Negative Easements
Hypo:
Π
Δ
ADT
AST
Proposed new
construction
Structure with
windows
facing, and
immediately
to the west
of, AST.
Π sues to enjoin the
construction by Δ of a
building on the AST
(alleged servient
tenement) on the theory
that Π has acquired an
easement by prescription
for the benefit of the
structure on Πs land, the
ADT (alleged dominant
tenement).
Q: What result and why?
1
Donald J. Weidner
Negative Easements
• In England, traditional negative easements, including
easements for light and air, could be acquired by
prescription.
• However, the doctrine of ancient lights has never been
adopted in the USA.
– American courts have held that negative easements cannot be
acquired by prescription.
– Consider the analogy to adverse possession:
• Did the servient owner have a cause of action against the person
claiming the easement?
• Today, there is little pressure to expand concepts of
negative easements, because courts will protect the
same interests as equitable servitudes.
– Nevertheless, there has been expansion in the list of negative
easements
• Conservation easements, for example
2
Donald J. Weidner
Easements versus Covenants
• An easement is generally thought of as being
created by a grant of a right.
– A grants to B, his heirs and assigns, an easement to
prohibit A from building on A’s land to a height of over
30’.
– A Grants a Right
• Because grants of negative easements
especially were limited, landowners turned to
promises by the person who would have been
the grantor of the easement.
• These promises were called covenants
– A promises, on behalf of A, his heirs, successors and
assigns, to refrain from building to a height of over
30’.
– A Undertakes a Duty.
3
Donald J. Weidner
Real Covenants versus Equitable
Servitudes
•
What might have been viewed as other
negative easements were instead
enforceable only as
1. Real Covenants
•
also known as “covenants that run with the
land at law
or as
2. Equitable Servitudes.
• Each has its own requirements.
4
Donald J. Weidner
Real Covenants
•
Distinction made between the benefit of
covenants and the burden of covenants
–
•
the test for the running of the burden is traditionally
more onerous than the test for the running of the
benefit
In order for the burden of a covenant to run at
law, there must be:
1. An intent of the parties (covenantor and
covenantee) that the covenant run;
–
stated differently, an intent to bind successors
2. The covenant must “touch and concern” the land;
and
3. There must be privity of estate for the covenant to
run.
5
Donald J. Weidner
Real Covenants (cont’d)
• There are two basic kinds of privity of estate:
– Horizontal privity – between the original covenantor
and convenantee;
• most say that horizontal privity is not required for the benefit
to run
– Vertical privity – between
• covenantor and convenantor’s assignees and
• between the covenantee and the convenatee’s assignees.
• A real covenant runs with an estate in land (and
not with the land itself).
– The assignee must receive an estate of the same duration as
the estate of the assignor.
• [Same concept in deciding whether a tenant’s transfer is an
assignment or a sublease.]
6
Donald J. Weidner
Hypo: Suppose that B, owner of Blackacre, has promised A, owner of Whiteacre, that
Blackacre shall not be used for industrial purposes. B sells Blackacre to C, and A sells
Whiteacre to D. C constructs a factory on Blackacre. D sues C for damages. Will the
covenant run to C and D?
A
Promissee;
benefit to
Whiteacre
B promises A “Blackacre shall not be
used for industrial purposes”.
Privity between original parties
(known as “horizontal privity”)?
A sells
Whiteacre to D
Promisor;
burden on
Blackacre
B sells
Blackacre to C
Privity between
promisor and
assignee (known as
“vertical privity”)
Privity between
promisee and
assignee (known as
“vertical privity”)
D
B
May D sue C for damages?
7
C
Constructs a factory on
Blackacre
Donald J. Weidner
Real Covenants (cont’d)
•
Preliminarily, there are 3 basic meanings that might be
given to the term privity of estate:
1. A landlord-tenant (continuing, tenurial) relationship;
2. A “successive relationship between a grantor and a grantee”
[majority rule]
–
–
In the above example, A and B would be in privity of estate under
this definition if B’s promise had been in a deed conveying
Blackacre from A to B.
Giving privity this meaning prevents enforcement of the covenant
against successors only when the covenant was not created in
conjunction with the transfer of some other interest in land;
3. Both parties have mutual interests in the same land, apart from
the covenants
–
In the land sought to be burdened.
8
Donald J. Weidner
Real Covenants (cont’d)
• Problem #1: A and B, neighboring owners,
decide they will mutually restrict their lots to
single-family residential use.
– They sign an agreement wherein each promises on
behalf of herself, her heirs and assigns, that her lot
will be used for single-family residential use only.
– The agreement is recorded under the name of each
signer.
A
Ableacre
Mutual Agreement: Lots
restricted to single-family
residential use only
B
Bakeracre
Sells
Bakeracre to C
C
9
Donald J. Weidner
Covenants Enforceable at Law:
Real Covenants (cont’d)
•
Part A: C builds an apartment house on
Bakeracre.
