National Waterworks Co. v. Kansas City

• Decision Date: 12 February 1895
• Docket Number: 1783,1828.
• Citation: 65 F. 691
• Parties: NATIONAL WATERWORKS CO. v. KANSAS CITY. KANSAS CITY v. NATIONAL WATERWORKS CO.
• Court: U.S. District Court — Western District of Missouri

65 F. 691

NATIONAL WATERWORKS CO. v. KANSAS CITY.

KANSAS CITY v. NATIONAL WATERWORKS CO.

Nos. 1783, 1828.

United States Circuit Court, W.D. Missouri, Western Division.

February 12, 1895

Louis C. Krauthoff, C. O. Tichenor, and Gardiner Lathrop, for National Waterworks Co.

John C Gage, L. C. Slavens, O. H. Dean, F. F. Rozzelle, and Frank Hagerman, for Kansas City.

Before BREWER, Circuit Justice, and PHILIPS, District Judge.

BREWER Circuit Judge.

At the May term, 1894, of the court of appeals for this circuit, a decree was ordered to be entered in this case, by which among other things, the National Waterworks Company was directed to execute and place in escrow with the clerk of this court, on or before December 1, 1894, good and sufficient deeds, assignments, releases, bills of sale, and other conveyances for the transfer to the city of Kansas City of the whole and complete waterworks system belonging to such company, including that portion thereof which is situated in the state of Kansas; and that within 30 days thereafter the city should file any exceptions it might have to the sufficiency of such conveyances. This decree was in obedience to the mandate of that court duly entered in this court, and on the day named, to wit, the 1st day of December, 1894, the waterworks company delivered to the clerk certain deeds and releases, which deeds and releases it claims constitute a full compliance with the terms of the decree against it. Within the 30 days the city filed exceptions, and the question now submitted to us for consideration arises upon these exceptions.

A brief general statement of the condition of the waterworks plant will help to a clear understanding of the exceptions. The distributing system is in Missouri, and the legal title to this is in the National Waterworks Company. The supply works and a long flow line are in Kansas, and the legal title to them is in the Metropolitan Water Company. Upon the Missouri property are two mortgages or trust deeds of $1,500,000 each. Upon the Kansas property are also two mortgages or trust deeds, one for $900,000, and the other for $2,000,000, which by the terms of the decree were to be fully released. The exceptions of the city run both to the deeds and the releases. It will be convenient to consider these separately.

And first, as to the matter of title, we do not understand that any objection is made to the form of the conveyances, or doubt entertained that whatever of title is in the grantors is conveyed by the deeds, but the objection is that the grantors, especially the Kansas corporation, have not a perfect title to the property they attempt to convey. The exceptions to the title are as follows: First, that so much of the flow line as passes through the 'Fowler Tract,' as it is known, is subject to an obligation for the supply of water as a condition of the title received by the company from the owners of that tract; second, that the flow line, for a distance of about two miles from the Quindaro supply station southward, is on the Missouri Pacific right of way, and there simply by permission of the railway company,-- a permission subject to revocation at any time, at the mere will of such company; and, third, that the Quindaro supply station and the flow line through the city of Kansas City, Kan., are so subject to the rights and powers of this latter city that it is impossible for the Metropolitan Water Company to vest in the city of Kansas City, Mo., a perfect, unincumbered, and permanent title thereto.

With reference to the first of these, it is understood that the company has obviated the objection by constructing a new flow line which does not pass through the Fowler tract, and so is not burdened by any conditions in the conveyance thereof.

