary, the record shows that the decision to retain these billing rights as belonging to the defendant — whether the defendant was occupying the position of buyer or seller — and, as Barnes expressed it in a letter to defendant’s Chicago office, written 10 days after the ruling was announced —whether the wheat ultimately went forward “as flour or wheat,” — was based on the desire “to hold the scale fairly between the country shipper and the miller, each one of whom would claim this saving.” In other words, the defendant deemed it necessary to absorb these refunds itself, if the plan provided for in the Food Control Act, based on the fixed price basis, was to work out properly and attain the ends it sought to accomplish. In doing so, both when it was the buyer and when it was the seller, it was doing so pursuant to its announced rule, and for the reasons given, as noted above, and the fact that when so doing, as seller, it was acting in conformity with the terms of what had been a peace-time custom among private traders, and when doing so as buyer, it was not acting in conformity with the terms of that custom, is, in our opinion, beside the point.

The complainant argues that the customs of the trade in the Chicago market were binding on defendant, whether known or unknown. With that proposition we do not agree. The effect of the enactment of the Food Control Act, the proclamations and executive orders of the President, and the ruling of the defendant, of December 1, 1917, was, in effect, that any and all trade customs in conflict therewith were abrogated and that those who chose to sell to or buy from the defendant must do so on that basis, and, furthermore, the complainant, in taking out and operating under its government license, as it was all during the time the transactions in question were had, agreed so to do.

As we have above stated, we are of the opinion the record abundantly shows that complainant not only knew of the ruling but also the fact that it was never rescinded and always remained in effect after its promulgation in December, 1917. Complainant urges that the contrary is apparent from the fact that it was engaged in business for profit and would not have bought wheat at a certain price, knowing in advance that it was, in effect, going to sell at a lower price, and that unless complainant expected to retain the benefit of the billing there was no possibility of a profit, but on the contrary, there was an absolute certainty of substantial loss. In our opinion the record fails to bear out that contention. There is nothing in the record to indicate that the amount of refunds on western freight bills constituted the profit complainant was to make on its purchases, either in whole or in part. Unless the wheat involved in such purchases ultimately was shipped east, and that, within 12 months, no refunds would ever become available to anybody. Moreover, it is clear that there were other sources of income and profit on complainant’s purchases of wheat. Although the storage charges on such wheat, going into complainant’s elevators, were borne by complainant up to the time it was sold, one of its own witnesses testified that “after it was sold, it remained in storage in the elevator and the complainant was paid the storage rate.” Complainant advances other contentions, in this connection, and we have given them careful consideration, but it will serve no purpose to review them all here.

Complainant contends that the appropriation of the refund claims by the defendant was in direct violation of the terms of the Food Control Act and the presidential proclamations and orders promulgated under the act, in that the effect of. that practice was that the defendant paid less than the fixed price for the wheat it purchased from complainant. In our opinion that contention is not sound. The defendant bought and paid for the wheat at the price fixed. That wheat had come into Chicago on a local freight rate. The receipted freight bill for the carriage had a possible right to a refund of an amount depending on the length of the carriage. If the wheat moved forward within a year somebody could collect that refund. The defendant, acting, in our opinion, within its powers as a governmental agency, under the terms of the Food Control Act and the presidential proclamations and orders issued pursuant to its terms, took the position that it must retain those refund rights itself, in order to accomplish the stabilizing of the price of wheat, as between all the interests concerned. In so doing, in our opinion, the price the defendant was paying for wheat was in no way affected.

Nor may we concern ourselves with the question of whether the ruling of the defendant was reasonable or sound. Dakota Central Tel. Co. v. State of South Dakota ex rel. Payne, 250 U. S. 163, 184. "Whether that ruling was “essential effectively to carry out the provisions of” the Food Control Act, was a matter for the exclusive determination of the executive branch of the Government, acting through the Food Administration, under the provisions of the act, and its decision upon that matter is not subject to judicial review, and consequently is not here in issue. Dexter & Carpenter v. United States, 275 Fed. 566, 570; Ex parte Willman, 277 Fed. 819.

