Chicago, Kalamazoo & Saginaw Railway Co. v. Lane

1. Specific Performance — Contract to Convey — Defíniteness. A contract to convey land for a railroad right of way is not too uncertain and indefinite to be specifically performed where complainant has taken possession with the express assent of defendants and constructed its road thereon and the consideration to be paid can be ascertained by a computation of the acreage used and the amount per acre paid therefor by defendant, including interest and taxes. 2. Evidence — Contracts—Parol Evidence — Time Limit. Where, prior to the execution of a contract for a deed of right of way for a railroad, two different drafts were prepared containing a limit within which the railroad must be constructed, whioh were rejected by complainant, after which defendants prepared, and the parties executed, one with the time limit omitted, defendants cannot by parol testimony insert a time limit. 3. Vendor and Purchaser — Contract — Railroad Right of Way — Crossings. Where a contract to convey land for a railroad right of way provides that the purchaser shall have three crossings over a proposed road to be built by the vendors, but contains no provision that the vendors shall have similar rights over the purchaser’s road, the vendor cannot insist on the insertion of such a provision in the deed. 4. Evidence — Parol Evidence — Written Contracts. Where a contract complete in itself is entered into with full knowledge of the circumstances by men of large business experience after negotiations extending over a consider, able time, it cannot be converted by parol evidence into a temporary memorandum containing nothing binding upon the parties. 5. Specific Performance — Contract to Convey — Right of Way — Abandonment—Evidence—Sufficiency. On a bill for specific performance of a contract to convey land for a railroad right of way, evidence examined, and held, not to support a decree denying relief on the ground that complainant had abandoned the route. 6. Same — Forfeiture—Estoppel to Assert. Where a parol contract to convey land for a railroad right of way was not to become binding until complainant had built its road along another right of way for which it had a contract with defendants, and defendants prevented the building of the other road, they could not take advantage of the failure to build in a suit for specific performance of the parol contract. 7. Same — Equity. Specific performance, though a matter of grace rather than of right, will not be denied where complainant, a railroad company, would be compelled either to abandon its road or take proceedings for condemnation, with its consequent risks, and specific performance will give each party what was contracted for without injustice to either.

Appeal from Kalamazoo; North, J., presiding. Bill by the Chicago, Kalamazoo & Saginaw Railway Company against M. Henry Lane and Frank B. Lay for the specific performance of a land contract. From a decree dismissing the bill, complainant appeals. Qomplainant owned and operated a railroad from Woodbury on the north to Kalamazoo upon the south. It desired an extension to the south so as to connect with some trunk line running east and west which would increase its facilities for travel and freight. The defendants owned several parcels of land and intended to con- . struct a belt line passing, around the business portion of the city of Kalamazoo on the north, east, and south, and forming a connection with other railroads passing through the city of Kalamazoo. It would also pass most of the manufacturing plants in the city. A route had been surveyed from a point near the terminal of complainant’s railroad to what was known as the Bryant Paper .Mill, and also other land known as the Reed Farm, lying a short distance east of said mill. Defendants desired a railroad to be thus constructed for the purpose of enhancing the value of their land lying along the river. One Hays, a real estate agent, entered into negotiations with the complainant and the defendants for the extension of complainant’s road along the line of the proposed belt line road. The Southside Improvement Company was organized and the defendants conveyed to that corporation a portion of the lands owned by them for the sum of $33,853.22. The Improvement Company was capitalized at $80,000. Hays entered into negotiations with Mr. Dewing who acted for the railroad company and persuaded the officers and the stockholders of the company to take $8,000 of the capital stock of the Improvement Company. The result of the negotiations was that the officers of the railroad took $8,000 of the stock, and the following contract was made between Mr. William S. Dewing and the defendants:, “ This contract, made this twenty-second day of June, A. D. 1899, by and between M. Henry Lane and Frank B. Lay, both of the city and county of Kalamazoo, and State of Michigan, parties of the first part, and William S. Dewing of the same residence aforesaid, party of the second part. “Witnesseth: That the said parties of the first part, in consideration of the sum of one dollar and other valuable considerations herein recited, to them in hand paid by said party of the second part, do hereby agree that they shall and will at any time before January 1st, 1901, following from the date hereof, at the written request of the said party of the second part, execute and deliver to him, or to any person or persons as he the said party of the second part shall direct in writing, a good and sufficient warranty deed of the following described land, situated in the county of Kalamazoo, State of Michigan, to wit: “Two rods of land lying northeast and south of proposed right of way of Belt Line Railroad as per survey commencing at the west side of Oxbow nearest present terminal of C. K. & S. R. R. and continuing to and along said Belt Line right of way to east side of Portage street. Also two rods of land lying on the north side of main Belt Line of railroad commencing at junction of crossing and running thence east along main Belt Line two rods wide to the east boundary of land owned by said first parties. Privilege to cross said Belt