Port Jervis, Monticello and New York Railroad v. New York, Lake Erie and Western Railroad

Vann, J.

The act under which both parties to this action, and their predecessors, were organized, provides that every corporation formed thereunder shall have power “ to intersect, join and unite its railroad with any other railroad before constructed, at any point on its route and upon the ground of such other railroad company, with the necessary turnouts, sidings and switches and other connections in furtherance of the objects of its connection.” It further provides that “ every company whose railroad is or shall be hereafter intersected by any new railroad, shall unite with the owners of such new railroad in forming such intersections and connections and gra/nt the facilities aforesaid; and if the two corporations cannot agree upon the amount of compensation to be made therefor, or the line or lines, the grade or grades, points and manner of such * * * connections, the same shall be ascertained and determined, by commissioners to be appointed by the courts.” (L. 1850, cli. 140, § 28; 3 R. S. [8th ed.] 1739.)

The learned counsel for the plaintiff claims that pursuant to this statute “ upon the construction and completion of the railroad now owned and operated by the plaintiff, in the year 1871 a connection and intersection was made between the said road and the road now occupied and operated by the defendant, by a mutual agreement between the railroad companies then owning said roads respectively, and that it was no part of said agreement that any sum whatever should be paid for the said connection or intersection,” and he excepted to the refusal of the trial court to so find upon his request. While it is not claimed that any written agreement was made, it is insisted that by a verbal arrangement, quite indefinite as to terms and details, the plaintiff’s predecessor acquired an irrevocable right to use, without compensation, the railroad track, depot, yard and turn-table now owned by the defendant at Port Jervis. Obviously such a right, if it exists, is an interest in real estate, and can be created only by a written instrument, unless, as the plaintiff claims, the Statute of Frauds has no application to the subject. Apparently the statute applies, because such agreements are not expressly excepted from its operation. The word “ grant,” as used in that part of the Railroad Act already quoted, indicates the nature of the agreement to be made by the two corporations with reference to the intersection ■of their roads. IsTo other word suggesting the character of the arrangement is used. If the companies can' agree, the ■established road is to “ grant the facilities aforesaid ” to the intersecting road. Moreover, one of the weightiest reasons to justify the enactment of the Statute of Frauds to regulate .agreements between persons, applies with increased force to .agreements between corporations, because, being perpetual, they may survive all the witnesses to any transaction. It is unnecessary, however, to now decide this question, as the ■court found, in effect, that the agreement under consideration was not permanent, but temporary and “ permissive only.” If this conclusion was justified by the evidence, it-necessarily ■defeats a recovery by the plaintiff.

The testimony mainly relied upon by the plaintiff was that ■of Mr. Wheeler, the president of the original company during the first year of its existence, and Mr. Ludington, a director. About a month after the first road was organized these gentlemen called on Jay Gould and James Fisk, at that time president and vice-president, respectively, of the Erie Company. 'Their action was not requested by the board of directors, but was purely voluntary. Mr. Wheeler testified that they said they could not bond the town of Forrestburg unless they had •certain pledges in relation to the connection with the Erie road; that such connection, as stated, was “ full terminal facilities, to run on their track, have the use of their switches, ■depot, turn-table and everything necessary for passenger and freight business; ” that Mr. Fisk, who “ did the principal talking, * * * said they would do it; that we should have these facilities and they would run the road until we were able to put on the rolling stock ourselves, at a very liberal ■ charge; that we should have these facilities free of charge ; ” but repairs were to be paid for. This was at the first interview, and at the second, about a month later, Fisk inquired •about the the prospect for tonnage and passenger traffic “ in ease they helped us build the road,” and promised to send an ■expert to examine the quarries and timber land on the route. .He sent a man accordingly, and afterward said he was satisfied and that “ they would do what they could.” “ It was repeated at every interview I had with him that we should have the terminal facilities free of charge and that they would run the road until we got ready to stock it ourselves, and that then we should have the terminal facilities free of charge.” On his cross-examination, Mr. Wheeler omitted the most important part of the various interviews as sworn to by him on his direct, although professing to state all that he could remember. He further testified that while no report was made to the board of directors “the fact that we had obtained these assurances' from the Erie Company was communicated to the directors of our company in the way of general conversations with them.” JSTo other witness remembered any such agreement as' Mr. Wheeler swore to. Mr. Ludington, who was with him at the first interview with Fisk and Gould, thought that it related to getting their consent to bond the town of Deerpark, in which the Erie Company was a large taxpayer, and to obtaining a subscription towards building the road and, in fact, such consent was given and a subscription of $10,000 made. When asked what was said about terminal facilities, he answered: “ In all the interviews, which were quite numerous, it was assumed rather than expressly agreed, understood, I cannot express in language how it was understood, there was no written agreement; they understood our position, and we took the ground that we expected to enjoy these facilities as one of the reasons why the road should go to Port Jervis against such opposition as we had at home, as Judge Low and all of Middletown was against our going to Port Jervis, and I urged this as a reason why they should help us, and they assented to it.” When asked to state the substance of the language used, he said: “ The substance was we wanted to build a railroad and without their aid we probably couldn’t build it. If we had to build the railroad and get our own terminal facilities, turn-table, machine shops, depots, etc., we couldn’t build it. That we would .probably have to do if we went the other way, because the Oswego road wasn’t even graded at that time, and that was one reason why we desired to get a connection with them.” Rothing more definite upon the subject was stated by this witness.

