1. A covenant undertaken by a railroad company granted an easement permitting the extension of its tracks over those of another railroad, to erect, alter, and improve signals necessary to render the use of such railroad crossing safe, relates to the interest in the easement granted, and the performance of the covenant affects the quality, value, and use of such easement. Consequently, it is a covenant running with the land, and is of such nature as to become obligatory upon those who succeed to the covenantor's title to the easement.
2. A covenant obligating one granted an easement to do continuously certain acts necessary to render the use of the premises affected by the enjoyment of the easement is not indefinite as to the time of its performance. The covenant is of a perpetual nature; the time of its performance is coexistent with the life of the easement.
This is an action brought by Atlantic Coast Line Railroad Company, against Georgia, Ashburn, Sylvester & Camilla Railway Company, in the Superior Court of Worth County.
The suit is one for the recovery of one-half of the expense of changes, alterations, and additions to an interlocking plant situated at the point where the tracks of the two railroads cross in Sylvester, Worth County, Georgia, defendant's liability being predicated upon a contract entered into in 1906 by and between the plaintiff and Flint River & Gulf Railroad Company, a predecessor in title of the defendant. The suit is in two counts, the theory of the first count being that the defendant was a successor in title to the easement of Flint River & Gulf Railroad Company, granted under said contract to establish and maintain its railroad track across the right-of-way and track of the plaintiff, and that the defendant was bound by the covenants contained in the contract, as covenants running with the land, it had adopted and agreed to become bound by under the contract.
Attached to and made a part of the petition was the contract between the plaintiff and Flint River & Gulf Railroad Company, the portions of which material to a consideration of this case read:
"That whereas the party of the second part desires, in the construction of its railroad, to cross with the one track at Sylvester, in the County of Worth, Georgia, where the line of the said second party now joins with the line of the first party, and the exact location of the physical crossing to be hereafter fixed and determined at the time of construction by the said first party; and
"Whereas, as a condition precedent to the enjoyment of the privileges sought to be obtained by said party of the second part, it is essential to the public safety, and to the convenience of the said party of the first part that the construction and use or employment of the proposed crossing by the party of the second part in the passage of trains or otherwise should be so regulated and governed as in no manner to endanger the one or impair the other; and
"Whereas, justice to the interest of the said party of the first part demands that proper guarantee of indemnity should be given for all losses, injuries or damages which it may sustain by reason of such crossing or its employment by said party of the second part, which do not result from any negligence on the part of the agents and employees of said party of the first part.
"Now, therefore, The Atlantic Coast Line Railroad Company, in consideration of the premises, does hereby grant to the Flint River & Gulf Railroad Company, its successors and assigns, the right to cross the lands or right-of-way and railroad track of the Atlantic Coast Line Railroad Company, at the point aforesaid, upon the conditions hereinafter specified; the said conditions as follows, to wit:
"First. That the crossing herein specified is confined to the main track of the Flint River & Gulf Railroad Company, and that same shall be in such manner as not to obstruct the drainage of the Atlantic Coast Line Railroad Company's roadbed.
"Second. That the plans for such crossing and the material employed for its construction and the culvert which may be necessary to provide for proper drainage of the said party of the first part's roadbed, shall be submitted to and in all respects acceptable to its engineer.
"Third: That every item attending the construction of said crossing and the repairs and renewals of the same shall be borne and paid by the said party of the second part, whether incurred directly, but its agents or by the proper officials of the said party of the first part, and the construction of said crossing, and the repairs and renewals of same shall be so arranged as not to interfere with the regular movements of the trains of the party of the first part.
"Fourth. That it shall be the duty of the party of the second part to keep and maintain said crossing in every part and particular, including grading, culverts, crossties, rail crossings and planking, in condition and state of repair at all times acceptable to the engineer of roadway of the party of the first part. That the said crossing shall not be constructed, nor shall any alteration or repair thereof be at any time made except under the supervision of the proper officer or agent of the party of the first part. And when such crossing is to be constructed, altered or repaired as aforesaid, the party of the second part shall notify the party of the first part, who shall promptly direct its officer or agent to superintend the work.
