Winslow v. Balt. & Ohio R.R. Co., 188 U.S. 646 (1903)

The receipt of rent by the beneficiary under the trust directly .OIB tenant will not amount to apart performance of the contract manner as to make it binding upon the trustees not signing w pears that the check received for such rent was not endorsed y [p. 647] tee and there is no proof that the beneficiary knew there was no binding lease in existence, but it does appear that subsequently rent was refused and only accepted under an agreement that the acceptance was without prejudice. Where a lease contains an option to the lessee to purchase at a price named in the lease during the continuance thereof and the trustees making the lease have no general or absolute power of sale, specific performance of that portion of the contract should be denied. Where a railroad company has built its line on land affected by such a lease, and the trustees have commenced an action to recover rent for the period of occupancy subsequent to the expiration of the lease, and also to re* cover possession of the property, there is no ground for an injunction against the prosecution of the action as to the recovery of the rent; it is proper, however, for this court to enjoin for a reasonable period, in order to permit condemnation proceedings to be instituted and prosecuted, that portion of the action which is an attempt to oust the railroad company from land upon which it has entered with a view to its purchase and constructed its road thereon for public purposes under the sanction of public authority and over which the public have rights which should not be obstructed or destroyed either by the company itself or by antagonistic parties claiming ownership as a result of a private agreement.

“ During the term of her natural life, and so that the same shall not be liable for the debts or subject to the control, contracts or engagements of her present or any after-taken husband ; to permit her by herself, or her special attorney appointed in writing, to be signed by her, to receive the annual income and profits of the same for her own sole and separate use, her receipt or that of her attorney so appointed as aforesaid alone to be an acquittance to the person or persons charged with the payment of such income or any part of the same, and to the extent only therein expressed to have been paid—and if she please to occupy, possess and use for her own account, accommodation and convenience and that of her family any part of the property, real and personal, so held for her separate use and benefit, she shall be allowed to do so; and if at any time the said Eliza Patterson shall in writing, to be signed by her in the presence of and to be attested by a subscribing witness, desire the said Carlisle P. Patterson, William H. Philip an Walter S. Cox, or the survivors and survivor of them, to se any part of the estate, real and personal, held by them for er separate use, for the purpose of changing the investmen thereof, it shall be lawful for the said named trustees or t e survivors or survivor of them to sell the same for such PurP^ only, and to transfer and convey the absolute estate m therein, to the purchaser thereof; to receive the procee s o any and every such sale of the purchaser, who shall not be re quired to see to the application thereof; and to inves same in such manner as the said Eliza W. Patterson ma^.j quire; and such new investment shall be held by thes sa^ trustees for the same use, trusts and purposes, and wi [p. 649] same powers and authority of sale and reinvestment as is herein declared of and concerning the original trust, subject and separate estate.

The company retained possession of the property from u gust 1, 1892, up to August 1, 1897, and paid the amoun money mentioned in the paper of 1892, being at the same ra that had been paid since 1872, and as was provided in the eas pf 1888. About the first of August, 1897, questions arose as the terms of future occupation of the land. The trustees r [p. 651] fused to execute any further lease, denied any obligation to renew it for any term, and said they preferred to sell, but refused to do so on the old terms, the land having in the meantime largely appreciated in value. In September, 1897, Mr. Winslow, in a letter to the company, said they were prepared to convey the property with a perfect title, and that they also preferred to execute such conveyance to any renewal of the lease. The company, however, prepared a lease, which provided for again leasing the land to it on the same terms for a period of five years, commencing on August 1, 1897, and this lease also contained a provision for a renewal for another five years, or until the lessors could convey the premises in fee simple to the company. This lease was never signed. Negotiations continued in regard to the matter, the company insisting it had the right to a renewal of the lease by virtue of the instrument dated August 1,1892, while the trustees denied that contention, and though willing to sell, were not willing to do so at the price named in the former lease, as they said that the value of the land had increased from $12,592 to over $30,000. During these negotiations and disputes the company retained possession of the land, and on or about February 1, 1898, (the dispute and the negotiations between the trustees and the company being still unsettled,) in accordance with the custom which it had followed during the running of the various instruments since 1872, of paying the rent semi-annually on the first days of February and August as it accrued, it sent the money that would have een due for rent, (if a lease were then in existence,) in the form 0 a money order payable to the order of Mr. Winslow, trustee o liza W. Patterson, and enclosed it in a letter addressed to