Mr. Dimmick, who was secretary during the first year until September, 1869, and, after that, president until 1875, when the first receiver was appointed, testified that, although he had repeated interviews with Mr. Gould, and was present at all the meetings of the board of directors, he did not remember that anything was ever said in regard to terminal facilities at Port Jervis, and that he “ never heard any claim put forward on the part of the Monticeilo Company that such arrangements had been made until this plaintiff was shut out of the Erie yard in 1888.” ' •

Mr. Riven, the vice-president, and Mr. Goodale, a director of the original company during the entire period of its practical existence, both testified to the same effect. It further appeared that it was the expectation at first to lease the new road to the Erie, and as early as July 13, 1869, a committee was appointed for that purpose, but it was finally arranged that it should be run by that company at a stated sum per mile. During the five years that this arrangement continued the terminal facilities were of no practical importance to the Monticeilo Company, as the Erie was forced to furnish them for its own convenience. When the reorganization came in 1875, a charge for the turn-table was asserted on the one hand and assented to on the other.. When the Erie Company was reorganized in 1878, a charge of $50 per month was made for terminal facilities, and there was evidence to support a finding that this charge was assented to. When the plaintiff was organized in 1886, a charge of $100 per month for the use of the same facilities was made by the Erie and for eighteen months was paid by the plaintiff without objection, but in 1888, when the charge was increased to $300, payment for the first month was made under protest, and since then no payment has been made. Ro action was ever taken by the board of directors of either company relating to the subject of terminal facilities at Port Jervis. Rothing appears upon the minutes kept by the respective secretaries indicating that the subject was ever reported to or considered by either board.

Much more evidence was given tending to support the theory of the defendant that the original arrangement, was merely a temporary expedient to enable a new road to start, its trains. The frequent changes in the amount charged also indicates its temporary character. It clearly Avas Avithin the poAver of the íavo roads to enter into a temporary arrangement, and the probabilities support that vieAv. The testimony of Mr. Wheeler is probable only on that theory. It can hardly he conceived that the Erie Company Avould consent to the use of so much of its property Avithout compensation or conditions, unless it had the poAver to terminate the arrangement at any time. As long as friendly relations continued between the íavo roads it did not charge Avhat the use of its property Avas Avorth, but AAdien the scope of the use Avas enlarged and a competing line was introduced into its yard and depot, the charge was increased. It had, liOAvever, asserted its right to charge and had from time to time increased the amount, and the ¡haintiíf and its predecessors had assented thereto for thirteen years, or during the entire period that the road was operated by them,. The position noAV taken by the plaintiff is inconsistent AA7ith that taken by the OAvners of its road from the time it Avas built.

We think that the evidence Avarranted the findings of the trial court, so far as the question under consideration is concerned, and that the affirmance by the General Term leaves us Avithout power to revieAV them.

The trial court found, as a fact, that about March, 1888, the plaintiff agreed to pay the defendant the sum of $300 per month for the use of said facilities after March, 1888; that the amount so agreed upon Avas the fair and reasonable value of such use, and that “under such agreement the plaintiff became bound to pay and the defendant became entitled to receive the sum of $300 per month for the use of said facilities so long as the plaintiff continued so use the same.” The court also found, as a conclusion of law, “ that the agreement of the plaintiff to pay the sum of $300 per month for the use of said facilities was and is a valid and binding agreement and continues ' in force and effect so long as such facilities are used, and said agreement is in no wise modified or changed.” These findings Were duly excepted to by the plaintiff. The judgment entered simply dismissed the complaint and vacated the temporary injunction.

Upon the argument, the counsel for the defendant consented that said findings of fact and law relating to an agreement by the plaintiff to pay $300 per month for the use aforesaid might be stricken from the record and the judgment modified accordingly.

After examining all of the exceptions, we think that the judgment should be modified so as to conform to the consent of counsel, as above stated, and, as thus modified, affirmed without costs.

All concur.

Judgment accordingly.