Williams v. Ind. Rail Rd. Co., 77A04–1311–CC–580.

• Docket Nº: No. 77A04–1311–CC–580.
• Citation: 33 N.E.3d 1043
• Case Date: March 31, 2015
• Court: Court of Appeals of Indiana

33 N.E.3d 1043

Berthal O. WILLIAMS and Patricia Williams, Appellants–Plaintiffs
v.
The INDIANA RAIL ROAD COMPANY, Appellee–Defendant.

No. 77A04–1311–CC–580.

Court of Appeals of Indiana.

March 31, 2015.
Rehearing Denied May 13, 2015.

33 N.E.3d 1045

Louis F. Britton, Charles H. Ray, Cox, Zwerner, Gambill, & Sullivan, LLP, Terre Haute, IN, Attorneys for Appellants.

John C. Duffey, Heather L. Emenhiser, Stuart & Branigin, LLP, Lafayette, IN, Attorneys for Appellee.

PYLE, Judge.

Statement of the Case

1] This appeal involves an “indenture” or agreement—dating back to 1901—between property owners and a railroad company. The indenture gave the railroad company a right to build and maintain a dam and the resulting accumulation of water on the landowners' property at a depth of fourteen to twenty feet so that the railroad could use it for railroad purposes. More than 100 years later, subsequent property owners—Berthal O. Williams (“Berthal”) and Patricia Williams (“Patricia”) (collectively “the Williamses”)—attempted to enforce that indenture with a subsequent railroad—the Indiana Rail Road Company (“IRR”)—and argued that IRR had breached the indenture. IRR moved for summary judgment, arguing

[33 N.E.3d 1046

that: (1) the 1901 indenture between the original parties was merely a personal obligation and not a covenant that ran with the land; (2) even if it was, the express terms of the indenture did not impose a duty on it to maintain the pond at a specified depth; and (3) even if the indenture so required maintenance of a specific pond depth, the Williamses could not enforce it against IRR because any alleged breach occurred before the Williamses purchased the property, causing any such covenant to cease running with the land. The trial court summarily granted IRR's summary judgment motion.

2] The Williamses now appeal that order and argue that the trial court erred by granting summary judgment to IRR because none of IRR's proposed arguments support that judgment. Because we conclude that the indenture was a covenant running with the land, that the terms set forth in the indenture required IRR to maintain the dam and the water level at a specified depth, and that the indenture contained a covenant, perpetual in nature, that did not cease upon a prior breach, we conclude that the trial court prematurely granted summary judgment. Accordingly, we reverse the trial court's judgment and remand for further proceedings.

[3] We reverse and remand.

Issue

[4] Whether the trial court erred by granting IRR's motion for summary judgment.

Facts

[5] In 1899, in a handwritten instrument, Lucy and Constantine Stewart (“the Stewarts”) conveyed a “perpetual” right-of-way over their land in Sullivan County to Southern Indiana Railway Company (“Southern”) for “railway purposes.” (App. 38). This right-of-way was granted to Southern and “its successors and assigns[.]” (App. 38). The instrument conveying the right-of-way was recorded that same day.

[6] Two years later, in April 1901, the Stewarts, along with another couple,¹ entered into an “Indenture” with Southern.² The Indenture provided:

THIS INDENTURE MADE AND ENTERED INTO this 27th day of April in, 1901, by and between the Southern Indiana Railway Company, party of the first part, and Constantine W. Stewart and Lucy A. Stewart, husband and wife, and John W. Boston and Sarah A. Boston, husband and wife, parties of the second part, WITNESSETH:

That Whereas the said Constantine W. Stewart and wife and John W. Boston and wife, of the said parties of the second part are the owners of the following described real estate situate[d] in the County of Sullivan, State of Indiana, to-wit:

The South East Quarter (1/4) also the North East Quarter (1/4) of the South East Quarter (1/4) of Section One (1) Township Nine (9) North of Range Eight (8) West.

