UNITED STATES SUPREME COURT DECISIONS ON-LINE

A ferry company operating a ferry across a navigable river and, owning the land at the landing and about the approaches to it, contracted with a railroad company for the use of the land for the purposes of its business so long as they should be used and employed for such uses and purposes. The railroad company in consideration thereof agreed to pay the taxes on the land, and not to interfere with the ferry company in respect of its ferry, and to always employ the ferry company in its transportation across the river. The railroad company entered upon the land, and laid down tracks and performed its part of the contract until it became insolvent and a mortgage upon its property was foreclosed. The property was purchased by a new railway company, which continued to carry on the business as it had been carried on before, but without making any new contract or any special agreement for rent. After continuing to carry on the business in this way for some time, the railway company diverted a portion of its transportation across the river to other carriers. Subsequently a further diversion was made, and then the company became insolvent, and a receiver was appointed, this officer also continued to carry on the business, and without making any special agreement, but eventually he wholly diverted the business and removed all the rails and tracks from the premises. The ferry company then intervened in the suit against the railway company in which a receiver had been appointed, claiming to recover compensation for the use of its property by the railway company and by the receiver, and for the value of the materials removed from the premises when possession was surrendered. The court below dismissed this petition and allowed an appeal.

Held:

(1) That the contract did not create the relation of landlord and tenant; that no rent having been reserved, or claimed, or paid during the whole occupation, the conduct of the parties was inconsistent with such a relation, and that under such circumstances, such a relation would not be implied.

(2) That the railway company, under the circumstances, acquired an equitable estate in the premises of like character with the legal estate previously held by the railroad company, and that both parties were equitably estopped from denying that such was the case;

(3) That the ferry company having, up to the argument in this Court, conducted the litigation solely on the theory that it was entitled clubjuris

Page 142 U. S. 397

as landlord to recover the rental value of the premises in question, this presented a serious obstacle in the way of doing substantial justice between the parties, but

(4) That a mistaken view of one's rights or remedies should not be permitted wholly to defeat a claim founded upon principles of equity and justice, and if the pleadings can be so amended as to admit proof of such claim, and such amendment does no introduce a new cause of action, though it may set up a new measure of damages or work a real hardship to the party defendant, it is within the discretion, even of the appellate court, to permit such amendment to be made.

(5) That the ferry company was not entitled to recover the value of the rails removed by the receiver.

It is not necessary that a party should formally agree to be bound by the terms of a contract to which he is a stranger if, having knowledge of such contract, he deliberately enters into relations with one of the parties which are only consistent with the adoption of such contract.

Where the judgment in a former action is upon demurrer to the declaration, the estoppel extends only to the exact point raised by the pleadings or decided, and does not operate as a bar to a second suit for other breaches of the same covenants, although if the judgment be upon pleadings and proofs, the estoppel extends not only to what was decided, but to all that was necessarily involved in the issue.

As between landlord and tenant, or one in temporary possession of lands under any agreement whatever for the use of the same, the law is extremely indulgent to the latter with respect to the fixtures annexed for a purpose connected with such temporary possession.

This case was argued before six Justices on the 14th of October of the present term. On the 19th of the same month, it was ordered to be reargued before a full bench. This was done on the 3d of December. The Court, in delivering its opinion, stated the case as follows:

This was an appeal from a final decree dismissing an intervening petition, filed December 21, 1878, by the Wiggins Ferry Company in a suit for the foreclosure of a mortgage upon the property of the Ohio and Mississippi Railway Company. The petitioner was a corporation created in 1853 for the purpose of operating a ferry across the Mississippi River at St. Louis, Missouri. The object of this intervening petition was to obtain compensation for the use and occupation by the railway company, from July 1, 1862, to November 18, 1876, clubjuris

Page 142 U. S. 398

and by John King, Jr., receiver of the said company, from that date to February 20, 1880, of certain lands, the property of the petitioner, upon Bloody Island, opposite the City of St. Louis, in the County of St. Clair, in the State of Illinois. The Ohio and Mississippi Railroad Company (hereinafter called the "Railroad Company") was a railroad corporation, and in 1851 was authorized by law to construct its road to Illinoistown, now East St. Louis, on the Mississippi River opposite St. Louis, and in 1854 was further authorized to extend its road from Illinoistown across Bloody Island to the main channel of the river. Bloody Island, as well as the land over which it could be conveniently reached, then belonged in fee to the petitioner. On April 1, 1858, the petitioner and the railroad company entered into a written contract whereby the ferry company granted and conveyed to the railroad company the right to construct, maintain, and use upon and over a certain parcel of land on Bloody Island, therein described, such tracks, depots, warehouses, and other buildings as the railroad company should find necessary and convenient to be constructed and used for the purpose of its business, together with a right of way over an adjoining piece of land, with the right to have and to hold the same so long as they should be used and employed for the uses and purposes of the railroad, as therein specified, and for no other purpose, even forever.

