Connolly v. Des Moines & Cent. Iowa Ry. Co., 48429

• Decision Date: 08 February 1955
• Docket Number: No. 48429,48429
• Parties: John CONNOLLY, III, and Buell M. Lindgren, Appellees, v. DES MOINES & CENTRAL IOWA RAILWAY COMPANY, Appellant, City of Des Moines, Iowa, Intervenor-Appellee-Appellant.
• Court: Iowa Supreme Court

Page 320

68 N.W.2d 320

246 Iowa 874

John CONNOLLY, III, and Buell M. Lindgren, Appellees, v. DES MOINES & CENTRAL IOWA RAILWAY COMPANY, Appellant City of Des Moines, Iowa, Intervenor-Appellee-Appellant.

No. 48429.

Supreme Court of Iowa.

Feb. 8, 1955.

Rehearing Denied April 8, 1955.

Bannister, Carpenter, Ahlers & Cooney, Des Moines, for appellant.

Emmert, James, Lindgren & Eller, Des Moines, and Connolly, O'Malley & McNutt, Des Moines, for appellees.

Harold Newcomb and John A. Blanchard, Des Moines, for intervenor-appellee-appellant.

MULRONEY, Justice.

Plaintiffs sought to enjoin the defendant's condemnation of a railroad right of way and the city of Des Moines intervened. All parties appeal from portions of the trial court's decree. We will state the facts as we present the issues between the parties.

About a half century ago an electric trolley railroad then called the Inter-Urban Railway Company, which ran into Des Moines, decided to construct a branch from its Beaver Valley substation west and north to the town of Urbandale. The right of way for this branch line was acquired by conveyances or condemnation proceedings and the construction was completed in 1906. On December 20, 1906 the Inter-Urban Railway Company transferred this right of way to the Des Moines City Railway Company, taking back a contract with the latter to use the tracks and right of way for freight. The result of this conveyance and contract was that the Des Moines City Railway Company and its successors maintained the passenger service over the branch line and the Inter-Urban Railway Company and its successors maintained the freight service over the line. There were successor companies for both of these railroads, due to name changes and bankruptcy proceedings and it is enough to state that after July, 1929 the successor to the Des Moines City Railway was the Des Moines Railway Company and after June of 1949 the successor to the Inter-Urban Railway Company was the Des Moines and Central Iowa Railway Company, the defendant in this action.

This branch line started at the Beaver Valley Substation near 20th Street on Harding Road and it goes almost due west to 30th Street. From there on there are curves to the south and north as it proceeds west across 34th Street or Leado Avenue, 38th Street, Beaver Avenue or 41st Street, 44th Street and 49th Street and thence west to the city limits and north to Urbandale. It will do no harm to the issues on appeal if we ignore the curves and street names, and probably make for clarity, if we picture a branch line extending west from 20th Street across numbered cross streets to the city limits or 63rd Street, thence northwest to Urbandale. Only portions of the right of way in the city are now involved.

The freight and passenger service over this branch line was operated by the two original companies or their successors until about 1942 when freight service west of 44th Street was discontinued, and early in 1950 passenger service west of 49th Street to the town of Urbandale was terminated, and the rails removed from that portion of the right of way. On August 29, 1947 the Des Moines Railway Company gave one Salzberg an option to purchase the track, trolley and right of way of this branch line, exercisable within 30 days after optionor ceased to operate passenger cars on the line. This option was recorded October 25, 1947. At that time Mr. Salzberg was the principal bond holder of defendant's antecedent company, then emerging from reorganization. When that company was reorganized into defendant company of which Salzberg is president the latter assigned the option to defendant company, July 5, 1949. It fairly appears that Salzberg took the option for the company and optionor so understood and in any event Salzberg joined personally with defendant in the notice and proceedings for exercise of the option.

On March 6, 1951 the Des Moines Railway Company ceased all passenger service and on April 2, 1951 defendant exercised its option. More will be said about the exercise of this option later but for the purpose of stating the issues between plaintiffs and defendant it is sufficient to state that defendant, by virtue of the exercise of this option, and the conveyance given pursuant thereto, is now the owner of the title, possessed by the Des Moines Railway Company, in the segment of right of way involved.

