NORTHERN PACIFIC RAILWAY COMPANY, Appellant,
vs.
WILLIAM S. ELY et al., Respondents
No. 3681
SUPREME COURT OF WASHINGTON
25 Wash. 384, 65 P. 555
June 29, 1901, Decided
Appeal from Superior Court, Spokane County. -- Hon. LEANDER H.
PRATHER, Judge.
ADVERSE POSSESSION -- OCCUPATION OF RIGHT OF WAY -- INCONSISTENCY
WITH EASEMENT -- LIMITATION OF ACTION.
Adverse possession of portions of a railroad right of way, for
purposes inconsistent with the company's use of the easement,
maintained by the adverse occupant for the statutory period of
limitation prescribed against actions for the recovery of real
property, will bar an action by the company to recover possession
thereof. (Northern Counties Investment Trust v. Enyard, 24 Wash.,
366, distinguished).
ADVERSE POSSESSION -- ESTOPPEL.
Where a railroad company stands by without objection for more
than ten years and permits portions of its land grant for right
of way to be acquired by settlers under the preemption and
homestead laws of the United States, who, together with their
grantees, plat said land into city lots, make valuable
improvements thereon, and expend large sums of money for taxes
and for street improvements assessed against said lots, the
company is estopped from asserting title to those portions of its
right of way thus occupied.
ADVERSE POSSESSION -- DEFENSE OF PUBLIC POLICY.
Where, through the negligence and laches of a railroad company,
the occupancy by others of portions of the right of way granted
to it by the government has ripened into title by adverse
possession, the company cannot set up the defense that the right
of way was granted for public purposes only and that it would be
against public policy to permit either its abandonment by the
company or the acquisition of adverse rights therein by way of
estoppel or of the bar of the statute of limitations.
Stephens & Bunn (C. W. Bunn and James B. Kerr, of counsel), for
appellant.
Frank T. Post, Samuel R. Stern, Frederick W. Dewart, James
Dawson, Henley, Kellam & Lindsley, and Joseph Rosslow, for
respondents.
DUNBAR, J. REAVIS, C.J., and FULLERTON, MOUNT, ANDERS, HADLEY and
WHITE, JJ., concur. DUNBAR
{*385} This action was brought by the Northern Pacific Railway
Company, successor to the Northern Pacific Railroad Company, to
recover possession of certain portions of its right of way in the
county of Spokane. The complaint alleges that the plaintiff was
the owner and entitled to the possession of a strip of land 400
feet wide, and that defendants had wrongfully entered thereon,
and judgment was demanded for the removal of a cloud, for the
quieting of title to the lands mentioned in the complaint, and
for the possession of same. Separate answers were interposed by
many of the defendants, separate trials had, and separate
verdicts rendered. A single judgment, however, was rendered,
determining all the issues in the case.
It may be conceded, we think, that the right of way which
embraces the land in dispute was granted to the Northern Pacific
Railroad Company by act of congress in 1864, and that, to the
title to the right of way thus granted to the Northern Pacific
Railroad Company, the Northern Pacific Railway Company has
succeeded. It may also be conceded, for the purposes of this
case, that the Northern Pacific Railway Company has complied with
all the terms and provisions of the act of congress aforesaid,
and has constructed its railroad through the whole of the line of
road between the points named in the granting act; that a map of
definite location was filed October 4, 1880, prior to the
acquiring of the title to the land in question by the defendants
or their predecessors or grantors; and that said railroad has
been continuously operated since its construction. The
defendants, answering, claim title by patent from the United
States government. The land was acquired under the pre-emption
and homestead acts, respectively, and all the defendants or their
grantors {*386} have been in quiet, peaceful, undisturbed, and
undisputed possession of said land for more than ten years
immediately prior to the commencement of this action, many of
them for nearly twenty years. Valuable improvements have been
made by the defendants, the said land consisting of town lots in
the city of Spokane, and having been platted and laid out as
additions to the city of Spokane by the defendants or their
grantors after acquiring title to the same from the United States
government. During all these years no claim whatever to these
lands has been made by the appellant. It has stood by and seen
improvements made thereon, and, in the case of defendant Brown,
an agreement was entered into between him and General Sprague,
who was then the general superintendent of the Northern Pacific
Railroad Company, that they would plat their lots so that the
streets of the addition which the railroad company was dedicating
would correspond with and meet the streets which Brown was
dedicating to the city of Spokane, and the agreement was carried
out by arranging the streets in accordance therewith. These
streets have been used by the public for from ten to eighteen
years. The testimony shows that, in addition to the improvements
which these defendants have made upon their lots, many thousands
of dollars have been paid by them for assessments levied upon
abutting land for the improvement of streets running through this
right of way; that the appellant has never paid these
assessments; that they have never been assessed to the appellant;
and that no question has ever been raised by the appellant as to
the right and obligation of the defendants to pay the same. While
the record does not show that any of the lands owned by the
defendants were deeded to them by the appellant, it does show
that the Northern Pacific Railroad Company has deeded to other
parties lots in the city of Spokane situated within the 400 feet
of right of way, upon which valuable improvements have been made
by its grantees.
