Scheller v. Tacoma Ry. & Power Co.

• Decision Date: 24 September 1919
• Docket Number: 15286.
• Court: Washington Supreme Court
• Parties: SCHELLER et al. v. TACOMA RY. & POWER CO.

184 P. 344

108 Wash. 348

SCHELLER et al. v. TACOMA RY. & POWER CO.

No. 15286.

Supreme Court of Washington

September 24, 1919

Department 1.

Appeal from Superior Court, Pierce County; E. M. Card, Judge.

Action by Frank Scheller, administrator, and others, against the Tacoma Railway & Power Company. Judgment for defendant, and plaintiffs appeal. Affirmed.

Holcomb C.J., dissenting.

Guy E. Kelly and Thomas MacMahon, both of Tacoma for appellants.

F. D Oakley, of Tacoma, for respondent.

MACKINTOSH J.

Respondent's predecessor was incorporated for the purpose of building and operating an electric railroad line between Tacoma and Steilacoom. One Whyte at the time was owner of section 22 which was situated near the line of the proposed railroad. Whyte platted a portion of the southwest quarter of that section, and, by written agreement with the railroad company, agreed to convey to it the E. 1/2 of N.E. 1/4 of S.W. 1/4, E. 1/2 of E. 1/2 of N.W. 1/4, blocks 7, 8, 15, 16, together with a strip of land 30 feet wide through the S.E. 1/4 of the section upon which the railroad had been located. The agreement between Whyte and the railroad company provided that Whyte should give a warranty deed to it and its assigns, which deed was to be deposited in escrow----

'to be delivered to the said party of the second part upon the performance by the said party of the second part of the following covenants and conditions, that is to say:

'The said party of the second part is to pay to the said parties of the first part the sum of one dollar, amount expressed in said deed as the consideration thereof, and shall on or before the 30th day of January, 1891, build, equip and operate a narrow gauge railroad between its point of beginning at, in or near the city limits of the city of Tacoma, Pierce county, state of Washington, along, through, over and by that certain lot, piece or parcel of land belonging to the said party of the first part, particularly described as follows:

'A strip of land thirty (30) feet in width through the southeast one-quarter of section No. twenty-two (22) in township No. twenty (20) north of range two (2) east of Willamette M. said strip being fifteen (15) feet on either side of the center line of the railroad track of the said party of the second part as the same is now located and shall be hereafter constructed through said tract, which said last described tract of land the said parties of the first part for the consideration of one dollar, the receipt whereof is hereby acknowledged do hereby grant and convey unto the said party of the second part its successors and assigns forever in fee simple for the use, and purpose of a right of way for said railroad forever disclaiming any and all interest in and to said tract, provided however, that said party of the second part shall use said described tract for the purpose of said right of way and other railroad purposes, and from thence to such a point at or near section 29 in township 20, north of range 2, E. W. M. (or further if considered practicable or desirable), as the said party of the second part may determine and shall at all times maintain and operate said narrow-gauge railroad either by itself or assigns between its terminal points and shall establish and maintain a station at such point upon or near the land last hereinabove described as shall be determined on, on the line of said railroad, and as shall be most advantageous to the parties hereto and shall stop the trains of said railroad at such stations on all trips either coming or going between said terminal points for the accommodation of the parties of the first part herein and any and all passengers who may desire or seek transportation from said station by said route or line of railroad.

'And it is stipulated, understood and agreed by and between the parties to this contract that as soon as said line of railroad is established, completed and equipped along and upon said last described lands said Pacific National Bank, who holds said deed in escrow, shall and may then deliver as the act and deed of the parties of the first part the said deed to the party of the second part herein for its own use and benefit, and for the benefit of its assigns.

'And it is understood and agreed between the parties hereto that the party of the second part is to have the immediate possession and control of said premises from and after the execution of said contract, and should said party of the second part fail to build and equip said railroad and to build and maintain such station as herein provided, then the said Pacific National Bank, who holds said deed in escrow, shall deliver said deed back to said parties of the first part, their heirs or assigns, and this agreement shall thereupon be void and of no effect.'

