Doty v. Railroad

Wilkes,' J. This is an action for breach of covenant contained in a deed made by plaintiff, Doty, to the Chattanooga Union Railway Company. The effort is to hold the assignee of that company upon the covenant as one running with land. Under the charge of the trial Judge the jury found for the defendant assignee, and the plaintiff has appealed and assigned errors. The question, as submitted to this Court, is whether the covenant sued on is one which runs with the land and affects the transferee or is merely the personal covenant of the Chattanooga Union Railway Company, the original grantee. In 1889 this railway company desired to extend its lines, already partially constructed, through the' lands o| the plaintiff. An agreément was made between the railroad company and plaintiff, which, for the purposes of this suit, sufficiently appears from the recitals and covenants in the deed by plaintiff' to the railroad company. These recitals are as follows: “For and in consideration of $5 in hand paid, the receipt of^ which is hereby acknowledged, and an agreement by the grantee to run daily passenger trains on and along the right of way granted, I, D. M. Doty have bargained and sold unto the Chattanooga Union Railway Company for right of way for the road of said company, the following described' pieces and parcels of land, ... to have and to hold the same, together with all the — 566 — rights, privileges, erections' and appurtenances thereon or thereunto belonging to the said Ohattanooga Union Railway Company, its successors, and assigns forever, with the promise that no other railway company shall be allowed to put its tracks on the right of way aforesaid, and if the^ same is abandoned by non use' for six months the title will revert to me. ... I warrant the title thereunto, and hereby bind myself, iny heirs and representatives, to defend the same to the said Chattanooga Union Railway Company, its successors and assigns, against the lawful claims of all. persons.” The deed is dated July 19, 1889. About three months thereafter the road was constructed and completed over the land, trains were put in operation, and a passenger service inaugurated. A station-house was built on the land, passenger trains were run once every hour each way, and passengers were received and discharged at Doty’s, the station on the land, all trains stopping there. After some time the trains were decreased to three a-day. After September, 1892, only mixed trains were operated, and only one per day, and in No-vemberj 1896, they ceased altogether to stop at this station, and ceased altogether to ' run passen•ger trains. In 1895 the railway company, having become insolvent, all its property was sold to one Merrill, and he afterwards conveyed to .the Belt Railway Company, and this company leased to — 567 — the Alabama Great Southern Railroad Company, which undertook to operate the line, pay all expenses, and defend all suits arising out of the operation of the road, to pay all judgments recovered against it, keep the premises in repair, and return Same when the lease expired. The Circuit Judge, in substance, told the jury that inasmuch as the railroad had not been built when Doty made the deed, the contract was personal and binding on the Chattanooga Union Railway Company only, and had no binding force upon its successors or assigns, and that as the covenant had been breached before the road was transferred to the parties against whom relief is sought as transferees, no recovery could he had against them. The plaintiff asks no judgment against the Chattanooga Union Railway Company, as it is insolvent, and the contest is with the transferees, upon the idea that the terms of the deed make a covenant upon the part of such transferees, and, as before stated, this is -the only question this Court is requested to determine. Very exhaustive and able briefs have been filed by counsel, and we are cited to a large number of cases, many of which we do not think apply to the real case under consideration. We think if we look at the situation of the parties, and what was intended by the provisions in question, it will aid us in reaching the rights of the parties. The Chattanooga Union Railway — 568 — Company desired to obtain a right of way over the plaintiff’s land. The • plaintiff was willing to grant it, provided .passenger service .was • furnished over the road. It appears that plaintiff also expected a station to be maintained upon the' land or so near to it as to make the passenger service a convenience ' and benefit, but for- some reason he seems to have omitted this feature from his written contract. It is manifest he cannot demand of any of the defendants anything more than that they shall run' daily passenger trains over that right of way. as provided in the deed. Whatever benefit would accrue to plaintiff from this he is entitled to from ' his grantee, and more than this he cannot claim from any one. Now as to the original grantee, it acquired under this agreement, and the conveyance . in which it is embodied, a right of way for railroad purposes, and for these purposes alone. This right granted to the railroad conferred upon it an easement over and upon the land — that is, ■ a right • to construct and lay its track over and upon the land and to operate it. Jones on Easements, Sec. 212. It is not provided how long this easement shall continue, except that if it is abandoned for six months it shall be extinguished, and the full title shall revest, in or revert to the plaintiff as owner of the 'fee or. - reversion. ' .Nor is- it provided how long the plaintiff shall be entitled, to have the -daily pássenger trains operated. It is plain that the running of the — 569 — train was to be and was the consideration for the right of user of the easement. Both. were, con-; tinning rights, and ' they were, mutually ■ dependent upon each other. So long as the consideration was paid — -that is, the trains were run — just.. so long was the road entitled to operate and enjoy its easement. It seems plain that if the consideration should fail by trains being discontinued, then the privilege purchased for this consideration of using the right of way should also fail. If the land: owner had sold his land, he could not have conveyed it clear of this servitude so long as the railroad company kept up its part of the. contract by furnishing the service. If the railroad company had sold its property, its assignee could only continue to operate the road by paying the consideration therefor, to wit, operating the train. A sale ■in invitum would carry with it the same results as to either the landowner, or the easement owner. The obligations are continuing and mutual. Each is based upon the other, and incurred in view of the other. It might not have been a wise contract to make, but there is no law - prohibiting unwise contracts. It may turn out the duty of running a passenger train will be a burden upon the road; it may be it will- be but a barren- benefit to the' landowner, as he can only require it to run and not to stop. We have examined the numerous cases cited by defendant’s counsel. We .do not think they are — 570 — applicable, and' many cited by the plaintiff’s counsel are also inapplicable as we view the case. We are of opinion the principle involved is that passed upon by the Supreme Oourt of Alabama in Gilmer v. Railroad, 79 Ala., 569. In that case the plaintiff had conveyed to the Alabama and Elorida Kailroad Company a right of way through his land in consideration that the railroad would stop its passenger and freight trains opposite his house, and receive and discharge passengers and freight upon proper signal. The deed ■ contained no language binding the assigns of the railroad company. The Mobile and Montgomery Kailroad Company was the successor and assign of the grantee. The plaintiff contended that the covenant ran with the land, and bound the assignee. .This was demurred to. The Circuit Judge sustained the demurrer, and the Supreme Court reversed this ruling, and held that the assignee was bound, though not named in the deed or covenant, and that the obligation to maintain a flag station was a continuing one, for any breach of which any owner of the right of way would be liable. The obligation to receive and discharge passengers was a burden upon the easement, which was, in turn, a burden upon the land. In the case at bar the obligation to run a daily passenger train over this particular piece of road was a burden upon the easement or privilege of owning and operating the right of way, In both cases the service to be — 571 — rendered by the railroad was in the nature of rent for the use of the right of way, no other consideration being paid therefor. The road might hare paid "in solido” in money or otherwise for this right of way once for all, but it stipulated to render certain service, that service to be continuous, and it is bound by its agreement. And so is any assignee or transferee bound to render the same service so long as it claims and enjoys the privilege, even though the word “assigns” is not used. The personal obligation of the original grantee could not extend beyond the time when his ownership ceased, as he would no longer be able to render the service without the road to render it upon, nor could the owner be required to look to such original grantee for any damages except such as accrued up to that time, and yet the obligation to render the service .must still continue as a burden upon • the easement or privilege of operating the road. 'So, if the contract was breached by the original grantee, the owner would . have had his right of action .at once. But this would not have exhausted his rights or remedies, for the obligations on each side are continuing, and a suit for breach at any time would, in a case like this, only cover the damages to that time; and as to the time subsequent to the breach, the obligation continues with successive rights of action for successive breaches. Even if we were mistaken in this view, still the breach by the — 572 — original grantee of the obligation to render the service did not put an end to that obligation and convert the landowner’s right to merely a chose in action for the breach already committed, and even if it did, he might waive snch right, or delay it, and bring the action at snch time as he chose and against snch parties . as, at the' time being, might