Erie-Haven, Inc. v. First Church of Christ

• Decision Date: 21 February 1973
• Docket Number: ERIE-HAVE,No. 3--672A24,INC,3--672A24
• Citation: 292 N.E.2d 837,155 Ind.App. 283
• Parties: , Hefner Chevrolet, Inc., Plaintiffs-Appellants, v. The FIRST CHURCH OF CHRIST, Scientist, in Boston, Massachusetts, et al., Defendants-Appellees.
• Court: Indiana Appellate Court

Page 837

292 N.E.2d 837

155 Ind.App. 283

ERIE-HAVEN, INC., Hefner Chevrolet, Inc., Plaintiffs-Appellants, v. The FIRST CHURCH OF CHRIST, Scientist, in Boston Massachusetts, et al., Defendants-Appellees.

No. 3--672A24.

Court of Appeals of Indiana, Third District.

Feb. 21, 1973.

Rehearing Denied March 27, 1973.

Shoaff, Keegan, Baird & Simon, Thomas M. Shoaff, Fort Wayne, for plaintiffs-appellants.

John H. Krueckeberg, Parry, Krueckeberg & Duemling, Fort Wayne, for defendants-appellees The First Church of Christ, Scientist, in Boston, Massachusetts, and The Principia Corp.

James R. Grossman, Gary M. Cappelli, Grossman & Scrogham, Fort Wayne, for defendants-appellees Max Himelstein, Rose Himelstein, and The Hausman Steel Co.

SHARP, Judge.

This action was initiated by Appellants Erie-Haven, Inc. (Erie-Haven) and Hefner Chevrolet, Inc. (Hefner) filing a complaint for a Declaratory Judgment to determine the rights of the parties with respect to an easement which was created by written contract between the parties' predecessors in interest.

The issues were ultimately fixed by a Second Amended Complaint and the answers filed in response thereto. After a series of interrogatories, both parties filed Motions for Summary Judgment with attached affidavits and exhibits. The parties also filed a stipulation as to certain facts concerning the question of whether the easement had terminated as a matter of law.

The trial court, after hearing oral argument on the respective motions, granted the Appellees' Motion for Summary Judgment and denied Appellants' Motion.

Appellants' Motion to Correct Errors, which was overruled by the trial court, presents the following issues for review:

(1) Whether the provisions of the contract as applied to the facts resulted in a termination of the easement as a matter of law.

(2) Whether the trial court erroneously applied the doctrine of equitable estoppel.

(3) Whether there existed genuine issues as to material facts so as to preclude the use of summary judgment as a means of disposing of the controversy.

A review of the facts contained in the record reveals that Erie-Haven and Hefner now have an interest in a tract of land adjacent to one now owned by the Himelsteins and leased to Hausman Steel Co. (Hausman). In 1949, Erie-Haven's predecessor in interest entered into a written contract with Himelsteins' predecessor in interest whereby Erie-Haven's predecessor, as grantor, granted an easement across the Erie-Haven tract (subservient tract) for the use of a railroad spur track to the immediately adjacent property of the Himelsteins (the dominant tract).

The relevant provisions of said easement agreement appear in paragraphs six and eight, respectively, as follows:

'It is further agreed by and between the parties hereto that there shall be established and is hereby established a permanent easement, which shall run with the land, for the use, operation and maintenance of said railroad switch track across the said Tract B (Grantor's subservient land); that the Party of the First Part (Grantee) shall have the right and privilege of using the said railroad switch line for the purpose of moving railroad cars from the said New York Central Railroad line to and onto the said Tract A (Grantee's dominant land) and that this right and easement to so use said line also be perpetual; that the Party of the Second Part shall have the right and privilege of spotting and unloading railroad cars on that part of the said railroad switch track which shall be located on the said Tract B (Grantor's subservient land), but such use shall be reasonable and shall not interfere with the reasonable use of such switch track by Party of the First Part as aforesaid.

It is further agreed by and between the parties hereto that if any business maintained on the said Tract A (the dominant property) shall be abandoned and completely discontinued to the extent that the said railroad switch tracks are no longer being used in connection with the said Tract A, then and in that case, the said rights, privileges and easements as set out in this Agreement shall become void and the said railroad switch track shall become the sole property of Party of the Second Part (Grantors).'