Line Railroad not to exceed three times. The curves as laid out on map shall be reduced to curves not sharper than three degrees. It being understood this deed conveys only such portion of lands for-said right of way as belongs to said first parties. Also the right to cross the main line of Belt Line as extended east, and any branch of said Belt Line as per map showing survey of said Belt Line and branches, for the sum of $1,000 more or less, payable as follows: On delivery of warranty deed free and clear of any and all encumbrances on or before January 1st! 1901. It is hereby understood the value of right of way or purchase price to be paid is based and to be computed upon cost of land per acre to said first parties with interest at seven per cent, from date of purchase and pro rata of taxes paid. “And the said parties of the first part do hereby further agree that they shall and will not, before January 1st, 1901, sell, convey, mortgage or otherwise encumber the said land, or any part thereof, or do any act or deed to diminish or encumber the title to said land. It is hereby fully understood and agreed between parties hereto that this option is given and accepted upon basis that said first parties may be able to secure release of mortgaged premises upon payment of a reasonable sum not less than purchase price paid. “ It is agreed by and between the parties hereto, that if the said party of the second part at the expiration of the aforesaid limited time shall have declined or omitted to make application for the purchase of said land at the price aforesaid, then this instrument shall be void, and the above sum of one dollar so paid as aforesaid shall be forfeited by the said party of the second part, and the said parties of the first part shall have the right to retain the same, as and for liquidated damages, and the said party of the second part shall relinquish to said parties of the first part all claim to said land, either in law or in equity, and also all claim to the said sum of one 'dollar so paid as aforesaid, and no claim of the said party of the second part under this contract shall then be effectual. “ In witness whereof, the said parties have hereunto set their hands and seals the day and year first above written. “M. Henry Lane. (Seal) “ In presence of “ Frank B. Lay. (Seal) “ Chas. B. Hays. “ William S. Dewing. (Seal) “ J. H. Dewing.” W. S. Dewing, J. H. Dewing, and Edward Woodbury were the officers of the railroad company and owned most of the stock. The defendants did not own all of the land over which complainant’s right of way was to extend. Being unable to agree with the owner of one piece over which it was desired to extend their road, they agreed to deviate their line, and made the following contract with the defendants for the purchase of a right of way which would give them a continuous line: “Articles of agreement, made this 28th day of August in the year of our Lord one thousand nine hundred between the Chicago & Kalamazoo Terminal Railway Co. and M. H. Lane and Frank B. Lay, of the City of Kalamazoo, Michigan, parties of the first part, and William S. Dewing, of the same residence, party of the second part, in the manner following: The said parties of the first part, in consideration of the sum of one thousand dollars, to be to them duly paid, hereby agree to sell unto the said party of the second part, all that certain piece or parcel of land lying and being situated in the city of Kalamazoo, county of Kalamazoo, and State of Michigan, and more particularly known and described as follows : “ Commencing at a point on the south line of Lake street in the city of Kalamazoo, where the easterly line of the right of way of the Chicago & Kalamazoo Terminal Railway Co. crosses said south line of Lake street, thence southerly along the easterly line of said right of way to the right of way of the Grand Rapids & Indiana Railroad Company, thence northwesterly to a point on the south line of Washington avenue where the westerly line of the east two rods of the right of way first mentioned crosses Washington avenue, thence northerly along the westerly line of said east two rods to the south line of Lake street, thence east two rods on the south line of Lake street to the place of beginning, together with the right and privilege to slope one rod of land next west at the above-described strip, at such places where cuts may be made for the purpose of grading and laying tracks on the right of way agreed to be sold by this contract. “ Said first parties also agree to sell to said second party a joint interest in the reservation made by the grantors in a certain deed recorded in libér 101 of deeds in the office of- the register of deeds of Kalamazoo county, at page 828, for the said sum of one thousand dollars, which the said party of the second part hereby agrees to pay the parties of the first part, as follows: Within thirty days of the date hereof. “ Said second party is to have the right at once to prepare said land for a railroad track. “It is mutually agreed between the said parties that the said party of the second part, shall have possession of said premises forthwith, and he shall keep the same in as good condition as they are at the date hereof, until the said sum shall be paid as aforesaid; and if said party of the second part shall fail to perform this contract, or any part of the same, said part., of the first part shall, immediately after such failure, have a right to declare the same void, and retain whatever may have been paid on such contract, and all improvements that may have been made on said premises, and may consider and treat the part.. of the second part as. _ tenant holding over without permission, and may take immediate possession of the premises, and remove the part., of the second part therefrom. “ And 'it is agreed that the stipulations aforesaid are to apply to and bind the heirs, executors, administrators and assigns of the respective parties.” After the first contract was executed Mr. William S. Dewing gave the defendants a letter reading as follows: “Gentlemen: I hereby agree that the option dated June 22, 1899, for right