application to the precise question involved, they are referred to as bearing on the intent of the parties, and therefore to be considered in the construction of the lease. Berridge v. Glassey, 112 Pa. 442, 3 Atl. 583, 56 Am. Rep. 322; North Penna. R. R. Co. v. Philadelphia & Reading Ry. Co., supra. The fourth paragraph of the lease contains the following clause, the proper construction of which is the principal subject of contention: ant of the assessment of the tax and request- While the above provisions are not of direct ed payment thereof as part of the rental under the lease, which defendant refused, whereupon plaintiff paid the tax and brought this action for recovery of the amount so paid. Defendant's affidavit of defense admitted the facts set forth in the statement of claim, but denied liability for the assessment under the terms of the lease. Plaintiff took a rule for judgment for want of a sufficient affidavit of defense, and the court below entered judgment for plaintiff for the above amount with interest, from which this appeal is taken; the sole error assigned being the action of the court in entering such judgment. The construction of a lease of another road to this same defendant, somewhat similar in its terms, was before this court in North Penna. R. R. Co. v. Philadelphia & Reading Ry. Co., 249 Pa. 326, 95 Atl. 100, where it was held an agreement by the lessee to pay all taxes and assessments of any and every kind assessed or imposed on the premises, franchises, or the business or receipts therefrom, or on the capital stock, or dividends, or the yearly payments to be made under the lease, for which the lessor would otherwise be liable or accountable under any lawful authority, was sufficiently broad in its scope to include liability for the payment of the federal income tax subsequently levied upon the lessor. It is earnestly contended by defendant, however, that the terms of the present lease are so different from the lease in the North Pennsylvania Railroad Case as to justify a contrary conclusion here. "The railway company [defendant] shall and will also punctually and faithfully pay all taxes, charges, and assessments which, during the continuance of the term hereby demised, shall be assessed or imposed under any existing or future law on the demised premises or any part thereof, or on the business there carried on, or on the receipts, gross or net, derived therefrom, or upon the said several issues of bonds or the interest thereon, or upon the capital stock of the Catawissa Company or the dividends thereon, or upon the franchises of the said company, for the payment or collection of any of which said taxes the Catawissa Company may otherwise be or become liable or accountable under any lawful authority whatever." While these provisions are not identical with the provisions of the lease in the North Penna. Railroad Case, I see no sufficient reason for adopting here a construction different from that placed upon the provisions of the lease in that case. The intention of the parties, as in that case, appears to be to impose upon the lessee the duty of paying to the lessor a sum sufficient to meet its obligations to its stock and bond holders, and to maintain its corporate existence. Its entire property and franchises were turned over to defendant on terms which gave the In the present case, as in the one above latter, to all practical purposes, absolute referred to, the federal income tax law was control. No business was carried on by not in existence at the time the lease was plaintiff subsequent to the lease from which made, and whether or not such a tax was it could derive income, but in lieu thereof within the contemplation of the parties it was dependent on rentals received under must depend upon their intention gathered the terms of the lease. Plaintiff had cerfrom the general terms of the lease. It is tain obligations to meet at stated intervals, first provided that, in consideration of the which might vary from time to time, and to lease of plaintiff's property and franchises, meet this contingency, instead of stipulating which are fully described, the defendant for a certain rent, a variable sum was pro"shall and will well and truly pay, or cause vided for, dependent upon the amount of to be paid, • * * as rent for the said charges or taxes which might in the future demised premises, the following sums of be imposed on plaintiff's corporate franchismoney." The first requirement is that de-es, stock, bonds, etc. It was only in this fendant pay such sum as will be "equal to all interest moneys hereafter to mature" on outstanding bonds of plaintiff company or on renewals or extensions thereof, "free from any tax thereon," with a further provision that, if defendant pay any part of the principal of the bonds, the annual rental shall be reduced accordingly. The lessee also agrees to pay "such sum as will be equal to 5 per cent." on the preferred stock outstanding or which may in the future be issued for improvements, in which case the rental shall be increased by a sum sufficient manner that the lessor, with no other source of income, could fully protect its stock and bond holders and enable it to continue indefinitely to pay the former "such sum as will be equal to 5 per cent." and to the latter interest "free of any taxes." It is true income tax is not specifically