Cromie v. Board of Trustees of the Wabash & Erie Canal , 71 Ind. 208 ( 1880 )

Worden, J.

Complaint- by the appellee, against the appellant and Oliver TI. Cassman, as follows :

“ The Board of Trustees of the "Wabash and Erie Canal complains of Oliver H. Cassman and John P. Cromie, and says, that on the 1st day of November, 1868, and from that day to the bringing of this suit, the plaintiff was, and still is, entitled to the exclusive possession of the part of the Wabash and Erie Canal which is within said county, and during all said time was and is the exclusive owner of all the ice formed in the same; that on the said 1st day of November, 1868, and at divers’times between that day and the commencement of this suit, the defendants wrongfully entered upon said canal within said county, and took and carried away therefrom large quantities of ice formed in said canal, and the property of said plaintiff, and sold and disposed of the same as an article of merchandise; that said ice so taken amounted in the whole to a large quantity, to wit, one million tons of ice, and the same was sold at a net profit of one hundred thousand dollars, and said ice was of that value.” Prayer for an injunction, and for judgment for damages in the sum of one hundred thousand dollars.

"We will state enough of the subsequent pleadings to develop the main points in the case, and the ground on which it must be decided.

The defendants answered:

1. By a general denial;

2. “ That said John P. Cromie was, during all the time complained of in said plaintiff’s complaint, the owner in fee of a certain part of the lands covered by the waters of said canal known as the ‘ wide water,’ being that part of lot No. 7 of school section 16, in township 28 north, of range 4 west, which is covered by said canal and wide water; and also of the part of the lands covered by the waters of said canal known ast lower wide water,’ near the mouth of Wea creek, being that part of the north-west quarter of section 34, township 23 north, of range 5 west, and of the east half of the north-east quarter of section 35 in said township and range, which is covered by the said canal and said lower wide water, subject only to the easement in said plaintiff to use said canal for the purpose of navigation, and for hydraulic purposes; that, being such owner, said Cromie employed the defendant Cassman to cut ice thereon-; that, in cutting said ice, no .damage whatever was done to any part of said canal, nor was the said easement in any manner interfered with, nor the use of said canal by said plaintiff obstructed or in the least disturbed. And the defendants deny that they, or either of them, cut ice upon or removed the same from any other part of said canal than the portions so owned in fee by said Cromie as aforesaid. Wherefore,” etc.

The ninth paragraph of the answer is too long to set out in full, but it alleged, in substance, among other things, that the defendant Cromie, on the 1st day of May, 1866, together with sundry other persons, entered into a written agreement, a copy of which is set out, for the purpose of forming a partnership to secure the repair and maintenance of the W abash and Erie Canal from the Ohio State line, westwardly, to Terre Haute, Indiana; that on the 23d day of Juue, 1866, the partners exhibited their contract to the plaintiff herein, who approved the same and entered into an agreement with said partners, by which it transferred, for the consideration' therein named, all the profits of said canal to said partners, a copy of which agreement was filed; by which agreement the plaintiff’ parted with all the right and control of the canal in Tippecanoe county from the 1st day of July, 1866, to the 1st day of July, 1878, which time has not expired, and the partners took possession of the canal in 1866 under the agreement, and held the same until after the ice left the canal in the spring of 1874, and until after the acts complained of were committed.

The agreement between the plaintiff and the partners will be stated more fully when we come to consider the sufficiency of this paragraph of answer.

Demurrers for want of sufficient facts were sustained to the second and ninth paragraphs of answer above noticed.

Issues were joined and the cause was tried by a jury, resulting in a verdict for the defendants. Oassman had judgment in his favor on the verdict, but the plaintiff obtained a new trial as to Cromie; and upon a second trial the plaintiff- obtained a verdict against Cromie for $6,750, on which judgment was rendered.

Errors are assigned, among other things, upon the ruling in sustaining the demurrers to the second and ninth paragraphs of answer.

The question arising under the second paragraph is whether the State acquired the fee simple to the land occupied by the Wabash and Erie Canal, and, therefore, whether the fee simple passed from the State to the trustees of the canal; or whether the interest thus acquired and transmitted was a mere easement.