^IR' burned to you a few days ago the draft you sent me for the rent of my property on First street, [p. 652] Washington, by the railroad company of Balto. & Ohio of $377.77. The draft was made out to Mr. Francis Winslow, trustee, and I could not draw it, as Mr. Winslow in Nicaragua, and I could not send it so far away to him, fearing it might be lost. I therefore return it to you, with the request that you would sign it, as you always have done heretofore, Cox, Jay & Winslow, trustees. Judge Cox & Mr. Jay are both here, so that they can sign it at once and I can have the money. By giving prompt attention to this small matter of business you will greatly oblige,

This voucher, and those which succeeded it, and which were forwarded to Mr. Winslow, as trustee, and made payable to is order, were retained by him until January, 1900, when they were returned to the company and a check given for ]e aggregate amount under an agreement that its acceptance should be without prejudice to the rights of the respective parties and their claims relating to the leasing of the lan o [p. 653] the renewal of the lease, or to any question or matter connected therewith.

In view of what has been said, we are of opinion that, un-er the provisions of the lease of 1892, executed by Francis inslow, trustee, for and on behalf of the life tenant, Mrs. lza W. Patterson, the appellant was and is entitled to one [p. 654] renewal of such lease for the term of five years from and after the first day of August, 1897, upon the terms and conditions of said lease as to the rents to be paid therefor; and that during the continuance of such term no suit for the dispossession of the appellant can be maintained. We are, also, of opinion that, for the time subsequent to the determination of said renewed lease for which the appellant shall require the use and occupation of said land, the appellant is entitled, and it is its duty to acquire the right to such use and occupation, under the exercise of the right of eminent domain conferred upon it by the act of Congress, by the ascertainment of the value of such use and occupation, and payment to the owners of the land of the just compensation so to be ascertained. And the bill of complaint in this cause may be retained for the purpose of such ascertainment of value and just compensation. It follows that the decree of the Supreme Court of the District of Columbia dissolving the injunction granted in this cause and dismissing the bill of complaint, must be reversed, with costs; and that the cause will be remanded to that court, with directions to vacate said decree, to restore the injunction and make the same perpetual, and for such further and other proceedings as may be just and proper, according to law and in conformity with this opinion. And it is so ordered.”

It is quite plain that a lease containing a covenant to renew at its expiration with similar covenants, terms and conditions contained in the original lease is fully carried out by one re newal without the insertion of another covenant to renew. Otherwise a perpetuity is provided for. Pigg°t v* Hawn, (1829) 1 Paige’s Ch. 412; Carr v. Ellison, (1838) 20 Wend. 178; [p. 655] Syms v. Mayor, (1887) 105 N. Y. 153 ; Cunningham, v. Patt&e, (1868) 99 Massachusetts, 248 ; Taylor’s Landlord & Tenant, 8th ed. §§ 333, 334.

e granting of a lease was an important and material act in e way of carrying out the trust under the will, requiring an exercise of the judgment and discretion of all the trustees. It was therefore necessary for them all to act in order to make a valid instrument. . one several trustees can be entrusted by his assoda es with the transaction of the business of the trust may sta Un Cer^n c’rcnmstances, conceded, but those circumances will not justify the doing of an act by one trustee on [p. 656] his own responsibility which is of a nature to require the deliberate discretion and j udgment of all the trustees. In the case of a lease of property, such as is presented herein, the signatures of all are necessary to the validity of the paper.

It is contended that the act of one of the trustees in signing the lease was subsequently ratified by the other by a recognition of its existence by long continued silence, if not by an e p ratification. But an express ratification would consist o signature of the other trustee to the paper, and of that t ere no pretense. A ratification of an invalid instrument o nature by recognition, we do not understand. The ins r [p. 657] was void under the statute of frauds, because of the lack of those signatures which could alone render it valid as a lease for five years. Recognition could not take the place of the absent signature. Whether the conduct of the trustees, or of Mrs. Patterson, amounted to such a part performance of an invalid contract as would take the place of the otherwise necessary signatures is another question. It is difficult to see how there could be any technical ratification of this instrument without a signing thereof by the other trustee.

e covenant to renew in 1897 for five years was thereby so far ren ered valid as to call for its recognition and enforcement. n t is case there was reason, as we have said, without referenee to any assumed part performance of, and aside from the & e8e covenants in, the paper of 1892, for the possession by e company and for the taking of the rent of the land by the s ees up to 1897. This reason was based upon the obligation c existed under the valid lease of 1888. The remaining possession from 1892 to 1897 and the payment of the money vol . clxxxviii —42 [p. 658] .658 OCTOBER TERM, 1902.