Complainant contends further that there is no reason of public policy why defendant should not perform its contracts literally as they were made. We do not understand that defendant is contending the contrary, as counsel for complainant state is the case. That question is in no way involved, in our opinion. The question rather is, what was the contract entered into? It is shown by the record, as we have endeavored to point out, that the contracts represented by the sales of wheat in controversy were not based on the pre-war custom which had prevailed in private dealing, but were based on the proposition contained in the ruling promulgated on December 1,1917. That ruling was effective and binding on all concerned. Haas v. Henkel, 216 U. S. 462; United States v. Birdsall, 233 U. S. 223; Leonard v. Lennox, 181 Fed. 760; Maresca v. United States, 277 Fed. 727; Roxford Knitting Co. v. Moore & Tierney, 265 Fed. 177.

The Food Control Act was war-time legislation. It granted the executive department of the government extraordinary powers. In exercising those powers and carrying out the purposes and effecting the objects of the act, in part through the defendant corporation as a governmental agency, that department was acting clearly within the powers granted.

“The defendant, although, in form, a private corporation, and liable to be sued as such, was organized and owned by the United States as an agency for public service, (and) was not engaged in ordinary merchandising, but under Mr. Hoover’s directions, was performing public functions arising out of the War and its sequels.” United States Grain Corp. v. Phillips, 261 U. S. 106.

For the reasons we have given, we are of the opinion that the Armour Grain Company has no interest in the refunds in question and that the chancellor erred in entering a decree requiring the United States Grain Corporation to account to it for them.

The decree of the superior court is, therefore, reversed and the cause is remanded to the superior court with directions to dismiss the bill for want of equity.

Decree reversed and cause remanded with directions.

Taylor, P. J., and O’Connor, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Boggs

license: Public Domain

text:
    Harry M. Morrison, Appellant, v. Dora I. Morrison, Appellee.
    1. Witnesses — husband as witness in suit for annulment of marriage where wife confined in asylum for insane. Where at the time of the hearing on a bill to annul a marriage upon the ground that the complainant was fraudulently induced to consummate the marriage by the false representations of the defendant that she was in good health and free from all infectious or communicable diseases, the defendant was confined in an asylum for the insane and appeared by a conservator ad litem, the complainant was not a competent witness in the suit.
    2. Husband and -vue'eí — sufficiency of evidence to show wife afflicted with syphilis at time of marriage. Evidence on a bill to annul a marriage upon the ground that the complainant was fraudulently induced to consummate the marriage by the false representations of the defendant that she was not afflicted with syphilis, held insufficient to show that the defendant was so afflicted at the time of the marriage.
    3. Husband and wife — denial of annulment of marriage for fraudulent concealment of affliction with syphilis where complainant continued cohabitation nine years after receiving information of affliction. Where the evidence on a bill to annul a marriage upon the ground that the complainant was fraudulently induced to consummate the same by the false representations of the defendant that- she was not afflicted with syphilis showed that the complainant cohabited with the defendant for nine years after he had information that defendant was so afflicted, the bill was properly dismissed for want of equity.
    Appeal by plaintiff from the Circuit Court of Marion county; the Hon. F. R. Dove, Judge, presiding. Heard in this court at the March term, 1926.
    Affirmed.
    Opinion filed July 9, 1926.
    L. B. Skipper, for appellant.
    Andrew J. Dallstream, for appellee.
   Mr. Presiding Justice Boggs

delivered the opinion of the court.

A bill was filed by appellant in the circuit court of Marion county charging that appellee, through false and fraudulent representations made by her to the effect that she was a person of good health and free from all infectious or communicable diseases of any kind or character, induced appellant to intermarry with her; that said marriage was consummated on October 2, 1908, and that thereafter they lived and cohabited together as husband and wife until appellant learned that appellee was suffering from the disease of syphilis; “that by reason of the said Dora I. Morrison having said communicable disease, it is impossible for her to perform the duties and obligations of their said marriage relations and renders its assumption and continuance dangerous to your orator’s health and life.”

It was represented to the court that appellee had been committed to an insane asylum, and a conservator ad litem was appointed to represent her. The conservator ad litem filed a general answer, neither admitting nor denying the allegations of said bill, but demanding strict proof thereof. A trial was had resulting in a finding in favor of the defendant, and a decree was entered dismissing said bill for want of equity. To reverse said decree, this appeal is prosecuted.

Appellant testified in his own behalf, to the effect that prior to his marriage with appellee he had received information that she had a venereal disease, and that he, appellant, stated to appellee that he wanted to raise children and that if she had such disease he would not marry her; that appellee replied that the information was untrue, that she' did not have such a disease and never had had, and that she was a healthy woman; that upon her said representations he married her; that thereafter they lived together as husband and wife until 1916 or 1917, when he learned from the witness Dr. Stoker, and from Mayo Brothers of Bochester, Minnesota, that appellee had syphilis, and had had the same for some while and that the same was a communicable disease; that upon learning of this, he ceased living with her.

