NASHUA AND LOWELL RAILROAD CORPORATION vs. BOSTON AND MAINE RAILROAD.
Landlord and Tenant, Construction of lease: covenant to pay taxes. Contract, In writing, Construction. Tax, Income.
A provision in a lease delivered in 1880 by one railroad corporation to another of the lessor's railroad and of its railroad property, by which the lessee covenanted to "pay all public taxes, assessments, and charges whatsoever that shall be imposed, either in Massachusetts or New Hampshire, upon the said first party, the lessor, on account of the property, franchise, or capital stock of the said party of the first part during said term," does not require the lessee nor its successor to repay to the lessor a Federal income tax assessed upon and paid by the lessor under 42 U. S. Sts. at Large, 252, upon rental received by it under the lease. Following Stony Brook Railroad v. Boston & Maine Railroad, ante, 379.
CONTRACT with a declaration described in the opinion. Writ dated January 2, 1925.
The defendant demurred to the declaration. The demurrer was heard by McLaughlin, J., and was overruled. The defendant appealed.
The action then was heard upon its merits by Lawton, J., without a jury, who found for the plaintiff in the sum of $2,442.14. The defendant alleged exceptions.
A. R. Tisdale, for the defendant.
A. Marshall, for the plaintiff.
RUGG, C.J. The plaintiff seeks to recover in this action of contract the amount paid by it for an income tax assessed on it by the Federal government. The plaintiff in 1880 leased its railroad and all its railroad property to a lessee to whose obligations the defendant has succeeded. The lessee covenanted to "pay all public taxes, assessments, and charges whatsoever that shall be imposed, either in Massachusetts or New Hampshire, upon the said first party, the lessor, on
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account of the property, franchise, or capital stock of the said party of the first part during said term."
The principles stated in Stony Brook Railroad v. Boston & Maine Railroad, just decided, ante, 379, govern the case at bar and show that the plaintiff cannot recover.
Exceptions sustained.
Order overruling demurrer reversed.