On Certiorari to the United States Circuit Court of Appeals for the Third Circuit.
The record in this case shows that in 1870 the Central Transportation Company (hereafter called the 'Central Company') was a corporation which had been in 1862 incorporated under the general manufacturing laws of the state of Pennsylvania. It was engaged in the business of operating railway sleeping cars, and of hiring them to railroad companies, under written contracts, by whcih the cars were to be used by the railroad companies for the purpose of furnishing sleeping conveniences to travelers. The corporation at this time had contracts with a number of different railroad companies in the East, principally, but not exclusively, with what is known as the 'Pennsylvania Railroad System,' and it had been engaged in its business with those companies for some time prior to 1870. In the year last named, the Pullman's Palace-Car Company (hereafter called the 'Pullmen Company') was a corporation which had been incorporated under the laws of the state of Illinois. It was doing the same general kind of business in the West that the Central Company was doing in the East. For reasons not material to detail, the two companies entered into an agreement of lease, which was executed February 17, 1870.
By its terms the Central Company leased to the Pullman Company its entire plant and personal property, together with its contracts which it had with railroad companies for the use of its sleeping cars on their roads, and also the patents belonging to it. The lease was to run for 99 years, which was the duration of the charter of the Central Company.
It was also agreed that the Central Company would not engage in the business of manufacturing, using, or hiring sleeping cars while the contract remained in force.
In consideration of these various obligations, the Pullman Company agreed to pay annually the sum of $264,000 during the entire term of 99 years, in quarterly payments, the first quarter's payment to be made on the 1st of April, 1870.
From the time of the execution of the contract, its terms were carried out, and no particular trouble occurred between the companies for about 15 years. During this time, and up to the 27th day of January, 1885, the Pullman Company paid to the Central Company, as rent under the contract, the sum of $3,960,000, without any computation of interest. About or just prior to January, 1885, differences arose between the companies. The Pullman Company claimed the right to terminate the contract under the eighth clause thereof, or else to pay a much smaller rent. The merits of the controversy are not material.
The two companies not agreeing, and the Pullman Company refusing to pay the rent stipulated for in the lease, the Central Company brought successive actions to recover the instalments of rent accruing. In one of them the Pullman Company pleaded the illegality of the lease, as being ultra vires the charter of the Central Company. The plea prevailed in the trial court, and upon writ of error the judgment upholding this defense was, in March, 1891, sustained in this court. Central Transp. Co. v. Pullman's Palace Car Co., 139 U.S. 24, 11 Sup. Ct. 478.