Mobile & Montgomery Railway Co. v. Gilmer

SOMERVILLE, J.

1. In Gilmer v. Mobile & Montgomery Railway Co., 79 Ala. 569 (s. c., 58 Amer. Rep. 623), we decided that the covenants, for the breach of which the present action is brought, were such as would be construed to “run with the land,” so as to be binding in law upon the defendant corporation, as assignee of the original covenantor, if chargeable with notice of the existence of these covenants. We are satisfied with this conclusion, as one fully sustained by judicial authority. — Morse v. Gardner, 47 Amer. Dec., Note on pp. 569-577, and cases cited.

2. We also adhere to the conclusion, that the demurrer to the complaint was properly overruled. Its averments show with srifficient certainty a total breach of the alleged covenant to establish and continue a flag-station or depot on the plaintiff’s land, where both passenger and freight trains would stop, on the giving of proper and usual signals, for the transportation of passengers and certain kinds of farm produce. If the stopping of the trains, as agreed to be done, would have seriously interfered with the running of the company’s schedule, this was matter of defense, to be averred and proved by the defendant, as coming more properly within the knowledge of the railroad officials than that of the plaintiff. So with the covenant to permit the plaintiff to cultivate the right of way granted by him, “so long as the privilege might not interfere with the wants and requirements of the railroad.” This would also be matter of defense, the onus of. averring and proving which was on the defendant, without the necessity of its being negatived by plaintiff in the first instance.

3. The instrument sued on purports to be executed by Charles T. Pollard, president, for and in behalf of the Alabama & Florida Railroad Company, and is under seal. The defendant company is the successor of that corporation, and is in possession of the right of way in controversy, claiming by privity of ownership from said corporation. The complaint avers facts which, show that the covenants sued on run with the land, and are as binding in law on the defendant as they were on the original grantee and covenantor. Under this state of the pleadings, the Circuit Court properly ruled that, in the absence of a sworn plea of non ost factum, putting in issue the execution of the paper, it was admissible in evidence without preliminary proof of its execution. It is true that a strict construction of the statute would confine this privilege to the written instruments which are the foundation of suits, and which purport to be “signed by the defendant, his partner, agent, or attorney in fact.” — Code, 1886, § 2770. But, construing this section in connection with other sections of the Code on the same subject-matter, our decisions have given a more liberal interpretation to it. Section 2676 of the Code requires every plea to be sworn to, which denies the execution by the defendant of any written instrument, the foundation of the suit, or the assignment of the same, whether it purports to be signed by him or not. This includes all cases where the instrument declared on is averred to be the defendant’s act in law, or is shown, by proper allegation of fact, to impose a legal obligation or duty on him. — Lazarus v. Shearer, 2 Ala. 718. So, under section 2771, “it is not necessary to prove the execution or assignment of any instrument offered in evidence under the plea of set-off, or other plea in bar, unless the plaintiff put the execution or assignment thereof in issue by a replication verified by affidavit.” — Code, 1886, § 2771. The purpose of these various statutes is to require the defendant to put in issue, by sworn plea, every written instrument which is the foundation of the suit, and which, taken in connection with the averments of the complaint, imposes on him the same legal obligation or duty which it purports to impose on the maker or obligor who signed it. A familiar illustration of the principle is found in a suit against an executor or administrator, on a paper executed by a deceased testator or intestate. It applies where, by privity of law or estate, the obligations of an instrument are cast on a defendant, although he did not sign the paper in person. — Ala. Coal Mining Co. v. Brainard, 35 Ala. 476; Montgomery & Eufaula R. R. Co. v. Prebles, 44 Ala. 255; Bryan v. Wilson, 27 Ala. 208; McWhorter v. Lewis, 4 Ala. 198; Wimberly v. Dallas, 52 Ala. 196. This construction is strengthened by the fact, that if, in an action of covenant, averring breaches, the deed or instrument is not put in issue by the plea of non est factum, the defendant, even by the rules of common law, was understood to admit so much of the instrument as is set out in the declaration.- — -2 Greenl. Ev., §§ 234, 247; Stephen’s Plead. (Tyler), 171.

