Ludington & Northern Ry. v. Epworth Assembly

• Citation: 468 N.W.2d 884,188 Mich.App. 25
• Decision Date: 18 March 1991
• Docket Number: Docket No. 123238
• Parties: LUDINGTON & NORTHERN RAILWAY, Plaintiff-Appellant, Cross-Appellee, v. The EPWORTH ASSEMBLY, Defendant-Appellee, Cross-Appellant. 188 Mich.App. 25, 468 N.W.2d 884
• Court: Court of Appeal of Michigan — District of US

Page 884

468 N.W.2d 884

LUDINGTON & NORTHERN RAILWAY, Plaintiff-Appellant Cross-Appellee, v. The EPWORTH ASSEMBLY, Defendant-Appellee, Cross-Appellant.

Docket No. 123238.

188 Mich.App. 25, 468 N.W.2d 884

Court of Appeals of Michigan.

Submitted Feb. 13, 1991, at Grand Rapids.

Decided March 18, 1991, at 9:30 a.m.

Released for Publication May 17, 1991.

[188 MICHAPP 27] Prince, Barecki, Nicholas & Burrows by Clifford W. Prince, Shelby, for plaintiff-appellant, cross-appellee.

O'Toole, Johnson, Potter, Rolf, Grafton & Eklund (Harold M. Street, of counsel), Muskegon, for defendant-appellee, cross-appellant.

[188 MICHAPP 28] Before MARK J. CAVANAGH, P.J., and MAHER and FITZGERALD, JJ.

MAHER, Judge.

Plaintiff appeals and defendant cross appeals from a circuit court judgment, entered following a bench trial determining the parties' respective interests in five adjoining strips of land. With regard to four of the strips, the trial court held that plaintiff had acquired a fee interest and that any possibility of reverter possessed by defendant was extinguished pursuant to 1968 P.A. 13, M.C.L. Sec. 554.61 et seq.; M.S.A. Sec. 26.49(11) et seq. With regard to the fifth strip, the trial court held that only an easement interest was acquired by plaintiff, but that this interest was terminated by abandonment. In this appeal as of right, defendant contends that 1968 P.A. 13 is unconstitutional or, alternatively, that it is inapplicable, while plaintiff contends that the trial court erred in finding that an abandonment of its easement interest occurred. We affirm in part and reverse in part.

The five parcels of land at issue in this case are adjoining fifty-foot-wide strips of land upon which plaintiff's railroad track is located. These strips of land pass through the land of defendant, a Michigan corporation comprised of owners of resort cottages situated northwest of Ludington, Michigan, along the shores of Lake Michigan. The operation of plaintiff's railroad has been a source of controversy between plaintiff and defendant for over seventy years. Twice, their disputes have reached our Supreme Court. See Epworth Assembly v. Ludington & N.R. Co., 223 Mich. 589, 194 N.W. 562 (1923), and Epworth Assembly v. Ludington & N.R. Co., 236 Mich. 565, 211 N.W. 99 (1926). ¹ Originally, defendant desired a railroad to service its [188 MICHAPP 29] members, providing them with transportation to its grounds. Accordingly, in 1895, defendant conveyed the southernmost strip of the five strips of land to plaintiff "to be used for railroad purposes only." In 1914, defendant sought to extend the railroad to some adjoining land to the north. When the extension was accomplished, it was agreed that plaintiff would be allowed to transport sand that was mined at the northernmost point of the extension because of the uncertainty of the passenger business in the extended portion. As it turned out, passenger service decreased and then ceased altogether in 1919 or 1920, and sand was hauled from that time on. See Epworth Assembly, 236 Mich. at 568, 211 N.W. 99.

Plaintiff's interest in the four northern strips of land, representing the extended portion of the railroad, was acquired pursuant to four more conveyances from defendant to plaintiff were executed in 1916. The second of the five strips, being immediately to the north of the southernmost strip conveyed in 1895, was conveyed pursuant to a quitclaim deed stating that the conveyance was "for railroad purposes only." Proceeding northward, the third strip of land was conveyed pursuant to a quitclaim deed containing the following language:

[I]f, for any reason the property premises or land above described shall, for one year or longer, cease to be used for railroad purposes, ... in that case all of the land herein described ... shall revert to the Epworth Assembly....

The document conveying the fourth strip of land contained language similar to that of the second. Finally, the document relating to the fifth and northernmost strip of land conveyed "[a]ll the [188 MICHAPP 30] sand down to the level of the road bed" in the described premises, and "[a]lso a right-of-way for railroad purposes on and over said land fifty (50) feet wide." Beginning with the southernmost conveyance and proceeding north, these conveyances shall hereinafter be referred to as conveyances one through five respectively.