be liable for snch breach. The consideration for this conveyance was not the bnilding of the railroad, but it was the daily running of the trains. We might suppose the right of way occupied and the road in operation. The landowner applies for damages under the statute, and the road meets him with the proposition, “If you will forego your damages, we will stipulate to render certain continuous service.” Would this not be a continuing obligation that would attach to the use of the easement ? But the present case is stronger, for the railroad obtains the privilege of occupancy and 'operation before there is any actual occupancy, upon the consideration that for such occupancy and privilege of operation the road will render a continuing service. The case of Midland Railway Co. v. Fisher, 125 Ind., 19, is also in point. In that case a right of way was granted to a railroad company in consideration of its agreement to construct a fence on each side of the railroad when completed. The railroad was not built until three years after the deed was made. The grantee' road mortgaged all its prop — 573 — erty, including the right of way, and the mortgage was foreclosed, and the defendant purchased and entered into possession. The land all passed to another owner. dSTo fence ivas built. In an action for damages against the purchaser of the road at foreclosure sale upon the agreement to build, the Court held it liable, not because it was bound for the debts of the old company, but because, by accepting and talcing charge of the right of way, it became obligated to build the fence, and the Court said the purchaser could not be permitted to enjoy the easement and refuse to perform the agreement which created and conferred it. It said, further, one who takes a privilege in land to which a burden is annexed has no right to' assert a claim to the privilege and deny responsibility for the burden; a party who acquires such a privilege acquires it subject to the conditions and burdens bound up with it, and must, if he asserts a right to the privilege, bear the burdens which the contract creating the privilege brought into existence. The covenant is an integral part of- the deed upon which rests the rights of the appellant. The deed which creates the asserted right discloses the covenant which burdens the right. In accepting the right under such a deed, and asserting a claim to the privileges conferred by it, subsequent grantees of the original covenantee become bound to perform the agreement. The covenant passed — 574 — with the land. The easement which. burdened the fee was an incumbrance, and the party that took the land took it subject to the incumbrance, but in taking subject to the incumbrance of the easement that party acquired the benefit interwoven with the incumbrance. Both the burden and the benefit., the easement and the covenant, essentially inhere in the land. One benefits the estate, the other burdens it. The party who acquires the estate necessarily acquires it with both the burden and the benefits. He must submit to the one, but he has a right to the other. In accord with this holding are cited Railroad v. Priest, 131 Ind., 413; Hazlett v. Sinclair, 76 Ind., 488; Bronson v. Coffin, 108 Mass., 175; Huston v. Railroad, 21 Ohio, 235; Carr v. Lowry, 27 Pa. St., 257; Kellogg v. Robinson, 6 Vt., 276, and while there are distinguishing features in each case,, the general principle involved is the same in each. The case of the Georgia Southern Railroad v. Reeves, 64 Ga. P., 492, was one where the grantor, in consideration of $25 and of the building of the railroad, conveyed to a company, -its successors and assigns, forever, in fee simple, the right of way through his land, and added in the deed the following words: “It is hereby agreed and understood a depot and station is to be located and given to said Osborn Peeves on the land — a strip — above conveyed, to be permanently located for the benefit of — 575 — said .Osborn Reeves, and his assigns, all to be used for the general purposes of the railroad company,” and it was held that the railroad by accepting such deed, entered into a covenant to comply with its terms, and this covenant ran with the land and became obligatory upon any second company which became the purchaser under proper legal direction of all the rights, privileges, franchises and property of the former. It has been held in a number of cases, and is not questioned, but that the acceptance of such a deed, though not signed by the grantee, binds such grantee to the stipulations and covenants in it. Midland Railway Co. v. Fisher, 125 Ind., and authorities there collated. X In Dorsey v. Railroad, 58 Ill., 65, it appears that a railroad entered into an agreement with Dorsey, in consideration of his conveyance of certain premises, that it would make and maintain certain fences and cattle guards at such places as' Dorsey might designate, and soon thereafter it conveyed its franchises to another road. Dorsey brought an action on the covenant against the as-signee, averring that it had notice of the agreement. A general demurrer was interposed and sustained upon the ground .that the covenant was merely personal, and did not bind the assignee, and it was held that this was error, that the covenant related to the land, and was from the relations of the parties, perpetual in its nature, — 576 — mild bound the assignee when the Legislature conferred upon it power to purchase the land. Where an estate is conveyed for a specified purpose, the purpose marks the limit or boundary beyond which the estate conveyed cannot ■ exist. City of Macon v. Railroad, 82 Ga., 501 (same -case, Am. & Eng. Railway Cases, 462); 3 Elliott -on Railroads, Secs. 939--94-1. The Courts incline, when the words may be construed as a condition or covenant, to hold that they create a covenant, and not a forfeiture. 