–
–
•
A sues C for damages.
Is there an enforceable real covenant?
A cannot recover damages from C if horizontal
privity of estate is required for the running of
the burden at law. A and B are not:
1. In a landlord-tenant (tenurial) relationship;
2. In the successive relationship of grantor/grantee; or
3. Mutually interested in each other’s land apart from
the covenant.
10
Donald J. Weidner
Covenants Enforceable at Law:
Real Covenants (cont’d)
• Is A’s lawyer liable to A for malpractice?
• Lawyer might have:
– Directed A and B to convey their lots to Straw;
then
– Directed Straw to convey:
• Lot A back to A by a deed with a promise by the
grantee A for the benefit of B’s lot; and
• Lot B back to B by a deed with a promise by B for
the benefit of A’s lot.
• Privity of estate has been called “a
malpractice trap for lawyers.”
11
Donald J. Weidner
Covenants Enforceable at Law:
Real Covenants (cont’d)
• Part B: Suppose that A, rather than C,
built the apartment house.
– Is C entitled to damages as against A?
• C can recover damages from A under the
2d Restatement view, because Privity of
Estate is not required for the benefit to run.
– Some say it is unfair in a reciprocal
arrangement such as this for C to succeed to
the benefit but not the burden.
12
Donald J. Weidner
Covenants Enforceable at Law:
Real Covenants (Cont’d)
• Given that the requirement of privity for the
burden to run is formal (because it can be
avoided by the use of a straw), what is its
justification?
– The authors believe: “The only real justification for
[the first Restatement’s requirement of horizontal
privity of estate] is that a damages remedy puts all the
defendant’s assets and not only the defendant’s
investment in the land at risk.”
– The Third Restatement repudiates the first
Restatement and states that horizontal privity is no
longer required for the burden of a covenant to run at
law to successors.
13
Donald J. Weidner
• Problem #2: In order to preserve A’s view over
B’s lot, A and B agree that no building taller
than 20 feet will be erected on B’s lot. The
agreement is recorded.
Could: 1 or 2
A
No building taller than
20’ on B’s lot, Bakeracre
B
Sells
Bakeracre
2. B promises, for heirs
and assigns, not to
build.
A gets a right
B undertakes a duty
1. B grants to A the right
to view over B’s land,
specifically saying that
A can stop any
building over 20 feet.
C
14
Erects a 30
foot tall
building
Donald J. Weidner
Real Covenants (cont’d)
• Result if A sues C for damages?
A. If the restriction is a covenant. The covenant may
be held to impose a burden that will not run at law
because there was no privity of estate between
convenantor and covantee.
B. If the restriction is an easement. A negative
easement of view does not require privity of estate
• The juxtaposition is an argument for abolishing
the requirement of privity of estate for the burden
to run at law
– there is no such requirement for an easement, the
functional equivalent.
15
Donald J. Weidner
Real Covenants (cont’d)
– If a court agrees that this creates a negative
easement of view, A can get damages from C for
interfering with A’s easement.
• If a court were to characterize negative rights – whether
arising from words of Promise or from words of Grant – as
negative easements, the privity requirement for negative
covenants would be dispensed with.
• In the case of affirmative duties imposed upon
the servient landowner, a court would probably
not characterize the covenant as an easement,
– thus the privity requirement would remain an
obstacle.
16
Donald J. Weidner
New Restatement Rule on Real
Covenants
• The new (Third) Restatement:
– Discards the vertical privity requirement
– Instead, draws a distinction between negative
covenants and affirmative covenants
• Negative covenants are treated like easements for
succession purposes (they run against any possessory
estate)
– That is, they run to all subsequent owners and possessors of
the burdened and benefited land
– Thus, both B, an adverse possessor, and C, a lessee, would be
liable on the covenant forbidding nonresidential use
• Affirmative covenants, requiring the burdened owner to
perform an act, are treated differently
17
Donald J. Weidner
Third Restatement Rule on Real
Covenants (cont’d)
• The different treatment for affirmative covenants:
– Burdens and benefits of affirmative covenants run to persons
who succeed to estates of the same duration as were held by the
original parties to the covenants
• In other words, to people who satisfy the traditional privity of estate
requirement
– Burdens also run to adverse possessors
– Only certain affirmative burdens run to lessees. Lessees must
perform only covenants that are more reasonably performed by
the lessee rather than by the landlord
• In our example, lessee C would be liable on the affirmative
covenant if cutting trees was more reasonably performed by the
lessee than the landlord
– Burdens run to life tenants, but the liability for the life tenant’s
performance is limited to the value of the life estate
• The Third Restatement applies the same rules to
equitable servitudes
18
Donald J. Weidner
Tulk v. Moxhay
Π was the owner in fee of the “vacant piece of ground in
Leicester Square, as well as several of the houses
forming the square.”