It being conceded that appellee was mentally incompetent and had been committed to an asylum for the insane, appellant was not a competent witness in a suit against her. Holton v. Dunker, 198 Ill. 407-411. Eliminating the testimony of appellant, the question arises as to whether the remaining evidence in the record is sufficient to prove the allegations of the bill.

Dr. W. A. Stoker, a witness for appellant, testified that some time in the year 1917 he examined appellee, and that * ‘ at that time she was a well marked case of what is commonly called paresis.” He further testified: “I have heard the statement of Mr. Morrison, the complainant here on the witness stand, describing her condition and what the specialist in St. Louis said about her condition; in my opinion, in 1908, and for some time before that, the complainant was suffering from this same disease, syphilis.”

Mrs. Sharp, a sister of appellee, being the only other witness on behalf of appellant, testified that she heard a conversation between appellant and appellee in which appellant informed appellee that he had heard that she had the disease of syphilis, and that her sister denied it. She also testified that she “had been to St. Louis with her (appellee) for the purpose of having her doctored; and was being treated for a venereal disease, contagious — the one that is commonly called syphilis; she was there under that treatment, as well as I can remember, about four or five months. ’ ’ This witness further testified: ‘ They were married in 1908, and continued to live together as husband and wife up until the time she went to Rochester, Minnesota, to Mayo Brothers, in 1917; * * * they were at Mayo Brothers two weeks; upon their return from Rochester, they came back to Centraba ; that would be sometime during the month- of May, 1917 * * *. I never had any talks with my sister after they returned from Rochester, with reference to what transpired up there; she never made any statements to me with reference to what their relations were after their return from Rochester.”-

An examination of Mrs. Sharp’s testimony clearly discloses that she herself was not at Rochester, Minnesota, with appellee, and whatever information she had with reference to the diagnosis made by Mayo Brothers was derived from appellee or from appellant. No physician from Mayo Brothers’ institution testified on the trial. Dr. Stoker did not examine appellee until 1917, and then diagnosed her case as one of paresis. However, he drew the conclusion from his examination at that time, and from the testimony of appellant as to the history of appellee’s case, and from Mrs. Sharp’s statement of what the doctors in St. Louis had said about her disease, that she was in 1908, at the time of her marriage with appellant, suffering from the disease of syphilis. This evidence is not sufficient upon which to base a finding that in 1908, at the time of said marriage, appellee had syphilis.

Without reference to whether fraudulent representations of the character set forth in appellant’s bill would in this State, if proved, be held sufficient to warrant a decree annulling the marriage relation, we are of the opinion and hold that the fact that appellant cohabited with appellee from 1908 to 1917, after having had information to the effect that she had a venereal disease, would warrant a court of equity in denying relief.

In Lyon v. Lyon, 230 Ill. 366, the court at page 370, in discussing the question of fraudulent representations as connected with the marriage relation, says:

“Concealment of the fact that the woman had previously been insane has been held insufficient to justify a decree of nullity of marriage. Cummington v. Belchertown, 149 Mass. 223. So has concealment of kleptomania. Lewis v. Lewis, 44 Minn. 124. Also concealment by a woman of unchastity prior to marriage. Leavitt v. Leavitt, 13 Mich. 452; Allen’s Appeal, 99 Pa. St. 196; Varney v. Varney, 52 Wis. 120. Also concealment of a prior marriage. Donnelly v. Strong, 175 Mass. 157; Fisk v. Fisk, 6 N. Y. App. Div. 432. Also concealment of the birth of an illegitimate child prior to marriage. Farr v. Farr, 2 MacArth. (D. C.) 35; Smith v. Smith, 8 Ore. 100.
“The fraudulent representations for which a marriage may be annulled must be of something essential to the marriage relation — of something making impossible the performance of the duties and obligations of that relation, or rendering its assumption and continuance dangerous to health or life.” Citing Smith v. Smith, 171 Mass. 404; Ryder v. Ryder, 66 Vt. 158; Cummington v. Belchertown, supra.

