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
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,
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
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
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
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
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.
Page 142 U. S. 406
MR. JUSTICE BROWN, after stating the facts as above, delivered
the opinion of the Court.
When the railway company became the purchaser at judicial sale
of the property, assets, and franchises of the railroad company, it
found the latter in possession of a tract of land upon Bloody
Island in the Mississippi River, making use of the same for its
tracks, depots, warehouses, and other terminal facilities, and also
sending to and receiving from St. Louis at this point its
passengers and freight by steamers not its own. It knew, or was
bound to know, that this property did not belong to the railroad
company. As the record shows that it remained
Page 142 U. S. 407
in possession of these premises for the next fourteen years,
using the same for some nine years of this time as they had before
been used, sending its passengers and freight to and from St. Louis
in the boats of the ferry company, and, in the language of the
answer, "treated the contract as in full force and binding upon
them," it must be assumed that it was fully informed of the
ownership of such property, and the terms of the contract under
which it was held and employed by the railroad company.
(1) Under these circumstances, what was the legal relation of
the railway company to this contract? In a case between these same
parties, 94 Ill. 83, the Supreme Court of Illinois held that the
covenants contained in the contract of April, 1858, were not such
as ran with the land, and that the relationship of landlord and
tenant was not created by such contract between the ferry company
and the railroad company. Indeed, the fact that the railway company
and its receiver continued in the occupation of this property for
over seventeen years, with the tacit consent of the ferry company
and without any suggestion of a tenancy or a demand for rent, is
sufficient of itself to show that the relations between them were
not those of landlord and tenant. Such relationship will never be
implied when the acts and conduct of the parties are inconsistent
with its existence. In
Carpenter v. United
States, 17 Wall. 489,
84 U. S. 493,
it was held by this Court that no reason for the implication of a
tenancy existed
"when an express contract or an arrangement between the parties
shows that it was not intended by them to constitute the relation
of landlord and tenant, but that the occupation was taken and held
for another purpose."
In that case it was shown that the entry had been made in
pursuance of an agreement to purchase, and it was held that the
tenant was not liable for use and occupation if the purchase were
actually concluded.
The railway company was not the formal assignee of the interest
of the railroad company in such a contract, nor could it become so
under the eighth clause of the contract without the consent of the
ferry company. It is a well established principle that the mere
purchase of a railway under a
Page 142 U. S. 408
foreclosure sale by a new corporation does not, of itself, make
such new corporation liable for the obligations of the old one.
Stewart's Appeal, 72 Penn.St. 291;
Vilas v. Milwaukee
&c. Railway, 17 Wis. 497;
Smith v. Chicago &
Northwestern Railway, 18 Wis. 17. The railway company, then,
upon taking possession of the property of the railroad company, was
at liberty to renounce the benefit of such contract if it chose to
do so, or to make such further arrangement with the ferry company
as they might be able to agree upon. It did neither, but still
maintained possession of the land. In view of the fact that the
railway company used this property precisely as it had been used;
improved it at great expense, by filling up low places and securing
it from the overflow of the river; graded and paved the riverfront,
erected buildings, paid the annual taxes, and, until 1871, employed
the ferry company to transport its passengers and freight to and
from the city -- in short, in the language of the answer, doing and
performing "all that the terms of the said contract required the
said Ohio and Mississippi Railroad Company to do and perform" -- we
think it must be held in a court of equity to have adopted such
contract and made it its own. This construction certainly consorts
with the acts and conduct of both parties, between whom different
modifications of the contract were proposed and discussed at
different times from 1872 to 1875. Under the circumstances of this
case, we agree with the conclusion of the special master that the
railway company acquired an equitable estate in the premises of
like character as the legal estate previously held by the railroad
company, which estate was in equity unimpeachable, and that the
railway company and the ferry company sustained the same relation
as had previously existed under the deed between the railroad
company and the ferry company, or at least that both parties are
equitably estopped from denying that such was the case. It is not
necessary that a party should deliberately 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. If a
Page 142 U. S. 409
person conduct himself in such manner as to lead the other party
to believe that he has made a contract his own, and his acts are
only explicable upon that theory, he will not be permitted
afterwards to repudiate any of its obligations. 2 Pom.Eq.Juris.
sec. 965;
Chicago & Alton Railroad v. Chicago &c. Coal
Co., 79 Ill. 121. This principle is applicable here, and it
results from this that if the railway company or its receiver has
been guilty of a breach of this contract, the petitioner is
entitled to recover its damages by reason of such breach in this
proceeding unless it has in some way become estopped by the
judgments of the state courts of Illinois or by its own conduct and
disclaimers in this suit.
