Lehigh Valley Terminal Railway Co. v. Currie

54 N.J. Eq. 84

• Court: New Jersey Court of Chancery
• Decided: October 15, 1895
• Status: Published

Opinion

Pitney, V. C.

By the fourth paragraph of the contract made October 2d, 1891, the fund of $5,000 now in controversy was to be paid to the complainant in case the ordinance of the city changing the grade of Avenue A should be set aside on certiorari, unless, pending the certiorari, the complainant’s roadbed should be actually constructed and rails laid for traffic. It is admitted that the ordinance was set aside on certiorari at the February Term, 1892, and that the roadbed had not then been constructed across the avenue, and that no rails had been laid for traffic, and in. fact that no rails at all were laid or could be laid across Avenue A until some months afterwards, when they were laid, not under the protection of the ordinance and agreement of the city, but under a new agreement made by the complainant with the county freeholders. By the express terms of the contract between the parties,’therefore, the complainant’s right to the fund is established.

The defendants contend that they should receive this sum of $5,000 because they have actually suffered the damages and the complainant has obtained the advantages for which this $5,000 was to be paid. If this were the case it would not establish the claim of defendants or impair that of complainant to this fund. The defendants can have no claim at law or in equity upon the fund except by the contract under which it was deposited. Apart from the contract, the relation of defendants to the complainant is merely that both parties own land abutting on the same highway. The complainant applied to the chosen freeholders of the county, who controlled this highway, for a change of grade, and the chosen freeholders made the change. Defendants allege that they have been damaged by the change. If so, their remedy, if any, must be against the county unless the complainant has, by its agreement, placed itself under some liability for the damages to defendants. If such liability had been created, defendants could, of course, resort to an appropriate remedy to enforce it, but that would not establish their right to this fund. The money was put in the hands of the trustees, not in trust, to satisfy damages from change of grade, but to pay on certain contingencies. The contingency has happened which required the payment to complainant. The trustees can only pay the money strictly as the contract requires, and the court cannot divert it to other purposes, however meritorious. The trustees are mere depositaries; they hold the money on a special trust, to pay as the agreement stipulates, and, under such a special trust, the rule stated by Lewin is: “ The duties thus prescribed to him the trustee is bound strictly to pursue, without swerving to the right hand or to the left.” Lew. Trusts 572.

If, however, the fund were placed at the full discretion of the trustees and of the court, to dispose of according to equity, as between these parties, the result would not be different.

It seems to me that the circumstances negative the allegation of defendants that the sum deposited with the trustees represented damages which the defendants would actually suffer by the proposed change of grade. It is not so stated in the contract, and the indications are the other way, for the fifth section provides that if any assessments are made against the defendants for benefits by reason of the proposed change of grade over and above the awards to be made to them for damages, the complainant shall pay such excess. Moreover, the complainant, in its contract with the city, had undertaken to pay all the expenses of the improvement under the sixty-second section (P. L. of 1872 p. 717) of the charter of the city. I am satisfied, from all the circumstances, that the payment was made simply to buy off the defendants’ opposition. They were able to seriously embarrass and delay, if not to actually defeat, complainant’s plan to so depress the avenue at the point in question as to enable it to build its road at the grade it desired and to avoid crossing the avenue at grade. Any considerable delay was a serious matter, resulting, as it must, in loss, in the meantime, of the use of the other parts of the road. The $5,000 here in dispute was retained as a guarantee not only against any further interference by certiorari on the part of the defendants or other persons similarly situate who might be influenced by the defendants, but also against the interference of the board of chosen freeholders of Hudson county, the danger of which, I am satisfied, was present in the minds of the parties when the contract was executed.

The avenue was little more than a paper street; the amount of travel'upon it was but trifling; it had never been graded or curbed, and no buildings had been erected upon it in that neighborhood. Under these circumstances it is not surprising that the commissioners appointed under the proceedings of the board of chosen freeholders awarded defendants nominal damages. Moreover, the supposed injury to the defendants’ property was considerably less under the grade adopted by the board of freeholders than under that adopted by the city, and the defendants had the benefit of having a sewer constructed which would drain most of their land, without being subjected to assessments for the cost of it.

The act of April 7th, 1888 (P. L. of 1888 p. 397), under which the freeholders proceeded, provides, in its sixth, seventh and tenth sections, for the ascertainment and payment of all damages caused by reason of changes of grade such as were here made. The language of the tenth section is :

“Incase any grade shall he changed, compensation shall be made to the person injured, if any there shall be, by such altered grade, such injury to be ascertained in the same manner hereinbefore [sections 6 and 7] provided in the case of land taken.”

With this provision in full view, complainant stipulated in its contract of March, 1892, with the freeholders to pay all damages which might be awarded to be paid by the county to any persons injured by the change of grade therein provided for.

