Court Opinion

ID: 3553625
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:05:26.013819+00
Date Added: 2024-06-11T09:27:03.021882
License: Public Domain

This is a writ of entry brought by the Boston, Concord  Montreal Railroad against the Boston  Maine Railroad, November 29, 1887, to recover possession of that portion of its railroad situated in the county of Merrimack. The plaintiff, reciting *Page 446 
the transfer of its road to the Boston  Lowell Railroad by a lease dated June 19, 1884, for the term of ninety-nine years, and the condition therein that the lessee should not assign or underlet the demised premises, or part with the possession thereof, except with the written consent of the lessor, alleges that on the first day of November, 1887, the Boston  Lowell Railroad corporation, in violation of its covenants, and without the written consent of the plaintiff and without right, assigned the plaintiff's railroad and delivered the possession of the same to the defendant; that the lease of the plaintiff to the Boston  Lowell Railroad thereby became forfeited; and that, in accordance with its provisions, the plaintiff entered upon the demised premises on the eighteenth day of November, 1887, for the purpose of enforcing the forfeiture and determining the estate thereby granted, but the defendant refused and still refuses to surrender the possession of its railroad to the plaintiff. The action is founded upon an alleged violation of the covenant not to assign, underlet, or part with the possession of the demised premises except with the written consent of the lessor; and the question is whether there has been such a violation of that covenant as to work a forfeiture of the lease.
No question arises in this action as to the validity of the Boston, Concord  Montreal lease to the Boston  Lowell Railroad, or the legality of the transfer of the plaintiff's railroad to the Boston  Lowell Railroad corporation under it. The action proceeds upon the assumption that the Montreal lease was originally a valid contract; and the ground upon which the plaintiff now seeks to be relieved from the further operation of it is, an alleged forfeiture of the demised estate, resulting from a violation of its covenants by the Boston  Lowell Railroad in assigning, underletting, or parting with the possession of the plaintiff's railroad, by and under a contract of lease to the Boston  Maine Railroad, dated June 22, 1887, and a transfer of the possession of the property and estate demised thereby, on the eleventh day of October, 1887, to the Boston  Maine Railroad. The plaintiff claims a forfeiture on the ground that the Boston  Lowell Railroad, by the lease of June 22, 1887, demised to the Boston  Maine Railroad its contract of lease of June 19, 1884, with the Boston, Concord 
Montreal Railroad, and that the execution of the lease of June 22, 1887, to the Boston  Maine was of itself an assignment of the plaintiff's road and a violation of the covenants of the Montreal lease; and that the Boston 
Lowell Railroad corporation have parted with the possession of the plaintiff's railroad to the Boston  Maine Railroad.
The Montreal lease provides that the lessors may enter and determine the estate thereby granted in case of a breach of any of its covenants; and the covenant for a violation of which a forfeiture is claimed is as follows: "Said second party [Boston  Lowell Railroad] *Page 447 
covenants and agrees that it will not assign or underlet the premises hereby demised, or part with the possession thereof, except with the written consent of the first party" (Boston, Concord  Montreal Railroad).
The provisions of the Maine lease of June 22, 1887, bearing upon the question under consideration, are the following: "The lessor [Boston 
Lowell Railroad] doth grant, demise, and lease unto the lessee [Boston 
Maine Railroad], its successors and assigns, its railroad and railroad property of every description, . . . and all rights, franchises, easements, privileges, and appurtenances thereto belonging, together with the right to demand and receive all tolls, rent, revenue, income, and profits of the demised premises, including also therein all the right, title, and interest of the lessor in and to any and all railroads operated by it, under lease or otherwise, so far as the same are assignable or transferable by the lessor without violation of law or of agreement, but not otherwise; and in and to any bonds, obligations, and contracts of or with other railroads, corporations, or individuals, and all income or other advantages and benefits to be derived therefrom . . .; hereby assigning and transferring unto the lessee, subject to all legal obligations and incumbrances thereon, all its railroad, railroad property, franchises, and assets of every description, except as above stated.
