Whalen v. Baltimore & Ohio Railroad

This appeal brings before us for the second time the covenant which constitutes the cause of action in the present controversy. It came here first in a bill for its specific performance in the case of Whalen v. Baltimore Ohio Railroad Co., reported in108 Md. 11. We having declined to grant the relief there asked for, the present suit at law was instituted in the Baltimore City Court to recover damages for an alleged breach of the covenant.

The railroad company as defendant below demurred to the declaration and the Court sustained its demurrer whereupon the plaintiffs appealed from the judgment for costs entered on the demurrer.

The declaration alleges that on May 5th, 1848, the railroad company by an indenture, of which profert is made, covenanted for the consideration therein mentioned with Thomas B. Dorsey and his wife their heirs and assigns "to construct and maintain a turnout and siding at Dorsey's Run on the main stem of said railroad, to take up and set down at said siding by the passenger cars of said company all persons going to and from the farm now occupied by the said parties of the first part and to leave at said siding to be unloaded any car in which any article or articles weighing at least three thousand pounds shall be laden for said parties and on which the cost of transportation shall have been paid at the place of lading."

It is further alleged in the declaration that the plaintiffs (appellants) have by mesne conveyances become seized of a large part of the land, owned and seized by the said Dorsey and wife at the time of the execution of the deed of 1848, and are entitled as the assigns of Dorsey and wife to enjoy the benefits of the covenants of that deed.

It is then averred that the railroad company from the year 1848 to the year 1907 has been abiding by and performing the covenants of said deed, in that it has been operating its passenger and freight trains over the right of way the deed described, and constructed and maintained a turnout and siding at Dorsey's Run on the line of its main stem, and took up and set down at the siding by its passenger cars all persons going to and from the said farm and delivered there all freight shipped thereto; but in the year 1907 the railroad company constructed a cut off on its main stem by virtue of which a large part of the right of way over the plaintiffs' land was abandoned, and it discontinued the turnout and siding at Dorsey's Run and refused, and still refuses, to take up and set down at that place by its passenger cars persons going to or from the farm, and that by reason thereof the plaintiff has sustained great damage in the several respects set forth in the declaration. There is no allegation that the railroad company fraudulently made the cut off and change of location in their main stem which resulted in the abandonment of the structures and stopping place at Dorsey's Run, nor was any such contention made at the hearing of the appeal.

In the suit for specific performance in 108 Md. we held, upon the authority of many cases then cited, that the covenant now in question constituted a valid contract binding upon the railroad company when entered into, and at that time capable of being specifically enforced, and that it ran with the land and enured to the benefit of the plaintiff as an assignee of a portion of the land. We declined to grant the specific performance and also the injunction asked for in that case, because, in our opinion, the railroad company had the right and power to make the cut off which it did, and the consequent alteration of the line on its main stem, "for the purpose of straightening the lines and reducing its grades and thus improving its service to meet its obligations to the public and also to increase its earning capacity for the benefit of its stockholders." We further said in that connection that, "the very purposes of its creation forbid that it should be tied to the same location forever."

We concluded our opinion in that case by saying: "Whether the plaintiffs are entitled to compensation in damages for the abandonment by the defendant of the turnout and siding and train service, so long maintained by the appellee at that place, this Court is not now called upon to determine but we are all of the opinion that the relief prayed for in the bill of complaint must be denied, and that the appellants must be left to seek redress for any injury which they may have sustained by such abandonment in a Court of law."

Having decided in the equity suit that the covenant was valid and that it enured to the benefit of the present plaintiffs, we are now called upon to consider whether an abandonment of the turnout and siding at this late day, resulting from a lawful change by the railroad company of the line of its main stem, constituted a breach of covenant for which an action at law for damages will lie. The covenant being a written contract its construction is a matter for the Court.

In order to arrive at the real purpose and meaning of the parties to a contract the Court, according to the accepted canons of construction, considers the language employed, the subject-matter and the circumstances under which it was made.

Considering the language used in the covenant before us, it is to be observed, that while it distinctly provides for the construction and maintenance of the turnout and siding on Mr. Dorsey's land and the stopping of the cars at that point it is entirely silent as to the duration of the maintenance of those structures or that service. We cannot yield our assent to the contention of the appellant that the word "maintain" ordinarily means to maintain indefinitely or forever. Its meaning in that respect depends upon the context in which it appears and the subject-matter to which it relates. There is plainly no specific or positive provision in the covenant touching the duration of the time during which the covenanted acts are to be done or privileges furnished.

In Texas Pac. R.R. Co. v. Marshall, 136 U.S. 393, the Texas Pacific Railroad Co. had covenanted, in consideration of the donation to it by the town of Marshall of $300,000 and sixty-six acres of land, to establish its eastern terminus at the City of Marshall and to construct there its main machine shops and car works. In one of the letters by means of which the contract was made the expression "permanently establish" the terminus, etc., occurred but in the others the word permanently did not appear. The money was paid and the land conveyed to the railroad company and it established its eastern terminus machine shops and car works at Marshall but after having maintained them there for eight years began to remove them to other places. The City of Marshall applied for an injunction to prevent their further removal. The U.S. Circuit Court, to which the application was made, granted the injunction but the case was reversed by the Supreme Court of the United States. In the opinion of the Supreme Court, speaking through JUSTICE MILLER, after alluding to the fact that the railroad company had established its terminus, machine shop and car works at the City of Marshall and maintained them there for eight years, said:

"If, however, the city desired something more than this, if it desired to make sure that these establishments should forever remain within the limits of the City of Marshall and that the railroad company should be bound to keep them there forever, such an extraordinary obligation should have been acknowledged in words which admitted of no controversy. It would have been very easy to have inserted into this contract language which forbade the company from ever removing the terminus of the road to some other point or from ever removing or ceasing to use the depot, or the car and machine shops and thus have made the obligation perpetual."

