Semple v. Cleveland & Pittsburg Railroad

Opinion by Mr. Justice Williams, The facts in this case are novel and the legal question raised upon them has not, so far as I am aware, been passed upon in any reported case. It seems that when the defendant company located the route for its railroad it was so located as to pass for the distance of fourteen hundred feet over the farm then held by the plaintiff’s predecessors in title. The company desired to secure upon the same farm a piece of land on which to build a woodhouse, another on which to build a watertank, and a supply of water from the spring that furnished the dwelling house, to provide for its engines. Instead of instituting proceedings for the condemnation of the land and water needed, it entered into negotiations with the owner which resulted in an agreement in writing, by the terms of which the landowner granted a right of way over his land fourteen hundred feet in length and ranging from sixty to one hundred and ten feet in breadth, according to the character of the surface. He also granted the land for the woodhouse and watertank, and the water from his spring necessary to supply the watertank. He also agreed to build a suitable depot or station house on his own land adjoining the company’s roadway, and to provide a person to sell tickets, take charge of passengers, and receive and deliver freight for patrons of the road at the station. The company on its part agreed to make use of the depot so to be erected, and to pay the landowner the same salary or commission “ for receiving and delivering property or freight and money received for tickets ” as it paid at other stations along the line of its road where the parties who owned the land over which the road passed owned also the buildings used for railroad purposes. This was probably a favorable contract for a struggling railroad company at the outset, but it was when looked at broadly an unwise one. It worked well while the landowner who negotiated it lived, but after his death the farm passed into other hands with whom the relations of the company were much less satisfactory and by whom its business was not done in a manner that satisfied the officers of the company. In other words, the contract under which the — 379 — company obtained all its rights upon and over this farm became a serious burden and a source of much negotiation and controversy. The question now arises how can the company be relieved of it, and be legally invested with the control of its own business at this station ? It has the power to violate its contract, as it is now doing, by refusing to stop its trains at the depot building or to turn over its business at that point to any person representing the owners of the farm. This does not end the contract relation, but exposes the company to an action each year, if not oftener, for the recovery of damages for the refusal to perform the contract under which it entered upon its right of way and their privileges, and for which it has paid nothing but the annual rental or value fixed by the terms of the contract. If the contract is to be rescinded it must be by notice to the owners of the land, and a proceeding to substitute the value to be fixed by viewers to be appointed under the general railroad laws for the annual value agreed on by the parties. But the contract is an entire one. The consideration for all the rights secured by the railroad company under it is the price or commission to be paid to the landowner for his services as agent in the collection of freight and the sale of tickets at the depot building built and owned by him. The company cannot therefore rescind in part. It must stand on its contract rights or rescind in toto, and fall back upon its right of eminent domain to protect itself in the enjoyment of its right of way and the other rights acquired originally by the contract. Now the company has undertaken to rescind in part. It retains possession of its way, its water supply, and the land acquired under the contract, but seeks to avoid the payment of the annual rental therefor by the condemnation of the depot building erected and occupied by the landowner. The result of this proceeding must be to turn the landowner over to successive actions for the recovery of damages from time to time for the refusal of the company to pay for what it declines to surrender, or to acquire by an exercise of eminent domain. The plaintiff asserts that this proceeding is against the law because in violation of the contract under which the company entered, and against equity because intended to disable her against her will from performing the services out of which the annual compensation arises. Her position is that so — 380 — long as the company affirms the contract by holding all that it acquired under its provisions it cannot be allowed to rescind it as to the one provision on which the compensation of the landowner rests. In other words it cannot affirm as to what it was to receive, and rescind as to what it was to pay. We think the contention is correct, and that the bill presents a proper case for equitable relief. The company must be required to elect whether it will pay for its right of way and other privileges as it agreed to, or by rescinding the contract, and proceeding under the right of eminent domain, pay for it under the provisions of the general railroad laws. It may do either, but its title must rest on a subsisting contract or on a valid appropriation. The learned judge of the court below treated this bill as a bill for the specific execution of the contract, and because he regarded the contract as an improvident one turned the plaintiff out of court. The company did not regard it as improvident when it was made. If now after many years of experiment under it, and an increase in the value of its business at this point, it finds some of its provisions inconvenient and burdensome, the fair and only fair method of relieving itself is to rescind or terminate the agreement on notice, and proceed to adjust the compensation of the landowner under the general railroad laws. That is what this bill in effect asks, and it is in no sense specific execution. It is conceded that under existing circumstances the company is not bound irrevoeabty to the provisions of the contract, but what is contended for is that it is bound until it exercises its election to rescind. This it may do at its pleasure, but it cannot hold under the contract as to all it takes by means of it, and against the contract as to all it was to give by way of consideration. It is also urged that this application comes too late since a bond was approved by the court of common pleas on the application