52 Ind. App. 332 | Ind. Ct. App. | 1913
This action was brought by appellee against appellants, to enjoin and restrain the latter from taking up, removing, or in any manner interfering with, a certain pipeline constructed along and across the right of way of said appellants, near the town of Eaton, Delaware county, Indiana.
On a verified showing made to the court, a temporary restraining order was issued. Appellants filed a motion to dissolve the restraining order, which motion was overruled. Issue of law was formed by appellants’ demurrer to the complaint, which demurrer was overruled. Issue of fact was formed by answer of general denial. Trial by the court, and oh request the court made a special finding of facts and stated conclusions of law thereon. To the conclu
Errors relied on for reversal are (1) overruling motion to dissolve temporary restaining order; (2) overruling demurrer to the complaint; (3) error in the conclusions of law; (4) error in each conclusion of law; (5) error in overruling motion for a new trial. As the motion to dissolve the temporary restraining order was based on the alleged insufficiency of the complaint, the first two errors assigned may be considered together.
After averring that appellant, Lake Erie and Western Railroad Company, was operating the Port Wayne, Cincinnati and Louisville Railroad, and owned the entire capital stock of the latter company, the complaint proceeds substantially as follows: That on February 11, 1907, the Port Wayne, Cincinnati and Louisville Railroad Company entered into a certain agreement with the United Box Board and Paper Company, a corporation having a factory located at Eaton, Indiana, wherein and whereby the Port Wayne, Cincinnati and Louisville Railroad Company granted to said United Box Board and Paper Company the right to lay, maintain and use one six-inch pipe for gas along and across the right of way and under the tracks of said Port Wayne, Cincinnati and Louisville Railroad Company, near the town of Eaton, Delaware county, Indiana; ‘ ‘ that a full, true and correct copy of said agreement is hereto attached, herewith filed, and made a part of this complaint, marked ‘Exhibit A’ ”; that in accordance with said agreement, the United Box Board and Paper Company, of Eaton, Indiana, laid and caused to be laid a line of six-inch pipe along and across the right of way and under the track of said Port Wayne, Cincinnati and Louisville Railroad Company, for a
It is further averred that appellee has paid the full consideration' and performed all the conditions of the agreement between the Fort Wayne, Cincinnati and Louisville Railroad Company and the United Box Board and Paper Company; that appellants knowing that said agreement does not, by its terms, expire until. February 10, 1917, and with full knowledge of the facts herein set out, threaten to, and, unless restrained by the court, will remove said pipe-line, thereby causing appellee great and irreparable damage, and making the balance of said pipe-line and all .of said gas wells, leases and contracts for the sale of gas, now belonging to appellee, of no value whatever; that such threatened action in the removal of said pipe-line would be in violation of the agreement, between the Fort Wayne, Cincinnati and Louisville Railroad Company and the United Box Board and Paper Company. The complaint further shows an emergency for the immediate issuance of a restrain
The contract, set out as an exhibit to the complaint, is shown to have been executed on February 11, 1907, for a term of ten years. No question arises on any part of this contract, except the sixth section, which provides that “the said pipe shall be used for the sole purpose of conveying gas, and this license shall not be assigned without the written consent of said first party being first obtained. ’ ’
In this case the complaint shows that a contract was entered into between the Port Wayne, Cincinnati and Louisville Railroad Company and the United Box Board and Paper Company, by the terms of which appellee acquired certain property rights, for the preservation of which and to avoid irreparable injury, this action was brought. Without the written contract, appellee would have no right of action, either for injunction or for damages. We think the contract was essentially the foundation of appellee’s right, and was a proper exhibit to be filed with the complaint as a part thereof. Old v. Mohler (1890), 122 Ind. 594, 596, 23 N. E. 967; Clupper v. Clupper (1904), 163 Ind. 418, 421, 72 N. E. 125; Williams v. Frybarger (1894), 9 Ind. App. 558, 560, 37 N. E. 202; State, ex rel., v. Adams (1896), 15 Ind. App. 310, 312, 44 N. E. 47.
Appellants make the further point that even if the contract is to be deemed a part of the complaint, still no right of action is shown, for the reason that the same provides that “this license shall not be assigned without the written consent of said first party being first obtained, ’ ’ and hence the instrument by its nature, as well as by its terms, is simply a license and therefore not assignable.
