Lewiston & A. R. Co. v. Grand Trunk Ry. Co. of Can.

• Decision Date: 01 January 1903
• Citation: 97 Me. 261,54 A. 750
• Parties: LEWISTON & A. R. CO. v. GRAND TRUNK RY. CO. OF CANADA.
• Court: Maine Supreme Court

54 A. 750

97 Me. 261

LEWISTON & A. R. CO.

v. GRAND TRUNK RY. CO. OF CANADA.

Supreme Judicial Court of Maine.

Jan. 1, 1903.

(Official.)

Report from Supreme Judicial Court, Androscoggin County.

Action by the Lewiston & Auburn Railroad Company against the Grand Trunk Railway Company of Canada. Case reported. Defendant defaulted. Damages to be assessed at nisi prius.

Action to recover the sum of $18,000, with interest, alleged to be due from the defendant to the plaintiff as rental for the plaintiff's railroad, station grounds, buildings, sidings, etc., and the property and estate of every kind belonging to the plaintiff, appurtenant to and designed for the purposes of maintaining and operating the plaintiff's railroad; the allegation being that the rental is due under the terms of a lease from the Lewiston & Auburn Railroad Company to the Grand Trunk Railway Company dated March 25, 1874.

The defense was based upon a provision in the lease that "all taxes which may be lawfully assessed upon the property or franchises of the lessors during the period of their lease may be paid by the lessee, and, if so paid, shall be deducted from the rent herein covenanted to be paid by said lessee." The defendant claimed to have paid taxes, and to be entitled to deduction of taxes of the nature referred to in the lease to an amount considerably in excess of any rentals claimed to be due, and that, with such deductions made, no balance was due the plaintiff.

Argued before EMERY, STROUT, POWERS, PEABODY, and SPEAR, JJ.

H. W. Oakes, J. A. Pulsifer, F. E. Ludden, W. H. Newell, and W. B. Skelton, for plaintiff.

C. A. & L. L. Hight, J. W. Symonds, D. W. Snow, C. S. Cook, and C. L. Hutchinson, for defendant.

POWERS, J. Assumpsit for two semiannual installments of rent, of $9,000 each, from June 10, 1898, to June 10, 1899, under a lease from the plaintiff to the defendant.

The plaintiff corporation was organized under a special charter (Laws 1872, c. 88, approved February 10, 1872), which empowered it to locate, construct, and complete a railroad from some point in the city of Lewiston to a point of connection with the Atlantic & St Lawrence Railroad, otherwise known as the Grand Trunk Railroad, within the limits of the city of Auburn. It was also authorized to lease its road, either before or after its completion, upon such terms as it might be able to agree with the Grand Trunk Railway Company. August 27, 1872, the plaintiff and defendant entered into an indenture, by which, in consideration of the defendant's agreeing, among other things, to take a lease of the road, when completed, for the term of 99 years, the plaintiff agreed to proceed with all diligence to construct and build the road, in a substantial and permanent manner, with suitable station grounds and buildings, and with the necessary sidings at the terminus at Lewiston. March 24, 1874, the parties entered into another written agreement by which the defendant, in consideration of $220,000 in cash and bonds paid to it by the plaintiff, agreed to "proceed with all diligence to construct and complete the railroad, known as the Lewiston and Auburn Railroad, as already located and partially constructed, in a substantial manner, and in all respects in accordance with the obligations, promises, and agreements" of the plaintiff contained in the indenture of August 27, 1872, to which reference is expressly made.

The next day, March 25, 1874, the lease was executed. By it the plaintiff leased to the defendant "the railroad of the said Lewiston and Auburn Railroad Company as now chartered, located and constructed, extending from the city of Lewiston to its point of junction with the Atlantic and St. Lawrence Railroad in the city of Auburn, together with all its station grounds and buildings, and all its rights of way and other easements and rights, and all the property and estate of every kind belonging to said Lewiston and Auburn Railroad Company, appurtenant to and designed for the purpose of maintaining and operating said railroad, * * * with full power and authority to finish and complete said railroad, as heretofore agreed between the respective parties heretp." The lessee was further authorized "to make or construct any new buildings or tracks necessary and beneficial to be used for the working of said railroad." The lease provided that all taxes which might lawfully be assessed upon the corporate property or franchise of the lessor during the period of the lease might be paid by the lessee, and, if so paid, they should be deducted from the rent covenanted to be paid by the lessee.

Immediately upon the execution of the lease the Grand Trunk Railway Company took possession of the property and franchises of the Lewiston & Auburn Railroad Company, and proceeded to construct and complete said railway in accordance with the agreement and obligation existing between the parties. While the work of construction was in progress, and before the completion of the road, the Grand Trunk Railway Company, on July 17, 1874, purchased for the sum of $2,215.10 certain parcels of land, and on November 20, 1874, another parcel of land for the sum of $90,000, all situated in the city of Lewiston, adjoining the original location of the Lewiston & Auburn Railroad Company. The defendant took and still retains the title to all land so purchased. On this land certain railroad sidings have been constructed, and certain buildings erected. Some of these buildings have been built by the defendant, and leased to the patrons of its leased road, the Lewiston & Auburn Railroad. Others have been built by the patrons of said leased road upon portions of said premises leased to them by the defendant. The lease and the two written contracts named are all parts of the same transaction, and are to be construed together.

1. During the period of the lease, and previous to the date of the writ, the defendant has paid taxes to the amount of $31,427.75 legally assessed by the city of Lewiston, from 1875 to 1898, inclusive, upon the land so purchased in July and November, 1874. These taxes the defendant claims the right to deduct from any rental accruing under the lease. The question is, are they taxes upon the corporate property of the plaintiff? In other words, is the land so purchased by the defendant, the title to which is now held by it, and of which it has the exclusive use, benefit, and control, the corporate property of the plaintiff, within the true intent and meaning of the lease? We cannot believe that such was the intention of the parties. It is true that by the indenture of August 27, 1872, the plaintiff agreed to construct and build the road, with suitable station grounds and buildings, and with the necessary sidings at the terminus at Lewiston, and that it was necessary to acquire a part at least of the land purchased, in order to provide suitable station grounds and necessary sidings and terminal facilities. When, however, this obligation to so construct and complete the road passed from the plaintiff to the defendant, as it did by the indenture of March 24, 1874 it was therein confined to the road "as already located and partially constructed." In the first indenture there is no reference to any location, and, being executed but a few months after the...