"Fifth: That it shall be the duty of the said party of the second part to provide promptly, at its own expense, steel rail crossing for any additional tracks which may hereafter be constructed at the point of crossing by the party of the first part, and all additional expense incurred in consequence of the existence of said crossing shall on request be forthwith paid to the party of the first part by the party of the second part, and generally the terms and conditions under which the track of the party of the second part, its successors or assigns, are crossed by such additional tracks of the party of the first part, its successors or assigns, shall be the same as though such additional tracks were the main tracks of the party of the first part and the party of the second part were crossing same.
"Sixth: That no part of the track of the party of the second part embraced within the limit of the roadway of the party of the first part shall be occupied by standing locomotives or cars, or by halting trains of the said party of the second part, or either party operating over or in connection therewith.
"Seventh: That in order to enable the said party of the second part to exercise successfully the privilege herein granted, without imposing hinderance or delay to the movement of trains on and over the tracks of the said party of the first part, and without injury or detriment to the same, by interference or otherwise with its operations; it shall be the duty of the party of the second part to erect, maintain and operate gates including derailing switches; the plans of the same and the erection to be approved by the engineer of roadway of the said party of the first part.
On the trial of the case, the plaintiff introduced the following documentary evidence: the contract by which the easement was granted by the plaintiff to the Flint River & Gulf Railway Company, its successors and assigns, to traverse the plaintiff's railroad tracks with its own documents showing the transmission of title to the casement through several parties and to the defendant, Georgia, Ashburn, Sylvester & Camilla Railroad Company; correspondence between the plaintiff and the defendant dated during 1924, in which the defendant agreed that an interlocking plant be built at the side of the crossing of the plaintiff's and defendant's railroad tracks, agreeable to the terms of the contract originally granting the easement to Flint River & Gulf Railroad Company, its successors and assigns; a letter written by the plaintiff, informing the defendant that the plaintiff deemed it advisable for the public safety and in order to comply with an order of the Interstate Commerce Commission made effective September 1, 1939, to alter and improve said interlocking plant by installing in connection with the signals thereof what are known as track circuits, electric switch locking, and moving the distant signals to said interlocking plant a greater distance therefrom, and demanding that the defendant make these improvements, in what the plaintiff contended was in compliance with the terms of the contract heretofore referred to, and under which the easement to cross the plaintiff's tracks with the line of the defendant's predecessor in title was originally granted; and a letter from the defendant refusing to make the improvements. This correspondence took place in 1941.
The plaintiff also introduced evidence establishing the fact that the Interstate Commerce Commission had issued an order of the nature indicated in its letter written to the defendant. However, no evidence was offered tending to show that the order dealt with the terms under which the work was to be done by the respective railroad companies, parties plaintiff and defendant in this suit, and it was admitted that it was later revoked as to the defendant. There was evidence that the plaintiff proceeded to make the improvements at its own cost, and the amount of expense incident thereto was also shown.
The trial judge overruled the defendant's general and special demurrers to the petition. At the conclusion of the plaintiff's evidence, the trial court sustained a motion for nonsuit. The plaintiff filed its bill of exceptions complaining of the ruling. The defendant filed a cross-bill complaining of the court's order overruling the demurrers.
We will consider the assignments made in both the main and cross-bills of exceptions, and dispose of them in this opinion. The main bill of exceptions raises the question as to whether the trial court should have granted a nonsuit, that is, whether the plaintiff failed to make out a prima facie case. The cross-bill of exceptions raises the question as to whether the petition failed to set out a cause of action.
In order to appreciate properly the matters for consideration both as to the pleading and proof of the case, it should be noted that there are three covenants contained in the seventh paragraph of the contract entered into by the plaintiff and Flint River & Gulf Railroad Company, defendant's predecessor in title. The first of these is to erect, maintain, and operate gates including derailing switches; the plans of the same and the erection to be approved by the engineer of roadway of the party of the first part.
The second of these provided that, whenever it shall be required by the public authorities of the State of Georgia, or it should be deemed proper and advisable by the party of the first part, all interlocking plant, including the proper protection of the crossing by interlocking signals and derailing switches, shall be constructed and maintained at the said crossing under the plans and direction of the party of the first part. The cost of the installation of said interlocking plant was to be borne by the parties hereto in equal proportions, that is, half and half; but the cost of maintenance of the said interlocking plant and its operation shall be at the sole cost of the party of the second part.
The third covenant was to alter and improve or erect new and improved signals upon demand of the party of the first part, under the same terms as provided in the original installation.
The suit is predicated upon an alleged breach by the defendant in refusing upon the plaintiff's demand to alter, improve, and erect "new and improved signals."