In consideration thereof the railroad company covenanted and agreed:

1. To pay all taxes on said parcels of land.

2. That the ferry company should never be hindered or interfered with in respect to its ferry by the railroad company, or by any other person claiming under said contract.

3. That the railroad company should always employ the ferry company to transport for it across the Mississippi River all persons and property that might be taken across said river either way by the railroad company, "to or from Bloody Island," either for the purpose of being transported on the railroad or having been brought to said river upon said railroad, so that the ferry company, its legal representatives and assigns, should have the profit of the transportation of all clubjuris

Page 142 U. S. 399

passengers, persons, and property taken across the river either way by said railroad company, either to or from St. Louis, the ferry company charging for said ferriage as low rates as charged by it to any other party between St. Louis and Bloody Island, which ferriage should be paid by the said railroad company to the ferry company, its legal representatives and assigns, owners of said ferry.

4. and 5. That the railroad company should grade and pave a certain piece of ground across the front of the property, and keep the same open and in repair for a wharf or street for the free passage of all persons, vehicles, and property, and that the ferry company should be entitled to wharfage upon the same.

6. and 7. That the railroad company should keep certain streets open for the free passage of all persons.

8. That the lots conveyed should be used for the purpose of right of way, depots, and other buildings for the use of the railroad company, and for no other purpose.

Upon the execution of this contract, the railroad company took possession of the premises, and thereafter used and occupied the same in accordance therewith, filled a portion of the grounds, and placed thereon their tracks, buildings, and other improvements, and fulfilled the covenants of said contract upon its part until July 1, 1862. At that date, the Ohio and Mississippi Railway Company, (hereinafter called the "Railway Company"), a distinct corporation, which had been chartered for the purpose of taking a conveyance of all the property and franchises of the railroad company, which it had purchased at a judicial sale under a decree of foreclosure, took possession of all the property of the said railroad company, as said purchaser, and also took possession of the premises described in the said contract. The railroad company then ceased to perform its corporate functions. The railway company was not a reorganization of the railroad company, but a new and totally independent corporation.

Such possession was taken by the railway company with the tacit consent of the petitioner, but without any special agreement for rent, and the premises were held, used, and occupied by the railway company with the sufferance and permission of clubjuris

Page 142 U. S. 400

the petitioner, until November, 1876, when, under proceedings to foreclose a mortgage upon the property of the railway company, a receiver was appointed who took possession of the premises and improvements, also with the tacit consent of the petitioner, but without any special agreement for rent. In respect to this, the answer of the receiver alleged the fact to be that

"from the time of the entry into possession of the purchaser up to the present time, the petitioner, the Ohio and Mississippi Railway Company, and this respondent, as its receiver, have treated the contract as in full force and binding upon them, and the said Ohio and Mississippi Railway Company and respondent have always and at all times done and performed all that the terms of the said contract required the said Ohio and Mississippi Railroad Company to do and perform."

Immediately upon taking possession of this property, the railway company began filling up, paving, and otherwise improving the same at considerable expense, and also filled in its right of way across the adjoining tract described in said contract, and, until about 1871 or 1872, exercised exclusive control over the premises, paid the taxes thereon, and complied with the conditions of the contract of April 1, 1858, giving to the ferry company the transportation of all its passengers and freight across the river at St. Louis. In the summer of 1871, the railway company changed its track from broad to standard gauge, which enabled it, by using the connecting tracks of the Chicago and Alton Railroad Company on Bloody Island, to transfer freight across the river by the Madison Ferry at Venice, Illinois, about two and one-half miles north of the Wiggins Ferry, and also by using the East St. Louis and Carondelet Railway to transfer freight to South St. Louis by the Pacific Ferry, which was about six miles south of the Wiggins Ferry, the Ohio and Mississippi having no tracks of its own connecting either with the Madison or the Pacific Ferry. About 1872, the railway company began to divert their freight from the Wiggins Ferry to the Madison Ferry at Venice, and also to the Pacific Ferry. The officers of the Wiggins Ferry, learning of these diversions, protested against them as breaches of the contract of April 1, 1858, and in 1874 brought an action at law clubjuris

Page 142 U. S. 401

in the state court of Illinois against the railway company for damages for violating its contract, by transporting freight by means of the Madison Ferry at Venice. A demurrer interposed by the defendant to the declaration was sustained, and final judgment rendered for the defendant, which was affirmed by the supreme court of the state at the June term, 1874. 72 Ill. 360.