{*387} The questions involved in this case are: (1) Adverse
possession of respondents; (2) that the action was barred by the
statute of limitations; (3) equitable estoppel by the laches and
misconduct of appellant. The questions of fact were put in issue
by the pleadings, were submitted to a jury and found in favor of
the several defendants, and the court upon said findings entered
its decree declaring the title of said lands to be in the
defendants. Under our statute, the right to commence an action of
this kind is barred after ten years' possession on the part of
the defendants, and it may be conceded that the bar is effectual
in this case if the statute of limitations runs against the
appellant. It is contended by the appellant that it does not, and
there is considerable discussion on the proposition of whether
the interest of the company in this right of way is merely an
easement, or whether it is possessed of a fee simple title. As we
view the law, however, these questions are immaterial; for, if
the statute runs in one instance, it would in the other. It is
the contention of the appellant that the statute does not run
against it, for the reason that the right of way is granted in
the interest of the public, and that it would be against public
policy to allow the company to alienate its right of way, thereby
depriving it of the power to carry on the business in aid of
which the franchise was granted, and that it must necessarily
follow that, if the company could not alienate its lands, public
policy would equally prevent an alienation through process of
law; that the statute of limitations presupposes a grant by the
true owner; and the appellant's predecessor having been the true
owner and the title to the land having been acquired by the
defendants subsequent to the acquiring of title by the appellant,
that no grant by the true owner had ever been made, and
consequently that the statute of limitations did not apply. The
statute of limitations, we think, is not {*388} based upon such
a thought, but is purely and essentially a statute of repose, in
the interest of the stability of titles and of good morals. One
holding land adversely to the rights of another can be divested
only by the action of the other, even with a better right, within
the time prescribed by the statute of limitations, and this is
true, even though he may have originally entered under a void
grant or sale. But his claim ripens into a perfect title and
becomes absolute, if such possession is not disturbed within the
time prescribed. As is said by 3 Washburn on Real Property (5th
ed.) p. 176:
"The operation of the statute takes away the title of the real
owner and transfers it, not in form, indeed, but in legal effect,
to the adverse occupant. In other words, the statute of
limitations gives a perfect title. The doctrine is stated thus
strongly, because it seems to be the result of modern decisions,
although it was once held that the effect of the statute was
merely to take away the remedy, and did not bind the estate, or
transfer the title."
That the statute of limitations is a statute of repose has been
decided by all modern authority, including many decisions from
this court. See Wickham v. Sprague, 18 Wash. 466 (51 P. 1055).
There are no exceptions under our statute, and it must apply to
the case at bar, unless the appellant's right to commence the
action is guaranteed by some higher authority. The statute is as
follows:
"§ 4796. Actions can only be commenced within the periods herein
prescribed after the cause of action shall have accrued. . . .
"§ 4797. . . . Within ten years,-- 1. Actions for the recovery
of real property, or for the recovery or possession thereof; and
no action shall be maintained for such recovery unless it appear
that the plaintiff, his ancestor, predecessor, or grantor, was
seized or possessed of the premises in question within ten years
before the commencement of the action."
