Lenz v. Chicago & Northwestern Railway Co.

The following opinion was filed June 20, 1901:

Dodge, J.

The rights of parties similarly situated with those now before us were considered by this court in Kuhl v. C. & N. W. R. Co. 101 Wis. 42 , which case, the respondent contends, is conclusive, as res adyudicata, upon the present. That contention, of course, cannot be sustained. The parties are not the same, and, as a decision in that proceeding would not have been conclusive against this petitioner, it cannot be conclusive in his favor.' So far, however, as the questions now presented are the same as those considered and disposed of in that case, the decision of the court is authoritative, upon the rule of stare decisis, unless we must now determine to overrule it.

The first position argued by appellant is that an abutting lotowner upon the opposite side of the street has no right to institute condemnation proceedings in reliance upon sec. 1852, Stats. 1898, for the reason that sec. 1296a, Stats. 1898, giving to the lotowner right to compensation, gives right of condemnation only to the railroad company. This question was squarely presented by the briefs of the opposing parties and was fully decided in favor of the petitioner in the Kuhl Case, and we see no reason to hesitate in yielding to that decision full authority now. That objection to the present proceeding must, therefore, be overruled.

It was further decided in the Kuhl Case that, if the Northwestern, as a consideration for the transfer, to it from the Lake Shore, assumed and promised and agreed to pay. all *202 the debts and obligations of said Lake Shore, and all just, claims against it,— as the court found in that case,— then it was liable upon that contract to the petitioner in a proceeding under sec. 1852, Stats. 1898, and that the statute of limitations upon such right of recovery commenced to run only upon the making of the deed containing such assumption of liabilities. Appellant now assails the holding that, original liability could thus be created against the Northwestern. It also contends that the evidence which is now before us does not support the finding. The first of these-contentions — that which assails the proposition of law decided in the Kuhl Oase — we have no hesitation in overruling. We are entirely satisfied with the conclusion reached, in that case. The second contention, however, was not ruled upon in that case, and must be considered. The deed merely recites, as one of its considerations, assumption by the Northwestern of all the existing debts, liabilities, and obligations of the Lake Shore. There is no other evidence of any agreement or assumption. Does that support the finding ? Appellant contends not, for several reasons: first, that the word “assumption” is not equivalent to an agreement to pay such liabilities; secondly, that, if it is, there is nothing to-support an inference of intention in the parties that the agreement was for the benefit of the petitioner, so as to give-him direct right of action thereon.

The contention that an agreement to assume a debt or-liability is not an agreement to pay it is supported by no argument beyond the fact that in nearly all the cases which have come before this court the phrase used has been “ assumes and agrees to pay.” The extent, therefore, to which such argument goes is to establish that we have not, in those-cases, been called on to decide the effect of “assumption”' alone. Other courts, however, have not been so exempt-industry of respondent’s counsel has discovered numerous instances of the use of the word'“ assume,” in all of which *203 it has been construed to include the duty of payment, if the assumption be of a debt, and of payment to the creditor. Braman v. Dowse, 12 Cush. 227 ; Locke v. Homer, 131 Mass. 93 ; Schley v. Fryer, 100 N. Y. 71 ; Stout v. Folger, 34 Iowa, 71 ; Sparkman v. Gove, 44 N. J. Law, 252; Mills v. Dow's Adm'r, 133 U. S. 423 . No decision has been cited in contradiction of these holdings. They seem to us entirely correct in principle and reason-* upon the subject now under consideration. “ To assume ” is defined by the lexicographers as “to take upon one’s self,” “to undertake,” “to adopt.” Obviously, to take upon one’s self or to adopt the obligation or the liability of another is to put one’s self in the place of that other as to such obligation or liability, to become bound as such other was bound. An assumption is broader than a promise to pay, as “liability” or “obligation” is broader than “money debt” in significance; but the broader term naturally and necessarily includes the narrower, in the absence of exception. As the liabilities and obligations of the Lake Shore, though covering other things, clearly included its duty to pay debts, so the assumption by the Northwestern bound it to pay the debts, as well as to perform the other obligations of the former company. The reason for the use of the word “ assumption alone in this connection in the deed is rendered obvious in the light of the situation. LTo other would have been broad enough. The Lake Shore was a railway company in full operation. Its undertakings were, of course, various. Freighting contracts, rent and hire of switch, track, and dockage privileges, outstanding mileage tickets, maintenance of a steamboat line, are but a few of the liabilities and obligations under which it rested, and as to which its grantee undertook to perform all its duties. The assumption of a debt includes the duty to pay it as fully as if the latter words were used. We thus reach the conclusion that the evidence — namely, the deed — fully supports the finding that appellant did assume and agree to pay *204 all the existing, debts, liabilities, and obligations of the Lake Shore; not impliedly, as counsel suggest, but by express agreement, evidenced and declared by the deed under which title to the railroad property is held and enjoyed. Vilas v. Dickinson, 13 Wis. 488 ; Stites v. Thompson, 98 Wis. 329, 331 .