Covenants in leases against assignment or subletting, having the force of conditions, are not favored by the courts. It is said in Jones, Landlord and Tenant §464: “Covenants against assignments, or underletting, are not favorably regarded by the courts, and are liberally construed in favor of lessees, so as to prevent the restriction of extending any further than necessary. ’ ’ This proposition is stated even more strongly in Riggs v. Purcell (1876), 66 N. Y. 193, 198, wherein it is said: “Such covenants are restraints which courts do not favor. They are construed with the utmost jealousy, and very easy modes have always been countenanced for defeating them.” Again, in Jones, Landlord and Tenant §466, it is said: “An ordinary covenant against sub-letting and assignment is not broken by a transfer of the leased premises by operation of law, but the covenant may be so drawn as to expressly prohibit such transfer, and in that case the lease Avould lie forfeited by an assignment by operation of law. Where a lessee covenanted ‘not to let, set, assign, transfer, make over, barter, exchange or otherwise part with the premises,’ and after-
In McAdam, Landlord and Tenant (4th ed.) §141, the rule is thus stated: “A covenant not to assign is broken by a voluntary assignment for the benefit of creditors, but is not infringed by an assignment by operation of law, as, for instance, under the bankrupt laws in case of the tenant’s bankruptcy, or under the insolvent laws in ease of his insolvency, or by means of an execution sale, for in such eases the assignment is not the act of the tenant, but of the law. ’ ’ This is not a new legal principle, but has been a recognized rule for more than a century. In Doe v. Bevan (1815), 3 M. & S. 353, Bayley, J., said: “In Doe v. Carter [(1798), 8 T. R. 57], it was decided that a proviso, that if the lessee, his executors, administrators, or assigns should assign, the landlord might re-enter, contemplated only a voluntary assignment, and not one which passed in invitum of the lessee, and where the party making the assignment acted in discharge of a duty cast upon him by the law. It has never been considered that the lessee’s becoming bankrupt was an avoiding of the lease within this proviso; and if it be not, what act has the lessee done to avoid it? All that has followed upon his bankruptcy is not by his act but by the operation of law, transferring his property to his assignees. Then shall the assignee have capacity to take it, and yet not to dispose of it ? Shall they take it only for their own benefit, or be obliged to retain it in their hands to the prejudice of the creditors for whose benefit the law originally cast it upon them? Undoubtedly that can never be.” Many other authorities support the propositions above stated, among which are the following:
It is averred in the complaint before us that appellee purchased the right granted by the lease at a receiver’s sale, made pursuant to an order of the chancery court of New Jersey, and the circuit court of the United States for the district of Indiana. Under the authorities herein quoted and cited, the covenant which would have been broken by an assignment of the lease by the United Box Board and Paper Company would not be broken where the lease was sold on decree in a proceeding against the original lessee. We must, therefore, hold that the rights under the lease originally granted to the United Box Board and Paper Company passed to appellee, and that the complaint is not bad on account of the covenant in the lease against assignment.
Appellants also rely for reversal on error of the court in stating its conclusions of law. We deem it sufficient to say that an examination of the findings discloses that the substance of the contract was set out therein, as was also a description of the leased premises, from ' which a surveyor might locate the same. The law requires no greater exactness.
It was fairly shown by the evidence that appellants did not recognize that appellee had any right in the leased premises. On July 28, 1909, the chief engineer of appellants wrote appellee, in part, as follows: “¥e have a pipeline located on our right of way extending for a distance of 24,100 feet north of Eaton, Indiana, which formerly belonged to the United Box Board and Paper Company. This pipe-line is not covered by an agreement, and it will be necessary to either have an agreement executed covering this pipe-line, or have the pipe-line removed.” In a subsequent letter appellants fixed the rental at $535 per annum, and still later appellee was notified that if he could not see his way clear to pay the rental named, steps would be taken to have the pipe-line removed from the railroad company’s right of way.
The evidence shows that appellants were acting throughout on the assumption that appellee had no right of any kind under the grant to the United Box Board and Paper Company. The threat of appellants to remove the pipe-line from their right of way ivas not made on account of appellee’s failure to pay an annual rental of $1, but clearly on account of Ms refusal to execute a new lease at an annual rental of $535. This was the theory on which the action was brought and defended. Another theory cannot be adopted on appeal.
Finding no reversible error in the record, the judgment is affirmed.
Note. — Reported in 100 N. E. 865. See, also, under (1) 22 Cyc. 932; (2) 22 Cyc. 741; (4, 5) 4 Cyc. 20; (6) 2 Cyc. 670. As to the construction of a restrictive covenant in a lease against an assignment or subletting, see Ann. Cas. 1913 B 889.