Π
Square
Sold, with covenant, FSA.
40 years after
covenant
ELMS, with a covenant binding Elms, his
heirs and assigns.
1. Keep and
Mesne conveyances
maintain pleasure
ground – paying the
costs.
2. Maintain open
state
3. Π’s Ts to have
“privilege” on paying
“rent”
Δ
Deed to Δ containing no
restrictions, but Δ purchased
“with notice”
Issue: Does burden run?
19
Donald J. Weidner
Tulk v. Moxhay (cont’d)
• Π still owns several houses in the square.
• Δ asserts the right to build on the square.
• Recall text: “Thwarted by the law courts’ refusal to
recognize new types of negative easements,
landowners turned…to the law of contracts.”
– in the early 19th Century
• Note the starting point in Tulk: The contract was
enforceable as between grantor and grantee;
– the question is whether it should also bind those who
purchase from the grantee (promisor).
• Assumption of the court: the covenant does not run
with the land at law (can you recall why not?).
– Call it a contract;
– Vendee had notice of it;
– Vendor paid a lower price because of it.
20
Donald J. Weidner
Requirements for Equitable Servitude
• The essentials of an equitable servitude (a
covenant that runs in equity even though
not at law)
1. There must be an intent that the covenant
run
2. The covenant must touch or concern (the
burdened land)
3. There must be notice to the burdened
purchaser
• Must there be a buyer who paid less because of
the covenant?
21
Donald J. Weidner
Equitable Servitudes and Privity of
Estate
• Horizontal privity is not required
– Thus eliminating the largest obstacle to covenants
running at law
• Vertical privity
– Is not required for the burden to run
• All subsequent possessor are bound by the servitude, just as
they are bound by an easement
– However, for a person other than the original
covenantee to enforce the benefit, in some
jurisdictions, the beneficiary must show that he
acquired land from the covenantee, either before or
after the covenant was made
• In this sense, vertical privity may be required for the
enforcement of the benefit in equity
• Analogous to the need to show you are an intended third
party beneficiary in contract?
22
Donald J. Weidner
Property Theory of Equitable
Servitudes
•
The Dominant Theory is the Property Theory
–
–
Rather than a contract theory
Propelled by courts that call an equitable servitude a negative
easement
Burdens the land itself and not an estate in land
–
•
•
Making it like an easement
Facilitates several holdings
1.
That, after the original promisor has conveyed the burdened
land, the promisor can not be sued on the covenant, either in
law or in equity
–
2.
3.
This is the right result because the original promisor loses control
of the land after assigning away the entire interest
The original promisee may not enforce restrictions after
conveying away the beneficial land.
If the government condemns the burdened land, it must pay
the benefited owner damages for loss of the servitude
Nevertheless, an equitable servitude arises out of contract,
and contract doctrines can apply.
23
Donald J. Weidner
Equitable Servitudes versus Real
Covenants
• The traditional difference between real
covenants and equitable servitudes [apart from
the differences in the requirements to create
them] relates to the remedy sought.
– The remedy for breach of a real covenant is damages
in a suit at law.
– The remedy for breach of an equitable servitude is an
injunction or enforcement of a lien in a suit in equity.
• Returning to real covenant Problem # 1:
– A can enjoin C from erecting an apartment house. C
has record notice of the restriction and hence is
bound by an equitable servitude
• even if not by a real covenant
24
Donald J. Weidner
Sanborn v. McLean
Neighbor sues to enjoin McLean from
constructing a gasoline filling station on Lot 86.
1892
CGors Own 91 lots fronting on
Collingwood Avenue
1892
CGors Convey 10 lots with
restriction
Residences only
1. The lots retained by
CGors are NOT
expressly restricted.
2. The deeds out are all
recorded.
Costing > 2,500
20’ setback
July
1893
CGors
Convey 11 lots
same restrictions
25
Donald J. Weidner
Sanborn v. McLean (cont’d)
Sept.
1893
CGors
Convey Lot 86
PI (Predecessor
in Interest of
McLean)
No restrictions.
The deed is recorded
Subsequently
CGors
Conveyed remaining
lots, some with, some
without, restrictions
For 17 years, residences only were built
Δ McLean
PI (Predecessor convey
with partially
in Interest)
built
residence
1910
Testifies that PI told him the lot
was not restricted
Had an abstract showing the
subdivision
Abstract presumably also
showed title free of restrictions
26
Δ McLean
Donald J. Weidner
Sanborn v. McLean (cont’d)
• Can you identify the precise moment at which
the easement arose?
– “If the owner of two or more lots, so situated as to
bear the relation, sells one with restrictions of
benefit to the land retained, the servitude becomes
mutual, and, during the period of restraint, the
owner of the lot or lots retained can do nothing
forbidden to the owner of the lot sold.”
