Town of Readsboro v. Hoosac Tunnel & WR Co.
| Decision Date | 09 February 1925 |
| Docket Number | No. 91.,91. |
| Citation | 6 F.2d 733 |
| Parties | TOWN OF READSBORO v. HOOSAC TUNNEL & W. R. CO. |
| Court | U.S. Court of Appeals — Second Circuit |
John G. Sargent, of Ludlow, Vt., and Robert E. Healy, of Bennington, Vt., for plaintiff in error.
Frederick J. Dunn, Samuel P. Sears, and McLellan, Brickley & Sears, all of Boston, Mass., for defendant in error.
Before HOUGH and MANTON, Circuit Judges, and LEARNED HAND, District Judge.
This is an action at law to recover for money expended by the plaintiff in the repair of a bridge across the Deerfield river at the town of Readsboro, Vt. It depends upon a contract executed on October 2, 1888, between the plaintiff and the Deerfield River Company, the predecessor in title of the defendant. The Deerfield River Company was incorporated under the general laws of Vermont on April 2, 1883. Its business, as stated in the articles of incorporation, included "the manufacture, transport, and sale of wood pulp, lumber, and other articles and such other business as is incident thereto at said Readsboro." The contract recited that the selectmen of Readsboro had laid out a highway across the Deerfield river to carry which it was necessary to erect a bridge; that for this object the town purposed to spend $4,000 and the state an added $4,000; that the Deerfield River Company proposed to build a railroad across the bridge to accommodate both parties. Therefore the company agreed to erect the bridge according to agreed specifications and to bear its entire cost above $8,000. Then followed the words on which the suit depends:
The company built the bridge and paid half the expenses of its maintenance until April 25, 1892. The Deerfield River Railroad Company was incorporated by special act of the Vermont Legislature in 1890. The defendant is a Massachusetts corporation, incorporated before 1886. On April 25, 1892, the Deerfield River Company conveyed its railroad in Vermont to the Deerfield Valley Railroad Company. On the following 24th of May that company conveyed the same railroad to the defendant. The first deed contained the following covenant: "This conveyance is made subject to all agreements, obligations, and covenants binding on said Deerfield River Company to maintain and permit farm crossings and cattle guards and erect and maintain fences, and to do any and all other acts and things relating to the use and control of said railroad line and property which said Deerfield River Company is under obligation to do as required by law, all of which the grantee is to assume and perform fully and completely." The second deed contained substantially an identical covenant. From that time until the controversies herein arose the expense of repairing the bridge was shared equally between the town and the defendant.
The defendant operated a narrow gauge railroad over the bridge until July, 1913, at which time it changed the gauge of its whole road, and, as its engineers decided that the bridge was too weak to bear a standard guage equipment, it discontinued the use of the bridge for any purpose, and removed its tracks in 1915. Since 1913 the weight of the equipment of a narrow gauge railroad has so much increased that the bridge would no longer carry even that, and it would be impossible, therefore, without entire rebuilding, for the defendant to use it for any railroad purposes, unless by a reversion to the old narrow gauge. By 1919 the bridge had fallen into serious disrepair, and the town determined, in the interest of its more permanent maintenance, somewhat to change its structure. It called upon the defendant to bear half the expenses of the proposed changes, which the defendant refused, and thereupon it did the work itself. This action resulted.
The items claimed are of two classes: Certain repairs done in 1917, amounting to $143.65, and other and more substantial repairs made in 1919, half of which amounted to $4,770.89. The court below allowed the jury to find for the plaintiff as to the earlier repairs, but took from them the repairs of 1919. These, as we have said, were of more substantial character. A sidewalk was added on the down stream side above a water pipe which the bridge carried. There had been originally a sidewalk on the opposite side, but this had disappeared many years before. Wooden handrails were replaced by steel. "A steel floor system" was substituted for the original wooden one. This comprised both steel stringers running lengthwise of the bridge and steel floor beams across it. Various incidental repairs were also made, such as repainting, repair of the rollers, and the like. The substitution of steel for wood was because of the increased price of the latter, and, indeed, perhaps of the impossibility of securing it. The writ of error was taken out because the District Court had refused to allow the jury to pass upon the repairs of 1919.
The first question is whether there is any contract at all on which the plaintiff may sue. The defendant argues that the original contract of 1888 was ultra vires the Deerfield River Company. We of course agree that, if so, that company could make no valid contract. Central Trust Co. v. Pullman Palace-Car Co., 139 U. S. 24, 11 S. Ct. 478, 35 L. Ed. 55. The rule seems to be the same in Vermont. Metropolitan Exchange v. Lyndonville Nat. Bank, 76 Vt. 303, 57 A. 101. We think it open to argument whether the charter of the Deerfield River Company did not give it the right to make the contract as an incident to its charter purposes. These expressly included the right to transport its pulp and lumber, which, being heavy and bulky, might properly enough be carried by a railroad. Doubtless it had no incidental power to carry passengers as well; but we are not concerned with the use which the company made of the railroad, but only whether it had the right to make the contract. Since that was to maintain a bridge for a railroad, and since a railroad, at least when limited to the bridge, might be used in the transportation of pulp and timber, we think it plausible to argue that the contract was within its powers. It might not be enough to invalidate it that it was in fact part of a more extensive venture, which taken as a whole was ultra vires. If so, the deeds of that company to the Deerfield River Company, and of the latter to the defendant, were valid assumptions of a valid contract. The purpose of those agreements was plain enough, and the parties have practically construed them in accordance with their normal meaning over a number of years. In such a situation a bill in equity would lie against the defendant under the rule in Goodyear v. Dancel, 119 F. 692, 56 C. C. A. 300 (C. C. A. 2). As no point was made of...
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