{*389} It will be observed that this case does not involve in any
manner a construction of the act of congress incorporating the
Northern Pacific Railroad Company, or the granting to the company
of its right of way. Neither is this an action against the
company, as many of the actions are which are cited by the
appellant. There is no attempt here to bind the company by an
ultra vires agreement, but the attempt is on the part of the
company to repudiate executed contracts and rights which have
grown up through the laches, negligence, and direct agreements of
the company. Neither is this an action where the court has
attempted to determine how much of the right of way was necessary
for the railway company to use in operating its road, but it was
a determination of the fact of how much of the right of way the
railroad company had abandoned, and how much of the right of way,
according to its own determination, it did not need for the
purpose of operating its road, and how much it could abandon
without defeating the purpose for which the grant was made. Of
the cases cited by appellant, the strongest one favoring its
contention, and the only one, therefore, which it is necessary
for us to notice is Northern Pacific R.R. Co. v. Smith, 171 U.S.
260 (18 Sup. Ct. 794); and it is claimed by the appellant that in
this case the rule was clearly announced that the company could
not abandon any portion of its right of way. There are some
expressions used by the court in this case which give
plausibility to appellant's contention, but there are so many
different propositions involved in the case that it is hard to
tell upon what exact proposition the case was decided. Great
stress seems to have been placed by the court upon the defect in
Smith's deed, and an examination of the cases cited by the court
shows that the exact question raised in this case was not
involved or considered seriously in that, although it was decided
in that case that {*390} the court had no right to determine the
question of how many feet had been used and occupied for railroad
purposes by the company, and that it was entitled to the number
of feet that were granted to it by the government. The concluding
remark of the court is as follows:
"The precise character of the business carried on by such tenants
is not disclosed to us, but we are permitted to presume that it
is consistent with the public duties and purposes of the railroad
company; and, at any rate, a forfeiture for misuser could not be
enforced in a private action;" --
a proposition which certainly cannot be controverted. But in that
case the company was in possession of the lands sought to be
obtained by Smith, the allegation being that it had been, more
than six years prior to the commencement of the action, in
possession of the premises. So that no question of adverse
possession and user or of the statute of limitations was
involved, and we do not think that the supreme court of the
United States, notwithstanding some expressions which are made in
this case and which were not necessary for its determination,
would, under the circumstances of this case, deprive these
defendants of their homes and property where a title had been
obtained through the government. and where, by consent,
agreement, and acquiescence of the company, time and money had
been expended in their improvement during all these years of
quiet and undisputed possession. If the doctrine of estoppel can
ever be invoked, it seems to us that it should be invoked in this
case against the appellant. In any event, the question of
protecting the rights of the government is not one which can be
raised by the appellant. If the rights of the government are in
any way involved or jeopardized by the possession of these lands
by the defendants, the government may act in the premises unaided
by the appellant, whose negligence and laches have been {*391}
the cause of these investments by the defendants. The appellant
should not be allowed to escape the consequences of its own
wrongful acts, and reap a fraudulent benefit, by pleading the
rights of the government. Indeed, our government is presumably
founded upon equitable principles, not in theory alone, but in
practice, and the citizen has a right to expect equitable
treatment, even at the hands of the government; and it has been
held that in good conscience the government is frequently
estopped from asserting rights which would destroy the equitable
rights of the citizen. In State ex rel. Attorney General v.
Janesville Water Power Co., 32 L.R.A. 391 (66 N.W. 512), it was
held that leave would not be granted to the state to institute an
action to forfeit the franchises of a solvent, active
corporation, carrying out the purposes of its creation in
supplying the necessities of a large number of people, whose
securities are held by innocent persons, in the absence of a
clear wilful misuse, abuse, or nonuse of its franchises. In that
case the court quotes from Commonwealth ex rel. Attorney General
v. Bala & B.M. Turnpike Co., 153 Pa. St. 47 (25 Atl. 1105), where
the court held that, in case of delay accompanied by
circumstances which would estop individuals, the state was
equally estopped. There the circumstances showed that a
corporation had been allowed to proceed and expend large sums of
money when the facts relied upon in the application for leave to
bring the action to forfeit the franchises were notorious. Held,
that the delay, under the circumstances, created an estoppel so
as to effectually prevent the institution of such proceedings.