mentioned in the lease; and, while a strict technical construction of the words of the lease would not include income tax, such construction would disregard the general object and purposes indicated by the various provisions governing the amount of rent provided for under tion or assessment is followed by the general clause which limits them to those "for the payment or collection of any of which said taxes the Catawissa Company may otherwise be or become liable or accountable under any lawful authority whatever." Since the Catawissa Company would not be liable for tax on the receipts derived from the business which it did not carry on, the clause in question is meaningless, unless the "receipts therefrom" be construed as meaning receipts from the "demised premises or any part thereof." As the rent provided for in the lease would plainly be a receipt from the premises, an income tax based thereon must be held to be a charge or assessment which defendant, under the terms of its agreement, is bound to pay. It is strenuously argued by defendant that | enumeration of the various objects of taxain the clause which requires defendant to pay all taxes or assessments "on the demised premises, or any part thereof, or on the business there carried on, or on the receipts, gross or net, derived therefrom," the word "therefrom" refers to the business, and not the premises, and as no business is being carried on by plaintiff, but, on the contrary, is transacted entirely by defendant, there can be no basis for construing this clause to require defendant to pay a tax on rents received from the premises. On the other hand, plaintiff argues "therefrom" refers to the premises, which forms the consideration for the rent, and income tax levied thereon is a tax or assessment which defendant agreed to pay. While defendant's view is more in accord with the strict grammatical construction of the clause, standing alone, yet reading it in connection with the remainder of the paragraph in which it occurs inclines me to the opposite view. The general effect of the paragraph is to require defendant to pay all taxes, charges, and assess ments which may be based on the subjects then enumerated. The business of operating the leased property is carried on solely by defendant. Plaintiff was therefore not concerned with a tax on the receipts derived therefrom. It was not doing business, nor was it engaged in business, as has been decided in McCoach v. Minehill & Schuylkill Haven R. R. Co., 228 U. S. 295, 33 Sup. Ct. 419, 57 L. Ed. 842. No valid reason existed for inserting a clause requiring defendant to pay taxes or assessments on something with which plaintiff was not concerned. The taxes or assessments in the minds of the parties at the time the lease was made were apparently those for which plaintiff might, then or in the future, be held accountable. The Under the ruling in McCoach v. Minehill & Schuylkill Haven R. R. Co., 228 U. S. 295, 33 Sup. Ct. 419, 57 L. Ed. 842, plaintiff was not engaged in business within the meaning of the federal Corporation Tax Act, and was therefore not liable for the excise tax for the months of January and February, 1913. However, as the payment of this tax was made before the decision in that case, upon demand by the lawful authorities, and with notice to defendant, whom, under the lease, I would hold liable for the payment thereof, plaintiff was justified in paying to avoid the risk of incurring the penalties of the act in the event of an adverse ruling by the court. As between plaintiff and defendant the amount thus paid was not, in my opinion, paid voluntarily, and an action of assumpsit lies to recover the amount so paid. Millard v. Del., Lack. & Western R. R. Co., 240 Pa. 234, 87 Atl. 601. For the foregoing reasons, I would affirm the judgment in this case. (255 Pa. 211) SPEER V. MONONGAHELA R. CO. (Supreme Court of Pennsylvania. Oct. 2, 1916.) 1. EMINENT DOMAIN 246(2) CONDEMNATION-ABANDONMENT. county, containing some 537 acres. His wife, Sarah Dawson Speer, was the owner of the other undivided one-third of the land. Upon the date in question, January 3, 1901, the defendant company located, and subsequently In view of Const. art. 16, § 8, providing for adopted, a route for its railroad across the the paying or securing of compensation before the taking of land under eminent domain, a land. Charles E. Speer died on May 2, 1905, railroad company, after adopting and locating having by his last will and testament deits line, may abandon the route before any ac- vised all his interest in the said land to his tual entry upon the land has been made for con-wife, and appointed her executrix. In Destruction purposes, and prior to the filing of a bond to secure payment of damages; no title being vested in the condemnor until such action. [Ed. Note.-For other cases, see Eminent Domain, Cent. Dig. 88 648, 649; Dec. Dig. 246(2).] 2. EMINENT DOMAIN 246(4) TION PROCEEDINGS. A railroad company located two routes over plaintiff's land, but did not take possession, and gave no security for the payment of damages. Thereafter it abandoned the routes before the landowner instituted proceedings to determine the damages. Under Act Feb. 19, 1849 (P. L. 79), and subsequent legislation, a railroad company, to acquire a right of way by eminent domain, must first make a preliminary entry for purpose of exploration, next adopt a route, and then pay or secure payment of damages to the owner. Held, that the railroad company, not having taken actual possession or paid or secured the damages, acquired no title, and the owner could not recover on the theory of condemnation. LOCATION OF [Ed. Note.