for the condemnation of the depot building; and the legal effect of the approval of the bond is to pass the title to the land or easement to which it relates. This would be so if the entry was rightly made and acquiesced in by the owner or upheld by the court. It would not be so if the entry was not rightfully made or if the bond was tendered under circumstances such as made the proposed exercise of eminent domain inequitable because palpably unjust. The cases cited in support of this contention fairly illustrate — 381 — both the rule and the exception. In Wadhams v. The Lackawanna and Bloomsburg Railroad Company, 42 Pa. 303, the landowner objected to the bond that the penal sum was not sufficient. Upon this question he was heard in the court having jurisdiction and that court overruled his objection, approved the bond, and ordered it filed. The right of the company to enter was not challenged. In fact it was conceded by the form of the objection taken, and when that was overruled the bond stood to the owner in lieu of the easement properly acquired by eminent domain. In Fries v. The Southern Penna. Railroad & Mining Company, 85 Pa. 73, neither the entry nor the bond were objected to in any manner, so that the only question raised was over the effect of an entry by virtue of eminent domain accompanied by the giving of security for the payment of the damages sustained thereby by the owner. We said in that case that “ The security being given in due course of law the grasp of the owner upon his property is loosed by the constitution itself, and consequently the easement acquired passes freed from his power to obtain payment otherwise than upon the bond and the proceeding by assessment of damages given by law.” But the point raised in this case is over the question whether the bond has been given in due course of law. The right of the company to give it, or to require the plaintiff to accept it in exchange for the depot building and lot in the face of the clear and unequivocal covenants securing the use of the same to the landowner, is denied. Indeed it is the question now to be determined upon final decree in this case. If we conclude that the company has no right at law or in equity to seize this building and the ground’ on which it stands in the face of its covenants, and while holding its right of way and other privileges under the same contract which secures this building to the landowner, then it follows that the company took nothing by the tender of a bond which it had no right to insist upon, and which the landowner was under no obligation to accept and actually refuses to accept. To assert the contrary is in effect to assert that although an entry may be made without right it can be made effective to divest the title of the person or corporation whose lands are wrongfully entered if a bond can be gotten upon the files approved as to the amount of penal sum and the sufficiency of the securities, — 382 — before the company can be stopped by an injunction from filing it. A result so monstrous would not be accepted, and the theory upon which it was reached would be rejected as unsound. It would deprive the landowner of the benefit of the judgment of a court of equity upon his right to protection against a deliberate violation of the contract which, while grasping all he had undertaken to convey, sought to wrest from him all that he was to receive in return. More objectionable still, it would deprive him of his recourse to a chancellor notwithstanding the fact that the machinery of the court was being made use of as the instrument for the accomplishment of this injury. We cannot assent to this position. The bond if accepted, or if the right to give it under the circumstances of the case was sustained by the courts, would stand to the owner in place of the easement lawfully acquired by the company from him. But if the seizure is unlawful, or has been permanently enjoined by a court of equity, the bond although approved by the common pleas and regularly filed among its records, must fall with the proceeding of which it is a part. If we restrain these proceedings no appropriation under the right of eminent domain can be consummated, there will be no easement for which the bond shall afford security, and it will become functus officio though remaining on the files. We see no reason therefore why the plaintiff is not entitled to come into a court of equity and ask to enjoin the proceedings entered upon to condemn her depot building until some other mode of payment by the company shall be substituted in the place of that which it is proposed to take away from her. If the contract is to be rescinded she has a right to insist that it shall be done in toto. If the right of way and other privileges are to be held against her under it, she has a right to ask for the compensation provided for by it, or its fair equivalent in damages. This contract seems to us as it did to the learned judge of the court below as one that ought never to have been made. It was improvident in the manner in which it committed the business of the company at that point to persons over whom the company had little if any control and absolutely no power of removal. But the company made it. It acquired valuable rights and privileges under it. It conducted business for years under it without apparent inconvenience or friction. The death of owners, the changes of interests, — 383 — the age and physical disabilities of the present holders of the title, and the unfriendly relations that have recently sprung up render it desirable that the contract relation should terminate and that the company should acquire its title under the right of eminent domain or by an out and out purchase from the owners, but as we have already said it cannot hold under the contract as to what it acquires and repudiate it as to the compensation to be paid. While it holds under the contract it must pay under the contract or an equivalent in damages. When it takes under eminent domain it must pay under the general railroad laws for its right of way and other privileges, if it wishes to retain them. Meantime an injunction must issue to restrain further proceedings looking to the separate condemnation of the depot buildings while the company continues to hold under the contract its right of way, water supply, and lots occupied for railroad purposes. The decree is reversed, and the record remitted that an injunction may issue as above stated, and that the court below may ascertain the net amount fairly due to the plaintiff by reason of the violation by the company of its agreement, set forth in the bill of complaint. The appellee to pay the costs of this case.