McHenry v. Ford Motor Co.

• Decision Date: 10 July 1959
• Docket Number: No. 13530.,13530.
• Citation: 269 F.2d 18
• Parties: James G. McHENRY and Donald G. McHenry, Appellants, v. FORD MOTOR CO., Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

269 F.2d 18 (1959)

James G. McHENRY and Donald G. McHenry, Appellants, v. FORD MOTOR CO., Appellee.

No. 13530.

United States Court of Appeals Sixth Circuit.

July 10, 1959.

COPYRIGHT MATERIAL OMITTED

Arthur J. Abbott, Detroit, Mich., for appellants.

Lloyd T. Williams, Jr., Dearborn, Mich., Richard B. Darragh, Lloyd T. Williams, Jr., Dearborn, Mich., on brief, for appellee.

Before ALLEN and McALLISTER, Circuit Judges, and MATHES, District Judge.

ALLEN, Circuit Judge.

This case arises out of an action in equity, filed in the Michigan State Court, April 29, 1953, to enjoin undercutting, washing away, flooding and erosion of plaintiffs'¹ land by waters of defendant's reservoir; to compel defendant to restore plaintiffs' land, improvements and equipment and to recover money damages for injuries sustained. The action was removed to the federal court of the Eastern District of Michigan, which, on February 11, 1957, granted a motion for summary judgment filed by defendant under Federal Rules of Civil Procedure rule 56(b) and (c), 28 U.S.C. The court denied plaintiffs' motion for new trial and leave to amend bill of complaint filed February 21, 1957, and a further motion filed November 20, 1957, for leave to file amended and supplemental bill of complaint, and this appeal was instituted. On the original hearing the judgment was affirmed upon the basis of the District Court's opinion, 146 F.Supp. 896, Affirmed 6 Cir., 261 F.2d 833. A motion for rehearing was filed and sustained and the rehearing was duly held. The conclusions expressed herein are those formed by the court upon rehearing.

The case arises out of the following facts shown by the record and found by the District Court. In 1925 James G. McHenry, attorney, and his wife, now deceased, owned some 190 acres of land bordering on the Huron River in Washtenaw County, Michigan. On October 5, 1925, they deeded 155 acres of this land to defendant, who purchased it for the purpose of flooding it with waters of an artificial lake to be created by a proposed dam, to be built downstream on the Huron River. Defendant completed the dam in 1932.

About 10 acres of the property was used as a country place on which Jas. G. McHenry had constructed a large stone house with numerous outbuildings, water power for a grist mill, and a water wheel for domestic lighting, on a canal along the river. Some 4 acres around the house were extensively landscaped. All of these buildings and improvements were situated on the 35 acres of the original tract not deeded by grantors to defendant. Some part of the remaining land was later deeded to the son of the grantors, coplaintiff Donald G. McHenry.

The land conveyed to defendant was described by metes and bounds and bounded by the center line of the Huron River. The deed contained the following provisions 146 F.Supp. 898:

"It is contemplated by the parties hereto that a pond or lake, in connection with a dam and power plant located lower down the stream, will be formed upon said lands by waters of the Huron River impounded thereon. In addition thereto, first party also grants and conveys to second party all flowage rights, running with said property due to the flowage thereof by said pond. No building or structure shall be erected on the lands hereby conveyed, nor shall any part of said lands, or any waters thereon, be occupied or used in any manner that would render the remaining lands of the parties of the first part adjacent to or abutting upon the lands hereby conveyed unsuitable or undesirable for high-class residence purposes; nor shall said lands be used otherwise than for the purpose of flowage by the waters of such pond or lake to be formed as aforesaid. This restriction shall remain in force for a period of thirty (30) years from the date hereof.

* * * * * *

"The parties of the first part reserve for themselves and for the personal use of the persons who shall be owners of, and shall reside upon, any part of their remaining lands abutting on the land hereby conveyed, the right at all times of ingress and egress to and from any waters upon any part of said lands, from and to any part of their remaining lands abutting upon or adjacent to the lands hereby conveyed, together with the right to go upon and use said pond or lake and the waters thereof for the purpose of boating, bathing, fishing, hunting, the same as any riparian owner on the banks of a natural lake or navigable stream."

The grantors' attorney, assisted by plaintiff James G. McHenry, himself an attorney, drew the deed.