Mr. Winslow was at this time absent in Nicarauga. There is no proof in the case that Mrs. Patterson knew there was no valid covenant in existence for the granting of a further five year lease from August 1, 1897. Her receipt of the inoneW^ beneficiary under the will of her mother would not bind t e trustees to renew a lease under an invalid covenant to do so, operate as a part performance of that invalid covenant. cially would this be so where, as in this case, there ha months, or ever since August 1,1897, been a substantialre usa [p. 659] by the trustees to renew on the old basis or to sell at the old price, and negotiations were still in progress between the trustees and the company relative to the terms of a continued occupation of the lands. The trustees and the company were alone the parties who could agree upon a lease, and while negotiations were pending on the subject, the receipt, unknown at the time to the trustees, of the money by Mrs. Patterson, as stated, could not be equivalent to a part performance by the trustees or either of them, of an alleged covenant to renew contained in the paper of 1892, the validity of which was at the same time denied.

Ppeals upon the subject of ousting the company from such possession. That court held that the evidence showed the company entered upon the use and occupation of the property [p. 660] in controversy with a view to its purchase when it could properly be effected. It was understood by all the parties what the character of the use and occupation of the land by the company was intended to be. Subsequently to its obtaining possession of the land in 1872 the railroad company constructed what is known as its Metropolitan branch, part of a highway between Washington city, the adjoining States and the West. This highway is not a merely private enterprise nor a matter of purely private concern. It is a public road, constructed for public purposes, under the sanction of the public authority, and over which the public have rights which cannot be permitted to be obstructed, much less destroyed, either by the company itself, to which the franchise has been granted as a public trust to construct and operate this road, or by antagonistic parties claiming the ownership of the land upon which it has been permitted to enter without previous payment therefor, or as the result of any private controversy between the railroad company and such parties. The company having entered by the license of the lessors, an action at law for the dispossession of the railroad company cannot be maintained if the company is willing to make compensation for its use and occupation of the land.

These views of the Court of Appeals we concur in, but we do not say that the company can take proceedings in this suit to condemn the land. The proceeding to condemn is otherwise provided for by law, and although the appellants contend that the company has no power under the law to do so, we are of opinion that by virtue of the various acts passed relative to the company, it has such power in this city with reference to this land. The court ought to keep in force for a reasonable time, say six months, that portion of the injunction prohibiting the trustees from continuing their proceeding to dispossess company from the land, in order to enable it to condemn sue land in proper proceedings for that purpose, which canno ® taken in the present suit. If more time is needed, the na court may upon application, after notice, extend the time it may seem reasonably necessary. If no proceedin^^ condemn are taken within six months from the issuing o [p. 661] mandate from this court to the court below, then the injunction should be wholly dissolved.

The plaintiff in error claims exemption under its c a passed in 1855, entitled “ An act to incorporate the Chicago [p. 663] Theological Seminary,” a copy of which is set forth in the margin.1*

The determination of the Federal question presente , in volves the decision of the question as to the proper construction of the exemption provision of the charter of plaint in error, and this court will, therefore, determine for itself, in exercise of its appellate and revisory jurisdiction, the ques io of construction presented, irrespective of the decision mae the state Supreme Court. Jefferson County Bank v. 6 ’ [p. 665] 1 Black, 443; Bridge Proprietors v. Hoboken, 1 Wall. 144; Delmar v. Insurance Co., 14 Wall. 668; Houston & Texas Central R. R. Co. n . Texas, 177 U. S. 66; Columbia Water Power Co. v. Columbia Electric Street Railway Co., 172 U. S. 475, 487.

The sole question presented by the decision of the state upreme Court is : To what did the words “ said seminary ” in e exemption provision refer—to the institution incorporated [p. 666] by the act, or to the place where instruction was to be given—the school buildings and grounds ?

name, is illustrated in the title of the act; in the procee mgs in the County Court, in the return of delinquent property an in the opinion of the Supreme Court of Illinois, in No. 14 • [p. 667] fact, that the general words “ the Chicago Theological Seminary ” were appropriate to designate the incorporated institution is recognized in the very name itself, “ the Board of Directors of the Chicago Theological Seminary.”

Whatever the rule in the absence of an express provision in the charter—whether the rule of strict construction applies to an exemption provision in the charter of a charitable corpora tion or not—the legislature of Illinois, in granting this charter, expressed its intention (in section 6) not to leave the question open, by making the express provision on the subject, that e act should be “ construed liberally in all courts.” F°r ^ases in which under similar statutory provisions, either abohs ing the rule of strict construction as to all statutes, or Pr0V in^ that it shall not apply to particular statutes, the rule of i era construction was held to apply in giving a construction inal and penal statutes, see Commonwealth v. Danis, 12 us ’ [p. 669] (Kentucky), 240; People v. Soto, 49 California, 67; Hankins v. People, 106 Illinois, 628 ; Maxwell v. People, 158 Illinois, 248; Peterson v. Currier, 62 Illinois App. 163.

e words used in the particular provision .should have. Vane • 132 U. S. 220; 23 Am. & Eng. Ency. of Law, Mer the title « Statutes,” p. 311; Chase v. Lard 77 N. Y. 1, [p. 670] 18 ; Middleton v. Greeson, 106 Indiana, 18 ; Leverimg v. Philadelphia, Germantown & Norristown R. R. Co., 8 Watts & 8. 459 at 463; Reiche v. Smythe, 13 Wall. 162.