The evidence shows that complainant feared that substantial damages might be awarded to defendants under this proceeding: also that it was liable to be disturbed in its work of constructing the sewer it had agreed to build in Fifty-ninth street, outside the jurisdiction of the county, and which was necessary in order to drain the boulevard at the low point immediately under the proposed bridge. The land on each side of that part of Fifty-ninth street under which the sewer was to be laid belonged to defendants, and counsel for complainant feared that it had no right as against defendants to construct that sewer after the ordinances in question, which sanctioned that construction, had been set aside. To provide against these two matters, viz., the possible award in favor of defendants, and their interference with the construction of the sewer, counsel for complainant, shortly after the execution of its contract with the county, approached defendants for a new contract with them, and submitted a draft of one which its' counsel thought it would enter into. This proposition was declined by defendants, but the unexecuted and unaccepted draft was set up by defendants in their answer and relied upon at the hearing as an admission by complainant of defendants’ right to the fund in question. I do not think it is competent evidence for that or any other purpose, and admitted it subject to the objection of the complainant, and with the remark that I thought it was incompetent. But upon looking at it I find in it no more than an offer to pay the fund here in question to the defendants in full satisfaction of all damages which might be awarded to the defendants by reason of the change of grade provided for in the contract with the freeholders, provided that no further interference, by certiorari or otherwise, should be made with the work of complainant. I can find in this offer no admission of defendants’ equity. It was, as before remarked, declined by defendants, and they afterwards went before the commissioners appointed under the act last cited and claimed damages.

An attempt was made to prove at the hearing that the defendants’ claim for damages was so framed and pressed as only to ask for damages over and above the sum named in the agreement of October 2d, 1891, and that the nominal sums awarded were, in fact, just so much over and above that sum. I think the attempt failed. Notice was given in writing to the commissioners by the defendants, that they did not waive their contract rights by their appearance, but there was no waiver by defendants of their right to damages from the county, and there is nothing on the face of the awards which are in evidence to indicate that any such matter was considered by the commissioners. Nor does it appear that this notice was brought to the attention of complainant, or that the commissioners could have taken into consideration the contract of October 2d, 1891, or that it was ever produced before them. The statute under which the commissioners were appointed prescribed their duties, and conferred.no power to pass upon this contract.

The principal reliance of defendants was upon the last clause in the fourth section of the contract, which provided as follows:

“ If, however, the roadbed, pending any certiorari, shall be actually constructed and rails laid for traffic at a grade accommodated to that established by the ordinance of January 13th, 1891, and not to the prior established grade, in such case the payment of said deposit shall be made to the executors upon such construction.”

The purpose of this clause was probably to provide for the contingency that the apprehended new writ of certiorari might be allowed without a stay or that some fresh statutory authority might be obtained, and that, therefore, the complainant might be able to construct its bridge across the street, and might venture to do so without suffering the delay apprehended from the pendency of a certiorari suit.

It is contended by defendants that the work of complainant was not seriously interfered with by the successful certiorari, and that it was able to prosecute its work with as much speed and dispatch as if the certiorari had not been brought and allowed. That is true as to some parts' of their road, but not as to the one hundred feet in length which included Avenue A, and this is the very point where the complainant apprehended the delay which its contract was made to escape. At that point it could not place its bridge without first excavating the street and reducing the grade so as to permit the travel to pass under, and it could not reduce the grade without municipal authority. It commenced the work of excavation at that point immediately after the dismissal of defendants’ certiorari on October 3d, 1891, but was stopped promptly by an injunction at the suit of the county, and then on October 31st, finally stopped by the allowance of the certiorari prosecuted by the county. At that time only a trifling amount of excavation had been effected, and the work at that point stood in that condition until after the agreement with the freeholders of March 24th, 1892, when it was pushed and progressed so rapidly that the bridge was placed on the piers '-in June. Prior to that, of course, no rails were or could be laid across Avenue A, and none were laid for some distance on either side of it. These facts, of course, exclude the idea of any literal or' substantial fulfillment of the condition of the contract now under consideration.

Defendants say that the spirit of the clause is that if there is no substantial delay caused by the certiorari then the $5,000 should be paid over. But the certiorari suit not only delayed but wholly defeated the change of grade which the contract was made to protect, and the delay caused by the certiorari would have been presumably perpetual but for the compromise with the county and the contract with it of March, 1892, by which the complainant procured a different change causing less excavation in front of the lands of defendants, and came under new obligations varying from those contained in the contract with the defendants.

The completion of the road was not, in fact, accomplished pending the certiorari and in spite of it, hence the case is not brought within the proviso in question. The contract of March, 1892, between the complainant and the county provided for the discontinuance of all suits between the parties, so that the certiorari could not be considered as still pending, even if a writ of error could be considered as reviving the ordinance during the suit after the final judgment of the supreme court, February 18th, 1892.

The result is that the evidence introduced by the defendants to show that complainant prosecuted its work after the certiorari with industry and without interruption, makes against the defendants rather than in their favor, since it shows the good faith of complainant in prosecuting its work as rapidly as possible. The difficulty in the way of defendants is that proceedings under the certiorari did not continue long enough to fulfill the terms of the clause in question; the roadbed was not actually constructed and the rails laid for traffic pending any certiorari.

I think the complainant is entitled to the fund.

The trustees have each answered and must be paid their costs. Such costs were rendered necessary by the refusal of the real defendants to consent to the payment of the fund tcf complainant. The trustees may retain their several costs out of the fund, and the defendants .Currie’s executors and Imbrie must pay complainant its costs, including the amount so retained by the trustees. I will so advise.