In 1933 the waters impounded in the lake reached a 686-foot contour level. The remaining 35 acres were bounded by the lake for a distance of approximately a mile and the soil thereon was soft, gravelly, porous, and easily eroded. The District Court found in substance that since the waters were impounded they have been washing away and undercutting plaintiffs' retained lands. As of the date of filing this suit in 1953 some 12 acres of plaintiffs' land, together with fences, pump houses, trees and shrubbery had been washed away, and on this date foundations of the main building were in danger of collapse. The District Court declared, "except for 5 or 6 acres, the remaining land is of no value for farming or residence purposes and, according to the complaint, is unsalable * * *."

Plaintiff, James G. McHenry, complained to defendant several times in 1933. In 1947, as a result of letters from McHenry and his attorney, defendant's agents inspected the property and said that it "ought to be `fixed up', which would cost an enormous sum of money * * *." Plaintiffs allege that they were led to believe that defendant would do something about the situation but no action has been taken.

Defendant's principal contentions in its motion for summary judgment were:

1. That as plaintiffs expressly granted defendant flowage rights, defendant is not liable for injury done by "the natural action of the impounded water."

2. That in the absence of negligence a reservoir owner is not liable to riparian owners for damages caused by the natural action of waters impounded in the manner consented to by the riparian owners.

3. That defendant acquired by prescription the right to have its waters abut against plaintiffs' land, together with all the natural consequences.

4. That plaintiffs' claims are barred by laches and the statute of limitations.

Plaintiffs relied upon the covenant in the deed reading "nor shall any part of said lands, or any waters thereon, be occupied or used in any manner that would render the remaining lands of the parties of the first part adjacent to or abutting upon the lands hereby conveyed unsuitable or undesirable for high-class residence purposes; nor shall said lands be used otherwise than for the purpose of flowage * * *." They contended that this provision imposes liability on the grantee for undercutting, washing away and erosion of plaintiffs' retained land. Plaintiffs also relied upon Michigan Statutes Annotated 26.524 which provides with certain exceptions not material here that no covenant shall be implied in any conveyance of real estate.

The District Court found that the above quoted covenant was ambiguous and that the intention of the parties must be ascertained as to its meaning. The court noted that the lands conveyed were clearly stated to be used for the purpose of creating an artificial pond in connection with a dam and power plant to be erected downstream of the Huron River and for no other purpose but for that of flowage. The District Court found that the damage was caused by the natural action of the impounded waters and considered that to hold defendant liable would nullify and destroy the grant of flowage rights; that defendant could not have full enjoyment of the rights conferred upon it in the deed if it had to lower the waters from the 686-foot level or to build a retaining wall for plaintiffs' extensive shore line. It concluded that, in the absence of negligence, defendant could not be held liable for action of its impounded waters beyond the limits of the land conveyed to it. The court conceded that the precise situation involved was not contemplated by the parties, but pointed out that the grantor, James G. McHenry, was an attorney, that he and his attorney drew the deed. Moreover, it found that grantor's attorney requested that a paragraph be inserted in the deed to the effect that "`surface flowage shall not extend beyond the boundaries of the lands hereby conveyed * * *.'" This provision was not included in the deed as executed. The deed having been drawn by the grantor was construed against him and the court found in effect that there was no negligence. It considered that the parties could not have contemplated that defendant should be required to build a retaining wall to protect plaintiffs' shore line. Plaintiffs answer, and the District Court so found, that it could not have been contemplated by the parties that the retained acreage would be subject to invasion by the waters of plaintiffs' lake to the point of ultimate destruction of all of plaintiffs' remaining land.

The District Court held that the pleadings, depositions and record showed that there was no genuine issue as to any material fact, that the damage was caused by the natural action of the impounded waters, that no liability rested upon defendant, and that defendant was entitled to a summary judgment as a matter of law. Rule 56(b) and (c).

It is the established rule of the federal courts in construing rule 56 that a summary judgment should be entered only in cases where there is no genuine issue as to any material fact. Begnaud v. White, 6 Cir., 170 F.2d 323; Sarnoff v. Ciaglia, 3 Cir., 165 F.2d 167; Estepp v. Norfolk & Western Railway Co., 6 Cir., 192 F.2d 889. On considering such a motion the pleadings are to be liberally construed in favor of the party opposing the motion. Purity Cheese Co. v. Frank Ryser Co., 7 Cir., 153 F.2d 88; Wittlin...