Whitlock v. Boston & MRR, 2281.

• Decision Date: 27 November 1928
• Docket Number: No. 2281.,2281.
• Citation: 29 F.2d 351
• Parties: WHITLOCK v. BOSTON & M. R. R. et al.
• Court: U.S. Court of Appeals — First Circuit

29 F.2d 351 (1928)

WHITLOCK v. BOSTON & M. R. R. et al.

No. 2281.

Circuit Court of Appeals, First Circuit.

November 27, 1928.

A. A. Ballantine, of New York City (Root, Clark, Buckner, Howland & Ballantine, of New York City, on the brief), for appellant.

Edward F. McClennen and Charles B. Newhall, both of Boston, Mass., for appellee Northern Railroad.

Before JOHNSON, Circuit Judge, and HALE and MORTON, District Judges.

HALE, District Judge.

On December 30, 1889, the Northern Railroad, a New Hampshire corporation, leased for a term of 99 years, to the Boston & Lowell Corporation, a Massachusetts corporation, the following property:

"(1) The railroad of the party of the first part (namely the Northern Railroad), extending from Concord in the state of New Hampshire, to White River junction in the state of Vermont, and the branch thereof to Bristol in the state of New Hampshire, together with the lands on which said railroad and branch are located. * * *

"(2) All its shares of the capital stock of the Concord & Claremont, N. H. Railroad and of the Peterborough & Hillsborough Railroad, together with the right to vote upon the same and receive to its own use any dividends thereon.

"(3) Its claim against the Concord & Claremont, N. H., Railroad on book account, * * * and its claim against the Peterborough & Hillsborough Railroad upon second mortgage bonds thereof. * * *"

The above constituted substantially all the property of the Northern Railroad. In February, 1890, the lease was assigned to the Boston & Maine Railroad; the assignee assuming all its obligations. The lease provided that the lessee should pay to the lessor a quarterly rental of $38,355 for the first seven and one-half years, and during the balance of the term a quarterly rental of $46,026. And these sums appear, by the answer, to be 5 per cent. per annum and 6 per cent. per annum, respectively, on the capital stock of $3,068,400. The lessee also agreed to pay quarterly to the lessor $1,250 as and for the expense of preserving its organization. It further agreed that "it will pay all taxes, assessments and charges whatsoever that may be imposed upon or payable by said party of the first part on account of its property, franchise, capital stock or otherwise, during said term, and three-twelfths of any taxes, assessments or charges which may be so imposed or payable for the year commencing April 1, A. D. 1889."

The lease contains a forfeiture provision, permitting the lessor to take possession of the leased property on default of 60 days in respect to any payments to be made by the lessee under the lease. It provides, further, that the lessee will indemnify and save the lessor harmless against all loss, cost, damage, or liability caused by, or arising out of, the operation of its road by the lessee, or by reason of the neglect of either party to operate said road, as required by law. It provides also, among other things, that the lessee will not permit the lessor to be subjected to any payment, penalty, or forfeiture for violation of law in any respect, and at the expiration, or earlier termination, of this lease it will return said demised road and property, with all equipment thereof, to the lessor in as good order and condition as the same were at the time of the execution of the lease, without diminution or depreciation.

At the time of the execution of the lease, the New Hampshire statutes, then in force, provided in the case of railroads for taxes on property, franchise, or capital stock; but did not provide for a tax upon...