• That is, there is an implied grant of a negative easement
for the benefit of the lots retained
– Not for the benefit of the grantor
– “For want of a better descriptive term this is styled a
reciprocal negative easement.”
27
Donald J. Weidner
Sanborn v. McLean (cont’d)
• “It is not personal to owners but operative upon
use of the land by any owner having actual or
constructive notice thereof.”
• The basic theory is that the court is effecting the
intent of the common grantor (“it must start with
a common owner”)
– to benefit the retained lots
– to carry out a “scheme of restrictions” on neighboring
lots sold by the common grantor
– Note the facts ex post used to prove the intent ex ante
• “The original plan was repeatedly declared in subsequent
sales”
28
Donald J. Weidner
Sanborn v. McLean (cont’d)
• A majority of courts imply negative
restrictions from a general plan.
• In Sanborn, there was not even an oral
promise of the developer to restrict the
remaining lands.
– “[A] few jurisdictions take the Statute of
Frauds more seriously. In California, an
equitable servitude must be created by a
written instrument identifying the burdened lot;
it will not be implied from the existence of
restrictions on other lots in a subdivision.”
29
Donald J. Weidner
Sanborn v. McLean (cont’d)
• If you decide that an easement arose in the first
instance, when the first lot was conveyed away,
the next issue is whether McLean is a
subsequent bona fide purchaser without notice
– if he is, he’s not subject to the servitude.
– In Michigan, deeds out to other buyers in a
subdivision from a common grantor give notice to
subsequent purchasers (see Note 1, p. 873).
• “Hence the first 21 deeds out are in the chain of title of lot
86.”
– However, unlike the note case, the retained lots were not
expressly subjected to the limitation
– Authors: the court might have rested there, holding
McLean had constructive record notice, but instead it
held McLean had inquiry notice.
30
Donald J. Weidner
Sanborn v. McLean (cont’d)
• What should McLean have done?
1. Ask the neighbors?
• Ct. says “no”.
– “[H]ad he inquired he would have found of record the reason for
the general conformation.”
– “Considering the character of use made of all the lots open to a
view of Mr. McLean when he purchased, we think he was put
thereby to inquiry, beyond asking his grantor whether there were
restrictions.”
2. On the record, he would have seen:
– Restrictions in 53 of 91 deeds;
– No restrictions in 38 of 91 deeds;
– That nevertheless showed a plan to restrict all 91 lots (?)
» Because they were all subdivided at the same time and
shown on the same plat?
31
Donald J. Weidner
Neponsit Property Owners’ Assn. v.
Emigrant Industrial Savings Bank
Δ purchased land at a judicial sale. The deed to Δ, and each prior deed
subsequent to a deed out by Neponsit Realty Company, “purports to convey the
property subject to the covenant, condition or charge contained in the original
deed.” Δ refuses to pay – the property owners’ association files an action to
foreclose a lien on the property.
1911 Neponsit
Neponsit
Filed a map of a strictly
residential community.
Sold lots referring to
the roads and streets
shown on the map
32
Donald J. Weidner
Neponsit (cont’d)
1917
Neponsit
Deyers
Deed with covenant
H,W
(Page 875, bottom)
Annual charge
Maximum $4 per lot
Payable to property owners association
To be a lien on the land
Devoted to roads, paths, sewers and “such other public
purposes as may be determined”
Run with the land until 1940
Deyers
H,W
33
Judicial
sale
Δ
Donald J. Weidner
Neponsit (cont’d)
•
Recall the “age old essentials of a real
covenant”
1. There must be intent (between covenantor
and covenantee) that the covenant run;
2. The covenant must “touch or concern” the
land with which it runs;
3. There must be privity of estate between the
party claiming the right to enforce the
covenant and the party “who rests under the
burden of the covenant.”
34
Donald J. Weidner
Neponsit (cont’d)
•
Recall the essentials of an equitable servitude
1. There must be an intent that the covenant run
2. The covenant must touch or concern (the
burdened land)
3. There must be notice to the burdened purchaser
•
Must there be a buyer who paid less because of the
covenant?
– Sanborn says mutual benefit is sufficient
35
Donald J. Weidner
Neponsit (cont’d)
•
•
Touch and Concern
A covenant to pay a sum of money looks like a
personal, affirmative covenant, that should not bind
successors.
Court:
1. “Touch and concern” is a judicially created test, which we
are more free to modify than if it were a statutory test
•
Recall Justice Pariente’s remarks on Supreme Court Day
2. We can abandon our statements that the only covenants
that can run are those respecting the use of land.
3. And our statements that affirmative covenants do not run.
36
Donald J. Weidner
Neponsit (cont’d)
• The touch or concern test is based on effect:
– Does the covenant impose, on the one hand, a burden upon
an interest in land, which, on the other hand, increases the
value of a different interest in the same or related land.