As between plaintiffs and defendant the controversy is over the ownership of the first 10 blocks of the right of way or from 20th to 30th Streets. This part of the right of way was originally acquired by deed from C. C. Nourse dated October 21, 1905 which contained a reverter clause providing for reversion of the right of way back to Nourse, his heirs or assigns, in the event passenger service was discontinued, or the road was operated otherwise than therein stated. It is admitted plaintiffs now own such reversionary rights.

Because a controversy had arisen as to the reverter of title by virtue of the Nourse deed the defendant commenced condemnation proceedings of this first ten block segment of the right of way from about 20th Street to 30th Street. Notice of the condemnation proceedings was served on plaintiffs which notice prescribed for viewing by the commissioners appointed by the sheriff on April 25, 1952. On April 17, 1952 plaintiffs filed their petition in this case seeking an injunction against the condemnation. Defendant answered admitting in effect that plaintiffs own any reversionary rights, if any exist, but contending they owned no interests which could not be adequately compensated for in the condemnation proceedings. There were other pleaded issues between plaintiffs and defendant which we will state later but plaintiffs' whole case depends upon the correctness of the trial court's first ruling that they now owned the right of way. From which ruling defendant appeals.

The Nourse deed contained a number of clauses stating the right of way that is granted 'is for the operation only of a suburban or interurban line of railway to be operated by electricity only for the transportation of passengers and such freight as may be incidental to said business.' It stated the conveyance was on condition that the railroad maintain certain stopping points and platforms for the purpose of taking on or discharging freight and passengers and it provided: 'It is further provided that if at any time hereafter the inter-urban railway company or its assigns shall cease to operate said road, as herein contemplated, for six consecutive months, their rights and privileges herein conveyed shall be forfeited and said right of way shall revert to said C. C. Nourse, his heirs or assigns, if he or they shall so elect.'

As stated, the passenger service was discontinued in March, 1951 and in the same year defendant put into use diesel locomotives for all of its motor power. Plaintiffs acquired their title by conveyance from Laurance B. Nourse on February 21, 1952 and shortly before this conveyance Laurance B. Nourse caused written notice to be served on defendants demanding immediate possession of said strip of right of way.

I. Defendant first contends there was no such violation of the terms of the Nourse conveyance as to cause the right of way to revert. The argument is based on the evidence that the area is served now by passenger busses operating on streets and the deed should be interpreted in the light of modern methods of passenger transportation. There is no merit in the argument. This strip of the right of way was never condemned. The parties in effect contracted that the right of way would revert in the event the electric railroad passenger service would be discontinued. They had a right to contract as they wished. If the original grantee did not like the terms pressed upon it by the owner, it could have condemned. It avoided condemnation by accepting something less than full rights and, theoretically at least, by paying something less than full compensation.

In Spencer v. Wabash Railroad Co., 132 Iowa 129, 109 N.W. 453, 454, the deed by which a railroad acquired a right of way contained a condition that nonuser for a railroad would cause reversion to grantor. When the railroad was abandoned we held there was reversion to the original grantor, the opinion stating:

'* * * The land was not originally condemned for railway purposes. * * * It was perfectly competent for the parties to thus contract. * * * the parties may contract as they will about the rights of way, and when they have so contracted courts must give force and effect thereto.'

See also Volume 36, Iowa Code Annotated, p. 89; Reichard v. Chicago, B. & Q. Ry. Co., 231 Iowa 563, 1 N.W.2d 721; Brugman v. Bloomer, 234 Iowa 813, 13 N.W.2d 313.

II. Defendant makes some argument that the decree quieting title in the plaintiffs to the strip under condemnation was beyond the power of the equity court. The argument is that defendants' failure to comply with the conditions of the deed constitutes a breach of conditions subsequent and equity will not enforce a forfeiture until the party entitled to take advantage of the breach has made re-entry or in some manner regained the estate. In the Reichard case, supra [231 Iowa 563, 1 N.W.2d 727], we pointed out that a determinable or qualified fee is one that could end 'on the happening of a merely possible event' and there too we stated:

'One must do much hair splitting to find any difference or distinction in the defeasible events which have been held, in the hundreds of cases where the question has arisen, to have terminated determinable fees, and fees upon condition subsequent.'

In the Reichard case we went on to hold there were sufficient acts shown to comply with the demands of the law respecting reentry if it be a condition subsequent, even though there was no actual re-entry. The facts are stronger in this case for, not only did plaintiffs' predecessor in title serve notice on defendants...