of way adjoining our Belt Line,1 shall not be sold to other parties, and if deed is executed under the same and delivered to me, I further agree that I will build, or cause to be built, a railroad upon this right of way, or in case of failure to do it, I will deed back to the Messrs. Lane and Lay, upon receipt of purchase price of right of way. And I further agree that I will build or cause to be built the three crossings mentioned in the said contract, but not build any interlockers thereto, and should other crossings be required, the railroad crossing the first railroad shall bear the expense of the same.” It was thoroughly understood by all parties that the contracts with Mr. Dewing were in fact made with the complainant, and that Mr. Dewing was acting for the complainant. The evident purpose of this communication was to remove any question as to the right of Mr. Dewing to assign the contract tó any other company. The first contract was deposited in escrow with Mr. Hays, to be delivered to Mr. Dewing when he had subscribed or caused to be subscribed $8,000 of the stock of the Southside Improvement Company. Mr. Dewing and his friends subscribed and paid for this stock, and the contract was delivered to him by Mr. Hays. Mr. Dewing soon after assigned the contract to the complainant and it entered upon the construction of its roadbed and track. No question ever arose as to its location. Defendants assented to it, were present while the work was going on, and made no protest or objection. The roadbed was constructed to the tracks of the G. R. & I. R. R., towards the Bryant mill. A spur was also constructed extending to the east crossing the Kalamazoo river to Kalamazoo Paper Mill No. 3. The complainant also purchased land which would have been unnecessary if the line had not been extended to the Bryant mill. It paid $1,500 to the G. R. & I. R. R. Co. for crossing under its track and paid one-half the expense for raising the track of the G. R. & I. R. R., while the Traction Company paid the other half. The expenses incurred in these improvements and purchases was approximately $71,000. All this was done without any protest from the defendants, or any hint upon their part that it was not done in strict accordance with the contract. From this statement should perhaps be excepted the construction of the extension to Paper Mill No. 2. This extension was not included in the original contract. It is claimed by complainant that there was a parol agreement for this extension upon the same terms as those in the first contract. The defendants executed and submitted a deed to the complainant for its approval, for this extension. It was satisfactory to complainant and was returned with request to insert the amount of the consideration when the complainant would pay the amount. Complainant made .a verbal request to defendants for the deeds. In reply thereto Mr. Dewing received from the defendants the following letter, dated August 25, 1900: “Dear Sir: In accordance with your verbal request we will prepare the deeds for the railroad right of way mentioned in writing of June 22, 1899, and the subsequent writing from you; we wish to state, however, that in order to get to our land and utilize it, it will be necessary for us to reserve the right to make and use three or more railroad crossings over the right of way that goes to you or the Chicago, Kalamazoo & Saginaw railway. We will therefore have the deeds prepared accordingly.” To this Mr. Dewing replied refusing to make any change in the contract, and demanded that a deed be executed in accordance therewith. No controversy had up to this time arisen between the parties. On November 1, 1900, the defendants wrote Mr. Dewing the following letter: “Dear Sir: In relation to the disagreement between us as to deeds prepared for right of way for the extension of the C. K. & S. Railroad, we do not feel that we ought fo or that we can give up what you ask. On the whole we think it best to withdraw all options heretofore tendered by us to you for the right of way for the C. K. & S. Railroad, and leave the matter for future arrangement. This we accordingly do. We believe, however, that there need be no trouble in coming to satisfactory terms.” On August 37th, prior to. the date of this letter, Mr. Dewing had written to the defendants notifying them that he was ready to accept the terms of the contract and to receive the deed. Defendants knew that complainant had paid half of the expense for raising the tracks of the Gr. R. & I. so as to let the complainant’s tracks go under it, and testified that complainant “could have had no other purpose to go under than to go to the Bryant Mill.” On October 33, 1900, defendants wrote complainant calling its attention to the fact that they had not yet received payment for the right of way. On the same day Mr. Dewing replied that he was ready to pay for a deed of the right of way when the defendants would make the deed in compliance with the contract. The officers of the complainant had been considering for some years an extension to the south. One of the routes considered was to Marcellus, to connect with the Grand Trunk Railway, which would be a continuation of the line past the Bryant Mill. Other extensions had also been talked of, but the extension to' Pavilion to connect with the Grand Trunk Railway there had not been thought of when the contracts were made. This extension was finally decided upon but not until the latter part of 1900; or the early part of 1901. It was constructed in the summer of 1901. It had not been determined upon until after the defendants refused to carry out their contract by the letter of November 1, 1900. The extension to Pavilion did not cross the G. R. & I., but went in a southeasterly direction from a point near the proposed crossing of the line to the Bryant Mill. We need not make any further reference to the facts in this statement. Proofs were taken in open court, and the circuit court entered a decree dismissing the complainant’s bill on the ground that it had abandoned that part of the route covered in “Exhibit A” extending across the G. R. &T. to the Bryant Mill.