3 Elliott .on Railroads, . Sec. 945, and cases cited. ■ . But if the words were -construed to be a forfeiture, that might be waived, and the party aggrieved may have his damages. 3 Elliott on Rail- ■ roads, Sec. 942,. at seq. It is said in 8th Am. & Eng- Enc. (new •od.), pages .138,; 139, that if. a' covenant relates ■to the interest or estate granted, so that its ■ performance or nonperformance will affect the quality, 'value, or mode- of enjoyment of the- estate, it will i’un with the land and bind any one ’ taking the estate with notice. See the cases there cited. The Supreme Court of North Carolina held in Norfleet v. Cromwell, 64 N. C., 1, in substance, that the rule in Spencer's case, 5 Coke, 16, had ■ no application to grants ’and covenants concerning easements, and s_aid in effect that covenants creating easements run with the land as against assignees in fee when the intent to create them is — 577 — clear, tire easement apparent, and the covenant consistent with, public policy, and adds that covenants are the proper mode of creating such servitudes as consist in acts to he done by the owner of the servient estate. The Court said: “The canal has been cut; the defendant cannot, in the nature of things, release the benefits which he has acquired; the land cannot be restored to its former condition,” and so the Court held the party in possession upon his covenant to repair. See to the same effect Crawford v. Wetherbee, 77 Wis., 419. It is true in the North Carolina case the words, “heirs and assigns” were used with ' regard to both parties, and the canal was already in existence, and the case is cited only as to the question of the applicability of the rule in . Spencer’s case to easements. In Nasury v. Southworth, 9 Ohio St., 351, this principle is announced, “that if the thing to be done upon the land, though not in existence at the time of the demise, would be of a permanent nature, connected with the use and enjoyment of the land, and beneficial to the assignee, an intent that it should run with the land and bind the assignee, shown by naming him in the deed, would be effectual.” It was then held that the word “assigns” is not used in a technical sense and as the only word appropriate for the purpose, but — 578 — that any equivalent words manifesting an intent to bind an assignee Avill suffice. While we think this is the proper view to take of the case, and these are the rules and principles to he applied, we are not unmindful of the authorities cited for the defendant, and which it appears were persuasive if not controlling in the Court bélow, and the very able presentation of them in this Court calls for a notice of them. We think they are clearly distinguishable from the cases we have cited, and from the one at bar. The contention of the defendant may well be formulated in the following words from Tiede-man on Heal Property, Sec. 190: “Covenants which relate to a subject-matter 'not in esse/ as for the erection of 'a new building’ upon the premises, do not run with the land so as to bind assignees unless they are expressly named therein.” See to same effect Kerr on Peal Property, Sec. 1218; Washburn on Real Property, page 532; Taylor on Landlord and Tenant, Sec. 260; Spencer’s case, 5 Coke, 16 (same case, 1 Smith’s Leading Cases, 138); Petroleum Co. v. Weare, 44 Ohio St., 612; Tallman v. Coffin, 4 N. Y., 136; Lyford v. Railroad, 92 Cal., 95. The last named case was decided under a Code limiting covenants running with the land to those conferring benefits on the land, and is not' applicable in this State. We are referred to the cases of Bream v. Dick — 579 — erson, 2 Hum., 128; Brooks v. Smith, 1 Shannon, 158; Cronin v. Watkins, 1 Tenn. Chy., 125; Hite v. Parks, 2 Tenn. Chy., 373, as holding with defendant’s contention. In the first named case there was an agreement on. part of the lessor to páy the lessee for im-provements made during the lease, or that the lessee .might take pay out of the rents. There was an assignment ' of the lease on. the one hand and of the reversion on the othefr, and ’the Court treated the question as to whether the agreement or covenant to have pay for improvements passed to the assignee of the lease as against. the assignee of the reversion. The Court said, that there was no covenant on the part of the lessees to improve except at their option, and the covenant of the lessor was to pay if they were made and left standing at the expiration of the lease. It was added that 'it was difficult to conceive how a covenant to pay a pecuniary consideration for a house if the