Opinion
11-03-1898
HUNTINGTON v. HEADLEY et al.
John B. Vreeland, for demurrants. Babbitt & Lawrence, for defendant Rockaway Val. Ry. Co.
Bill by Oollis P. Huntington against William T. Headley and others. Defendant the Rockaway Valley Railway Company filed a cross bill, to which defendants Vreeland and the Watnong Brick Company demurred. Heard on bill, cross bill, and demurrers. Demurrers overruled.
John B. Vreeland, for demurrants.
Babbitt & Lawrence, for defendant Rockaway Val. Ry. Co.
EMERY, V. C. The original bill is filed to foreclose a mortgage which covers a large tract of land, some portions of which were conveyed by the mortgagors (the defendants Headley) subsequent to the giving of the mortgage. Defendant Watnong Brick Company is the owner of one of such portions by a conveyance from the Headleys dated February 12, 1891; defendant Vreeland holds by assignment a mortgage given by the Headleys on March 11, 1889, upon the premises covered by complainant's mortgage; and the defendant railway company owns and operates a railway constructed on a portion of the mortgaged premises which are included in the deed to the brick company and Vreeland's mortgage. The company has no deed for the premises occupied by it, and the cross bill is based upon allegations that its predecessor in title, the Rockaway Valley Extension Railroad Company, to whose property rights and franchises it has succeeded, entered on these lands, and built its railroad thereon, under an oral agreement made on Its behalf with the Headleys for a conveyance. This oral agreement is alleged to have been made previous to the conveyance to the brick company, but the cross bill charges that after the conveyance there was some agreement by which the brick company agreed to convey to the railroad company the lands covered by the line of the railway, but the conveyance had not been made. The object of the cross bill is to have the properties subject to the mortgage of complainant, and the mortgages or incumbrances held by the defendants to the bill, marshaled for their payment according to equitable principles, and the claim of the cross bill is that in equity the line of railway shall be charged only with the value of the premises at the time of entry, with Interest from that date. The cross bill further alleges that the officers of the two companies had no knowledge of the existence of the incumbrance until the bill was filed, and that the railroad is operated for public travel. The company has the right of condemnation under the general law. The demurrers to the cross bill filed by the defendant Vreeland and the brick company are for the reasons (1) that the bill is filed to enforce an oral contract within the statute of frauds; (2) that it claims some interest in the lands under a verbal contract or parol consent; (3) that the court has no jurisdiction to ascertain the value of the lands and damages without condemnation proceedings. Upon the authority of several decisions cited by counsel, the demurrers must be overruled. Railroad Co. v. Booraem (Err. & App. 1877) 28 N. J. Eq. 450; Railway Co. v. Stanley's Heirs (Err. & App. 1882) 35 N. J. Eq. 283; Railroad Co. v. Kamlah (Ch. McGill, 1886) 42 N. J. Eq. 93, 6 Atl. 444.
As to the objection based on the statute of frauds, it must be noted that the cross bill is not filed to enforce the performance of an agreement for sale of lands made by the owner subsequent to the acquisition of demurrants' rights, but to enforce equities arising from the construction and operation of a railroad upon lands which were entered upon for that purpose, under express agreement with the original owner, and continued by consent of the Headleys under their alleged agreement to convey. Parol consent to entry on the land and to the construction and operation of the road, given under these circumstances, while it does not give any legal title (Hetfield v. Railroad Co., 29 N. J. Law, 571), creates an equity against the owners for a conveyance to the railroad company upon such compensation as is equitable to all parties interested. What these equitable terms are will be settled on final hearing, both as against the owner or his grantee and against the previous incumbrancers. But the effect of the demurrer to the cross bill is to deny the right to any equitable relief whatever upon the bill, and to hold that their only relief, under the circumstances set out in the cross bill, is by proceedings for condemnation.
The bill of the original complainant, being filed for the foreclosure of a mortgage upon the entire premises, draws with it the Jurisdiction for the settlement by this court of all equities relating to the marshaling of different portions of the property by reason of conveyances or incumbrances subsequent to complainant's mortgage, and any such equities as between defendants may be properly put in issue by cross bills, if necessary. For this reason, and upon the authority of the cases above cited, the demurrers must be overruled, and the cross bill answered.