Cunningham v. New York Cent. R. Co.
| Decision Date | 04 May 1943 |
| Docket Number | 17088. |
| Citation | 48 N.E.2d 176,114 Ind.App. 90 |
| Parties | CUNNINGHAM v. NEW YORK CENT. R. CO. |
| Court | Indiana Appellate Court |
Cunningham & Shandy, of Kentland, for appellant.
Sammons & Sammons, of Kentland, for appellee.
This was a suit for damages commenced by appellant's decedent Jennie M. Conrad, based upon the alleged breach of a covenant to maintain a railroad station on lands conveyed by her for that purpose. The appeal is from a judgment upon a verdict for the appellee returned at the close of all the evidence by peremptory instruction.
The substituted complaint alleged appellant's appointment as administrator and that on March 27, 1905, Mrs. Conrad, then owner of five thousand acres of land in Newton County contracted in writing with The Indiana Harbor Railroad Company through C. W. Hotchkiss, its President, to convey to it a 100 foot right of way four miles long through her land together with six acres for station purposes in consideration of its promise to erect and maintain a station thereon together with certain switches and stock pens. That pursuant to said agreement, the lands were deeded, the railroad constructed, the station erected and named Conrad and that it was maintained by appellee, successor to The Indiana Harbor Railroad Company, by various consolidations, until March 1, 1939, when the station was closed and abandoned.
The appellee in its first paragraph of answer admitted the foregoing. Its second paragraph alleged the maintenance of the station for thirty-three years and that by such maintenance the consideration for the land conveyed was fully paid. The third paragraph alleged that the abandonment was authorized by the Public Service Commission of Indiana and the fourth alleged that the appellee could not further comply with any agreement to maintain the station and at the same time discharge its duty to the public.
By stipulation and evidence introduced at the trial the facts alleged in the complaint were admitted or proven and the appellant introduced evidence to prove the amount of damage suffered. Evidence was also introduced to prove that Mrs. Conrad at her death still owned about three thousand acres of land surrounding the station and that the station was abandoned without her consent. The appellee offered evidence to the effect that the abandonment had not damaged appellant's decedent and that the revenue from the station had by 1939 fallen to practically nothing.
Both parties agree that the case involves a covenant rather than a condition subsequent and that no question of forfeiture or any right thereto is involved.
It was held in the case of Louisville, New Albany & Chicago Railway Co. v. Sumner, 1885, 106 Ind. 55, 5 N.E. 404, 55 Am.Rep. 719, that a covenant similar to that under consideration, contained in a deed conveying land to a Railway Company, is not void as being against public policy and that an action for damages would lie for the breach thereof. In that case the defense of substantial compliance did not arise since the depot was never erected.
Conditions subsequent, having the effect in case of a breach to defeat estates already vested, are not favored in law, and hence always receive a strict construction. Hunt v. Beeson, 1862, 18 Ind. 380; Jeffersonville, Madison & Indianapolis Railroad Company et al. v. Barbour et al., 1883, 89 Ind. 375; Sheets et al. v. Vandalia Railway Company, 1921, 74 Ind.App. 597, 127 N.E. 609, and it has been held in this state that the erection and maintenance of a depot upon the land conveyed, for a long period of years, is a substantial compliance with such a condition. Jeffersonville, Madison & Indianapolis Railroad Company et al. v. Barbour et al. supra; Sheets et al. v. Vandalia Railway Company, supra; Cleveland, Cincinnati, Chicago & St. Louis Railway Company v. Cross et al., 1928, 87 Ind.App. 574, 162 N.E. 253.
Applying the rule of strict construction it was held in Jeffersonville, Madison & Indianapolis Railroad Company et al. v. Barbour et al. supra, in a case where property was deeded for depot purposes, but no time was fixed for the occupancy thereof for such purposes, that the parties must have intended that the occupancy should be for a reasonable time, that the railroad was not required for all time to come to use the premises for such purposes and the Court said, "Had the grantors intended that the lot should be occupied by the railroad for all time to come for depot purposes, words suitable to express such intention would have been employed," and it is held in a majority of jurisdictions, though not in all, that in the absence of a provision specifying a term of years or perpetuity, such a covenant or condition subsequent does not require operation in perpetuity, or forever, but is complied with by performance covering a long term of years. Scheller v. Tacoma Ry. & Power Co., 1919, 108 Wash. 348, 184 P. 344, 7 A.L.R. 810 and note.
The text writers do not differentiate between covenants and conditions in their treatment of the subject and there are many cases involving covenants which apply the rule of substantial compliance in cases similar to this. Louisville & N. R. Co. v. Johnson's Adm'x, 1925, 207 Ky. 813, 270 S.W. 58; Scheller v. Tacoma Ry. & Power Co., supra; Maryland & Pennsylvania R. Co. v. Silver, 1909, 110 Md. 510, 73 A. 297; Texas, etc., Ry. Co. v. Marshall, 1890, 136 U.S. 393, 10 S.Ct. 846, 34 L.Ed. 385; Whalen et al. v. Baltimore & O. R. Co., 1910, 112 Md. 187, 76 A. 166; Texas & P. Ry. Co. v. Scott, 5 Cir., 77 F. 726, 37 L.R.A. 94.
Most of the cases adhering to the majority rule either use or quote with approval language to the effect that a covenant or condition of the kind under consideration is fairly complied with by the erection and maintenance of a station for a long period of years, and until the exigencies of business, the convenience of the public and the welfare of the railroad demand its removal, and it appears to us that this is the correct rule. It is based upon the theory that such a covenant or condition is presumed to be made subject to the exigencies of the company's further development, the general contingencies of business, the public interest and the continuing development of transportation routes. Texas & P. Ry. Co. v. Scott, supra; Whalen et al. v. Baltimore & O. R. Co. supra; Scheller v. Tacoma Ry. & Power Co., supra.
In the case of Sheets et al. v. Vandalia Railway Company, supra, McMahan, C. J., speaking for this Court, although dealing with a condition and not a covenant, cites with approval the case of Maryland & Pennsylvania R. Co. v. Silver, supra, and says, with regard to the conveyance under consideration in the Sheets case [74 Ind.App. 597, 127 N.E. 616], "Such conveyance was undoubtedly made subject to the general exigencies of business and public interest, and the change, modification, and growth of transportation routes as this may affect the requirements of the railway company's business," citing Railway Co. v. Birnie, 1894, 59 Ark. 66, 26 S.W. 528.
The company may not wilfully and arbitrarily refuse to maintain a public station at any place on its line, when it has legally obligated itself to do so, Maryland & Pennsylvania R. Co. v. Silver, supra, nor will the fact alone that the company is losing money permit it to escape obligations voluntarily assumed. Fort Smith Light & Traction Co. v. Bourland et al., 267 U.S. 330, 45 S.Ct. 249, 69 L.Ed. 631.
Having determined upon the rule, we proceed to apply it to the facts in the instant case. As said by the court in Jeffersonville Madison & Indianapolis Railroad Company et al. v. Barbour et al., supra, 89 Ind. 379, in discussing a condition...
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