-For other cases, see Eminent Domain, Cent. Dig. § 654; Dec. Dig. 246(4).] 3. EMINENT DOMAIN 266 ROUTE-REMEDY. The remedy for an entry by a railroad company on lands without the consent of the owner, and without making or securing payment of compensation, is by bill in equity or action of trespass, instead of a petition for the appointment of viewers. [Ed. Note. For other cases, see Eminent Domain, Cent. Dig. 88 694-696, 702, 703, 705; Dec. Dig. 266.] Appeal from Court of Common Pleas, Fayette County. Proceedings by Louise Dawson Speer, administratrix d. b.. n. c. t. a. of Charles E. Speer, deceased, against the Monongahela Railroad Company, for compensation for the condemnation of land. From a judgment on verdict for plaintiff based on the award of viewers, defendant appeals. Reversed. Argued before BROWN, C. J., and POTTER, MOSCHZISKER, FRAZER, and WALLING, JJ. W. J. Sturgis and S. J. Morrow, both of Uniontown, for appellant. E. C. Higbee, of Sterling, Higbee & Matthews, and F. P. Rush, both of Uniontown, for appellee. cember, 1909, the defendant company located and adopted a route for a branch railroad, leading from the main line previously adopted, for a distance of about 1,600 feet across the property. No bond was filed by the defendant company, however, and no possession of the property was ever taken by it. On January 7, 1910, before these proceedings were instituted, Sarah Dawson Speer conveyed the land in question to J. V. Thompson by a deed containing no reference to the right to damages in the eminent domain proceedings. Subsequently on July 31, 1911, as executrix of Charles E. Speer, she filed a petition for the appointment of viewers. She died on or before May 15, 1912, and Louise Dawson Speer, administratrix d. b. n. c. t. a., was substituted as plaintiff. At the same time that Sarah Dawson Speer filed her petition as executrix of Charles E. Speer, she filed a similar petition in her own right for the appointment of viewers to assess damages to the one-third undivided interest which she owned in the land, at the dates of the locations of 1901 and 1909. On May 7, 1912, these locations were abandoned by formal action of the board of directors of the defendant company. The court below was, however, of the opinion that the petitioners were entitled to the appointment of viewers. The same persons were appointed in each case, the views were held together, and, on appeal from the award of the viewers, the two cases were tried at the same time before the same jury. In his charge the trial judge summarized the facts, and the contention of appellant, as follows: "In 1911 and 1912, on another and different location through part of this property, a railroad was actually constructed, and is now in operation, with the consent of J. V. Thompson who owned the property at that time. It is contended on the part of the defendant that, inasmuch as no railroad ever was built on either the route laid out for a main line in 1901, or on that laid out for a branch line in 1909, but that both routes were abandoned in the regular way by the defendant company, the company is not liable in these actions for damages to the plaintiff." POTTER, J. This is an appeal from the The court below affirmed a point presented judgment of the court below, rendered after verdict upon the trial of an appeal from an by counsel for plaintiffs, which assumed that award of viewers appointed to assess dam- the right to damages had vested in the ownages resulting from certain steps taken by ers of the property at the time of the locathe defendant company in partial exercise tion of 1901, and he refused the following of its right of eminent domain. It appears point, presented by counsel for defendant: from the record that on January 3, 1901, taken by the court of common pleas, upon the "It appearing that before any action had been Charles E. Speer was the owner of the undi-petition for the appointment of viewers, and vided two-thirds of a tract of land in Fayette on May 7, 1912, the board of directors of the defendant company, by resolution duly adopted, that, after final judgment in condemnation abandoned the location of 1901, without having proceedings, a municipality cannot disconentered upon the land for the purpose of continue. In Wood v. Trustees of State Hosstructing its railroad, and without having tendered or filed any bond or bonds to secure the pital for Insane at Warren, Pa., 164 Pa. 159, damages to the landowner, the railroad com- at page 169, 30 Atl. 237, at page 238, it was pany had the right to abandon its location, and held that, after possession of the land has your verdict should be for the defendant.' been actually taken, the proceedings cannot be discontinued and possession abandoned. Mr. Chief Justice Sterrett said: [1] The refusal of this point is made the subject of the third assignment of error, and the fundamental question in this appeal is thereby raised. That question is whether the railroad company, after adopting and locating its line, had the right to abandon the route, before any entry upon the land had