Proprietors of Locks & Canals on Merrimack River v. Boston & Maine Railroad

245 Mass. 52 | Mass. | 1923

Rugg, C.J.

This is a writ of entry to recover three parcels of land in Lowell leased by the demandant to the Boston and Lowell Railroad Corporation by three leases dated respectively in 1837, 1840 and 1845. It is the contention of the demandant that the leases have expired by their own limitations. The plea was nul disseisin, with specification of defence that the tenant claims to hold possession by virtue of the leases; that the Boston and Lowell Railroad Corporation was on the first of December, 1919, consolidated with the tenant, the Boston and Maine Railroad, and that since that consolidation, the possession of the tenant is by virtue of its being in part, although under another name, the Boston and Lowell Railroad Corporation, the original lessee.

The demandant is a corporation established by St. 1792, c. 13, and supplementary acts. The tenant is a corporation established by St. 1843, c. 90, and supplementary acts, and by statutes of Maine, New Hampshire and New York. The Boston and Lowell Railroad Corporation was established by St. 1830, c. 4, with reservation of right by the Commonwealth to purchase all its property after the expiration of ten years from the opening for use of the railroad, subsequently by St. 1832, c. 87, extended to twenty years. It operated its railroad between Lowell and Boston until 1887, when by authority of statute it leased all its franchises and property to the tenant, which thereafter operated that railroad as a part of its system.

The Boston and Lowell Railroad Corporation, together with several other railroad corporations, termed for convenience “subsidiary companies,” were authorized to consolidate with the tenant, the Boston and Maine Railroad, by Spec. St. 1915, c. 380, and acts in amendment thereof, and the acts of other States. Pursuant to that act the several railroad corporations became consolidated and joined with the tenant, the Boston and Maine Railroad, forming one corporation under that name. An agreement to that end was executed by all the corporations including the Boston and Lowell Railroad Corporation. Brown v. Boston & Maine Railroad, 233 Mass. 502, 511.

Each of the leases here in issue contained an habendum clause and a covenant. The covenant clause has no decisive significance upon the issue here depending, but resort may be had to it for light upon the meaning of the habendum clause.

The habendum clause shows that the leases are for an indefinite term. They are to continue until the happening of one of several events and then to cease. The crucial event may happen at any time, or it may never happen. The leases, therefore, may never come to' an end. The effect of the words used was to convey a base fee. It is enough to say without further discussion that the case upon this point is governed by Jamaica Pond Aqueduct Corp. v. Chandler, 9 Allen, 159, First Universalist Society of North Adams v. Boland, 155 Mass. 171, Flynn v. Caplan 234 Mass. 516, Institution far Savings in Roxbury v. Roxbury Home far Aged Women, 244 Mass. 583.

A closer analysis of the leases is necessary to determine exactly their force and effect. The words “To Have and to Hold to said party of the second part, the said premises during their continuance as a Corporation,” are fitly chosen to convey a fee to a corporation. The corporate existence of the lessee has been continued and its corporate meetings held notwithstanding the consolidation of it with the tenant. The words next following, namely, “ and while they continue to be the sole owners of said Bail Boad,” can best be considered after the rest of the paragraph has been interpreted. Next occur the words expressive of the rent to be paid and the time for its payment. These need not be discussed in detail because nothing essential' turns upon them. It is not contended that there has been any breach in these particulars. Then follow the words plainly expressive of the condition on which the leases shall terminate: “ and in case said party of the second part shall fail and neglect to pay said rent for the space of one year after the same shall become due, or in case said Bail Boad should become the property of the Commonwealth, then in either of these events, the said premises shall revert to, and become the proper estate of said party of the first part.” These are words avowedly stating in precise terms the conditions on which the estate shall terminate. They specifically declare the events which shall cause a reverter. The grammatical form of this part of the clause indicates that these two alone are the crucial occurrences which shall bring the estate to an end. The words “ and in case . . . or in case ... in either of these events ” naturally import a choice of one or the other of the two grounds specified. ' The inference naturally to be drawn from these words and this arrangement is that a purpose is manifested to make these-two the only decisive events with reference to the term of the estate. If one resorts to approved canons for the construction of the language, the same result is reached. The structure of the sentence and the common meaning of the words alike confirm the idea that reverter rests upon one or the other of these two events. Neither of these events has happened. The rent has been promptly paid. The Commonwealth has not exercised its power to take over the property of the lessee.

The words already quoted, “ and while they continue to be the sole owners of said Rail Road,” must be given an interpretation in connection with the rest of the instrument of which they are a part. It would in every aspect be a strained construction to hold that the words “ in either of these events ” stretch back to include this phrase. We should hesitate to say that in the context this phrase could rightly be interpreted as describing an event on the happening of which the estate of the lessee was to end and to revert. Without resting the decision on that ground, other considerations may be noted. The word “ sole ” adds little if anything to the force of the word “ owners.” Insurance Co. v. Haven, 95 U. S. 242. The word “ sole ” does not occur in the covenant clause of the lease where the reciprocal duty of the lessee is set forth. The covenant by the lessee is to surrender the premises when they shall “ cease to be the owners and Proprietors of said Road.”

The object of the consolidation of two or more solvent corporations into one is not usually to wind up the business of the old corporations but to continue as a unit that which theretofore had been separate. Whether the old corporations are merged into the new or are continued in existence under a new name depends upon the terms of the statute and contract under which the consolidation is brought about, and upon the pre-existing relations of the constituent corporations to which the statute and contract relate. The subject matter and the written instruments may give color each to the other. All the circumstances must be* considered in reaching a conclusion as to the nature of the transaction.. A consolidation differs from a sale and from simple succession. " In effecting it, instruments of transfer often are used. When different corporations are consolidated, commonly the franchises, privileges, rights and properties continue their existence, to be enjoyed and exercised by the new or enlarged or reorganized corporate entity.

The statute and the agreement for consolidation of the Boston and Lowell Bailroad Corporation with the Boston and Maine Bailroad contained phrases apt to express the element of succession to all rights and property and cont,innit,y of legal person. So far as statute or agreement can compass that result, the Boston and Maine Railroad as tenant stands in the same place as did the Boston and Lowell Railroad Corporation as original lessee.

The Legislature cannot deprive the demandant of its rights under its contracts. The lease was made, however, to a public service corporation. This fact, known to the demandant at the time of the execution of the contracts, carries with it some implications as to the power of the Legislature over such corporations. The tenant performs the same service to the community and to the demandant as did the original lessee. It is bound to do all that can be required of a railroad corporation" operating lines between Lowell and Boston. We are of opinion that the tenant, under the statute and contract in the light of the special circumstances, is in substance and effect the Boston and Lowell Railroad Corporation so far as to enable it to enjoy the rights conveyed to that corporation under the leases

here in question. The case on this point falls under the principle of several decisions. John Hancock Mutual Life Ins. Co. v. Worcester, Nashua & Rochester Railroad, 149 Mass. 214. Day v. Worcester, Nashua, & Rochester Railroad, 151 Mass. 302. Central Railroad & Banking Co. v. Georgia, 92 U. S. 665. Green County v. Conness, 109 U. S. 104. Wabash, St. Louis & Pacific Railway v. Ham, 114 U. S. 587, 595.

Exceptions overruled.