The Canfield Lumber Co., Himelsteins' remote predecessor and grantee of the easement, continued on the dominant tract from the time of the agreement until July of 1961, at which time it removed its business from the dominant property and ceased all operations thereon.

Following the vacation of the dominant property, the said property passed by Will to Appellees, First Church of Christ, Scientist, and the Principia Corporation, who thereafter listed the property for sale. From the date of the listing until the sale of the dominant tract in 1964, the property was vacant, but never lost its commercial character.

In 1964, the First Church of Christ, Scientist, sold the dominant tract to the Himelsteins, who shortly thereafter leased a portion of said tract to Hausman. Hausman occupied the property in the spring of 1964 and began to use the spur track sometime later.

Prior to entering into the lease with the Himelsteins, a representative of Hausman talked with a member of the Board of Directors of Erie-Haven, who tried to interest Hausman in leasing the Erie-Haven tract. Hausman explained that the Erie-Haven tract was not sufficient for the intended uses of Hausman. Also, Hausman commenced the construction of improvements on its leased tract and purchased cement from Erie-Haven in conjunction with said construction. Finally, the President of Erie-Haven visited the dominant tract while the construction of the improvements was under way.

In January, 1965, Hefner secured a leasehold interest in the subservient tract owned by Erie-Haven and within three months of the acquisition of such interest notified the respective Appellees of its intent to fence off the easement.

I

The first issue concerns the proper construction to be given the various provisions of the contract which created the easement. The Appellants, Erie-Haven and Hefner, maintain that all the conditions necessary for the cessation of the easement were fulfilled. They contend that when the Canfield Lumber Co. vacated the dominant tract so that the land lay idle for three years, the railroad switch tracks were no longer being actively used in connection with said dominant tract. Therefore, the easement became void and the property over which the easement ran became the sole property of the owners of the subservient tract.

The Appellees, with whom the trial court agreed, argued that it is only when the grantee's dominant property is no longer being used for any business purposes, coupled with a complete abandonment and complete discontinuation of the use of the switch tracks, that the grantor or its successors would have a right to terminate the easement. Under this interpretation, the termination is not contingent upon the abandonment and discontinuation of any viable business activity on the dominant tract, but rather such termination is predicated upon the tract assuming an economic character such that the continued use of the switch track in connection therewith is no longer feasible. As long as the switch tracks remain a valuable asset to the dominant tract, regardless of whether they are in active use, the easement continues to exist.

Both parties have cited the standard rules of contract interpretation in aid of their respective positions. We have been referred to the rules which provide that a court should give effect to all the parts of an instrument, and a construction of the instrument which renders a reasonable meaning to all its provisions will be preferred to one which leaves a portion of the writing useless or inexplicable. The trial court made use of the above rules and in its first memorandum opinion stated:

'Plaintiffs' contention is well founded if the words of limitation are read apart from the whole of the contract. However, Plaintiffs' interpretation is inconsistent with the parties' express provision that the easement be permanent, perpetual and run with the land. If the easement was intended, as expressly provided, to be perpetual, then interim periods of on use during transfers of ownership were contemplated within the agreement. Indeed, the parties manifested their intent that the easement not be merely personal to the Canfield business entity when they used the phrase '. . . any business maintained on the said Tract A . . .'. Interpreting the words of limitation in the preferred manner, as to be consistent with the whole of the contract, the easement would become void only when the tract assumed a character which would make the existence of the switch track unnecessary.'

Thus, the trial court agreed with the interpretation of Appellants but for the fact that the easement was to be perpetual. If the trial court's initial premise is correct (i.e., that termination is inconsistent with a perpetual easement), then it would logically seem to follow that the trial court's own interpretation is likewise inconsistent since it also provides for termination based on a different contingency. It should be pointed out, however, that a forfeiture or termination provision in an easement agreement is not necessarily repugnant to a perpetual grant of said easement.

The nature, extent and duration of an easement created by an express agreement or grant must be determined by the provisions of the instrument creating the easement. Spencer Stone Co. v. Sedwick, 58 Ind.App. 64, 105 N.E. 525 (1914). An easement is an interest in land and may be held in fee. Shirley v. Crabb, 138 Ind. 200, 37 N.E. 130 (1894). A fee simple or lesser estate in land may be created so as to be defeasible. Lantz v. Pence, 127 Ind.App. 620, 142 N.E.2d 456 (1957). While an easement is normally held in fee, it is well established that an...