The railroad company constructed the road, obtained the deed, and took possession of the property, selling and disposing of that portion thereof not used by it for its right of way. At the time of platting, Whyte mortgaged all of the S.W. 1/4 of the section except the E. 1/2 of E. 1/2 of S.E. 1/4 of the S.W. 1/4 and E. 1/2 of S.E. 1/4 of N.E. 1/4 of S.W. 1/4, to the Mason Mortgage Company, which sold the mortgage to the ancestor of the plaintiffs, who purchased the mortgage, relying upon the value of the property as the same was enhanced by the railroad and transportation facilities; the property not then or now being worth the purchase price except as the same should be connected with Tacoma by adequate transportation facilities. Thereafter the respondent in this action purchased all the property and franchises of the Tacoma & Steilacoom Railway Company and operated the road for 25 years or more. The appellants' ancestor was compelled to and did foreclose the mortgage and bought in the property at the mortgage sale, and died, devising the property to the appellants. Thereafter the respondent discontinued the operation of the railroad at this point and tore up and abandoned the same, and the appellants brought this action at law seeking to recover damages from the respondent for its failure to comply with the agreements in its contract, upon the theory that these agreements constituted covenants running with the land and that the abandonment of the railroad constituted a breach of such covenants which entitled the appellants to maintain an action for damages. A demurrer was sustained in the complaint, and the action was dismissed, upon which this appeal was taken.

It is to be borne in mind that this is not an action seeking to enjoin the railroad company from abandoning the line, such as was the case of Day v. Tacoma Ry. Co., 80 Wash. 161, 141 P. 347, L. R. A. 1915D, 547, which relates to the same situation and to which case reference is made for the facts relative to the abandonment; that being an action where the property owners were attempting to obtain equitable relief by way of injunction. Nor is this an action in equity seeking to recover property granted to the railroad company upon a breach of the conditions accompanying the grant. The appellants argue that the agreement between Whyte and the railroad company created covenants running with the land, and that therefore they, being now the owners of the land, can recover for the breach of such covenants. The respondent argues that the agreement merely created conditions subsequent for a breach of which the proper parties in interest would be confined to a forfeiture of the property granted, and that the appellants, not being the grantor nor his heirs, are strangers to and have no right under the contract to enforce such forfeiture or recover damages. This phase of the case involves one of the most complicated questions in the law. From the time of Spencer's Case, reported in 5 Coke, 16, till the present day, the courts have been engaged in painstaking and irreconcilable expositions of the subject, until, as was said by this court in Pioneer S. & G. Co., v. Seattle Cons. & D. D. Co., 102 Wash. 608, 173 P. 508 :

'Many of the old doctrines have since been expressly overruled; others seem to be ignored; and more and more equity has come to enforce covenants which technically do not run with the land. * * * At any rate, the contract appears to be such a covenant regulating or restricting the use of the land as will be enforced in equity, when the party acquiring title took with notice, whether it is technically a covenant running with the land or not.'

The law not looking with favor upon forfeitures, the courts have been inclined, in cases difficult of solution, to resolve the doubt in a disputed agreement as creating a covenant running with the land rather than as a condition subsequent. Union Stockyards Co. v. Nashville Packing Co., 140 F. 701, 72 C. C. A. 195. The following cases, including the Pioneer Sand & G. Co. v. Seattle Cons. & D. Co., just cited, would incline us to the view that the agreement between Whyte and the railroad company gave rise to covenants running with the land: Withers v. Wabash Railroad Co., 122 Mo.App. 282, 99 S.W. 34; Dorsey v. St. Louis, etc., 58 Ill. 65; Georgia So. Ry. v. Reeves, 64 Ga. 492; Gilmer v. M. & M. Ry., 79 Ala. 569, 58 Am. Rep. 623; Whalen v. B. & O. Ry., 108 Md. 11, 69 A. 390, 17 L. R. A. (N. S.) 130, 129 Am. St. Rep. 423; Blanchard v. Detroit, Lan., etc., Ry., 31 Mich. 43, 18 Am. Rep. 142; Ford v. Ore. Electric Ry. Co., 60 Or. 278, 117 P. 809, 56 L. R. A. (N. S.) 358, Ann. Cas. 1914A, 280.

The case of Mills v. Seattle Montana Ry. Co., 10 Wash. 520, 39 P. 246, holding that the agreement there under consideration was a condition subsequent, is based upon the fact that the grantee was in that case insisting upon such a construction; the court saying:

'It is a proposition too well understood to require argument

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