It might also be observed that appellant’s'contention that appellee has had syphilis, a communicable disease, since prior to their marriage in 1908, and that he and appellee cohabited together as husband and wife until 1917, without his becoming aware of such condition, is somewhat inconsistent.

We are of the opinion and hold that the trial court did not err in dismissing appellant’s hill for want of equity. For the reasons above set forth, the judgment and decree of the trial court will be affirmed.

Judgment affirmed.


text:
    Terminal Railroad Association of St. Louis, Appellant, v. Cain-Hurley Lumber Company, Appellee.
    1. Railroads — duty to construct service tracks extending beyond company property. Neither by common law nor under Cahill’s St. ch. 114, Mi 158, 159, or Cahill’s St. ch. Illa, H 45, is it the duty of a common carrier by railroad to construct service tracks connecting with its main lines elsewhere than upon its own property.
    2. Railroads — validity of contract for extension of service track beyond company property, conditioned upon covenant to save rafil

      road harmless from loss due to fire communicated from such property. A common carrier by railroad, being under no legal obligation to construct a service track connecting with its main lines elsewhere than upon its own property, may lawfully condition its agreement to construct such a track upon property other than its own upon an undertaking by the beneficiary of such track to save the railroad company harmless from any loss resulting from injury or damage to the persons or property of others through fire communicated from the premises so served, such agreement being a good consideration and its exaction not contrary to public policy.
    3. Railroads — right to enforce covenant exacted as condition of constructing service trade where hill discloses conditions which would support order to construct without conditions. A covenant on the part of an owner of private property, in consideration of the construction by a railroad company of a service track upon such property, to save the company harmless from any loss due to fire communicated from such property, will be binding and enforceable notwithstanding it appears, from the averments of a bill to secure such enforcement, that the situation of the parties is such that on a hearing before the Public Utilities Commission the company could be compelled to construct such service track without right to exact such covenant.
    Appeal by plaintiff from the Circuit Court of St. Clair county; the Hon. George A. Crow, Judge, presiding. Heard in this court at the March term, 1926.
    Reversed and remanded with directions.
    Opinion filed July 9, 1926.
    T. M. Pierce, J. L. Howell, Kramer, Kramer & Campbell and Ralph F. Lesemann, for appellant.
    T. J. Hoolan, Maurice Y. Joyce and Louis P. Zerweck, for appellee.,
   Mr. Presiding Justice Boggs

delivered the opinion of the court.

At the April, 1923, term of the circuit court of St. Clair county, an action in assumpsit was instituted by appellant against appellee. On motion of appellant, said cause was transferred to the equity side of said court.

The bill as finally amended charged that on September 5,1912, the East St. Louis Belt Railway Com-party (designated in said contract as the “Railroad”) entered into a contract with one Robert Abeles (design nated as “Industry”), for the construction of a spur track from the main track of the “Railroad,” to and upon certain premises owned by the “Industry,” 50 feet of said track to be laid on the land of the “Railroad,” about 60 feet across a highway known as “Bend Road,” and about 590 feet on the premises of the “Industry.” The “Railroad” was to construct the industrial track, and thereafter maintain and repair the same. It was to install, maintain and operate such interlocking work, signals, crossings, gates or other safety appliances which it deemed expedient, or which would be required by law. The “Industry” was to furnish and maintain a roadbed satisfactory to the railroad’s engineer; was to obtain the necessary permits or ordinances for the construction, maintenance and operation of said track; was to drain and protect the lands, property and streets affected by said track; was to furnish at its own expense the necessary cross and switch ties required for the construction of the track, and upon completion of said track was to pay interest to the railroad at a specified rate on the current value of all materials and labor used in the construction of the same and was thereafter to pay the actual cost of maintaining the said track plus 10 per cent. The “Railroad” was to have the right to use the industrial track free of charge, provided that such use would not necessarily interfere with the business of the “Industry,” and was also given the right to extend said track in order to provide track facilities for any individuals, partnerships or corporations that would furnish a roadbed for the same, and would pay their fair and equitable share of the construction cost of the track in question, which said sum was to go to the “Industry.”

