Wabash R. Co. v. Grate

• Decision Date: 19 June 1913
• Docket Number: No. 7,966.,7,966.
• Citation: 53 Ind.App. 583,102 N.E. 155
• Parties: WABASH R. CO. et al. v. GRATE.
• Court: Indiana Appellate Court

53 Ind.App. 583

102 N.E. 155

WABASH R. CO. et al.

v.GRATE.

No. 7,966.

Appellate Court of Indiana, Division No. 1.

June 19, 1913.

Appeal from Superior Court, Allen County; Carl Yaple, Judge.

Action by George Grate against the Wabash Railroad Company and others. Judgment for plaintiff, and defendants appeal. Reversed, with instructions.

Edwin P. Hammond, William V. Stuart, Daul W. Simms, and Allison E. Stuart, all of Lafayette, and Fred. E. Zollars, of Ft. Wayne, for appellants. Thomas S. Wickwire, of Angola, and Colerick & Hogan, of Ft. Wayne, for appellee.

HOTTEL, P. J.

This is an appeal from a judgment recovered by appellee in an action brought by him in the De Kalb circuit court against appellants to recover damages alleged to have resulted to appellee on account of the removal by appellant railroad company from the town of Ashley in said county its division terminal and headquarters, and the resulting abandonment and dismantlement of the roundhouse, shops, and other structures necessary to and connected with said terminal division at said place.

The complaint is in a single paragraph, a demurrer to which was overruled. Appellants filed a separate and several answer in six paragraphs. The first paragraph of this answer was a general denial; the second paragraph alleged that the contracts were not in writing; the third and fourth paragraphs each set up the six-year statute of limitations; the fifth paragraph alleged that the contracts were without consideration, and the sixth paragraph alleged performance of the contracts sued on. The sufficiency of the special answers were not questioned by demurrer, and the only reply thereto was a general denial. There was a trial by jury and a finding and a general verdict against both appellants. With the general verdict the jury returned answers to interrogatories. Each appellant filed in the following order a motion for judgment on the answers to interrogatories notwithstanding the general verdict, a motion for a new trial, and a motionin arrest of judgment. These several motions were each overruled, and each appellant saved an exception to each ruling. These rulings and the ruling on the demurrer to the complaint are each assigned as error and relied on for reversal.

Many objections are urged against the sufficiency of the complaint, and in their discussion of these objections and the other errors relied on appellants have presented several questions to which there seem to be no decisions of either of the courts of appeal of this state directly applicable. In some of the objections to the complaint questions are presented concerning which we are not free from doubt, but assuming, without deciding, that the complaint states a cause of action, we have reached the conclusion that the evidence wholly fails to support the theory upon which it must be held to be predicated, and for this reason limit our discussion and decision of the questions presented to those alone which involve the theory of the complaint and the sufficiency of the evidence to support such theory.