In anticipation of the completion of the St. Louis bridge in 1871, the railway company entered into an agreement with the bridge company by which it bound itself, so soon as the bridge should be completed, to connect its own tracks with those on the bridge and to transport over and across said bridge all freight and passengers of the railway company under its control destined across the river at St. Louis, and to continue this arrangement for ten years. The bridge was completed about June 15, 1874, after which date the railway company ceased to transfer any of its passengers across the river on the boats of the Wiggins Ferry, sending them in omnibuses over the bridge instead, and from that time onwards none of the passenger traffic of the said railway company was ever done by the Wiggins Ferry Company, except during a few days in 1877 when the eastern approach to the bridge was burned.

Subsequently, and about 1875, the railway company began to divert its freight from the ferry company to the St. Louis Transfer Company. In 1876, the ferry company brought a second suit in the state court against the railway company, to the declaration in which the defendant demurred. The demurrer was sustained by the circuit court, and final judgment entered for the defendant, from which an appeal was taken to the supreme court, which affirmed the judgment of the court below. 94 Ill. 83.

On October 18, 1878, the receiver of said railway company obtained an order authorizing him to erect a new enginehouse upon other ground owned by the railway company, and also to remove to such ground the rails and materials from the land owned by the Wiggins Ferry Company. This order appears to have been obtained without notice to the petitioner. Under this order, the receiver at intervals removed clubjuris

Page 142 U. S. 402

all railway tracks from the ground in question, against the objections of the ferry company, which claimed that all the tracks, ties, switches, and buildings on the property belonged to it as appurtenant to the freehold. The grounds in question, being those described in the contract of April 1, 1858, remained in possession of the receiver until February, 1880, when their use was finally discontinued by him and possession surrendered to the ferry company.

On December 21, 1878, the ferry company filed an intervening petition, and on April 27, 1880, an amended petition, claiming compensation for the use and occupation by the railway company and its receiver of the premises in question from July 1, 1862, to February 20, 1880, and for the value of the materials removed from the premises when possession was surrendered. The defendant, answering, denied all liability and also pleaded the statute of limitations. The case having been referred to a special master to hear and try the same upon the evidence, he filed his report on April 15, 1886, giving his conclusions of fact and law upon the evidence taken. His conclusions were summarized as follows:

"1. The deed of April 1, 1858, conveyed to the railroad company an estate of limitation in consideration of the covenants to be performed by it, and when that company ceased to use the premises for the purpose of transacting its business, the contingency happened which, by the words of the deed, was to limit the estate, and the estate then ipso facto determined."

"2. Upon the determination of the estate of the railroad company, the railway company entered into possession of the premises with the tacit consent of the ferry company; and, by the mutual acts and acquiescence of these two parties, an equitable estate, of like character as the legal estate which had existed by virtue of the deed, with the same reciprocal rights, privileges, and obligations, was created, or at least neither party will be permitted in equity to deny, to the prejudice of the other party, that such was the case."

"3. The railway company was under equitable obligation, so long as it held the premises, to perform, the covenants forming

Page 142 U. S. 403

the consideration of the grant, including the covenant pertaining to ferriage, the same as if it had been one of the original contracting parties."

"4. In case of default as to such performance, this Court has jurisdiction to award equitable compensation in money to the petitioner under the circumstances in this case."

"5. The defendants have partially failed to perform their equitable obligation as to ferriage."

"6. Equitable compensation will be such sum of money as will, as nearly as may be, place the petitioner in as good condition as that in which it would have been if the obligation as to ferriage had been fully performed."

"7. The extent of such partial failure or the loss sustained by reason thereof do not clearly appear in evidence, and a re-reference to take further testimony on this point is recommended."

"8. The iron rails and other like materials necessary for the purposes of the grant, laid by the defendants and their grantor in the track on the premises, did not become part of the realty, and the defendants had lawful right to remove the same before surrendering the premises."

Exceptions were filed by both parties to this report, upon consideration whereof the court dismissed the intervening petition at the cost of the ferry company, with the allowance of an appeal. clubjuris

Page 142 U. S. 406