Paragraph 12 of said contract provided: “All cost occasioned by loss, damage or injury to property or persons resulting in death, or otherwise, from fire however caused, or from water used in extinguishing the same upon the premises of the ‘Industry,’ shall he home by it, and said ‘Industry’ shall fully indemnify and save harmless the ‘Railroad’ from all loss, damage or injury to the persons or the property of others from fire communicated from the premises of the ‘Industry.’ ”

There were other provisions in said contract which it is not necessary to refer to at this time. The bill further charged that on the same day the contract was executed the interest of the East St. Louis Belt Railway Company was, with the consent of said Abeles, assigned and transferred to appellant, appellant to assume all obligations therein to be kept and performed by the East St. Louis Belt Railway Company. Said bill further alleged that on March 16, 1914, the interest of Abeles, with the consent of appellant, was assigned to the Cain-Hurley Lumber Company, a Missouri corporation, it to be bound by all the covenants and obligations to be kept and performed by Abeles.

Said bill further charged that on February 23,1922, a fire originated on the premises of the “Industry” and was communicated therefrom to certain railroad cars and rolling stock belonging to others and in the possession and control of appellant, situated on said industrial track on the premises of the “Industry,” which were thereby damaged and destroyed by said fire, “which said loss and damage to said cars and rolling stock amounted to the sum of $30,814.14”; that prior thereto appellant had entered into certain contracts with the owners of said cars and rolling stock, whereby it became liable to such owners for the loss and damage occasioned by said fire, and paid to them the amount above set forth.

Said bill further alleged that thereafter, on or about November 9, 1922, the Cain-Hurley Lumber Company of Missouri was dissolved and a corporation of the same name, consisting of practically the same stockholders and officers, was organized under the laws of the State of Illinois, which said Illinois corporation took over the property and assets of said Missouri corporation; that said assets so taken over by said Illinois corporation were reasonably worth $60,000 in excess of the amount paid therefor, and that appellee, the Illinois corporation, took over a large amount of the assets of said Missouri corporation without paying any consideration therefor. Said bill prayed for an accounting, etc.

To said bill appellee filed a demurrer, and on hearing the demurrer was sustained by the court, and a decree entered dismissing said bill for want of equity. To reverse said decree, this appeal is prosecuted.

Counsel for appellee in their brief and argument state: “Appellee does not contend that the subject matter of the contract in question is illegal and that, therefore, the contract is void on grounds of public policy. But appellee does insist that the terms and provisions of section 12 of said contract by which the railroad seeks to make the industry indemnify and save it harmless from all loss, damage or injury to the property of others from fire, however caused, is without consideration, against public policy, contrary to law and illegal and void.”

It is the contention of appellee that under the provisions of section 1 of “An Act requiring common carriers of freight to provide and maintain sidetracks and connections for shippers and receivers of freight,” appellant was obligated to construct the spur in question and if it had refused, would have been compelled to do so under section 2 of said act. (Cahill’s St. ch. 114, ¶¶ 158 and 159.)

On the other hand, counsel for appellant insists that under the provisions of the Warehouse Act [Cahill’s St. ch. 114] above cited, it clearly appears that in no case can a railroad company be compelled to construct a spur line beyond the limits of its own property; that, this being true, if another industry or business desires to connect with the lines of a railroad company, said railroad company and said industry would have the right to enter into a contract with reference thereto, with provisions of the character here complained of, and that the consideration therefor would be the doing by the railroad of something which under the law it could not have been compelled to do.

We are of the opinion and hold that the position of appellant in this connection is well taken. The contract in question provides that appellant railroad company shall construct and operate the industrial track on the property of the “Industry,” and shall furnish the rails therefor. At common law, there was no duty on the part of a railroad company, in a case of this character, to provide a switch track connection between its main line and the premises of a person or corporation desiring the same. Vincent v. Chicago & A. R. Co., 49 Ill. 33; People v. Chicago & N. W. Ry. Co., 57 Ill. 436; 4 R. C. L. 680-681; 33 Cyc. 124; Lake Shore & M. S. Ry. Co. v. Hoffert, 40 Ill. App. 631.

The section of the Warehouse Act relied upon by appellee is as follows: in favor of or against any such shipper.” [Cahill’s St. ch. 114, ¶ 158.]