• Court says the grantee “obtained not only title to
particular lots, but an easement or right of common
enjoyment with other property owners in roads,
beaches…and improvements in the same tract.”
• “The burden of paying the cost should be inseparably
attached to the land which enjoys the benefit.”
– Sound like Demsetz?
37
Donald J. Weidner
Neponsit (cont’d)
Privity of Estate
• “Though between the grantor and the grantee there was
[horizontal] privity of estate”, how is there privity between
the Defendant and the Property Owners’ Association?
– The Association “has not succeeded to the ownership of any
property of the grantor.”
– “No right to enforce even a restrictive covenant has been
sustained in this state where the plaintiff did not own property
which would benefit by such enforcement.”
• We might expand Tulk to allow an equitable servitude at
the instance of one who owns no land, but do not need
to decide, because we can say that there is the
requisite privity of estate to let this covenant run at
law:
– The corporate property owners association “has been formed as
a convenient instrument by which the property owners may
advance their common interests.”
– The property owners association is acting as the agent of the
property owners.
38
Donald J. Weidner
Neponsit (cont’d)
• Grand old case the permits a covenant to run
with the land:
– Even though it is an affirmative covenant to pay a
sum of money (subject to a $4.00 per lot per year
cap);
– Even though the money will not be spent on the land
burdened by the covenant (but on roads, paths,
parks, beaches);
– Even though the money will not be spent on the land
of the promisee’s assignee – the property owners’
association – [unless you disregard the corporation
and see the property owners behind it]; and
– Even though the money may be used “for such other
public purposes” and, hence, is arguably quite vague.
39
Donald J. Weidner
The Burden of Affirmative Covenants
•
Courts have been wary of enforcing
affirmative covenants against
successors:
1. They are reluctant to issue orders to perform
a series of acts that require continuing
judicial supervision.
2. Enforcing an affirmative covenant may
impose a large personal liability on a
successor.
3. An affirmative obligation, unlimited in time,
resembles a feudal service or perpetual rent.
40
Donald J. Weidner
Restatement, 3d, and Touch and
Concern
•
•
Restatement (Third), Servitudes, discards
“touch and concern.”
Distinguishes
1. Grounds for refusing to enforce a servitude at its
inception
–
Does it violate public policy?
–
–
–
–
privacy and sanctity of the home
protecting residential housing consumers against sharp
practices and unconscionable burdens
maintaining stability of neighborhoods
protecting investment-backed expectations
2. Grounds for refusing to enforce a servitude because
of subsequent events
41
Donald J. Weidner
Hypo: Prior to Caullett
• Smith and Jones are neighbors. Over the back
fence, they each agree to refrain from cutting
down the magnolia trees on their lots and they
each agree to replace any magnolia trees that
are destroyed. They reduce it to writing and
record it.
• May Brown enjoin Smith from violating the
covenant?
– If Brown is president of the local chapter of the Sierra
Club?
– If the agreement says it may be enforced by the
Sierra Club?
42
Donald J. Weidner
Hypo: Prior to Caullett con’t.
• Does not Neponsit say it can be
enforceable?
– Perhaps not: -- Neponsit dealt with the
situation in which there was privity of estate
between original covenantor/covenantee
– Perhaps not: -- Neponsit dealt with a situation
in which the entity enforcing the covenant was
found to be in privity of estate with the owner
of the servient estate.
43
Donald J. Weidner
Hypo: Prior to Caullett con’t.
• Recall from Neponsit:
– [N]o right to enforce even a restrictive
covenant has been sustained in this state
where the plaintiff did not own property which
would benefit by such enforcement [so that
some of the elements of an equitable
servitude are present].
44
Donald J. Weidner
Caullett v. Stanley Stillwell & Sons
• Developer, by Warranty Deed, conveyed a
1-acre lot to buyer for $4,000, with the
“covenant, agreement and restriction” that
– “the grantors reserve the right to build or
construct the original dwelling or building on
said premise.”
– Covenant recites that it is to run with the land.
• The original buyer is the plaintiff (not a
question of runnability).
• Negotiations over the construction of a
dwelling broke down.
• Buyer sues to quiet45title.
Donald J. Weidner
Caullett (cont’d)
•
Held: unenforceable for 3 reasons:
1. Too vague
•
incapable of enforcement because it does not
specify:
– type of structure to be built;
– cost of structure to be built;
– duration of grantee’s obligation
•
•
unclear whether it was intended as a right of first
refusal
unclear of its application if grantees built their
own structure with their own hands
46
Donald J. Weidner
Caullett (cont’d)
2. Does not “touch and concern” the land, therefore,
neither:
•
•
–
equitable servitude; nor
covenant running at law.
Why does it not “touch and concern” the land?