The exemption clause of the charter has been construe y [p. 671] the Supreme Court of Illinois in Theological Seminary v. People, 174 Illinois, 177, and this is res judicata.

e ^ter s International Dictionary. And the word “ seminary is to be defined, according to the same authority, as “ a [p. 672] place of education, as a school of a high grade, an academy, college or university.”

“ If, however, taking the express words of the act, an [p. 673] out extending their meaning by implication, they may be held to include all property belonging or appertaining to the ‘seminary ’ mentioned in the second section, or to include all the property belonging or appertaining to the corporation, and there is reasonable ground for doubt which was intended by the legislature, that doubt must be resolved in favor of the State. In other words, if the language is capable of a broad or more restricted meaning, the latter must be adopted. The second section of the charter mentioning certain property to be located in or near the city of Chicago, and which is denominated ‘ the seminary,’ we think the words in the fifth section, ‘ said seminary,’ refer to that particular property, and to so hold seems to do no more than to give the language of the two sections their literal and ordinarily understood meaning. To say, as is contended by appellee, that ‘ said seminary ’ was intended to mean the corporation, is to extend the meaning of those words by implication, which is not permissible.

’ u it does not follow that the intention was to include in y0L. CLXXXVHI—43 [p. 674] that exemption all property owned by it used for purposes of the school.”

“ Especial respect should be had to such decisions w en dispute arises out of general laws of a State, regulating its ex ercise of the taxing power, or relating to the State’s dispositio of its public lands. In such cases it is frequently necessar^ to recur to the history and situation of the country in or er^ ascertain the reason as well as the meaning of the laws, a knowledge of such particulars will most likely be foun in [p. 675] tribunals whose special function is to expound and interpret the state enactments.”

n ° section 6 of the charter, providing that the act “shall Courteifle U Pu^ic act> an(l shall be construed liberally in all s or the purposes therein expressed.” error construction contended for by the plaintiff in in anH °U Ca.^ ^°r a reversal the rules otherwise prevailing is nev g°verning claims for exemption from taxation. But it hon can R6 ess that if in any way the language of exempoy a liberal construction be said to cover the whole [p. 676] property owned by the corporation, such construction must be adopted by reason of the provisions contained in section 6. We think this is claiming entirely too much for the language of that section.

ical Seminary, the contract has been impaired and the judgment should be reversed. It is now decided that the exemption relates only to the seminary, that is, to the buildings, and, therefore, the judgment is affirmed. Now, givingto the words of exemption their natural meaning, and construing them strictly, there does not seem to me to be a doubt that they relate to the Theological Seminary incorporated by the act, and referred to as such in its first section. My mind does not enable me to see what else the words can mean. If it was intended merely to exempt a building or buildings, language could have been employed which would have aptly conveyed such meaning. Instead of doing this, the language used in the act—as I understand it—excludes such construction, since it declares that the exemption shall relate to the property “ belonging or appertaining to said seminary ; ” the word “ belonging ” clearly referring to the corporation created by the act and on whom was conferred the power to own and possess property. Emphasis is added to this view when the scope of the exemption is borne in mind ; since it embraces not a mere building or its accessories, but the property of whatever kind or description, thus describing and referring to the power to own and acquire property of every kind and description, real or personal, conferred on the Theological Seminary by the act. It is further to be observed, as throwing light upon the subject, that m the fourth section, immediately preceding the grant of the exemption, the particular buildings or place of learning to be constructed by the Theological Seminary is twice referred to as the institution, thus showing that the legislative mind had immediately before it when the exemption was granted the distinction between the Theological Seminary as a corporate entity to which the exemption was granted, and the institution to be constructed and supported by the Theological Seminary. I cannot, moreover, conceive that the words of the statute, im mediately following the section granting the exemption, commanding that the provisions of the contract “ shall be liberal y construed in all courts for the purposes therein expresse , should have what seems to me their plain meaning, disre garded, by causing them to refer, not to the act as a who e, [p. 681] but to some particular provision in it. I find nothing in the language which lends itself to such a view.