The conclusion thus reached — that the finding is supported by the evidence — brings this case again to identity with the Kuhl Case on this immediate subject, for the finding there considered was in the same words. We might well rest our present decision on that authority, but it may be well to consider some of the earnest argument of appellant’s counsel against the existence of direct personal liability to petitioner. He urges upon us an intimation in Electric Appliance Co. v. U. S. Fidelity & G. Co. 110 Wis. 434 , where it was said: “There are cases going to the limit of holding that, to entitle the third person to recover upon a contract made between other parties, there must not only be an intent to secure some benefit to such third person, but the contract must have been entered into directly and primarily for his benefit. .” . . We consider the true rule to be that there must not only be an intent to secure some benefit to the third party, but thei’e must be a promise, legally enforceable.” The insufficiency in .the bond under consideration in that case was that it did not require or promise any payment to the materialmen seeking to enforce it, merely protection to the obligee party; hence, of course, there was no apparent intent to benefit the materialmen. Clearly, if the performance of a contract must necessarily benefit the third person, am intent to accomplish that result must be presumed. Payment direct to the third person is, of course, a benefit to him, and, if that is required by a contract, the intent to so benefit is beyond question. It is not essential that the individual claimant should have been specifically in mind. If he falls within a class to whom payment is agreed to be made, that suffices. An agreement *205 to pay all creditors is as surely intended for benefit of each as if he were specified by name. Houghton v. Milburn, 54 Wis. 554 ; Johannes v. Phenix Ins. Co. 66 Wis. 50, 56 . That the agreement before us contemplated payment direct to the creditors cannot be doubted. An agreement to hold the Lake Shore harmless against its liabilities, nay, even an agreement to pay its obligations, might be ambiguous, for it might contemplate only payment to the company in reimbursement. An agreement to assume, however, is subject to no uncertainty. Ry that the promisor takes upon himself— adopts — the obligation or duty of the other. That duty or obligation is to pay to each creditor the amount of his debt, to discharge each liability to the same person and in the same manner as the Lake Shore was bound to do. These considerations constitute a clear distinction from Simson v. Brown, 68 N. Y. 355 , cited by appellant, even if that case were recognized as authority. There a penal bond. was merely conditioned upon paying a debt owed to a third person by the obligee, and upon holding obligee harmless. The third person was held not entitled to sue because there was no promise to pay him, merely a promise to pay a certain sum to the obligee unless the debt were paid to such other. Whether or not we should agree with that construction of the bond is immaterial. Upon that construction the case was decided, recognizing the proposition we now assert,— that a promise to pay to a third person does evince an intent to benefit him.