The demurrer attacks the petition on the ground that the covenant of the contract obligating Flint River & Gulf Railroad Company, the defendant's predecessor in title, to alter, improve, and erect new and approved signal devices, is not binding upon the defendant railroad because it was not a party to the contract; and that the covenants were merely the personal undertaking of Flint River & Gulf Railroad Company, for a breach of which the defendant as its successor in title could not be held liable. It must be conceded that, if the covenant referred to was a covenant running with the land, the successors to the easement granted by the plaintiff under the terms of the contract would be responsible for its faithful performance.
The covenant to improve, alter, or erect new and improved signals, upon demand of the plaintiff, without question did relate to the interest in the easement granted, so that its performance or non-performance did affect the quality, value, and use made of the easement. This is exactly what has been held to constitute a covenant running with the land. Atlanta, Knoxville &c. Ry. Co. v. McKinney, 124 Ga. 929 (53 S. E. 701, 6 L. R. A. (NS) 436, 110 Am. St. R. 215). But the defendant asserts that, in order for a covenant to fall within the category of those running with the land, it must relate to a thing in being, and "when the covenant extends to a thing which is not in being at the time the demise is made, it cannot be appurtenant or annexed to the thing that hath no being." In this connection it is argued with force that, since the new and improved signals were certainly not in being when the contract was signed, they could not be appurtenant or annexed to the lease granted by the contract.
The fact that the signals were not in esse did not bring the covenant in reference to altering, improving, and erecting them within the rule.
In order for the covenant to be construed as one running with the land, unaffected by the rule referred to, it is not necessary that the thing to be supplied by the covenantor, in implementing the use and enjoyment of the demised premises, be in esse when the promise is made so long as that to which it is to be "appurtenant or annexed" is in existence. In Atlanta, Knoxville &c. Ry. Co. v. McKinney, supra, this principle finds pronouncement.
In the instant case, the crossing of the railroad tracks was presently existing when the contract was entered into; it was the thing to which the new and improved signals were to be added so as to affect the use and enjoyment of the easement granted.
So we conclude that the covenant in reference to the alterations, improvement, and installation of new and improved signals was a covenant running with the land, so that the defendant, as Flint River & Gulf Railroad Company's successor in title to the easement created by the contract, was bound to perform it.
The defendant contends that the contract upon which the suit is predicated is too indefinite as to the time of its performance to be enforceable. The point is not well taken. The contract is perpetual in its nature. While the defendant enjoys the right to the easement created by it, it must abide by the terms of and perform its valid covenants.
The defendant further urges that the provisions of the covenant by which Flint River & Gulf Railroad Company, its successors and assigns are obligated to erect new signals and alter and improve existing signals, is too indefinite to be enforceable because it does not describe or designate with sufficient particularity the kind of signals, quality, or quantity of signals that must be installed to meet the requirements of the covenant, nor yet, what work is to be done or materials furnished in making the alterations and improvements called for by the covenant.
The words "new and improved" are no more definite than the term "first class and permanent," held by the Supreme Court in Hart v. Georgia Railroad Co., 101 Ga. 188 (28 S. E. 637), to be too indefinite to serve as a descriptive phrase, and the contract is not any more definite as to what is to be done or furnished in the alterations and improvements of the signals.
The plaintiff insists that the contract stipulates with complete precision what the defendant is obligated to do and furnish in complying with the covenant.
The plaintiff contends that, under certain provisions of the contract, the covenant in reference to the signals was to be performed in a manner satisfactory to it, and that its decision as to what must be done and furnished by the defendant in altering and improving the existing signals and installing new ones was according to the terms of the contract conclusive; hence, that the contract was certain for the reason that it could be made certain by the plaintiff determining precisely what it would require of the defendant as faithful performance of the covenant.
In this connection the plaintiff stoutly maintains that a contract, which without more particularity defines what is to be done by one under the duty to perform a covenant therein contained, gives to the party for whose benefit the covenant is made the right to require as performance thereof anything in the realm of reason, and is valid and enforceable.
In support of this position, the plaintiff brings to the attention of this court a number of interesting cases of various jurisdictions.
There is a Georgia case, MacKenzie v. Minis, 132 Ga. 323 (63 S. E. 906, 23 L. R. A. (NS) 1003, 16 Ann. Cas. 723), which we think is equally good authority for what is actually held in those cases.