4. The demurrer to the first plea of the defendant was properly sustained. Being a general denial of all the allegations of the complaint, it was a denial of the execution of the written instrument which was the foundation of the suit, and should have been supported by affidavit. The want of affidavit is a defect which is available on demurrer.- — McWhorter v. Lewis, 4 Ala. 198; Bryan v. Wilson, 27 Ala. 208.

5. The action, being founded on a writing under seal, would not be barred by any period of limitation less than ten years. — Code, 1886, § 2614. The demurrers to pleas number two and three, setting up the statute of limitations of one and six years, were properly sustained.

6. To make the contract sued on binding on the Alabama & Florida Railroad Company, in whose behalf it purported to be executed, it was not necessary that the act of Pollard in executing it should have been originally authorized by a resolution of the board of directors, appearing among the corporate proceedings, or minutes of the company; nor that it should have been ratified in this manner. The deed of Gilmer, granting the right of way, and this instrument executed by Pollard, stating the conditions and limitations attending its delivery, were executed contemporaneously, bear the same date, and refer on their face to the same subject-matter. They constitute, therefore, in legal effect but one instrument, and may be so connected by parol evidence, if necessary. — Robbins v. Webb, 68 Ala. 393. The railroad officials, having accepted the deed under which their title was acquired, were chargeable with notice of the limitations and covenants contained in this instrument, which was part and parcel of the deed. The knowledge of Pollard, as president, and of Jordan, as general superintendent, who are shown to have had full parol authority to arrange all rights of way, and who together made this contract, must be construed to be the knowledge of their principal — the company. The acceptance of the deed, with the benefits of the contract, and possession under it by the railroad, was a full ratification of the act of its agent, and estopped that corporation from denying the fact of the agent’s lawful appointment, as well as his authority to act in the premises. — Ala. Gr. So. R. R. Co.- v. S. & N. R. R. Co., 84 Ala. 570. The contract or covenants sued on involve no question as to the conveyance of the legal title to lands by an agent of a corporation, without written authority. Hence the cases of Standifer v. Swann, 78 Ala. 88, and Ware v. Swann, 79 Ala. 330, cited by defendant’s counsel, have no bearing on this case. — See Swann v. Miller, 82 Ala. 530, 537.

7. The facts of the case show, also, that the defendant is chargeable with notice of the existence of these covenants, which run with, and burden the land occupied as a right of way. The plaintiff, Gilmer, was clearly a “creditor” of the Alabama & Florida Railroad Company, within the meaning of section six of the act of the General Assembly, approved August 5th, 1868, which authorized a consolidation of said road with the Mobile & Great Northern Railroad Company, under the new name of the Mobile & Montgomery Railroad Company. The word creditor, as there used, includes unsecured as well as secured creditors.' — M. & W. R. R. Co. v. Branch, 59 Ala. 139. The agreement sued on bears date March 7, 1868 — several months prior to the consolidation. The damage recovered by the plaintiff arose from the breach of this agreement. We have repeatedly held, that one who has a claim or demand arising from a contract in existence at the time of a fraudulent conveyance, is a creditor within the meaning of the statute of frauds, although he had no existing cause of action at the time such contract was made, by reason of the contingent liability of the debtor. A surety is accordingly held to be a creditor from the date of his suretyship, and irrespective of the time when his cause of action accrued. — Fearn v. Ward, 65 Ala. 33. And so the covenantee in a deed of warranty is deemed a creditor, not from the time of his eviction, but Rom the time the covenant was executed. — Bibb v. Breeman, 59 Ala. 612. For like reasons, the plaintiff must be held to be a creditor of the Alabama & Florida Railroad Company, from the date of his contract, Rom the breach of which the present cause of action arose, and not from the time of the actual breach which entitled him to sue on it.