In the ease of The Water Works Co., etc., v. Burkhart, 41 Ind. 364, it was decided that the State acquired the fee, and not a mere easement. That was a thoroughly considered case, and we think the decision binding upon us, as having become a rule of property, and do not feel justified in again entering upou an examination of the question as an open one. We may remark, however, that since that decision two cases have been decided in other States in accordance with it. Malone v. The City of Toledo, 34 O. S. 541, and Wyoming Coal, etc., Co. v. Price, 81 Pa. St. 156; The latter case strongly supports the Burkhart case in construing the various statutes on the subject as in pari materia.

It is about nine years since the case of The Water Works Co., etc., v. Burkhart, was decided. In the mean time, large rights may have been acquired on the faith of that decision, that would be utterly destroyed by overruling it. The case is one of the class to which the doctrine of stare decisis applies with all its force. It was said by the Supreme Court of the United States, in Goodtitle v. Kibbe, 9 How. 471, 478, that “ it must be a very strong case indeed, and one where mistake and error had been evidently committed, to justify this court, after the lapse of five years, in reversing its own decision; thereby destroying rights of property which may have been purchased and paid for in the mean time, upon the faith and confidence reposed in the judgment of this court.” See also the case of Rockhill v. Nelson, 24 Ind. 422. We therefore adhere to the decision in the case of The Water Works Co., etc., v. Burkhart, supra, and decline to re-examine the question thus decided.

There was no error in sustaining the demurrer to the second paragraph of answer.

We pass to the ninth paragraph.

The contract made a part of this paragraph is a long one, and we set out so much of it only as seems to have a bearing upon, the question involved. It contains a preamble, concluding as follows :

“ Therefore, To secure the repair and maintenance of said canal, and to preserve, maintain and keep the same for the use of the people of the State of Indiana, and to protect the rights and interests of the bondholders therein, the said Board of Trustees of the W abash and Erie Canal do make the following agreement:” Then follows the agreement, of which we set out the following parts :

“ This agreement between the Board of Trustees of the Wabash and Erie Canal, in the State of Indiana, of the first part, and Alfred P. Bdgerton, Reed Case, Luther Jewett, Robert Breckinridge and Mentor Bradley, citizens of said State of Indiana, and their associates, partners under the name and style of The Wabash and Erie Canal Company, organized at Delphi, Indiana, May 26th, 1866, of the second part, witnesseth:

“ That the said Board of Trustees, for the purpose of preserving as far as in their power the navigation of that part of said canal, from the lower lock in the city of Terre Haute to the Ohio State line, do hereby set apart and apply for the use of said Wabash and Erie Canal Company, contractors, all the tolls and revenues to be derived, or which may accrue, from the above specified part of the canal, during the term of this agreement, with full power to collect and use the same for the purposes herein stated.

“ In consideration whereof the said contractors do hereby agree and bind themselves to maintain and preserve the navigation of that part of said canal hereinbefore specified, from the 1st day of July, 1866, until the 1st day of July, 1878, and to keep and preserve the same in good order for use, with all its structures, within the limits specified, including locks, dams, dam abutments, aqueducts, culverts, waste-wiers and embankments, and all the works appurtenant to said canal, and which the Board of Trustees are required to keep, maintain, and preserve. * * * Collectors of toll and revenues shall be appointed by the board of trustees, upon the recommendation of the parties of the second part, who shall also determine the number, location, compensation, time and manner of payment of the same.

“ The contractors shall choose one of their number as a general manager, whose compensation shall be fixed by them, and paid as herein stated. He shall keep his office at Eort Wayne until otherwise agreed by the parties hereto, which shall be the general business office of the company. His duties shall extend to a general supervision of the canal and its business, as the representative of the contractors, and to the current and ordinary repairs and maintenance of the canal, and to a rigid watchfulness over the expenditures of the several districts, and to such other matters as may be assigned him by the contractors. * * * * All the tolls and revenues of that portion of the canal embraced in this contract shall be received and collected by the collectors appointed and commissioned by the board of trustees, and shall be deposited in such national or state banks most convenient to the collectors’ offices, as may be selected by said contractors, to the credit of the Board of Trustees of the Wabash and Erie Canal, for the use of the Wabash and Erie Canal Company, for the purposes herein stated, and no other. An accurate account shall be kept by the trustees, in their office at Terre Haute, of all said receipts, and of all disbursements; and all the moneys shall be applied to the uses and purposes contemplated in this agreement, and shall be held in trust by said trustees for such uses and purposes only. * * * *