•
•
•
Not permanent enough?
Concerns a “single, personal service”
Doesn’t touch or concern the land because there is no
restriction on the use of land of any permanence.
3. The benefit is in gross
– Even if the covenant were directly restricting the use
of land
–
“[W]hatever the effect of the burden of the covenant, its
benefit is clearly personal to the grantor…not enhancing or
otherwise affecting the use or value of retained lands.”
47
Donald J. Weidner
Caullett (cont’d)
• Generally, prerequisite [to running at law] is a
finding that both burdened and benefited
properties exist and were intended to be affected
by the contracting parties.”
– “Where…the burden is placed upon the land, and the
benefit to personal to one of the parties and does not
extend to his or other lands, the burden is generally
held not to run with the land at law. The policy is
strong against hindering the alienability of one
property where no corresponding enhancement
accrues to surrounding lands.”
48
Donald J. Weidner
Caullett (cont’d)
• So, courts are making a policy judgment:
If this is beneficial to neighboring lands,
then the burdens on alienability will be
supported - enforced.
49
Donald J. Weidner
Shelley v. Kraemer
• Shelley is a 1948 decision. One of the
cases involved comes from Missouri and
dealt with an agreement that
– was entered into by 30 out of 39 owners of
lots fronting both sides of a street in St. Louis
– The 30 owners held title to 47 out of the 57
parcels in the district described in the
agreement.
– The agreement was subsequently recorded.
50
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• There was an agreement:
– to restrict the “use and occupancy”
– for a term of 50 years
– it shall “be a condition” that “shall attach to the land”
– as a “condition precedent to the sale” of same
– no part shall be “occupied by any person not of the
Caucasian race”
– intent “against the occupancy as owners or tenants
of any portion of said property for resident or other
purposes by people of the Negro or Mongolian
Race”
51
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• “At the time the agreement was signed, five of the
parcels in the district were owned by Negroes.”
• Shelleys are African American grantees who
received a warranty deed to the parcel in question.
– “The trial court found that [the Shelleys] had no actual
knowledge of the restrictive agreement at the time of the
purchase.”
• In 1945, owners of other property subject to the
restrictive convenant sued, asking that:
– Shelleys “be restrained from taking possession” and
– “that judgment be entered divesting title out of [the
Shelleys] and revesting title in the immediate grantor or in
such other person as the court should direct.”
52
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• The trial court took the easy way out: it said that
the agreement never became effective because
it was not intended to be effective until all
owners had signed, which had not happened.
• The Supreme Court of Missouri reversed and
“directed the trial court to grant the relief for
which [the neighbors] had prayed. That court
held the agreement effective and concluded that
enforcement…violated no rights guaranteed to
[Shelleys] by the Federal Constitution.”
• When the Missouri court rendered its decision,
[Shelleys] were occupying the property.
– They were ordered off the property.
53
Donald J. Weidner
Shelley v. Kraemer (cont’d)
•
Shelleys claim they are denied their rights under three
clauses of the 14A:
1.
2.
3.
•
Equal protection
Due process
Privileges or immunities
Recall the 14th Amendment:
Section 1. All persons born or naturalized in the United States and subject
to the jurisdiction thereof, are citizens of the United States and of the
state wherein they reside. No state shall make or enforce any law
which shall abridge the privileges or immunities of citizens of the
United States; nor shall any state deprive any person of life, liberty, or
property, without due process of law; nor [shall any state] deny to any
person within its jurisdiction the equal protection of the laws.
***
Section 5. The Congress shall have power to enforce, by appropriate
legislation, the provisions of this article.
54
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• Supreme Court says that, without more,
the covenants themselves do not violate
the 14A:
– “So long as the purposes of those
agreements are effectuated by voluntary
adherence to their terms, it would appear
clear that there has been no action by the
state and the provisions of the Amendment
have not been violated.” (emphasis added)
55
Donald J. Weidner
Shelley v. Kraemer (cont’d)
•
Neighboring property owners asserting the
benefit of the covenant
1. “urge that judicial enforcement of private
agreements does not amount to state action;
2. or, in any event, the participation of the state is
so attenuated in character as not to amount to
state action within the meaning of the
Fourteenth Amendment.
3. or, “even if the states…may be deemed to
have acted in the constitutional sense, their
action did not deprive [the Shelleys] of rights
guaranteed by the Fourteenth Amendment.”
56
Donald J. Weidner
Shelley v. Kraemer (cont’d)
•
3 Basic approaches to finding state
action:
1. Public function theory
2. State encouragement theory
3. Pervasive government involvement
57
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• Constitution extends to “state authority in the shape of
laws, customs, or judicial or executive proceedings.”
• Further, judicial action that triggers the 14A is not
simply the operation of a proceeding that is
procedurally unfair.