been made for construction purposes, and prior to the filing of a bond to secure the payment of damages. If the railroad had at that time the right to abandon the location, there was no basis for these proceedings, and the discussion as to whether the proper parties acted, becomes immaterial. In the exercise of the power of eminent domain by municipal corporations, the right to discontinue has been liberally sustained. In Funk's Adm'rs v. Waynesboro School Dist., 3 Sad. 177, 10 Atl. 427, we held as set forth in the syllabus: "In proceedings for the taking of land for school purposes, under the act of April 9, 1867 (P. L. 51), where there has been no actual or permanent taking of the land, the petitioners may withdraw all proceedings at any time before final confirmation of the report of viewers." And in Moravian Seminary v. Bethlehem Borough, 153 Pa. 583, 588, 26 Atl. 237, it was held that in condemnation proceedings the court has power to authorize a discontinuance, on proper and adequate terms, at any time before judgment, even after a verdict on appeal. Again in Huckestein v. Allegheny City, 165 Pa. 367, 30 Atl. 982, it was held that where a city undertakes to change the grade of a supposed street, and it afterwards appears that the street has never been opened or adopted by the city, proceedings to assess damages may be discontinued after verdict and judgment. In Franklin Street, 14 Pa. Super. Ct. 403, it was held that condemnation proceedings by a municipality might be discontinued, even after a bond had been filed and notice given to property owners to remove. In this case Rice, P. J., said (page 411): "It is safe to say, in general, that the courts have been careful not to lay down a rule upon this subject which will prevent municipal corporations from receding from proposed action of this kind before the landowner has obtained final judgment for his damages, unless the corporation has in the meantime taken actual possession of the land. See generally upon this subject, Elliott on Roads and Streets, 209, 280, and 2 Dillon's Mun. Corp. § 608. It is proper that this view should be taken. The public good, or the inability of the treasury to fairly bear the burdens, may require that it should recede, and if the landowner is fully compensated for the actual injury he has sustained, no injustice is done in permitting the municipality to do so." "If, in the face of their unequivocal acts and declarations, defendants had a right to discontinue, and had been permitted to do so, there inaugurating new proceedings, and in like manwould have been nothing to prevent them from ner withdrawing therefrom; and thus they might commence and abandon new proceedings from time to time with the view of obtaining an award that would be satisfactory to themselves. Corporations and others invested with the power of eminent domain should not be permitted to thus experiment with judicial proceedings for any such purpose. Whenever it clearly appears, as it does in this case, that there has been such an actual taking under the power of eminent domain, as invests the donee of the power with title, and gives to the landowner a vested right to compensation, the former should not be permitted to discontinue without the consent of the latter. Any other rule would be productive of oppression and other mischievous results." In that case, it appeared that the hospital was a state institution, with the right of eminent domain, and that the state became security for all damages to the owner of the The premises were approproperty taken. for hospital purposes. It was held that such priated, entered upon, and actually occupied which invested the trustees with title to occupancy constituted a permanent taking the land, and gave to the owner a vested right to compensation. In Fischer v. Catawissa R. R. Co. and Philadelphia & Reading R. R. Co., 175 Pa. 554, at page 558, 34 Atl. 860, at page 861, it was held that after a railroad had filed its bond in condemnation proceedings and had entered into possession, it was too late to discontinue. Justice Sterrett said: Mr. Chief "The effect of the proceedings deliberately instituted by one of the defendants, including the approval and filing of the bond, appointment of viewers, etc., was to divest plaintiff's right to the possession of the land taken, and remit him to his claim for compensation, under the Constitution, secured by the bond, etc. Not only had a divestiture of plaintiff's right of possession been effected, but, after the approval and filing of the bond, defendants were in the actual and rightful possession of the land in question. Under all our decisions it was then too late to discontinue the proceedings. Wood v. Trustees of State Hospital for Insane, Warren, Pa., 164 Pa. 159, 30 Atl. 237: Williamsport & North Branch R. R. Co. v. Philadelphia & Erie R. R. Co., 141 Pa. 407, 21 Atl. 645, 12 L. R. A. 220, and cases there cited." We know of no case in this state, where the land has not been actually occupied, in which it has been held that a railroad may not abandon a right of way, if it chooses to do so, before compensation has been paid, or secured by the filing of a bond. Our constitutional provision clearly makes the payment But in Myers et al. v. South Bethlehem or securing of compensation the, turning section 8, of the Constitution of Pennsyl- paid, the title vests at once in the company. vania, provides that: "Municipal and other corporations, and individuals invested with the privilege of taking private property for public use, shall make just compensation for property taken, injured, or destroyed by the construction or enlargement of their works, highways or improvements, which compensation shall be paid or secured be fore such taking, injury, or destruction.