"The lessee shall pay all operating expenses of the lessor, and of all railroads of which it shall come into possession, or which it shall operate under and by virtue of this instrument, there being included therein as part thereof all repairs and renewals; all expenditures arising out of any contract, obligation, business, negligence or misfeasance, or however otherwise arising, and whether the liability for the same now exists or be hereafter created, in any way connected with the use and operation of the demised premises, or of railroads operated by the lessee or lessor as herein provided, and including damages to persons or property . . . The lessee shall pay, as the same become due, the rentals of all railroads of which it shall come into possessions or which it shall operate under and by virtue of this instrument, during the continuance of this lease, and of all roads leased to the lessor according to the terms of the several leases, and the interest on the indebtedness of the lessor, and on the indebtedness of all roads leased or operated by the lessor which this lessor is under obligation to pay, a schedule whereof is hereto annexed . . .
"The lessor covenants that if it be found impracticable to at once deliver immediate possession of any railroad leased or operated by it at the inception of this lease, by reason of any agreement to the contrary or other reason, it will use all reasonable efforts to deliver, and will deliver, possession thereof as soon as practicable. The lessor shall, meanwhile, continue in the possession of such railroad, and, under the direction of the lessee in all *Page 448 
respects, shall continue to use and operate the same under its contract with the company owning the same, and to pay the rental or other consideration agreed to be paid for the use of the same, and to receive the earnings thereof, but shall immediately transfer and pay over all such earnings to the lessee to its own use, which, in consideration thereof, shall reimburse the lessor for all expenditures, and indemnify and hold it harmless against all costs, claims, and liabilities arising out of the lessor's possession and operation of said railroad, or under and by virtue of its lease or other contract for operating the same.
"The lessee shall use and operate the railroads and properties herein demised, in accordance with the charter of the lessor, and of the several corporations whose roads are so operated shall furnish all cars, engines, rolling-stock, and equipment of every description required, in addition to the like property hereby demised, for the due operation of the railroads operated under and by virtue of this lease; shall observe and perform all the provisions of contracts of the lessor with railroads now leased or operated by it, under the provisions of this indenture . . ."
An examination of these provisions of the Maine lease and of the whole instrument does not admit of a reasonable doubt that the intention of the parties was to transfer all the interest of the Boston  Lowell corporation in its railroad and railroad property, and the practical operation, management, and control of the same, to the Boston  Maine Railroad. It is conceded that the lease went into actual operation October 11, 1887, and that the Maine and Lowell corporations have since been acting under it. Upon these facts the question of the forfeiture of the Montreal lease is not a difficult one.
The provision in the Montreal lease that the Lowell corporation should not assign, underlet, or part with the possession of the demised premises, except with the written consent of the lessor, was designed to secure a personal performance of its covenants by the Lowell corporation. The lessor had the right to choose their tenant, and, whatever may have been its purpose in doing it, the conclusion is irresistible that the stipulation against assigning, underletting, or parting with the possession of the demised premises was inserted in the lease to secure the exercise of the personal integrity, discretion, and judgment of the lessee in shaping the policy and controlling the management and operation of the road. The language of the lease is susceptible of no other reasonable interpretation.
By the Maine contract of June 22, 1887, the Lowell corporation leased its railroad and railroad property to the Boston  Maine Railroad, and agreed to continue in the possession of the Montreal road, which it could not lawfully lease, and to use and operate it under its Montreal lease, in all respects under the direction of the Maine corporation. Nothing was done under the *Page 449 
Maine contract until October 11, 1887, when the Boston  Maine corporation took possession of the property leased to it by the Lowell company, and the lease went into operation. Since then the Lowell company claims to have operated the Montreal road, — presumably according to its agreement with the Maine corporation. There is no evidence or claim that it has operated it in violation of the terms of the Maine contract. But it is entirely immaterial whether the Maine corporation has exercised any actual control over the management and operation of the Montreal road, or that the Lowell company has operated it without consulting the Maine corporation. If the fact is so, it is merely evidence that the management of the Lowell company has been satisfactory to the Boston  Maine. Whenever the Maine corporation chooses to interfere or exercise active control, the Lowell is bound to obey. It may interfere at any moment.
The Lowell company has voluntarily parted with its power to control the operation of the Montreal road, and has become the agent and servant of the Boston  Maine Railroad, and its possession is the possession of the Maine corporation. This, in spirit and in substance, is a breach of the covenant of the Montreal lease and a forfeiture of the estate granted by it. If the condition of the Montreal lease had been in terms, as it is in legal effect, that the lessee should not assign, underlet, or part with the possession of the Montreal road to the Boston  Maine Railroad Corporation, it would not admit of a question that the execution and operation of the Maine contract of lease was a violation of that condition.