Atlantic & Danville Railway Co. v. Southern Railway Co.

McLemore, J.,

dissenting:

Finding myself in hopeless disagreement with the-majority opinion I present the following as my reasons, therefore.

The decision of the case depends entirely upon the-construction to be given certain clauses in the lease the-meaning of which has been thought uncertain because-of the imposition of an income tax imposed by the United States Government on the rental money paid by the Southern Railway Company to the Danville Company.

Both contracting parties intended that the stockholders of the two companies should- during the life of the lease receive exactly the same treatment. This appears from an examination of clause II of the contract, an extract from which is as follows:

“It being the intention hereof that during the original term created by this indenture each of the 21,800 shares of the common stock of the Danville Company shall receive the same advantage by way of dividends, as shall be given to any of the one million two hundred, thousand shares of the common stock of the Southern Company now outstanding.”

Now, if the intention of the parties is to control, then. the case seems to me to have been improperly decided. The intention of the parties has been declared, and this fact takes the case out of the reasoning of a great-many of the decisions quoted and relied upon by the defendant in error.

The authorities relied upon by defendant in error were all cases attempting to discover, from the language-employed in the several contracts, the true intent and meaning of the contracting parties. Here the parties themselves have declared the meaning of the language employed and their interpretation should be respected..

*715This expressed intention of the contracting parties was attempted to be made doubly sure, by the insertion in the lease of the following clause intended to insure to the Danville Company a fund for distribution exonerated from all conceivable deductions:

“II. That in addition to the annual and other rental hereinbefore provided for it will assume and pay as they fall due and become payable, all lawful taxes, levies, charges and assessments which may be made upon the Danville Company or upon the demised premises, during the term hereby created, and any and all renewals thereof, by the United States or by any State, city, county, municipal or governmental authority.”

There seems little else that could have been said to make certain that the stockholders of the Danville Company “shall receive the same advantage by way of dividends as shall be given to any of the one million two hundred thousand shares of the common stockholders of the Southern Company now outstanding.”

All taxes, levies, charges and assessments laid upon the Danville Company by the United States Government or otherwise were to be absorbed by the Southern Company by direct covenant so to do, and yet the effect of the construction placed upon the lease by the opinion of the court allows the stockholders of the Southern Company to receive their dividend free of the tax, and the stockholders of the Danville Company to receive theirs subject to the tax- — -just exactly the result which the parties by a specific covenant had provided against.

The very object declared by the parties to be the purpose and effect of the lease — namely, to place the stockholders of both companies in a position of financial equality — has been clearly defeated by the decision of the court in this case.