***” Until compensation is paid or secured, no title vests in the condemnor. If it enters Templeton v. Wilkes-Barre Coal Co., 50 Pa. Super. Ct. 341. Doubtless, also, the landowner may waive the filing of a bond, and permit the proceedings for the assessment of damages to go on. In such case, payment of damages would vest the title. In any event, there must be reciprocity of right between the owner and the railroad. While the owner retains title, he cannot ask payment as though it had been transferred. So long as upon the land for the purposes of construc- he has the right to treat the railroad as a tion before compensation has been made or trespasser, it must have the reciprocal right secured, it is a trespasser, and as such may to abandon its location, and withdraw all be enjoined from proceeding. "Before pay claim thereto. For any possible damages ment or security it is clear that the entry is that the owner may have suffered in the tortious and not rightful." Western Penna. meantime, his remedy, as indicated above, R. R. Co. v. Johnston, 59 Pa. 290. The rem- is by an action of trespass. While there is edy for an entry by a railroad company up-diversity in the practice in the various states, on land, without the consent of the owner, and without making compensation, or securing its payment, is by an action of trespass, and not by petition for the appointment of viewers. Mountz v. Philadelphia, Harrisburg & Pittsburgh R. R. Co., 203 Pa. 128, 52 Atl. 15. [2, 3] In Fries v. Southern Penna. R. R. & Mining Co., 85 Pa. 73, at page 75, it was said: "The security being given in due course of law the grasp of the owner upon his property is loosened by the Constitution itself." with respect to the right to discontinue proceedings in eminent domain, before completion, it is stated in Ann. Cas. 1913E, 1062, that: "In the absence of statute fixing the time within which a discontinuance may be had, the general rule is unquestioned that an eminent domain proceeding may be discontinued at any time before the rights of the parties have become reciprocally vested." We are therefore of opinion that as in this case there was no occupancy of the land by the railroad, and no entry thereupon It is evident that until the security has by it for purposes of contruction, and as the been given the grasp of the owner is not location was formally abandoned before viewloosened, and the title to his property re- before any bond had been filed to secure payers were appointed to assess damages, and mains in him. In Williamsport & North Branch R. R. Co. v. Philadelphia & Erie R. ment of compensation, title to the land did R. Co., 141 Pa. 407, 21 Atl. 645, 12 L. R. A. not pass to the railroad, no reciprocal right 220, it was pointed out that three successive to damages became vested in the landownsteps are contemplated by the act of Feb-ers, and there was no right of recovery in this proceeding. ruary 19, 1849 (P. L. 79), and subsequent legislation, in order to vest title to the road- The first, second, third, and fourth assignway in the corporation. These are: (1) Aments of error are sustained, and the judgpreliminary entry on the lands of private owners for the purpose of exploration. (2) The selection and adoption of a line for the location of the proposed railroad. (3) "Pay ment to the owner for what is taken and the consequences of the taking, or security that it shall be made when the amount due him is legally ascertained. The title of the owner is not divested until the last of these steps has been taken. Levering v. Philadelphia, Germantown & Norristown R. R. Co., 8 Watts & S. 459; McClinton v. Pittsburgh, Ft. Wayne & Chicago Ry. Co., 66 Pa. 404; Dimmick v. Brodhead, 75 Pa. 464; Buffalo, N. Y. & Philadelphia R. R. Co. v. Harvey, 107 Pa. 319; Gilmore v. Pittsburgh, Va. & Charleston R. R. Co., 104 Pa. 275. As against him, the corporation can acquire only a conditional title by its act of location, which ripens into an absolute one upon making compensation." Of course, a railroad company, after the right of way has been located by its directors, upon preliminary surveys, may agree with the landowner as to the ment is reversed. (255 Pa. 219) SPEER V. MONONGAHELA R. CO. (Supreme Court of Pennsylvania. Oct 2, 1916.) Appeal from Court of Common Pleas, Fayette County. Proceeding by Louise Dawson Speer, executrix of Sara Dawson Speer, deceased, against the Monongahela Railroad Company. From a judgment for plaintiff on the verdict after an versed. award of viewers, defendant appeals. Re Argued before BROWN, C. J., and POTTER, MOSCHZISKER, FRAZER, and WALLING, JJ. W. J. Sturgis and S. J. Morrow, both of POTTER, J. In this appeal substantially the same questions are raised as in that at No. 420, January term 1915 (99 Atl. 810), in which an opinion has just been filed. The reasons for the decision in that case are controlling here. ments of error are therefore sustained, and the The first, second, third, and fourth assign |