“AIL payments for repairing and preventing of breaks, repairing or rebuilding lock gates, for the regular boat forces, for cleaning out the canal, for lock tending, watchmen, and all other regular and ordinary repairs, expenses, and all repairs made by the district superintendents, shall be made by the Board of Trustees from the funds collected and deposited as aforesaid, upon the certificate or order of the general manager of the contractors, every sixty days from the 1st day of July, 1866. * * * *

“ Whenever, from insufficiency of revenues, the contractoi’s shall make any advances of money for any of the purposes herein designated, the amount thereof, with interest, shall be repaid to them from the revenues first thereafter collected and deposited as aforesaid. * * * *

“ And it is also expressly understood, that no obligation or debt shall be created by said contractors against this division of the canal during the existence of the present contract, except for advances made as aforesaid; and the trustees will not be responsible in any manner for any losses to said contractors, by reason of this undertaking; the said contractors agreeing to take the tolls and revs* núes as a full compensation. * * * *

“ There shall be no change or interference on the part of the contractors with the existing leases of water-power by the trustees or the State, except upon consultation and mutual agreement with said trustees; and at all times, when the streams from which the canal derives water will admit, it shall be supplied as the trustees are now bound to supply it; and all water rents shall be charged and collected by the collectors as heretofore, and for the use of said contractors; and said trustees, upon failure of any lessee to make payment of rent when due, shall, upon application of the contractors, proceed to enforce at once the payment thereof according to law, at the expense, if any, of said contractors. It is expressly understood that any and all moneys arising from the tolls and revenues of the canal, which, at the end of each and every year during the existence of this contract, have not been drawn for and applied to the uses and purposes designated herein, shall belong to the contractors, parties hereto, for the purposes of this contract, and shall be paid over to said contractors, reserving by mutual consent enough of said moneys to meet current repairs, having in view the permanent maintenance of said canal, which amount so reserved shall not be less than twenty-five thousand dollars.

“ The compensation of the following officers shall be paid out of the tolls and revenues of said canal, to wit: The general manager of the contractors, and the contingent expenses of his office, and such other expenses as shall be allowed him by the contractors; the collectors, district superintendents, lock tenders, and such other agents as may be appointed by the contractors, which said compensation shall be paid on the order of the general manager of the contractors, in quarter-yearly payments from the time this contract takes effect; also the sum of eight thousand five hundred dollars per annum towards the general expenses of the trust from the first day of July, 1866, payable quarterly.”

We assume the validity of the contract, as no objection to it has been made. There can be no doubt that, by its terms, the contractors, The Wabash and Erie Canal Co., were entitled, for their own use, to the proceeds of all the tolls and revenues which might accrue from the specified portion of the canal, during the time provided for by the contract, after paying the expenses of keeping the canal in repair, and such other expenses as were stipulated for. The contract amply provides for the necessary application of the proceeds of tolls and revenues to the payment of expenses of keeping the canal in repair, and such other expenses as are provided for, and contemplates that any residue shall go to the contractors.

Having executed the contract, what right, it may be asked, have the trustees of the canal to the ice that might be formed in it during the existence of the contract? We think the trustees bad no such right, but that the right to the ice passed to the contractors, just as much as any other portion of the revenue “ to be derived, or which might accrue, from ” the specified portion of the canal. The ice may have been a source of revenue, as much as water rents or any thiug else pertaining to the canal. The word “revenue” is broad enough to cover income derived from the ice in the canal. The first definition of the word given by Worcester is “ Income or annual profit received from lands or other property.”

The ice in the canal is as much a part of the canal as the water in a fluid state, and the water as much a part of the canal as the ground on which it rests, or the embankments, locks, etc.

It may be, that, as between the trustees and the contractors, the trustees had the right to require that the proceeds of the ice should be deposited in the manner provided for by the contract, in order that they might be used, if necessary, in paying expenses of keeping up the canal, and the other expenses provided for, before the distribution of any surplus to the contractors; but, if so, that was a matter between the trustees and the contractors, about which no question arises here.

The contractors were as much entitled to the ice and the proceeds thereof as they were to the tolls or water rents; and, by one of their number, Cromie, they have received the same. Cromie may be responsible to his co-contractors for their respective shares of the proceeds of the ice, but he is not responsible to the trustees of the canal therefor.

For these reasons, we think the court below erred in sustaining the demurrer to the ninth paragraph of answer.

The judgment below is reversed, with costs, and the cause remanded for further proceedings in accordance with this opinion.

Note. — IIowk, J-., having been of counsel in the cause, did not participate in the decision.