The court, in effect, said: If the complainant were a private
individual, the court would not hesitate to say that his laches
were a bar; and the same rule holds good notwithstanding the
application is by the attorney general on behalf of the state.
The question involved is not one under {*392} the statute of
limitations, but one of laches, which may be imputed to the state
as well as to an individual. While time does not run against the
state, time, together with other elements, may make up a species
of fraud, and estop even sovereignty from exercising its legal
rights, -- citing Willmott v. Barber, L.R. 15 Ch. Div. 105;
Attorney General v. Johnson, 2 Wils. Ch. 102; Attorney General v.
Delaware & B.B.R. Co., 27 N.J. Eq. 1. The court, concluding,
said:
"The principles here maintained should be quite rigidly applied
where, as in this case, the corporation has not merely been
allowed, but has been compelled, by those chiefly interested and
the real moving parties, to proceed at great expense, under the
franchises sought to be annulled, for a considerable period of
time, while the facts relied upon as grounds for forfeiture have
been all well known."
This language might be appropriately applied to the facts in this
case, and could as well be applied to the individual defendants
here as to corporate defendants there; for these defendants have
not only been allowed to possess these lots, but the title to
them has been conveyed to them by the government of the United
States after a compliance on their part with the requirements of
the law in relation to pre-emption and homestead claims, and
after, in addition to the expense and time necessarily involved
in obtaining title under these acts from the government, the
expenditure of many thousands of dollars in creating permanent
improvements on these lands, and in paying many thousands of
dollars assessments for the improvement of streets, in addition
to other taxes for the benefit of the government, with the
knowledge and acquiescence, and in some cases the actual
agreement, of the appellant. It is also held in Commonwealth v.
Turnpike Co., supra, that where a turnpike company is allowed,
without objection, {*393} to expend a large amount of money in
extending its road, under authority of and a decree of court, a
commonwealth is estopped to question the regularity of the
proceedings under which such authority was granted. There again
the court said:
"In England, from whence we derived the great body of common law,
and most of our principles in equity, it is well settled that
while time will not run against the crown, yet time, together
with other elements, may make up a species of fraud and estop
even sovereignty from exercising its legal rights;" --
citing Attorney General v. Johnson, supra, where there was an
attempt on behalf of the crown to restrain a purpresture in the
river Thames, and the court refused to entertain the bill because
of the delay on the part of the attorney general in instituting
the proceeding. Citing, also, Attorney General v. Sheffield Gas
Consumers Co., 3 De Gex, M. & G. 304. See, also, Attorney General
v. Delaware, etc., R.R. Co. 27 N.J. Eq. 631.
As showing that the rule that the company cannot alienate any
part of its right of way is not to be literally construed, it has
been decided that a railroad company to which congress has
granted a right of way across the public lands and sections of
lands adjoining such right of way, in aid of the construction of
its road, has power to dedicate to the public the right to cross
its tracks and right of way. Northern Pacific R.R. Co. v.
Spokane, 64 Fed. 506 (12 C.C.A. 246).
On the proposition that, when a corporation has made contracts in
violation of its powers, the validity of such contracts can be
questioned only by the government, see National Bank v. Matthews,
98 U.S. 621.
No case is cited by the appellant which holds that a railway
company may not lose a part of its right of way by adverse
possession, by abandonment or estoppel, and we do {*394} not
think that any case can be found which advances those
propositions, but many courts have held the reverse. In
Pittsburgh, etc., Ry. Co. v. Stickley, 155 Ind. 312 (58 N.E.