As to the second, it is true that there is no deed or other writing from the Missouri Pacific Railway Company vesting in the water company a right, either temporary or permanent, to use the right of way for its flow line. But the testimony shows that the railway company has a fee-simple title to its right of way; that the water company had permission from the division superintendent of the Missouri Pacific Railway Company to construct its flow line thereon; that the railway company, under contract with the water company, carried the pipes and distributed them on such right of way; and that, in the year 1887, the water company, at considerable expense, dug a ditch and constructed the flow line along the tracks, and upon the right of way, thus establishing a connecting between the supply station at Quindaro and the distributive system in the city of Kansas City, Mo. This work of construction was not done secretly or hastily, but publicly, and under such circumstances as to charge upon the railway company full knowledge thereof. No challenge of its occupation and use of the right of way has been made by the railway company during these intervening years. These facts establish a parol license so far executed as to vest in the water company a right of occupancy and use. I do not regard the permission given by the division superintendent as a contract binding on the railway company, but as one circumstance, with others, showing a knowledge by the company of what was being done on the right of way. The rule is recognized in this state, as elsewhere, that where one party enters upon the real estate of another under a parol license from the latter, and at large expense constructs an improvement which is necessary for the successful carrying on of the business of the licensee, the licensor is estopped to deny the right of the licensee to continue such occupancy and use so long as the necessities of his business require. Among other authorities, are the following: House v. Montgomery, 19 Mo.App. 170; Baker v. Railroad Co., 57 Mo. 265; Chiles v. Wallace, 83 Mo. 84; Le Fevre v. Le Fevre, 4 Serg. & R. 241; Rerick v. Kern, 14 Serg. & R. 267; Campbell v. Railroad Co., 110 Ind. 490, 11 N.E. 482; Wilson v. Chalfant, 15 Ohio, 248; Clark v. Glidden, 60 Vt. 702, 15 A. 358; Brewing Co. v. Morton, 47 N.J.Eq. 158, 20 A. 286; Duke of Devonshire v. Eglin, 14 Beav. 530. In Rerick v. Kern, 2 Am.Lead.Cas. (5th Ed.) 569, Messrs. Hare & Wallace, after reviewing the authorities, say:

'From the cases which have been cited, we may deduce two things: * * * A license cannot be revoked or withdrawn so long as it is essential to the possession or enjoyment of a vested right or interest, which has been created by the licensor, or placed, with his assent, in a situation where the continuance of the license is essential to its enjoyment. These inferences obviously result from the general rule that no one can recall a promise or declaration made with a view to influence the course of another after he has acted upon it, and thus placed himself in a position where he must necessarily suffer if it be withdrawn. An equitable estoppel arises, under these circumstances, to prevent the legal title from being used as a means of injustice.'

The case in 47 N.J.Eq. 158, 20 A. 286, is in point, and the facts and rulings thereon are thus stated in the syllabus:

'(1) When a license has been so far executed that its revocation would work a fraud, actual or constructive, upon the licensee, equity will restrain such revocation, although its continuation results in an easement upon the lands of the licensor in favor of the lands of the licensee.

'(2) No distinction in equity arises out of the place where the works are erected under license, whether upon the lands of the licensor or licensee.

'(3) The owner of a brewery constructed, at considerable expense, a drain from the cellar of the brewery along the line of a neighbor's lot, by his consent, and connected it with a public sewer in a street upon which the brewery lot did not face, and maintained it for thirty years. No particular time was fixed for the continuance of the drain. Its continuance was of great consequence to the brewery, and worked little or no injury to the neighbor's lot. Held, that the presumption, from the circumstances, was that it was to continue as long as the necessity of the brewery required it, and that the owner of the adjoining lot should be restrained from disturbing it so long as the brewery lot was used for a brewery, or until a public sewer should be constructed in the adjoining street.'

The case in 14 Beav., supra, is also very significant. In that case it appeared that the town of Grassington was much inconvenienced by the want of a supply of water, and it was discovered that a supply might be obtained by conveying it through certain lands, among them the land of the defendant, and it was charged that he consented that pipes therefor might be laid through his land. In his answer the defendant admitted that he had consented to the passage of the water through his land, but claimed that it was only upon consideration of his being paid a proper and reasonable price therefor, and alleged that no such price had been paid or agreed upon. There was evidence to show that he, without objection, saw the work in progress, and simply said to the workmen: 'Take care that you don't stop up my drains in cutting through them, for, if you do, I shall tear up your water course. ' The works were completed, and used for a period of nearly 10 years, without any dispute or contest on his part; and it was held that he could not prevent the enjoyment of the right of passage, though entitled to payment of a proper consideration therefor, and the matter was referred to a master to ascertain what should be paid. Other authorities might be cited, but these are sufficient to show the course of decision.

There is nothing technical or arbitrary in the rule thus laid down but it is founded on obvious...