The first action between these parties was brought in 1874 in
the St. Clair Circuit Court, and was determined upon a demurrer to
the declaration, which alleged a breach of the third covenant of
the contract in this, that in November and December, 1873, the
defendant wrongfully, and without plaintiff's assent, brought to
its railroad in East St. Louis and its said depot across the
Mississippi River, from the City of St. Louis, in its cars, certain
loads of grain to be transported eastwardly on its railroad, and
caused said grain in said cars to be transferred across said river
from St. Louis to its depot at East St. Louis by way of Venice, a
village two miles above East St. Louis, on a rival ferry, and also
caused certain carloads of coal to be taken in its cars from East
St. Louis, by way of Venice and thence across the Mississippi River
to the City of St. Louis on said rival ferry. As the contract,
which was set out
in haec verba in the declaration,
provided that the railroad company should employ the ferry company
to transport across the river all persons and property which might
be taken either way by the railroad company "to or from Bloody
Island," there was an apparent variance between the contract and
the breach alleged in the declaration, in bringing to its depot in
"East St. Louis" the property in question. A demurrer was
interposed to this declaration and sustained, and final judgment
entered in favor of defendant, an appeal taken to the supreme
court, and the case affirmed. 72 Ill. 360. In delivering its
opinion, the supreme court held that the contract was confined
Page 142 U. S. 410
in its operation to the territorial limits of Bloody Island, and
that there was nothing in such contract, unless it arose by
implication, that prevented the railway company from extending its
tracks to Venice or any other point, however distant, and crossing
passengers and freight there for St. Louis or points beyond. The
court in that case seems to have assumed that the railway diverted
its passengers and freight from Bloody Island altogether by sending
them across the river from points above and below the island. But
there is nothing in this decision which estops the ferry company
from showing that the railway company did in fact send them to its
depot upon Bloody Island, and from there diverted them by tracks of
other roads to ferries above and below said island, as was actually
the case, and thereby defrauded petitioner of its rights under the
contract. If, as a matter of fact, the diversion complained of
began after the arrival of the freight at the grounds of the ferry
company upon Bloody Island, a different case is presented from that
passed upon in this opinion. All that was actually decided was that
the ferry company had no right to complain if the railway company
sent its freight across the river from other points than Bloody
Island, and the estoppel extends no further than this. Where the
judgment in the 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.
Wash. & Alexandria Packet
Co. v. Sickles, 24 How. 333,
72 U. S. 5 Wall.
580;
Gould v. Evansville &c. Railway, 91 U. S.
526;
Boyd v. Alabama, 94 U. S.
645;
Russell v.
Place, 94 U. S. 608;
Morrell v. Morgan, 65 Cal. 575.
The second action was brought in 1876 in the same court against
the railway company as assignee of the railroad company, also upon
the covenants contained in the third clause of the contract, and,
like the former, was disposed of upon demurrer to the declaration
which sought to charge the defendant as
Page 142 U. S. 411
the legal representative and assignee of the railroad company in
said contract. The supreme court, 94 Ill. 83, affirmed the judgment
of the court below sustaining the demurrer to said declaration upon
the ground that the covenant that the railroad company would always
employ the ferry company to transport for it all persons and
property across the Mississippi River was not a covenant running
with the land. The opinion states that
"the suit is against one corporation averred to be the assignee
of another, upon a covenant made by the alleged assignor. There is
no express undertaking averred in the declaration, by the assignee,
to perform the covenant of the assignor, nor is there any averment
therein from which such an undertaking can be held to be legally
implied. The only ground upon which there can be any reasonable
pretense to base an argument in favor of the right to recover is
that the covenant is one which in legal contemplation runs with the
land, and it will therefore only be important to inquire whether
this is such a covenant."
The opinion then discusses the requisites of such a covenant,
the nature of the grant to the railroad company, and holds that
such covenants did not create the relation of landlord and tenant,
but only an easement, which was not for life, for years, or at
will, but was a freehold of inheritance, answering to the accepted
description of a base or qualified fee. It also held that the
covenant sued on was not one the performance or nonperformance of
which affected the nature, quality, or value of the property
demised, the easement granted being in the two parcels of land, not
in the ferry, while the covenant was purely a collateral covenant
affecting the ferry only, and therefore not one running with the
land. The decision was carefully guarded, the court observing that
it was not pertinent to inquire whether the appellants bad a remedy
in equity, or in some other action at law, and that the decision
went no further than the matters specially noticed. The case, which
was determined solely upon common law principles, is no estoppel to
an equitable proceeding like this to obtain compensation for the
use and enjoyment of the petitioner's property.