Plaintiff last operated a train on the track in February 1981. Thereafter, between 1982 and 1988, defendant erected a number of barricades across the strips of land, paved over two crossings, planted some trees, placed soil on some of the land, and ran a number of water and sewer pipes under the tracks.

On March 8, 1988, plaintiff commenced the instant action, seeking money damages, an injunction to prevent defendant from constructing barricades, and a declaration of the interests of the parties in the five strips of land. Defendant responded, contending both that plaintiff had abandoned its interests in the strips of land and that the operation of the railroad constituted a nuisance. Prior to trial, defendant brought a motion challenging the constitutionality of 1968 P.A. 13, M.C.L. Sec. 554.61 et seq.; M.S.A. Sec. 26.49(11) et seq., which provides for the extinguishment of certain reversionary interests in land. The trial court ruled that the act was constitutional, and further held that Sec. 4(c) of the act, M.C.L. Sec. 554.64(c); M.S.A. Sec. 26.49(14)(c), providing that the act does not apply to terminable interest held for public purposes, was not applicable.

After plaintiff agreed to waive its claim for money damages, a bench trial was held on May 3 and 4, 1989.

At trial, plaintiff's general manager, Bernard Sterk, testified that fifteen derailments occurred on plaintiff's tracks between 1976 and 1980, but [188 MICHAPP 31] that in 1977 plaintiff spent approximately $170,000 to rebuild portions of the track so that it could accommodate larger railroad cars. Nevertheless, by the end of 1978, plaintiff's board of directors began considering the possibility of abandoning the railroad because of the loss of customers. Thereafter, business continued to decline and many customers began to insist on receiving sand by truck. Consequently, sand was last hauled on plaintiff's tracks in February 1981. Although trains have not run since that time, plaintiff has continued to derive revenue from investments and the rental of its cars.

In 1982, Sterk had a letter hand-delivered to defendant, asking it to restore a portion of the track which it had removed when a water line was put in. The letter also informed defendant that plaintiff had no intention of abandoning the railroad and that it hoped to use the track again when the business climate improved.

Kenneth Howell, one of plaintiff's superintendents, testified that ever since the train stopped operating he has walked the track probably once a month making inspections. There was also testimony that in 1983 plaintiff replaced some railroad ties that had been removed by defendant when the water line was installed, and that in 1984 plaintiff hired laborers to clear the entire length of the track of weeds.

Defendant's general manager, William Karlson, testified that derailments would occur three or four times a month from 1975 on, often blocking traffic for an average of two hours. He believed these derailments posed a hazard to the people who lived there because of the heavy equipment needed to correct a derailment. Residents of the Assembly also testified regarding the disruptive nature of the derailments and the loud screeching [188 MICHAPP 32] noises that occurred when the trains negotiated the track's curves.

Karlson testified that the several alterations defendant made to the strips of land subsequent to February 1982 were made pursuant to the Board of Trustees' purported belief that the land had reverted back to defendant one year after trains had ceased running.

After the parties submitted written closing arguments, the trial court found that the title received by plaintiff pursuant to conveyances one through four (the four southern strips of land) consisted of a fee simple determinable interest, but that defendant's possibility of reverter in each of the strips of land had been extinguished pursuant to 1968 P.A. 13, since defendant never recorded a written notice indicating its desire to preserve such interests. M.C.L. Sec. 554.65; M.S.A. Sec. 26.49(15). Thus, the court declared plaintiff the fee simple owner of the four southern strips of land and enjoined defendant from interfering with plaintiff's use of the property. However, the court also held that, due to the state of the track and the large number of derailments, operations of trains over the tracks constituted a de facto nuisance. Additionally, with regard to the fifth and northernmost strip of land (received pursuant to conveyance number five), the trial court determined that the title received by plaintiff was that of an easement in gross, but that this interest had been terminated by abandonment. Both parties now appeal as of right.

I

Neither party disputes the trial court's determination that the interest received by plaintiff pursuant to conveyance number five was that of an easement. However, in its sole issue on appeal, [188 MICHAPP 33] plaintiff argues that the trial court erred when it found that this easement interest was lost because of abandonment. We agree.

In finding that an abandonment of plaintiff's easement interest occurred, the trial court stated:

Since February of 1981, the corporate minutes of plaintiff shows an intent to improve its rail freight traffic. However, it is the Court's understanding that it is not plaintiff's intent that controls but instead actual usage....

The Court is very reluctant to drive the final nail in a coffin especially where a corporation has tried over the years to reestablish itself as a viable corporation. However, it is readily...