• “[T]he action of state courts in enforcing a substantive
common law rule formulated by those courts” may
result in a 14A violation, even though there has been
compliance “with the most rigorous conceptions of
procedural due process.”
– Recall Neponsit said: These are our rules, we can change
them
58
Donald J. Weidner
Shelley v. Kraemer (cont’d)
•
Court says there are two questions:
1. Was there state action?
2. Was the state action of the prohibited sort?
• Ct. says it has “no doubt” there is state action
“in the full and complete sense of the phrase.”
– There were willing buyers and willing sellers
here
– Without the intervention of the state courts,
the purchasers “would have been free to
occupy the properties in question without
restraint.”
• A response: According to traditional property
doctrine, the “willing seller” was a willing thief willing to sell what he59 did not own.
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• State “made available to [the neighbors] the full
coercive power of government to deny [African
Americans] the enjoyment of property rights….”
• Legislature could not impose these rules – nor
can executive – nor can the judicial branch.
• The 14A is not “ineffective simply because the
particular pattern of discrimination, which the
state has enforced, was defined initially by the
terms of a private agreement.”
• How were equal protection rights violated?
• Would covenants against whites have been enforced?
60
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• Property rights and race:
– “Equality in the enjoyment of property rights was
regarded by the framers . . . as an essential precondition to the realization of other basic rights and
liberties which the amendment was intended to
guarantee.”
– The Court further cited what is now Sec. 1982:
• “All citizens of the United States shall have the same right, in
every State and Territory, as is enjoyed by white citizens
thereof to inherit, purchase, lease, sell, hold, and convey real
and personal property.”
– From the Civil Rights Act of 1866
• Remember: Buchanan v. Warley (1917)
• Remember: Jones v. Alfred Mayer (1968)
61
Donald J. Weidner
Shelley v. Kraemer (cont’d)
• Was there a denial of the equal protection rights of the
neighbors?
– Was their property “taken?”
– Recall, Court said: “The enforcement …was…pursuant to
the common law policy of the states as formulated…in
earlier decisions.”
• As to the neighbors’ claim of a denial of their equal
protection:
– “The Constitution confers upon no individual the right to
demand action by the state which results in the denial of the
equal protection of the laws to other individuals. And it
would appear beyond question that the power of the state to
create and enforce property rights must be exercised within
the boundaries defined by the Fourteenth Amendment.”
62
Donald J. Weidner
Western Land Co. v. Truskolaski
• 1941 → Subdivider → Subdivided, subjecting the
lots to covenants that restricted the subdivision to
single-family dwellings and further prohibited
businesses of any kind.
• 1972 → Subdivider → wants to build a shopping
center on 3.5 acres of land it still owns.
– The parcel borders what has become a major four-lane
artery
• Multiple homeowners sue to enforce the
covenant.
• Subdivider says: the covenants are no longer
enforceable because of changed circumstances.
63
Donald J. Weidner
Western Land (cont’d)
• The area has “markedly changed.” In 1941, the
property surrounding the subdivision was used
primarily for residential and agricultural
purposes, with very little commercial
development of any kind.
– 30 years later:
• city’s population has increased from 20,000 to 95,000.
• there are shopping centers, motels, businesses, right
across the street from the subdivision.
• City has filed resolution of intent to rezone to commercial
– But the change has not yet been made
64
Donald J. Weidner
Western Land Co. (cont’d)
• Even though nearby avenues may become
heavily traveled thoroughfares, restrictive
covenants are still enforceable if the singlefamily residential character of the neighborhood
has not been adversely affected, and the
purpose of the restrictions has not been
thwarted.”
– commercialization has not rendered them
unenforceable because they are still “of real and
substantial value to those homeowners living within
the subdivision.”
• Value in what sense?
65
Donald J. Weidner
Western Land Co. v. Truskolaski con’t.
• The covenants would not be enforceable
– if “the properties were entirely unsuitable and
undesirable for residential use and that they had no
suitable economic use except for business or
commercial purpose.”
• “As long as the original purpose…can still be
accomplished and substantial benefit will inure to
the restricted area . . . the covenants stand even
though the subject property has a greater value if
used for other purposes.”
– What is the “substantial benefit” if the restrictions are
depressing the value of the property?
66
Donald J. Weidner
Western Land Co. v. Truskolaski con’t.
• “The burden of showing that the subdivision is not
now suitable for residential purposes” is on the
person challenging the covenants.
• Note: “a zoning ordinance cannot override
privately-placed restrictions.” Presumably:
– The power to override restrictions is not part of the
“zoning” power delegated to local government by the
state, or
– To do so might constitute a “taking”
• “In order for community violations to constitute an
abandonment, they must be so general as to
frustrate the original purpose of the agreement.”
67
Donald J. Weidner
Legislative Intervention in Enforcement of
Covenants
• Covenants are preventing land use from
becoming as intensive as zoning and planning
authorities would permit or encourage.
