Adamstown Canning & Supply Co. v. Baltimore & Ohio Railroad

Thomas, J., delivered the opinion of the court. The present appeal is from a decree of the Circuit Court for Frederick County overruling a demurrer to the bill of complaint of the appellee and continuing in force until the hearing of the case upon its merits the injunction theretofore granted, with leave to the defendant to answer. The bill was filed by the Baltimore and Ohio Railroad Company against the Adamstown Canning and Supply Company, a body corporate, and alleges that in January, 1904, a corporation named the Adamstown Packing Cbmpany of Frederick County was formed for the purpose of carrying on and conducting at Adamstown, Frederick County, Maryland, a general packing business, and that said company, desiring to obtain the advantages afforded by the plaintiff’s railroad, and to secure the greatest possible convenience in loading and unloading property to be received by and shipped to it, arranged to buy a parcel of land adjacent to the right of way of the plaintiff, and applied for and obtained from the plaintiff an agreement for a siding to be laid and built partly on the land of the plaintiff and partly on the land to be purchased by said company, but1 that inasmuch as the said company proposed to build on said parcel of land its packing house, warehouse and other necessary buildings, contiguous or near to said siding, and not far from the railroad of the ²⁰¹ plaintiff, the plaintiff “made it a term of said agreement that the said company should assume all risks by fire in the consideration of” the agreement on the part of the plaintiff that said company should have the benefit and privilege of said switch or siding; that said agreements were fully executed by a deed from John W. Thomas and wife to said company, dated February 20th, 1904, conveying to it said parcel of land, containing two acres1, one rood and twenty-five perches, and by an agreement in writing, executed and delivered on April 15th, 1904, between the plaintiff and said company, through its proper agent, a copy of which deed and a “duplicate original” of said agreement were filed with the bill; that said company took possession of said parcel of land and pursuant to said agreement the siding was built and completed in May, 1904, with a total length of 429 feet, of which 190 feet were on the right of way of the plaintiff and 239 feet on the parcel of land so conveyed to said company, and that thereafter the said company erected itsi warehouse and other buildings; that said agreement contained, among others, the following provisions: “In further consideration of the advantages and benefits to accrue to said second party (meaning said company), it is further agreed that the said second party will indemnify and protect and save harmless said first party against loss or damage or expense by fire to cars and contents standing upon said siding which have been placed there for use of said second party. And said second party hereby releases said first party (meaning the plaintiff) from all claims of whatsoever character for damages resulting to the property of said second party by reason of fire originating from the engines and locomotives of the first party and resulting in the burning or destruction of or injury to the property of the second party.” v The bill then alleges that a certain George L. Thomas and Stephen A. Thomas, the owners of a certain parcel of land ²⁰² west of the parcel of land so purchased by said company, desiring to obtain the convenience and advantage in loading and unloading property received upon and shipped from their said land, applied for and obtained from the plaintiff an agreement for a siding to be extended from the siding located on the land of siaid company over the land of said company and thence upon their land; that said company agreed that said siding should be so extended, and the siding was accordingly extended for a further distance of 230 feet, in pursuance of agreements duly executed by the parties, and upon the same terms and conditions stated in the agreement between tbe plaintiff and said company; that the said George L. and 'Stephen A. Thomas erected a warehouse and other buildings on their said land, and that in pursuance of said agreement the said siding and its extension has been continuously used by the plaintiff in connection with its railroad; that subsequently, in tbe year 1909, the said George L. and Stephen A. Thomas, with the full knowledge, assent and participation of said company, and upon the same terms and conditions contained in the agreement between tbe plaintiff and said company, obtained from the plaintiff a further extension of said siding on their land of 165 feet.

