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PENNSYLVANIA R. CO. v. INDIANA HARBOR BELT R. CO.

February 11, 1958

THE PENNSYLVANIA RAILROAD COMPANY, A CORPORATION
v.
INDIANA HARBOR BELT RAILROAD COMPANY, A CORPORATION.



The opinion of the court was delivered by: Julius J. Hoffman, District Judge.

  The Pennsylvania Railroad Company has instituted this action against the Indiana Harbor Belt Railroad Company for recovery under the indemnity or contribution provisions of an agreement for the parties' joint use of certain railroad tracks and right of way owned by the plaintiff in the City of Chicago. The matter has been tried before the court sitting without a jury, and counsel have aided the court by the preparation of comprehensive briefs addressed to the issues raised by the pleadings and evidence.

The plaintiff seeks to recover all or part of the amount expended by it in the defense and settlement of the claim of Miriam McGregor Uzdzinski arising out of an accident which occurred on September 25, 1950, at the crossing of the plaintiff's tracks and 106th Street in Chicago. From the admissions, stipulations, and evidence introduced, it appears that the crossing in question was a part of a short section of the railroad system formerly owned by the Calumet River Railway Company. On June 6, 1901, the Calumet River Railway Company entered into an agreement in the nature of a lease and described as a joint facility agreement, granting to the Michigan Central Railroad Company and the Chicago Junction Railway Company the right to use this section of the railroad and its appurtenances jointly with the owner. The plaintiff has succeeded to the rights of the owner under this agreement, and the defendant has assumed the position of the two lessee railroads.

While this agreement remained in force, and on September 25, 1950, one of the defendant's trains, consisting of a locomotive and 28 to 30 cars, was proceeding in a northerly direction over the jointly-used tracks. As this train reached a point approximately 150 feet south of the intersection of the track with 106th Street in Chicago, the crossing watchman employed by the plaintiff commenced to lower the crossing gates to bar traffic in the street. One of the descending gates struck Mrs. Uzdzinski, who was riding on the rear seat of a motorcycle driven by a companion. She brought suit against the plaintiff in the Superior Court of Cook County, Illinois, and the plaintiff, relying upon the indemnity provisions of the joint facility agreement, tendered the defense of the action to the defendant here. The tender was refused, the plaintiff here defended, and at the trial Mrs. Uzdzinski recovered a verdict and judgment in the sum of $150,000 for her injuries. Pending appeal, a compromise was effected and, after the remittitur of $100,000, a final judgment for $50,000 was entered in Mrs. Uzdzinski's favor in the Appellate Court.

The plaintiff now seeks to recover the amount of that award, along with expenses and costs incurred in the defense and settlement of the suit, in the total amount of $68,934.01, under the terms of the joint facility agreement. The defense rests upon the interpretation of that agreement.

The plaintiff relies upon three provisions of the contract to support its claim for indemnity or contribution. For convenience, the relevant clauses will be separately considered.

I.

Section 8 of the agreement in issue deals with the subject of the parties' respective liabilities for injury to persons or property. The first sentence of that section provides:

    "The parties of the second and third parts
  [defendant's predecessors], each respectively, assume
  all risk of loss, damage, or expense that may be
  inflicted upon them or either of them or in respect
  to their employees, passengers, or the property of
  other parties under their control, arising from any
  act or omission on the part of any officer, agent, or
  employe of the first party [plaintiff] or the
  employes of the second and third parties while on the
  track system, a right of joint use of which is hereby
  demised, and shall and will during the continuance of
  this agreement, save and keep the first party
  harmless from any and all claims, demands, loss, or
  damage on account thereof."

The purport of this clause is to relieve the lessor from liability to its lessee, or to persons or property brought onto the premises in the course of the lessee's operations. In other words, when the defendant's train, with its passengers, employees, baggage, and freight, enters upon the plaintiff's tracks, the defendant assumes the risk, whether injury is caused by the employees of the plaintiff or defendant. The provision would cover an injury like that involved in United States Steel Corp. v. Emerson-Comstock Co., D.C. N.D.Ill. 1956, 141 F. Supp. 143, but it has no application here. The claimant, Mrs. Uzdzinski, was neither a passenger nor an employee of the defendant, and her claim against the plaintiff falls outside the scope of this exculpatory clause. The plain words of the agreement admit of no other reasonable intendment.

Beyond this, the plaintiff argues earnestly that the quoted provision imposes liability for all "loss, damage, or expense that may be inflicted upon" the plaintiff by any act or omission of either the plaintiff's or defendant's employees. We need not stop to consider whether an agreement such as this could reasonably be construed as casting upon the defendant a duty to indemnify for injuries suffered by the plaintiff at the hands of its own employees, or whether a loss incurred by way of payment of the claim of an outsider could be brought within the meaning of the words employed. The sentence speaks only of losses inflicted upon "the parties of the second and third parts," "or either of them." The plaintiff, as party of the first part, is not included; the word "either" embraces two, not three.

This sentence of the agreement bears but a single reasonable meaning. In the absence of ambiguity, extrinsic evidence as an aid to interpretation may not properly be considered. The evidence offered by the plaintiff in an effort to show that the parties in their dealings have construed the contract differently must therefore be omitted from the consideration of this point. Finch v. Theiss, 1915, 267 Ill. 65, 107 N.E. 898; Young v. Illinois Athletic Club, 1928, 310 Ill. 75, 141 N.E. 369, 30 A.L.R. 985. It follows that this branch of plaintiff's claim for indemnity is without merit.

II.

The second basis for the plaintiff's claim to indemnity is the second sentence of section 8 of the joint facility agreement. That sentence provides:

    "* * * And the parties of the second and third
  parts, each respectively, hereby further assume all
  risk and all liability for injury or damage to
  persons, or to their own property, or to property of
  third parties caused by their trains, cars, or
  locomotives, by reason of or growing out of all
  defects in the right of way, road-bed, track, or
  tracks, bridges, or culverts, or insufficiency of the
  fences, or a lack of fences along the right of way of
  the railway and tracks covered by this

  indenture, or the failure to erect or build
  signboards or gates, or cattle guards, or other
  protections at highway or street crossings in
  compliance with law, or the failure to erect
  interlocking systems or other safety appliances at
  railway crossings, connections, or intersections, or
  the erection or construction of fences, sign-boards,
  gates, cattle guards, interlocking systems or other
  safety appliances or protections which do not fully
  conform to law, and they and each of them shall and
  will during the continuance of this agreement save
  and keep the party of the first part harmless from
  any and all claims, demands, loss or damage on
  account thereof; but if the party of the first part
  shall fail to repair defects in the tracks or bridges
  within a reasonable time after notice in writing so
  to do, specifying such defects, or shall fail to
  build or erect such fences, sign-boards, gates and
  cattle guards, interlocking systems or other safety
  appliances as may be required by law, or to repair
  the same if needing repairs, within a reasonable time
  after notice in writing so to do, specifying the
  places where such fences, sign-boards, gates, cattle
  guards, interlocking systems or other safety
  appliances should be erected or repairs thereon are
  needed, or the changes necessary to make the same
  conform to ...

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