8. This brings the case fully within the influence of Spence v. Mobile & Montgomery Railway Co., 79 Ala. 576, where we construed section six of the act now under consideration, which provides that the consolidation of the said companies under the new name “shall in no way affect the rights of the creditors of such companies, and their separate existence shall be continued as to all the rights and remedies o£ creditors.” — Acts 1868, p. 82. In that case, the precise argument was made which is here urged upon our consideration, viz., that the stockholders who organized the defendant corporation — The Mobile & Montgomery Railway Co. — were bona fide purchasers of certain property of the Alabama & Florida Railroad Company, because they were the innocent holders of the mortgage bonds of the road, and had bought the property at a regular mortgage sale, without notice of any prior lien or equity attaching to it. It was held that the bondholders were chargeable with notice of every thing contained in the act of incorporation which created the company with which they were dealing, analogously to the notice imputed by law to the purchasers of land titles, who are compelled to know all they might learn by a diligent examination of the links of their chain of title. Such an examination would have informed them that the rights of creditors were unaffected by the sale, and that the plaintiff was a creditor, whose demand inhered to and followed the land in controversy, and bound it in the hands of all assignees chargeable with notice of the incumbrance.

There are other reasons urged by appellee’s counsel, which prove equally fatal to the defense based on this ground; but these we need not consider.

9. We entertain no doubt, that the measure of damages in this case, for the breach of the covenants sued on, was properly stated by the circuit judge, as the difference between the present value of the lands, and what the value would have been had all the stipulations in the contract been substantially performed; or, in other words, the additional value which would have accrued to the plaintiff’s land in the event the covenants had been performed. The promise of the faithful performance of these covenants as to establishing and maintaining a depot near the plaintiff’s residence, and allowing him to cultivate the right of way, was the consideration of the deed made by him to the railroad. The covenants themselves qualify the estate taken by the railroad, and ^i minished its value. They also enured to the benefit of the adjoining land owned by Gilmer, and increased its market value, as they were intended to do. This appreciation in value was clearly within the legal, if not the actual contemplation of the contracting parties. The loss of this increased value is the natural and proximate result of the defendant’s breach of these covenants, and is the fairest and closest approximation of the actual damage sustained by him, which, the law is capable of finishing. It is, in fact, the precise pecuniary loss which the plaintiff has suffered by the defendant’s total breach of the contract. The adjudged cases fully support this view, as to the measure of the plaintiff’s damages. — Watterson v. Alleghany R. R. Co., 74 Penn. St. 208; s. c., 8 Amer. Railway Rep. 30; Clark v. Zeigler, 79 Ala. 350; s. c., ante, 154; Bronson v. Coffin, 108 Mass. 175; s. c., 11 Amer. Rep. 335; Stoudenmire v. DeBardelaben, ante, 85; s. c., 4 So. Rep. 723; 3 Suth. Dam. 135.

10. The plaintiff was entitled, as he has elected to do in this action, to declare for a total breach of the entire agreement, and combine his claim for damages running through many years in a single action. This would avoid a multiplicity of vexatious suits, which it is both the pleasure of the courts and the policy of the law to accomplish, where it can be done without working injustice to either party. It would be discreditable to the administration of justice in our courts, to drive a litigant to redress his rights by a hundred suits, where one would answer his purpose quite as well, and do no wrong to his adversary. — Trustees of Howard College v. Turner, 71 Ala. 429; s. c., 46 Amer. Rep. 326; Erie R. R. Co. v. Douthet, 88 Penn. St. 243; s. c., 32 Amer. Rep. 451.

11. The correspondence and other transactions between the plaintiff and the officers of the Alabama & Florida Bail-road Company, which occurred before the execution of the deeds and covenant relating to the right of way, were properly admitted in evidence, as tending to prove permissive occupation, and to rebut the idea of adverse possession by one from whom the defendant derived title.

The rulings of the Circuit Court, in our opinion, can all be construed to harmonize with these principles.

We have examined the other errors assigned, and can discover nothing which can operate to reverse the judgment, which is accordingly affirmed.

Clopton, J., not sitting.

Case Details

Case Name: Mobile & Montgomery Railway Co. v. Gilmer

Court Name: Supreme Court of Alabama

Date Published: Dec 15, 1888

Citation: 85 Ala. 422

Court Abbreviation: Ala.