And [w]hereas the said party of the first part [Southern] is the owner of a right of way running through or adjacent to the said above described lands and whereas the said party of the first part [Southern] is desirous of erecting and

[33 N.E.3d 1047

constructing and maintaining a dam on its said right of way for the purpose of accumulating a body of water to the end that it may use the same for railway and other purposes, which said dam it desires to erect and construct at or near a railroad bridge on its said right of way through and under which said bridge a stream of water flows and which said stream passes through the above described lands.

Now, [t]herefore, in consideration of the benefits accruing to said owners of said lands and in further consideration of the right which is hereby granted unto said owners of stocking the pond or accumulation of water occasioned by the erection and construction of said dam with game fish, the parties of the first part [Southern] will also assist in stocking [the] pond with fish and the right of said owners and others, by their consent, to take fish from said pond, and the further consideration of the right which is hereby granted to said owners to use said water for farm or other purposes, and the right to cut and use or dispose of ice therefrom, and the right to use said accumulation of water for boating purposes, the said parties of the second part [the Stewarts and the Bostons] hereby grants [sic] unto the said party of the first part [Southern] the right to construct and maintain at or near the bridge aforesaid a dam which shall be not less than fourteen feet or more than twenty feet in height and of sufficient length to properly and effectually dam the water flowing through the said stream so as to acquire an accumulation of water of a depth of not less than fourteen or more than twenty feet at its deepest point, and so as to cause an accumulation of water which may cover whatever portion of said above described lands as the said dam so constructed may reasonably cause to be overflowed, except that the overflow shall not cut off access to a strip of land on the north east part of said land, and the said owners of said lands hereby grant unto the said party of the first part [Southern] the right to maintain the said dam and said accumulation of water on said lands, with the further right to use the above described lands for public gatherings and pic-nic purposes, it being understood that the parties of the second part [the Stewarts and the Bostons] in the boating, pic-nic and public gathering purposes hereinbefore granted to them shall have the right of all revenue derived therefrom. It is understood that the said second party [the Stewarts and the Bostons] may, at his option, terminate the right to have pic-nic and public gatherings on said lands.

It is further agreed by the parties hereto that said first part [Southern] shall construct a wife ^{[ 3 ]} fence around said pond or body of water, within ten feet of the water line of said pond, the fence to be maintained by the first party [Southern].

IN WITNESS WHEREOF, The Southern Indiana Railway Company has caused in duplicate its corporate name to be hereunto subscribed by its President, and its corporate seal to be affixed and attested by its secretary, this 27th day of April 1901. And the parties of the second party [the Stewarts] have hereunto set their hands and seals this 27th day of April 1901.

(App. 39) (emphases added).⁴ Thereafter, Southern constructed a dam, Hickory

33 N.E.3d 1048

Dam, on its right-of-way. At some later point, Southern also built a water tower and pump adjacent to the dam. The Indenture was later recorded in January 1945.

7] In November 2005, the Williamses purchased property east of and adjacent to the railroad's right-of-way from Alice Jane Schollaert via a warranty deed.⁵ The legal descriptions for the two tracts of land conveyed contained references to the railroad right-of-way as a boundary line for the tracts of land. Additionally, the warranty deed provides that it is “[s]ubject to any and all easements, agreements and restrictions of record.” (App. 86).

[8] In May 2006, IRR acquired the railroad, including the right-of-way, through a quit claim deed and easement agreement with Soo Line Railroad Company d/b/a Canadian Pacific Railway. After IRR acquired the right-of-way, it did not use the pond or any water from the pond.

[9] In August 2008, Berthal sent a letter to IRR to notify it that there was a “large sink hole” near the dam and railroad that, in Berthal's opinion, was “undermining the integrity of [IRR's] dam and the overlying rail tracks.” (App. 65). In the letter, Berthal opined that the “dangerous condition” of the sink hole would “eventually result [in] a significant surface, subsidence, possibly the washout of the dam, and potentially a catastrophic derailment.” (App. 65). Berthal also referenced the Indenture entered into by IRR's and Berthal's “predecessors” as well as the dam and “resulting lake” that were “created under” the 1901 Indenture. Berthal stated that this “agreement provides for certain obligations to maintain the lake” and alleged that these obligations were now IRR's obligations. (App. 65). In his letter, Berthal stated that the overflow water from the dam was “exiting the lake through the sink hole” and that the sink hole had been there since at...