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Erie Railroad Co. v. Groves

Decided: April 27, 1933.

ERIE RAILROAD COMPANY, A CORPORATION, PLAINTIFF-RESPONDENT,
v.
S.J. GROVES & SONS COMPANY, A CORPORATION, DEFENDANT, AND LIBERTY SURETY BOND INSURANCE COMPANY, A CORPORATION, DEFENDANT-APPELLANT



On appeal from the Supreme Court.

For the defendant-appellant, Edwards, Smith & Dawson.

For the plaintiff-respondent, Hobart & Minard.

Wells

The opinion of the court was delivered by

WELLS, J. This is an appeal from a judgment entered on an order made by Judge Brown sitting in the Hudson Circuit of the Supreme Court, as a Supreme Court commissioner, striking out the answer of the defendant Liberty Surety Bond Insurance Company (hereinafter referred to as Surety Company) on the ground that it was sham, and ordering summary judgment entered against said Surety Company for $25,000.

Briefly the facts are that S.J. Groves & Sons Company (hereinafter referred to as Groves Company), a foreign corporation, was engaged in the construction of a portion of a new state highway near Homestead, Bergen county, New Jersey.

By crossing the railroad of the Erie Railroad Company (hereinafter referred to as Erie Company), the Groves Company could save a two-mile haul in making its fill.

J. B. Mathews, in charge of the construction of the road as job superintendent for Groves Company, entered into negotiations with the representative of the Erie Company, for permission to construct and use, in carrying out its contract, a private, temporary crossing over its railroad.

It was finally agreed that this permission would be granted under certain conditions, one of which was that Groves Company should execute the standard license agreement which the

Erie Company had for such purposes, and furnish an indemnity bond and subscribe to certain other conditions. There was some delay about getting the license agreement signed and furnishing the bond. The Groves Company was in a hurry to make use of the crossing and it was agreed to start the work of constructing the crossing at once, provided the Groves Company write the Erie Company a letter, embodying the terms verbally agreed upon.

Mathews accordingly wrote a letter to the Erie Company under date of October 15th, 1928, from the Groves Company's office (which had been set up at Ridgefield, New Jersey) upon the stationery of the Groves Company in which, among other things, he (purporting to speak for Groves Company) agreed that the crossing was to be constructed at the expense of the Groves Company and that Groves Company would assume the expense of a watchman at the crossing and would agree to assume full liability for the acts or negligence of said watchman and indemnify the Erie Company and New York, Susquehanna and Western Railroad Company for any damage to property or loss of life arising through the neglect of this watchman; and would agree to furnish a bond for $25,000 as a guarantee of indemnity to the Erie Company for any loss, damage to property or injury to persons arising out of the construction, use and removal of the crossing, and would sign the standard form of license agreement, &c.

This letter was signed "S.J. Groves ...


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