The material averments of the complaint are in substance as follows: In January, 1892, appellant railroad company owned and operated certain lines of railroad, and desired to build an additional line from the town of Montpelier, Ohio, through Indiana, to the city of Chicago, and to obtain at some suitable place along such proposed line, and adjacent thereto, a sufficient quantity of land (not less than 100 acres) about one mile in length on which to establish its division headquarters and terminal, and erect depots, roundhouse, side tracks, yards, and all other necessary buildings in connection therewith. To acquire such land from the owners by direct purchase or by condemnation would have cost such company a price far in excess of the actual acreage value thereof, because of the manner in which the farms comprising the land would have to be cut up, and to avoid paying such excessive price, and as an agency through which to purchase such land at a reasonable price appellant railroad company on March 14, 1889, through its officers and directors, procured and caused the organization of the appellant Indiana Improvement Company. The articles of incorporation of such company stated that it was organized for the purpose of buying and selling lands, etc., but the real purpose of organizing such corporation was to enable appellant railroad company to acquire through its agency the land needed by it at a reasonable price, and at the same time enable the organizers and stockholders of the improvement company to make a profit by platting into town lots and selling the lands purchased by it and not used by the railroad company, it being agreed by the railroad company that in consideration of the anticipated benefits to be derived by it from said transaction it would construct and permanently maintain on the land purchased by it all of the offices, buildings, and structures aforesaid, and to fully equip, operate, and maintain said division headquarters thereon, thereby giving to said town lots a permanent and enhanced value, and also enabling appellant improvement company to more readily dispose of the same at a profit. The officers, directors, and stockholders of the improvement company were, with but one exception, also officers and directors of the railroad company, and seven-eighths of the capital stock of such improvement company was owned by officers, directors, and stockholders of the railroad company. The improvement company was practically an auxiliary to the railroad company, and was controlled and governed by the same men, and it with full knowledge and consent of the railroad company purchased and acquired title to more than 700 acres of land in the counties of Steuben and De Kalb, and platted thereon the town of Ashley, and procured the same to be incorporated as a town under the laws of the state of Indiana, and conveyed to the railroad company 112 acres of said land for the uses above specified, which land was conveyed for its actual acreage cost to said improvement company, which company, with knowledge of the railroad company, and for the purpose of inducing appellee and others to purchase lots and invest money in the improvement and development of the town of Ashley, represented and agreed with appellee and others that, if they would purchase lots and improve them, said railroad company would locate and permanently maintain all of the buildings, structures, etc., aforesaid, and would fully equip, operate, and maintain said division terminals and headquarters at said point; that the railroad company would give employment to a large number of persons at said place, who, with their families, would be sufficient in number to give to said town a population of from 6,000 to 10,000 persons, all of whom would become permanent residents thereof. Said promises, undertakings, inducements, and agreements thus made by the improvement company were all made with the full knowledge and consent of the officers and directors of the railroad company, and were all ratified and adopted by it as its personal promises, agreements, and undertakings, and were all made for the purpose of inducing appellee and others to purchase said town lots and to erect buildings thereon. As a further inducement to appellee, the railroad company did establish a division headquarters and division terminals at said point, and did erect certain offices, buildings, structures, etc., thereby giving employment to a large number of persons who became and were inhabitants of said town, and also thereupon agreed with appellee and publicly announced that it was the purpose and intention of appellant railroad company to keep and perform each and all of the several promises, agreements, and undertakings of said IndianaImprovement Company. Relying thereupon, and induced thereby, appellee purchased a certain lot in the town of Ashley, to wit, lots 7 and 8 in block 38, De Kalb county, Ind., and paid to said Indiana Improvement Company therefor $300, and erected on said lot a building of the value of $1,700, which sum was actually expended in its construction by appellee in reliance upon said several promises and agreements of appellants, and appellee in all respects complied with his part of said agreement; that the railroad company, in violation of its agreements abandoned said point as a division terminal and headquarters, demolished and removed its said roundhouse from said point, and dismantled its shops, and wholly abandoned the said town of Ashley, to appellee's damage in the sum of $1,500.

[1] Some of its averments indicate that the complaint proceeds on the theory that appellee was induced to purchase and improve the lots in question by the fraudulent representations, acts, and conduct of the agents and officers of the appellant companies, but, when carefully read, it will be seen that it is not sufficient on this theory. There is no averment that such representations were false, or that they were falsely or fraudulently made knowing them to be false, or that they were recklessly made not knowing whether they were true; nor is there any averment that they were made for the purpose of cheating and defrauding appellee. New v. Jackson, 95 N. E. 328, and authorities there cited.

[2] It also appears that the statements, representations, acts, and conduct relied on as the inducement to appellee to purchase and improve the lots in question related to and were representations, statements, and conduct with reference to a thing to be done in the future, viz., the location and permanent maintenance of the buildings, etc., at Ashley, and were not made with reference to an alleged existing or past fact, and hence as averred furnished insufficient ground upon which to predicate fraud. Bennett v. McIntire, 121 Ind. 231, 234, 23 N. E. 78, 6 L. R. A. 736, and authorities there cited; Robinson v. Reinhart, 137 Ind. 674, 682, 36 N. E. 519;Smith...