Philadelphia Library Co. v. Beaumont

The opinion of the court was delivered, by Thompson, J. The plaintiffs below are the owners, by a devise from James Logan, in trust for the Loganian Library, of a ground-rent reserved by the testator in a tract of 396 acres and 120 perches of land, in Solesbury township, Bucks county, and the defendants claim title to the land subject to rent, under and by virtue of sundry conveyances and descents from Jonathan Ingham, the original grantee. The original rent reserved in 1747 was ¿£21 sterling, which, by a covenant in the deed of the land, was to remain a rent-charge for the period of one hundred and seven years, when a re-valuation of the land and improvements was to be made, and half the increased value ^added to the existing ground-rent, •which was to be the rent for another period of one hundred and twenty-one years, and so on, under periodical valuations at intervals of one hundred and twenty-one years, for ever. The difficulty here has arisen in a difference of opinion as to the mode of valuation to be adopted. Is it to be according to the estimated annual value of the premises, or by a valuation of the fee of the land and improvements, half the interest of which to be added to the preceding rental ? The plaintiffs contend for the latter, and the defendants for the former. The words in the deed in which the difficulty has arisen are as follows : at the end of the first period, which was to be in 1861, “ the said tract of land and plantation, with all the improvements thereon, are to be valued by four judicious men, to be indifferently chosen by the heirs and assigns of the said James Logan, of the one part, and the executors, administrators, and assigns of the said Jonathan Ingham, of the other part, and by how much the true value of the said land and improvements shall, in the [49] estimation of tlie said four persons, exceed the rent herein reserved, one full half or moiety of such excess shall be added to said rent reserved, and from that time become a new rent,” and be paid yearly to the heirs and assigns of the grantor for a further period of one hundred and twenty-one years, and so on for ever. In construing this reservation we should bear in mind that the parties had in view the creation of a ground-rent unextinguishable, but subject, at long intervals, to be changed and increased by a re-valuation of the property out of which it was to issue. This the parties might legally do, although it is somewhat novel. In conveying land on ground-rent, a valuation of the premises in some cases is necessary. This fixes what may be called the capital, and a rate of interest agreed upon ascertains the rent reserved. If extinguishable, the capital which would produce an interest equal to the rent, would be the sum necessary to be paid to extinguish the charge. This is the usual course of such transactions, and we have not a word to show that any different mode for ascertaining the rent was to be observed. If the words do not forbid it, then the construction will be that the usual mode was intended. The deed of the grantees provides, “ that the land and plantation, with all the improvements thereon, are to be valued,” not at what they would rent for by the year. The words used have a greater scope than this, and there is nothing elsewhere discoverable which would qualify them. The suggestion that six per cent, is too high a rate for a farm, may be true or not, owing to many circumstances — it might be a high rent now, and a very low one fifty or a hundred years hence. This consideration is too vague to be allowed to alter the obvious import of the words used. Having valued the land and plantation, then the future rent is to be ascertained by so much as the true value of said land and improvements “shall exceed the rent reserved,” by adding one “ full half or moiety of each excess” to the existing rent. The valuation is to get at a capital, the interest of which is to be the rent reserved. It is not pretended that the half value of the premises is to be paid as rent every year. This would be absurd. But the fee was to be valued, to get at the sum that half of the interest would represent, which being added to the existing rent, was to be the future charge. The words used, and the object intended, both look to this as the meaning of the parties. There are certainly no words limiting the valuation to what the premises would rent for per year, which would involve calculations for taxes and repairs, as contended for by the defendants. The consideration that six per cent, would be a high rent we have seen is not sufficient to require the interpretation contended for. On the other hand, in [50] addition to the difficulty in estimating what the taxes might be and the repairs in the future, the process might result in great injustice, as has been well suggested by the plaintiff’s counsel, by letting the farm and improvements so run clown at the period for estimating the annual value as to be of little worth. Thus, although the fee might have greatly appreciated in the general property of the county, or advance of property in the neighbourhood, the rental might be very little, if any, advanced. Tested by the words used, and supported by the object of the parties, and the mode in which such matters are usually transacted, we think the decree at Nisi Prius was based on the true construction to be given to the deed. I do not appreciate the difficulty suggested of the possible change of the rate of interest. It is the same now that it was one hundred and seven years ago, when the ground-rent was reserved, and we can predicate nothing of the possible contingency that the rate per centum may be changed. If it shall be so before 1982, the period of the next valuation, we may trust the courts of that day to discover the proper rate per cent, on the capital, necessary to constitute the rent by the law regulating the rate which existed at the making of the contract. The decree at Nisi Prius affirmed at the costs of the appellants.