The bill further avers that the said Adamstown Packing Company of Frederick County, from the date of its incorporation in January, 1901, until the first part of the year 1910', conducted its packing business on said lot of land so purchased by it, and that the plaintiff believed it was a body corporate, but that during] said year the plaintiff learned that said company had not paid the bonus tax upon its capital stock as required by law, and that, in consequence thereof, it was not a corporation but a voluntary association of shareholders carrying on the business under the name of the Adamstown Packing Company of Frederick County; that the parties interested as such shareholders conducted said business under the belief that the company was in law a corporation, until they discovered in 1910 that the payment of the bonus tax ²⁰³ was a prerequisite to corporate existence!, and that thereupon they determined to form a partnership under the name of the Adamstown Canning and Supply Company, and as such partners to take the title to the parcel of land so conveyed by John W. Thomas and wife, assume all the contractual rights and obligations, acquire all the rights and privileges of the Adamstown P'acking Company of Frederick County, and to continue the business theretofore conducted; that accordingly a deed was executed and delivered January 20th, 1910, in the name of the Adamstown Packing Company of Frederick County, and under its corporate seal, by its president and secretary, Samuel O. Thomas and G. Leicester Thomas, conveying said parcel of land to J. Franklin Thomas, Samuel C. Thomas, Curtis W. Thomas, Stephen A. Thomas, John W. Thomas, G. Leicester Thomas and G. Frank Thomasi, as joint tenants, “a partnership trading as the Adamstown Canning and Supply Company”; that subsequently, on August 22nd, 1910, J. Ffanldin Thomas, Samuel C. Thomas, Stephen A. Thomas, Curtis W. Thomas, John W. Thomas and G. Leicester Thomasi, six of the grantees in the' above mentioned deed, formed a corporation named the Adamstown Canning and 'Supply Company, to carry on said business', with all of said grantees as directors, and on the 6th of Sep'tember, 1910, all of the grantees in the deed from the original company, and their wives, including John W. Thomas, who with his wife, Ad die M. Thomas, conveyed the parcel of land containing two acres, one rood and twenty-five perches to the original company, united in a deed conveying said land to the new corporation, the Adamstown Canning and Supply Company; that the formation of said partnership and said new corporation, and said conveyances, were steps taken to remedy the legal consequences of the failure to pay the bonus tax on the capital stock of the original company and to vest title in the new corporation, and that “in management, control, operation, ownership, assets, rights, privileges and siding obligations:, the said Adamstown Packing Com ²⁰⁴ pany of Frederick County, the said volunteer association, the said partnership and the new corporation are identical in fact and in substance”; that on the 31st of August, 1910, the Adamstown Canning and Supply Company, the defendant., obtained from Stephen A. and G. Leicester Thomas, and their wives, a deed for the land upon which said siding had been extended under the several siding agreements with the said Stephen A. and G. Leicester Thomas; that the siding contracts of the plaintiff with the original company and with Stephen A. and G. Leicester Thomas “were known to, accepted by and acted upon, and the benefits and advantages thereof appropriated and enjoyed, with the full knowledge of the terms and stipulations of said siding contracts in every respect” by the siaid partner-ship and the new corporation,, “respectively and successively in the order of their formation,” and that by reason and virtue of the acceptance by them of the benefits and obligations of said agreement, and their “substituting themselves in said agreement in the place of, and as one and the same legal entity and pea-son as” the original company, the plaintiff did not revoke or rescind said agreements but accepted the said partnership' and corporation as the parties to said agreements, and discharged and fulfilled all its duties and obligations ther-eunder, and a.t their “instance and request, severally and successively,” delivered and received property on said siding for their benefit and advantage; that from the date of the original siding agreement to the filing] of the bill in this case, the plaintiff used said siding in pursuance of the terms of said agreement, and that such use was with the full knowledge of the said origr inal company, the said partnership1 and the present corporation, the defendant, that said use by the plaintiff was under, pursuant to and by virtue of the terms of said agreements, Avhieh were recognized by them as being- in full force and effect; that the said original company, said firm, the defendant corporation, and the plaintiff, accepted all of the terms of said siding contracts, and each discharged its obligations- ²⁰⁵ thereunder until 1914, when the defendant sustained, on its said property, a losa by fire which is claimed to have resulted from sparks from the engines and locomotives of the plaintiff, and refused to comply with the terms of said contracts and to release the plaintiff from any claim for damages from said fire; that the defendant is bound by said siding contracts and the terms thereof; that the defendant accepted said parcel of land and entered into possession thereof with full knowledge of the terms and conditions upon which said siding was built, and service thereon was continued, and with such knowledge accepted such service under said contracts and agreed that thereunder the plaintiff should have the same use and enjoyment of said siding as theretofore under said contracts; that ever since the existence of the defendant the plaintiff has used and enjoyed said siding under and by virtue of said contracts with the full knowledge and acceptance by the defendant, and that neither the original company, the said partnership; nor the defendant, has ever revoked, or attempted to revoke or deny, the right and privilege of the plaintiff to use siding under- said siding contracts; subject to all the limitations, conditions and terms thereof; that on or about the 5th of November, 1914, the defendant had certain property in the warehouse built, on said parcel of land containing two acres!, one rood and twenty-five