Understandably, legislatures have intervened.
• Massachusetts statute (p. 919) provides:
– No restriction shall be enforced or declared to be
enforceable unless the restriction is “of actual and
substantial benefit to a person claiming rights of
enforcement.”
– Even if a restriction is of substantial benefit, it may
not be specifically enforced, but only may be
enforced by money damages, if any of the following
conditions exist:
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Donald J. Weidner
Legislative “Conditions” Suggesting Damages Is
The Only Appropriate Remedy
(1) changes in the character of the properties affected or their neighborhood in
available construction materials or techniques, in access, services or facilities,
in applicable public controls of land use or construction, or in any other
conditions or circumstances, which reduce materially the need for the restriction
or the likelihood of the restriction accomplishing its original purposes or render it
obsolete or inequitable to enforce except by award of money damages, or (2)
conduct of persons from time to time entitled to enforce the restriction has
rendered it inequitable to enforce except by award of money damages, or (3) in
case of a common scheme the land of the person claiming rights of
enforcement is for any reason no longer subject to the restriction or the parcel
against which rights of enforcement are claimed is not in a group of parcels still
subject to the restriction and appropriate for accomplishment of its purpose, or
(4) continuation of the restriction on the parcel against which enforcement is
claimed or on parcels remaining in a common scheme with it or subject to like
restrictions would impede reasonable use of land for purposes for which it is
most suitable, and would tend to impair the growth of the neighborhood or
municipality in a manner inconsistent with the public interest or to contribute to
deterioration of properties of to result in decadent or substandard areas or
blighted open areas, or (5) enforcement, except by award of money damages,
is for any other reason inequitable or not in the public interest.
69
Donald J. Weidner
Legislative Intervention in Enforcement
of Covenants (Cont’d)
• Judicial reactions to such a statute vary.
• Massachusetts said no taking, because the
statute merely limits the remedy, not the right.
• But an Indiana court said taking when a statute
authorized planning commissions to vacate
outmoded plats, including any recorded
covenant or restriction applying to the platted
acreage.
70
Donald J. Weidner
Rick v. West
• 1946--A 62 acre parcel was subdivided with a
recorded declaration of covenants restricting the
use of land to single-family dwellings.
• 1956 – Rick sold to Catherine West a ½ acre lot
on which she built a house.
• Post 1956 – Rick contracted to sell 45 acres to
industrialist
– with the sale conditioned on the rezoning of tract from
residential to industrial.
• Town Board – Rezones the parcel to industrial.
• Ms. West – refuses to release the covenant in
her favor: the sale fell through.
71
Donald J. Weidner
Rick v. West (cont’d)
• 1959 – unable to sell more than a few lots, Rick
sells the remaining lots to Π.
• 1961 – Π contracts to sell 15 acres from the tract
to hospital.
• Ms. West again refuses to release covenants.
• Π sues Ms. West, declaring the covenants to be
unenforceable because of a change of conditions.
• Ms. West wins:
– No evidence of substantial change within the
neighborhood.
– No change at all within the Π’s tract.
• Response: the absence of change is the problem.
– The subdivision project was a failure and never did sell
out.
72
Donald J. Weidner
Rick v. West (cont’d)
• Cardozo:
“Restrictive covenants in respect of land will be
enforced by preventative remedies while the
violation is still in prospect, unless the attitude
of the …owner in standing on his covenant is
unconscionable or oppressive.”
–Is the test satisfied in Rick v. West?
• Is it a subjective test or an objective test?
• Further:
“Relief [enforcement] is not withheld because
the money damage is unsubstantial or even
none at all….”
73
Donald J. Weidner
Rick v. West (cont’d)
• Balancing is rejected by the Rick v. West court:
–“It is not a question of balancing equities or equating
the advantages of a hospital…with the effect it would
have on defendant’s property”
• Compare nuisance law
• Just as it was by Cardozo:
–“[N]o process of balancing the equities can make the
plaintiff’s the greater…or ever place the two in
equipoise.”
• Court says there is no statutory basis for
awarding pecuniary damages when the
restriction is not outmoded.
74
Donald J. Weidner
Rick v. West (cont’d)
•
Four Possible Outcomes:
1. Enjoin the Hospital.
–
Give the Holdout the entitlement.
2. Enjoin the Hospital only if Holdout pays damages to
the Hospital (“reverse damages”)
–
–
Give the Holdout the entitlement but make it pay for the
damages it causes.
See Spur Industries
3. Deny the injunction (permit the breach to continue)
–
Give the Hospital the entitlement
4. Deny the injunction (permit the breach to continue)
only if the Hospital pays damages to the Holdout.
–
–
Give the Hospital the entitlement but make it pay damages.
That is, protect the Holdout with a damage remedy.
75
Donald J. Weidner