The most serious obstacle in the way of doing substantial
Page 142 U. S. 412
justice in this case arises from the attitude assumed by the
petitioner throughout the entire proceedings in the circuit court
that it was entitled to recover the rental value of the premises in
question. Up to the time of the appeal to this Court, the
litigation was conducted solely upon this theory. The original
petition contained no reference to the contract of 1858, nor any
claim on the part of the ferry company that performance of the
covenants for ferriage was the consideration for the use of the
land in question. It averred simply that the railway company, with
the consent of the petitioner, took possession of the lands owned
by it, and, by the sufferance and permission of the petitioner,
used and occupied the same without any special agreement for rent,
and sought to charge the company for the value of such use and
occupation, and to enjoin the receiver from removing the tracks and
other property belonging to or attached to the freehold, upon which
petitioner claimed a lien. While the amended petition set forth the
contract of 1858, the possession of the premises by the railroad
company and the purchase and entry into possession, by the
defendant under the covenants of the contract, it assumed that the
judgment of the supreme court in the first case above mentioned
estopped the receiver from setting up or claiming that either he or
the railway company ever held said premises under or by virtue of
said contract; averred that neither he nor the railway company had
paid petitioner anything for the occupation of said premises;
claimed that it was entitled to receive a reasonable and just
compensation for such use and occupation during the time the
premises were held by the railway company or the receiver, and
prayed for such just and reasonable compensation for the use and
occupation, as well as an account of all property and material
removed from the premises, and for general relief. Even after the
master had reported his opinion that the estate conveyed by the
deed of 1858 was determined, and that an equitable estate of like
character as the legal estate which had existed by virtue of the
deed was created, and that the railway company was under equitable
obligation, so long as it held the premises, to perform the
covenants forming the consideration of the grant, and had
Page 142 U. S. 413
recommended a reference to ascertain the equitable compensation
to which the petitioner was entitled, the ferry company refused to
act upon such recommendation, and excepted to the report upon the
ground that the master failed to find that the relation of landlord
and tenant existed between the petitioner and the railway company.
In view of these facts and of the persistency with which it has
pressed its claim for rent and repudiated its right to recover
under the contract, it would have no just cause of complaint if
this Court refused to permit a change of front and affirmed the
decree of the court below. Did this disposition of the case involve
any thing less than a total and final denial of any right whatever
to compensation for the use of this property, it might be proper to
do this. There is much to be said, however, in favor of the equity
of petitioner's claim to an equivalent for the benefit the
defendant has received from the use of this property, and we do not
consider it beyond the power of this Court, upon broad principles
of justice, to refer this cause back for such further proceedings
as are permitted by the rules and practice of courts of equity.
When the facts of the case show the plaintiff to have an
equitable title to relief, this Court, while it may be unable to
afford such relief upon the case made by the bill, has in several
instances asserted its power to remand the case to the court below
for an amendment of the pleadings and such further proceedings as
may be consonant with justice. In
Crocket v.
Lee, 7 Wheat. 522, plaintiff filed a bill to obtain
a conveyance of land covered by a certificate of settlement right
the legal title to which was in the defendant, and he was decreed
by the court below, in conformity with another bill filed by the
defendant, to convey to the defendant the land covered by his
patent. It was contended in the supreme court that the defendant
ought not to be allowed to recover on his cross-bill by reason of
his failure to make the proper averments with respect to the
invalidity of the plaintiff's title. The court adopted the view of
the appellant in this particular, but remanded the case with
directions to permit the parties to amend their pleadings. In
Watts v.
Waddle, 6 Pet. 389, this Court affirmed the
decree
Page 142 U. S. 414
of the circuit court refusing the specific execution of a
contract, but after reviewing the evidence in detail, it further
ordered that to give relief for the rents and profits of the land
in controversy, the decree of the circuit court dismissing the bill
should be opened and the case remanded for further proceedings in
conformity with law and justice. In delivering the opinion of the
court, Mr. Justice McLean observed that
"a new ground of relief has been assumed in the argument here
that was not made in the circuit court, which is that although this
Court should be of the opinion that a specific execution of the
contract ought not to be decreed, still the complainants are
entitled to a decree for the rents and profits of the land, while
it was in the possession of the defendants. . . . There is no rule
of court or principle of law which prevents the complainants from
assuming a ground in this Court which was not suggested in the
court below, but such a course may be productive of much
inconvenience and of some expense."