193), it was held by the supreme court of Indiana that adverse
possession, acquiesced in by the company for the statutory
period, prevented a recovery, and we cannot do better than insert
a portion of the opinion of the court in that case:
"Appellant finally insists that land acquired by a railway
company for right of way or station purposes cannot be taken from
it by adverse possession, because a railroad is a public highway,
and because the statute forbids interference with the company's
exclusive use. A railway company owes certain duties to the
public, but it holds and uses its property for the profit of its
stockholders. The cases holding that the statute of limitations
affords no defense to actions for encroachment upon streets and
roads, are inapplicable. A railroad is not a public highway in
the sense that it belongs to the people. Railroad officers are
not governmental agents whose laches creates no bar. It is true
that, for reasons of public policy, a judgment creditor will not
be permitted to destroy a railroad by cutting it into parcels on
execution sales, if the company resists. . . . If a company
voluntarily disable itself to perform its duties to the public,
its charter may be forfeited. But there is no reason why a
railway company should not be permitted to dispose of land it
does not need in fulfilling its public duties, or why, if it
disposes of land it does need, it should not be compelled, if it
wishes to avoid a forfeiture of its charter, to re-acquire the
land by purchase or condemnation. It is true that the statute
entitles a railway company to take land in fee and forbids
interference with the company's exclusive use. But the right to
the exclusive use (which is an incident to every unqualified
ownership) must be asserted. If one occupies adversely for twenty
years land owned by a railway company, the statute of limitations
should raise the presumption of a grant, for the company holds
its lands for private gain as a private proprietor. The state
confers the power {*395} of eminent domain to enable railway
companies to perform efficiently their duties as common carriers.
But it is not apparent why the state should be concerned in
preventing investors in railway stocks from sustaining loss
through the negligence of their agents;" -- citing Illinois,
etc., R.R. Co. v. Houghton, 126 Ill. 233 (18 N.E. 301; 1 L.R.A.
213, 9 Am. St. Rep. 581); Illinois, etc., R.R. Co. v. O'Connor,
154 Ill. 550 (39 N.E. 563); Illinois, etc., R.R. Co. v. Moore,
160 Ill. 9 (43 N.E. 364); Donahue v. Illinois, etc., R.R. Co. 165
Ill. 640 (46 N.E. 714); Illinois, etc., R.R. Co. v. Wakefield,
173 Ill. 564 (50 N.E. 1002); Matthews v. Lake Shore, etc., Ry.
Co. 110 Mich. 170 (67 N.W. 1111, 64 Am. St. Rep. 336); Bobbett v.
South Eastern Ry. Co., L.R. 9 Q.B. Div. 424; Norton v. London,
etc., Ry. Co., L.R. 13 Ch. Div. 268; Erie, etc., Ry. Co. v.
Rousseau, 17 Ont. App. 483.
In Matthews v. Lake Shore, etc., Ry. Co., supra, it was held
that, after a right to use land as part of its right of way had
been granted to a railroad company, and such company fenced its
right of way excluding such land, and thereafter the grantor
conveyed the land to the plaintiff, who inclosed the same and
used it for crops and pasturage, openly and continuously, without
the assent of the company, for more than fifteen years, the
plaintiff acquired title by adverse possession. To the same
effect are numerous other cases. In fact, it seems to be the
universal authority.
The case of Northern Counties Investment Trust, Limited, v.
Enyard, 24 Wash. 366 (64 P. 516), cited in appellant's reply
brief in support of the position that possession for more than
the statutory time on a railroad right of way was not adverse,
but permissive, shows, on examination, that the circumstances
surrounding it were altogether different from the circumstances
surrounding the case at bar. Under the circumstances of that case
it was held that the occupancy of a portion of the right {*396}
of way of the railroad company by the owner of a servient estate
was not inconsistent with the easement, the occupation there
being for the purposes of farming the land embraced in the right
of way. We do not desire to extend the rule enunciated in that
case. But, whether or not the facts in that case warranted the
conclusion reached by the court, certainly the circumstances
shown by the record in this case will not justify the conclusion
reached in that, that the occupancy of the defendants, taken in
connection with the improvements and the use to which the
improvements were put, was not inconsistent with the appellant's
right to use the same for railroad purposes.
In consideration of all the circumstances surrounding this case,
and of the underlying principles governing rights and remedies,
we are of the opinion that the judgment should be affirmed.
DISPOSITION
Affirmed.
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