Oldham v. Chicago & NW Ry. Co.

• Decision Date: 27 August 1931
• Docket Number: No. 9076.,9076.
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: OLDHAM v. CHICAGO & N. W. RY. CO. et al.

52 F.2d 111 (1931)

OLDHAM v. CHICAGO & N. W. RY. CO. et al.

No. 9076.

Circuit Court of Appeals, Eighth Circuit.

August 27, 1931.

Gale B. Braithwaite, of Sioux Falls, S. D. (U. S. G. Cherry, Holton Davenport, and J. F. Wickhem, all of Sioux Falls, S. D., and Windsor Doherty, of Winner, S. D., on the brief), for appellant.

Irwin A. Churchill, of Huron, S. D. (Lewis Benson, of Flandreau, S. D., on the brief), for appellees.

Before KENYON and BOOTH, Circuit Judges, and DEWEY, District Judge.

DEWEY, District Judge.

Relief in the nature of specific performance of a contract was asked by complainant, Harold A. Oldham, as against the defendants, Chicago & North Western Railway Company, a corporation, and Pioneer Town Site Company, a corporation. The contract relied upon recites:

"Whereas the Pioneer Town Site Company, a corporation of the State of Nebraska, is engaged in the business of purchasing lands and laying out town sites along the lines of railway of the Chicago and Northwestern Railway Company, and its proprietary lines in the States of Nebraska, South Dakota and Wyoming, and in selling the property so laid out into town lots; and

"Whereas the Chicago and Northwestern Railway Company contemplates the construction of a line of railway from Dallas, South Dakota, into and through Tripp County, South Dakota, upon which line a route as surveyed, staked out and located, it contemplates the location of three stations in Tripp County, South Dakota, north and west of the present town of Colome; and

"Whereas, the Pioneer Town Site Company has in contemplation the acquisition of lands at such stations, when located, for the purpose of laying out and marketing town lots, out of which it has reasonable expectations of considerable profit on its outlay; and

"Whereas Ernest A. Jackson, of Dallas, South Dakota, proposes that the Pioneer Town Site Company should give to him the privilege of securing lands for town sites at the three proposed stations along the line of said proposed route, upon the terms hereinafter stated;

"Now Therefore this agreement, made this twenty-ninth day of November, A. D., Nineteen hundred and nine, between the said Ernest A. Jackson, party of the first part, and the said Pioneer Town Site Company, party of the second part;

"Witnesseth:

"First: The said Ernest A. Jackson will pay upon the execution and delivery of these presents, to the Pioneer Town Site Company, the sum of Twenty-five Thousand ($25,000.00) Dollars in cash, the receipt of which is hereby acknowledged.

"Second: The Pioneer Town Site Company agrees on its part that it will yield to said Jackson the privilege of securing lands and platting town sites at such stations on the proposed line of the Northwestern Company as it may locate in Tripp County, north and west of Colome, provided said Jackson will lay out and plat a reasonable town site at each of said stations, within a period of six (6) months after construction work is begun on said railroad, and that it will not itself secure lands or plat or sell town lots at said three stations, unless said Jackson shall fail to plat the same within said period of six (6) months.

"Third: The said Ernest A. Jackson will acquire, and, upon demand, convey to the said Pioneer Town Site Company, or to such corporation as it may direct, for the consideration of One Dollar, by good and sufficient Warranty Deed, frce and clear from encumbrance, such right of way and station grounds at each of the stations to be located on said line of railway, north and west of Colome, as the said Pioneer Town Site Company, or such Railway Company as it may designate, may select.

"Fourth: The said Ernest A. Jackson will, upon demand convey by good and sufficient Warranty Deed to the said Pioneer Town Site Company, or such corporation as it may designate, for the consideration of One Dollar, such right of way over any other lands in Tripp County, South Dakota, now owned or controlled, or which may hereafter be owned or controlled by the said Ernest A. Jackson before the construction of said line of railway, which may be crossed by said located line of railway, as said Pioneer Town Site Company or such Company as it may designate, may deem necessary for the proper construction, operation and maintenance of said railroad, including cuts and embankments, such right of way to be in no case less than one hundred (100) feet in width.

"Fifth: The Pioneer Town Site Company will also use its best endeavors to secure the location of a station on Section Twenty (20), Township Ninety-nine (99), (Winner), North of Range Seventy-six (76) west of the Fifth Principal Meridian, when the railroad shall be constructed to that point. Whenever said Chicago and Northwestern Railway Company shall extend its line west of Section Twenty (20), Township Ninety-nine (99), (Winner), North of Range Seventy-six (76), the Pioneer Town Site Company will use its best endeavors to secure the location of stations, one on the North half of Section Twenty-three (23), Township Ninety-nine (99), North of Range Seventy-eight (78), one on the South half of Section Sixteen (16), Township Ninety-nine (99), North of Range Seventy-nine (79) or the Northwest Quarter of Section Twenty-one (21), Township Ninety-nine (99), North, of Range Seventy-nine (79) (provided the railroad shall be located across the above described lands), or as near thereto as would be practicable, and to the best interests of the said Railway Company.

"Sixth: It is understood and agreed between the parties hereto that the Pioneer Town Site Company assumes no duty or obligation for the location or construction of said proposed railroad, either on its own behalf or on behalf of the Chicago and Northwestern Railway Company, at any time. It is also understood and agreed that the Pioneer Town Site Company does not undertake to designate the points at which stations may be located upon said line of railroad.

"Seventh: This agreement shall have no effect upon the Chicago and North-Western Railway Company, its rights or duties under the law.

"In Witness Whereof the Pioneer Town Site Company has caused these presents to be executed by its President and Secretary, and its corporate seal to be hereto affixed, and the said Ernest A. Jackson has set his hand and seal hereto the day and year first above written.

"Ernest A. Jackson Seal. "Pioneer Town Site Company "Corporate Seal. By Marvin Hughitt "President.

"Attest: J. B. Redfield, Secretary.

"Approved: J. F. Cleveland, Land Commissioner."

The bill of complaint alleges, in substance, that shortly after the execution of the contract the railway company located its line to and designated stations at Winner (on section 20) and at Jordan (on north half northeast quarter of section 23) and at Carter (on southwest quarter of section 16), all in Tripp county, S. D., and proceeded to and did construct and extend its line of railroad to Winner; that the road was not extended beyond Winner until 1929 and then the proposed route was changed and the road is being built on a route that will miss Jordan and Carter from three to five miles. The town sites having been platted on the proposed route, the deflection therefrom will greatly damage the plaintiff, who purchased the contract and real estate formerly owned by Jackson.

The bill further alleges that the town site company was organized by the railway company, its capital stock owned and controlled by the officers and agents of that company, and the earnings were paid to the railway company; that the contract was executed by the town site company as the agent and as a subsidiary of the railway company and afterwards ratified by it, and that the contract was in truth and in fact the contract of the railway company. That Jackson paid the substantial cash consideration, conveyed the land for the station at Winner and certain right of way through his lands as provided by the terms of the contract, and performed other services, all of which benefits were received and retained by the railway company.

From these allegations the complainant claims, first, that the contract should be considered as having been executed by the railway company and its sole obligation; second, that the railway company is estopped from denying that it is bound by the terms of the contract; and, third, that to permit such a denial would be inequitable and a fraud upon the plaintiff.

The prayer of the complaint is that the defendants, and particularly the railway company, be compelled to specifically perform the contract, and that it be restrained from building its line over any other route than through Jordan and Carter in Tripp county,...