So in
Parkhurst v. Van Cortlandt, 1 Johns.Ch. 273,
where possession had been taken of land, and improvements made
under an imperfect agreement for purchase, though the court would
not grant relief upon the ground of part performance, yet the bill
was maintained for the purpose of affording the party reasonable
compensation for beneficial and lasting improvements.
See also Walden v.
Bodley, 14 Pet. 156;
Neale v.
Neale, 9 Wall. 1;
Hardin v. Boyd,
113 U. S. 756.
In the case under consideration, while the prayer of the
petition is for compensation for use and occupation, its present
claim for an assessment of damages under the contract is not
inconsistent with the allegations of the petition, which are
that
"the railway company, defendant, after taking possession of said
premises, as aforesaid, observed and kept, until the summer of
1871, some of the covenants of said contract, which were to have
been kept and performed by its said predecessor in the ownership of
said line of railroad, . . . and thereby induced your petitioner to
believe, and it did believe, that said railway company had adopted
said contract as its own, and that it would continue to observe and
keep the covenants thereof which were to have been kept and
performed by the said railroad
Page 142 U. S. 415
company, and that by reason of its having taken possession of
said premises and held, used, and occupied the same as aforesaid,
it thereby became and was legally bound, as the successor of said
railroad company in the ownership of said line of railroad, to keep
and perform the covenants of said contract,"
etc. It then alleged the failure and neglect to employ
petitioner to do its ferriage, and that it "totally ignored and
repudiated said contract, and denied any and all obligations to
carry out any of the covenants," etc., and averred a loss of
profits thereby in the sum of $150,000. We have shown that the
inference it draws from all this -- namely that it is entitled to
have a just and reasonable compensation for the use and occupation
of said premises -- is untenable, but it does not necessarily
follow that it is wholly remediless. Rules of pleading are made for
the attainment of substantial justice, and are to be construed so
as to harmonize with it if possible. 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 not 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.
The Anne
v. United States, 7 Cranch 570.
(2) We agreed with the court below that the petitioner is not
entitled to recover the value of the rails removed by the receiver
from the premises upon Bloody Island. They were laid there under a
mere easement granted by the petitioner, and obviously with no
intention that they should become part of the realty. 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. It
is incredible that it could have been the intention of the parties
that the rails and switches laid upon this ground by the railroad
company should become the property of the landlord, when, by the
terms of the contract, the ferry company had the right to put an
end to it at
Page 142 U. S. 416
any time upon six months' notice. In
Van Ness
v. Pacard, 2 Pet. 137, it was held that a house
built by a tenant upon land primarily for the purpose of a dairy,
and incidentally for a dwelling house for the family, did not pass
with the land. The earlier authorities are reviewed in that case by
Mr. Justice Story, and the conclusion reached that whatever is
affixed to the land by the lessee for the purpose of trade, whether
it be made of brick or wood, is removable at the end of the term.
Indeed, it is difficult to conceive that any fixture, however
solid, permanent, and closely attached to the realty, placed there
for the mere purposes of trade, may not be removed at the end of
the term. In the case of
Wagner v. Cleveland & Toledo
Railroad, 22 Ohio St. 563, it was held that stone piers built
by a railroad company as part of its road on lands over which it
had acquired the right of way did not, though firmly imbedded in
the earth, become the property of the owner of the land, as part of
the realty, and that, upon the abandonment of the road, the company
might remove such structures as personal property. So in
Northern Central Railroad v. Canton Co., 30 Md. 347, it
was held that the rails fastened to the roadbed of a railroad, as
well as the depots and other buildings, might, under certain
circumstances, be treated as trade fixtures, and removable by the
company if the surrounding circumstances showed that at the time
the rails were laid upon the land, it was not intended that they
should be merged in the freehold. In that case, the road was built
upon land under a license and permission of the owner. It is
entirely clear that the rails in the case under consideration did
not become part of the realty, and that the receiver was not guilty
of waste in removing them from the land.
But for the reasons above stated, and under the peculiar and
exceptional circumstances of this case, we think the decree of the
court below should be
Reversed, but without costs, and the case remanded for such
further proceedings as may be consonant with justice and in
conformity to this opinion.