“Any railroad being a common carrier of freight, upon application of any shipper tendering or receiving freight or merchandise in carload lots, shall construct, maintain and operate, upon reasonable terms upon its own right of way at any regular station, a switch connection with any such shippers railroad track which may be constructed to connect with its railroad upon its right of way, where such connection is reasonably practicable and can be put in with safety and will furnish sufficient revenue business to such railroad company to justify the construction and maintenance of the same, and shall furnish cars for the. movement of such traffic upon such switch upon its own rails to the best of its ability without discrimination

An examination of this statute clearly discloses that the duty of building service tracks, imposed on railroad companies thereby, is limited to the construction of the same on their own property. It is not made the duty of a railroad company to construct service tracks for the benefit of others, beyond its own premises. This holding is supported by authorities in other States, where similar statutes have been under consideration. New York Cent. & H. River R. Co. v. General Electric Co., 83 Misc. 529, 146 N. Y. Supp. 322; Northwestern Warehouse Co. v. Oregon, R. & Nav. Co., 32 Wash. 218; People v. Public Service Commission, 176 App. Div. 28, 162 N. Y. Supp. 520; Atchison, T. & S. F. R. Co. v. State, 24 Okla. 616, 104 Pac. 908; Northern Pac. R. Co. v. Railroad Commission of Washington, 58 Wash. 360.

The law further is that a statute attempting to compel a railroad company to build a track beyond the line of its own property would not be valid or binding. Missouri Pac. R. Co. v. Nebraska, 217 U. S. 196; New York Cent. & H. River R. Co. v. General Electric Co., supra; 22 R. C. L. 792.

The right of railroad companies to enter into contracts of this general character has been recognized by our Supreme Court. Sholl Bros. v. Peoria & P. U. R. Co., 276 Ill. 267; Public Utilities Commission v. Smith, 298 Ill. 151-159; Chicago, R. I. & P. R. Co. v. Hamler, 215 Ill. 525-529; Blank v. Illinois Cent. R. Co., 182 Ill. 332-337; Von Oven v. Chicago, B. & Q. R. Co., 317 Ill. 334.

In Blank v. Illinois Cent. R. Co., supra, the court at page 337 says: “It (the railroad company) is not charged with the duty of carrying express companies at all, and is therefore entitled to make a special contract establishing the duty and liability of the railroad on its side and of the express company on the other. * * * Such a contract gives to the express company rights superior to other express companies and to the general public, which it has no right to demand, and which the railroad company is under no obligation to furnish except upon terms agreeable to it.”

In Chicago, R. I. & P. R. Co. v. Hamler, supra, the court at page 529 says:

“The defendant is a common carrier of passengers, and as to them it assumes the duties and liabilities of a common carrier, but the Pullman Company furnishes special facilities and services to passengers, and the defendant is not a common carrier of Pullman cars and employees performing duties therein. The defendant might undertake to receive and haul the cars of the Pullman Company, but in doing so had a right to enforce such terms as it might elect.”

In Sholl Bros. v. Peoria & P. U. R. Co., supra, the court at page 274, in discussing the construction of a contract between a railroad company and a coal company, has this to say:

“Plaintiff in error also contends that such a construction of the contract would be contrary to public policy and void, for the reason. that railroad companies, being quasi public corporations created for the purpose of performing the duties of common carriers, have no right to contract with a corporation or individual to give exclusive right to transfer any commodity over any part of their lines. * * * The side-track involved in this case is not a part of the public railway of plaintiff in error. It is connected with said railway but not a part of it, and could not become a part of the railway system of plaintiff in error unless it be purchased or acquired by condemnation proceedings. As hereinbefore pointed out, the right of way on which the track was built is the private property of the defendants in error, and the right of the railway company therein is limited and governed by the provision of the contract that has been considered.”

Counsel for appellee also cite section 45 of the Public Utilities Act (Cahill’s St. ch. 111a, ¶ 45) in their brief, but do not refer to it in their argument. However, an examination of this statute will disclose that there is no provision therein requiring- a railroad company to extend its lines beyond its own premises.

It is also contended by counsel for appellee that paragraph 12 of the contract in question was against public policy and therefore illegal and void. This point is not well taken, and the authorities above cited clearly so hold.

It is further the position of counsel for appellant that, even though it be conceded that the situation of the parties as disclosed by the averments of the bill was such that on a hearing before the Public Utilities Commission appellant could have been compelled to make the connection and do the work which it has done in this instance, without any covenant on the part of appellee of the character covered by paragraph 12, yet until it has been so determined, the parties interested having entered into the contract in question and having performed under said contract, the same would be valid and binding until such determination by the proper authorities be had.

We are of the opinion and hold that this point is also well taken. Jefferson Deposit Co. v. Central Illinois Light Co. of Peoria, 309 Ill. 262-269.