Another consideration is quite conclusive of the intent of both parties to the agreement in question that appellant was to become bound directly to the creditors of the Lake Shore; that is the fact that such construction has been given to assumptive agreements in conveyances at least ever since Bishop v. Douglass, 25 Wis. 696 , decided in 1870, and followed by many other decisions, among them MceClellan v. Sanford, 26 Wis. 595 ; Bassett v. Hughes, 43 Wis. 319 ; *206 Palmeter v. Carey, 63 Wis. 426 . By these oases the law had, before this deed was made, become entirely well settled that such agreements confer right of recovery upon the third party creditor against tlie promisor, and it must be presumed the parties intended such result. The rule of the above authorities has since been repeatedly confirmed. Enos v. Sanger, 96 Wis. 150 ; Kuener v. Smith, 108 Wis. 549 .

The petition is vigorously assailed for noncompliance with sec. 1846, Stats: 1898. It is, of course, apparent that that section and the following were framed to regulate proceedings upon an original application by a railroad company for ■condemnation of land before the same had been taken, and we have heretofore had occasion to suggest that, in the nature of things, they cannot be literally applicable to a proceeding by the owner of property under sec. 1852, after the railroad company has taken and occupied land and he is proceeding, not technically to effectuate condemnation, but to secure compensation for that taking upon the theory of a contract to pay him, implied by the statute from the act of taking. Babcock v. C. & N. W. R. Co. 107 Wis. 280 . In such a proceeding we see no reason why the ordinary rule as to liberality in the construction of pleadings should not apply, for the petition becomes, in substantial effect, a complaint in an action on contract. Nevertheless, there does remain so much characteristic of a proceeding m rem as that from the final determination in the proceeding is to result judicial determination of the extent of real-estate rights acquired by the railroad, as well as the amount of compensation which it must pay therefor. The adjudication becomes a muniment of title, and should, therefore, be so definite as to permit of no ambiguity in the extent either of the real estate affected or of the rights of the company therein. The petition should be broad enough .and definite enough to support such a finding and judgment. We cannot commend either the petition or the finding in this case *207 as fully satisfying these requirements. The petition goes no further than to declare the existence of the-track in a -certain street opposite petitioner’s premises. As the track is but about five feet wide and the street presumably sixty feet, this is no very definite location. The ordinance permitting the laying of the track, and referred to by date in the petition, is no more specific. The finding, however, reduces the ambiguity by fifty per cent., for it locates all the railway company’s rights upon the north half of the street. One purpose of definiteness, at least in the finding, is to enable the commissioners to intelligently fix the compensation, and that they cannot do unless they know what the railroad ■company is to have and the claimant to lose. The petition and finding are not entirely satisfactory in that respect, and, if we could see that prejudice therefrom would result to the •appellant, we might feel obliged to reverse. It is to be noted, however, that the defects consist merely in lack of definiteness and specification, which might have been cured upon proper objection'by the appellant, if prejudicial to him. The petition might have been amended on proper objection, and '■such defects in the finding avoided upon a request calling the circuit court’s -attention thereto. Upon careful consideration of the entire record, we construe the court’s finding as adjudicating that the appellant and its grantor have taken, and upon making compensation will be entitled to enjoy, the privilege of maintaining a switch track, at such place as they please and the city will permit, on the north half of Quay street. Such right the Lake Shore obviously applied for and received from the city. The ordinance does not limit them to any particular place in the street; indeed, the limitation to the north half now comes for the first time in the finding. In this view of the situation, we reach the conclusion that the finding is sufficiently specific, construed as above stated, to enable commissioners to intelligently fix the compensation which the petitioner should receive for injury or dam *208 age to his property from the obstruction of the north half of Quay street opposite the same, and that the appellant is not prejudiced so as to require reversal, in the light of the directions of sec. 2829, prohibiting reversal by reason of any error or defect in pleadings or proceedings which does not affect the substantial rights of the adverse party.

By the Court.— Order appealed from is affirmed.

A motion by the appellant for a rehearing was submitted on the brief of Edward, M. Ehyzer, for the motion, and that of G. G. Sedgwick, contra.

The motion was denied September 24,1901.