Neither the cases cited by the plaintiff nor MacKenzie v. Minis hold an undertaking to do the absolute will of another, and to do or supply whatever he may reasonably demand without other limitations and designation of what the promisor must do in the discharge of his promise, is legal and enforceable.
The species of contract to which those authorities refer is the agreement of a promisor to deliver certain goods, render specific services, or erect a described structure to the satisfaction of the promisee. The parties to contracts of that nature know with reasonable certainty what is required of the promisor; there is a meeting of the contracting minds.
Those cases have no application to a situation such as is presented by the facts of this case. This is true because here there was no meeting of the minds of the contracting parties as to what would constitute a performance of the covenant, the performance of which would, except for its indefinite character, be binding upon the defendant. The railroad executives when committing their respective railroads to the contract, could not have contemplated what the plaintiff might in the dim future reasonably require to be done in the alteration, improvement, and installation of the signals. Indeed, the plaintiff's officials could not have conceived any definite idea of what they or their successors in future years might demand.
So, even if the plaintiff is correct in its construction of the contract, there was no meeting of the minds of the parties, plaintiff and Flint River & Gulf Railroad Company, the defendant's predecessor in title, as to what was to constitute performance of the covenant for the breach of which the suit was brought. Consequently, the contract would--even accepting the plaintiff's interpretation of it--be unenforceable.
It is well to observe in connection with the subject here discussed that, under the law of this State, to agree that the performance by one party must be satisfactory to the other is not of the same legal import as an agreement to perform the contract to furnish whatever may be reasonably required by another. The former type of agreement simply carries with it the right, whether reasonable or not, to in good faith reject what is offered by the other party as compliance with the contract. MacKenzie v. Minis, supra. It does give an option to the promisee to choose something else not contemplated by either party to the contract. The latter vests in the promisee the right to choose anything within the scope of reason. The one rests soundly and logically upon the basis of common conception or a meeting of the minds of the contracting parties as to what will amount to carrying out the contract. The latter does not possess that basic foundation.
Moreover, a careful analysis of the contract reveals that it really is not susceptible to the interpretation given it by the plaintiff. The only three expressions contained therein that could be construed to give the plaintiff an option as to what was to be done in the performance of the covenant relating to the signals are: first, the words contained in the first clause, seventh paragraph of the contract, which relates only to the installation of signals and gates, and has no application whatever to the signal referred to in clause three of the same paragraph. In clauses two and three of the paragraph referred to is contained the stipulation that the signals be altered, improved, and installed under the plaintiff's "plans and directions." Both of these phrases relate, not to the quantity and quality of what is to be furnished in complying with the covenant, but simply the manner in which it is to be performed. 12A Words and Phrases, Direction, p. 133; Noice v. Schnell, 52 A. L. R. 965.
The plaintiff earnestly argues that, if this contract is held to be too vague to be legally binding upon the defendant, the holding would affect the validity of the many like contracts. The thought is also presented with much force that contracts to be performed or carried out over a considerable period of time can not possess as pronounced quality of certainty and preciseness as those that are to be presently executed. But the courts cannot concern themselves with expediency or look to the industrial welfare of society in making their decisions.
Contracts can be conveniently couched in such language and have embodied in them stipulations that make them certain, even when they are to be performed over long and indefinite periods of time and under ever-changing conditions.
In the contract now under consideration the signals to be supplied could have been legally described as "comparable in number, nature, and design to those commonly used or in vogue in the general territory served by the contract railroads, and by railroads of the class to which either or both of the railroads belonged, at such times as the signals might be installed agreeably to the terms of the contract." Or it might have been provided that such signals be installed as would meet the approval of the public authorities having jurisdiction of such matters at the time of their installation. The vogue in signals might vary, but the requirements of such provisions would always furnish a fixed standard, a criterion as to the kind, quality, and quantity of the signals to be supplied.
The court erred in not sustaining the defendant's general demurrer.
In these circumstances it is hardly necessary to review the decision of the trial court further than to observe that, while the petition set forth no cause of action, the evidence did prove the case as laid therein, and did not disclose any defense to the action that did not clearly appeal from the petition itself. So, under authority of Daniel v. Powell, 45 Ga. App. 473 (165 S. E. 173), the court, having overruled the general demurrer, erred in granting the nonsuit.
Let the judgments on both the main bill of exceptions and the cross-bill be reversed.