In answer to appellant’s position that it would not be required, under either the Warehouse Act or the Public Utilities Act, to construct its lines beyond its own premises, it is contended that paragraph 1 of the contract in question conveyed to the railroad company the premises on which the track known as the industrial track was laid.

Said paragraph does not give to the railroad company the land over which the industrial track was laid, but simply gives it the control of said strip of ground during the time that said track is located thereon. This possession and control of the strip of ground on which a service track is laid on private ground, as in this case, by a railroad company, is held to follow as a matter of law. Chicago Dock & Canal Co. v. Garrity, 115 Ill. 155; Public Utilities Commission v. Smith, supra; Von Oven v. Chicago, B. & Q. R. Co., supra, 342. This holding is in accord with Northwestern Warehouse Co. v. Oregon R. & Nav. Co., supra, and with Northern Pac. B. Co. v. Bailroad Commission of Washington, supra, where a conveyance of the right of way over the private property involved was tendered.

Appellee contends that appellant, by constructing the spur line in question, thereby conclusively admitted that all of the conditions existed which would have been sufficient to have warranted an order by the proper authorities, compelling the railroad to construct said spur, and that it was not necessary to show that said conditions existed. It might just as well be argued that said parties, by entering into the contract here involved, recognizing that the matters involved were not covered by the provisons of either the Warehouse Act or the Public Utilities Act, were therefore contracting in reference to said matters.

Appellee cites and principally relies on the case of Public Utilities Commission v. Cleveland, C., C. & St. L. R. Co., 296 Ill. 513, to establish its contention that paragraph 12 of the contract in question is not based upon a consideration and is therefore invalid.

In that case, negotiations had been commenced between Kuhn and the railroad company for the building of an elevator by Kuhn, and for a switch track to the same, connecting with the main track of the railroad company. The extension to the elevator was to be built at Kuhn’s expense, and during the negotiations he was informed that he would be required to execute a sidetrack agreement, to which he made no objection, but the nature of the agreement, or what it was to contain, was not stated or determined. After he had built the elevator, a draft of the proposed sidetrack agreement was presented to him, which he refused to execute because it contained certain conditions which he deemed unreasonable and to which he had not assented. Among these provisions was one very-similar to that in paragraph 12 in the contract in the case at bar. Upon Kuhn’s refusal to execute the agreement, the railroad company refused to furnish a switch track, and accordingly Kuhn applied to the Public Utilities Commission for an order requiring the railroad company to furnish it in accordance with the provisions of the Public Utilities Act, which order, upon hearing, was granted. The court in discussing the case, page 516, says:

“The statute gave Kuhn a right to the connection upon conditions which existed and about which there was no controversy. The re-location of the switch-track was reasonably practicable, and it could be installed without materially increasing the hazard of the operation of the railroad. The business which might reasonably be expected to be received over the connection was sufficient to justify making the connection, and Kuhn agreed to pay the entire expense of the location of the track. * * * Having the right to the connection there was no consideration whatever for any agreement on his part to bargain away in advance the rights which the law gave him, and if he had made an agreement as claimed it could not be enforced. * * * A railway company cannot refuse to perform the duty enjoined upon it by the statute or annex any other condition than is therein provided.”

The facts in the case at bar, however, do not bring it within the Kuhn case, for the reason that the record not only fails to show conditions which would warrant the Public Utilities Commission in ordering the railroad company to build the- spur in question, but affirmatively shows that those conditions do not exist, in that it affirmatively shows that the greater part of the line in question was built on premises not owned by the railroad company, but which were owned by appellee.

If the fire in question originated on the premises of the “Industry,” and was communicated from the premises of the “Industry” to the property in the possession and control of the railroad company and for which it was responsible, as charged in said bill, and that property was destroyed, we see no reason why an indemnity such as the one here involved should not be given effect. In so holding we do not, as we understand it, run counter to the holding of the Supreme Court in Public Utilities Commission v. Cleveland, C., C. & St. L. R. Co., supra.

As counsel for appellee in their brief and argument do not raise the question of the right to an accounting in this case, if paragraph 12 is held valid and enforceable, we do not deem it necessary to discuss this feature of the case, further than to say that in our judgment such accounting is fully warranted by the authorities. We therefore hold that the court erred in sustaining a demurrer to said bill.

The judgment and decree of the circuit court is therefore hereby reversed and said cause is remanded, with directions to overrule said demurrer and to proceed with said cause.

Beversed and remanded with directions.