tenant should see proper to erect it, could he said to touch and concern the land so as to run with it. But the Court also held that the agreement was a personal covenant upon the theory of Spencers case, 5 Coke, 16, where it was sought to charge the defendant, as assignee of the lessee, for failure to construct a brick wall upon the demised premises. The Court said, among other things: “When the covenant extends to a thing in esse, parcel of the — 580 — • demise, the thing to be done by force of the ' covenant is quodam modo annexed and appurtenant to the thing demised, and shall ’ go with the land, and shall bind the assignee, although he be 'not bound by express words, but, when the covenant extends to a thing not in being at the time of the demise, it cannot be appurtenant or annexed to a thing which hath no being; as, if. the lessee covenants to repair the house ’demised to him during the term, that is parcel of the contract, and 'extends to the. support of the thing demised, and, therefore, is quodam modo annexed and appurtenant to the house, and shall bind the assignee, although hé be not expressly named' in the covenant. But in the case at bar the covenants concern a thing ' which •was not in esse at the time of the demise made, but to be newly built thereafter, and therefore shall bind the covenator, his executors and administrators, and not the assignee, for the law will not annex the covenant to a thing which hath no being.” Bream v. Dickerson, 2 Hum., 128. The case of Brooks v. Smith, 1 Shannon’s Cases, 162, approves this doctrine, stating it in-these words: “A covenant to do something in ■ existence at the time, as to repair the houses, cultivate the land in a particular manner, to reside ■on the premises, to let the lessor have free access to certain rooms in the house, runs with the land and binds the assignee even .without the word ‘assigns,’ but if it be to erect something upon the — 581 — premises, such as a shop, house, machinery, or wall, that does not -bind the assignees unless they are expressly named.” Citing Addison on Contracts, 979. The two cases cited from 1st and 2d Tenn. Chancery Reports, above, are in accord with this, holding, and all recognize the Spencer case. In other jurisdictions the Spencer case has been criti-. cized, if not denied. Without questioning thq correctness of this holding, upon the reason given and confined strictly to the, facts of the case, we think, there is a difference in the cases in this: In these cases there , was,a covenant or agreement (so far as it was, absolute and not optional) to do a certain specified thing — as, to build a house or wall or pay for improvements. There was no continuing and. daily accruing consideration or agreement on either-side, there was no continuing obligation on either,: as in this case. Plere, from the very nature of-the agreement, the burden must be borne by the party in possession for the time being and opeiy ating the road. The benefit must accrue to the,party in possession of the premises over • which, the easement is granted. The service can be rendered by no other, the benefit can be reaped by no other, except the parties in' possession. If is not a consideration capable of being reduced to an absolute money value. The land is burdened by the easement. This can only be offset — 582 — by the benefit to the servient estate, and this is a continuing burden and benefit. But there is another view to take of the matter. The contract in this case on the part of the railroad is not to build the road, but to render the passenger service after it is built. The contract upon the part of the landowner is to grant an easement. So far as this agreement goes there is no stipulation to build or put something new on the land, neither upon the servient estate, nor upon the dominant estate. While, of course, the trains cannot operate unless the road is first built, there is no stipulation for the latter, but only for the former, treating the road as already constructively built. But as to the landowner, his contract is to give an easement over his land. He does this by the very instrument which stipulates for the service. Upon the execution of this agreement the road has an easement, before it does a lick of work on the land, or even enters upon it. There is no contract, therefore, to put anything new upon the land, but rather to use it in a certain manner, both parties acting upon the assumption that the road is already built. This makes a case analogous to the provisions already referred to of cultivating or using the land in a certain manner, or residing on the premises, or allowing access to certain rooms in — 583 — the house, in all of which cases the covenant runs with the land. We think upon these grounds, and perhaps others that might he stated, there is a well-marked distinction between the eases, and that this case does not fall within the reason nor letter of the cases cited by defendant, but under those relied on by plaintiff and others herein cited and commented upon. Eor the reasons stated, we are of opinion that the learned trial Judge was in error, and the judgment is reversed and cause remanded for a new trial. The appellee will pay costs of appeal.