In so far as public railway stations are concerned it was said by us in the recent case of Md. Penna. R.R. Co. v. Silver,110 Md. 517: "It has been held in a number of well-reasoned cases that the covenant on the part of a railroad company to erect and maintain a flag station for local trains at a certain place on its line, even if originally valid, is fairly complied with by the erection and maintenance of such a station for a period of years, and until the exigencies of its business, the convenience of the public and the welfare of the railroad demand its removal.Texas v. Scott, 37 L.R.A. 94; Mobile v. People, 132 Ills. 559; Camp's Case, 15 L.R.A.N.S. 594; Jefferson v. Barbour,89 Ind. 375."

In the case in 108 Md. we recognized the soundness of the distinction, made in many decisions, between covenants to maintain stations for public convenience and those to establish and maintain sidings, turnouts, crossings and the like for private use merely. We there said that the former class of covenants are generally condemned as against public policy while the latter are to be governed by the circumstances of each particular case. The covenant now under consideration not only stipulates to construct a turnout and siding, on the main stem of the railroad, at Dorsey's farm but also "to take up and set down at said siding by the passenger cars of said company allpersons going to and from the farm" and also to receive and deliver freight at that point under the conditions therein mentioned. The provision for stopping its passenger cars at the farm for all persons going to or from it comes very close to an agreement for establishing a public station of the kind involved in Silver's Case, in 110 Md.

In our opinion such a covenant as that, when it contains no stipulation for maintaining the structures or stopping the trains either in perpetuity or during a specified period, should, in view of the well known scope and purpose of a public service corporation like a railway company, be presumed to have been made subject to the exigencies of the company's further development and needs. As was said in the case of Texas and Pacific Railway Company v. Scott, 41 U.S. App. 624: "It cannot be true that an agreement on the part of a railway company to establish a station at a particular point is an agreement to keep it there forever. It must be that such an agreement is made subject to the general exigencies of business, the public interests, and to the change modification and growth of transportation routes, as these may affect the requirements of the railway company's business. The contract having this limitation, we think that the establishment of a railway station and its maintenance to the full extent claimed or expected for thirty-six years is, under all the circumstances, a substantial and sufficient compliance with the terms of the contract relied on here."

When, in a case like the present one, after the company has maintained the structures and stopping place agreed on for more than fifty-nine years, it becomes necessary or desirable for the promotion of better public service to so alter the location of its road bed as to no longer pass the place mentioned in the covenant, and the change is made in good faith, we think the previous maintenance of the structures and stopping place should be regarded as a substantial performance of the covenant, and be held sufficient to discharge the company from further liability thereunder.

Eight years maintenance of a terminus, shops and car works was held in Marshall's Case, supra, to amount to a performance of the covenant.

Seventeen years maintenance of a public station until "the exigencies of business, the convenience of the public and the welfare of the railroad" demanded its removal, was held by us in the recent case of Md. Penna. R.R. Co. v. Silver, supra, to constitute a fair compliance with a covenant to make and maintain a passenger and freight station on a specified lot of land conveyed to it for that purpose.

In the case of Mead v. Ballard, 74 U.S. 290, the ancestor of Mead conveyed in 1847 a tract of land in Wisconsin by a deed containing the following language, "said land being conveyed upon the express understanding and condition that the Lawrence Institute of Wisconsin chartered by the Legislature of said territory shall be permanently located on said lands;" and further provided that on the failure of such location being made within a year thereafter the land should, on the repayment of the purchase money, revert to the grantors. The institution was located upon the lands within the specified time and its buildings were erected thereon. About ten years thereafter the buildings burned down and were never rebuilt, but a larger and better set of buildings were erected on an adjoining lot of land. Mead the heir of the grantor thereupon tendered the purchase money and demanded a reconveyance of the land and upon the refusal of his demand brought suit. It was held in that case that when the trustees of the institute by resolution located it on the land and erected its buildings thereon the contract was complied with. It was further held that the use of the wordpermanently in the condition in the deed did not require them to rebuild the burned buildings and that the title to the land was not forfeited by the failure to do so. That case was in part decided upon the fact that by the terms of the deed the institute was to be located on the land within a year and that it therefore meant something that could be done in a year, but it is cited and relied on by the Supreme Court in the Marshall Case.

In view then of the absence from the covenant sued on in this case of any stipulation for the maintenance in perpetuity of the structures and service therein contracted for, and also in view of the very long time for which they were in fact maintained, and the nature of the event which caused their ultimate abandonment, we are of the opinion that there was no error in the action of the learned judge below in sustaining the demurrer and we will affirm the judgment appealed from.

Judgment affirmed with costs.