Essex Co. v. Goldman

• Decision Date: 05 May 1970
• Citation: 357 Mass. 427,258 N.E.2d 526
• Parties: ESSEX COMPANY v. Benjamin B. GOLDMAN, trustee, et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 526

258 N.E.2d 526

357 Mass. 427

ESSEX COMPANY v. Benjamin B. GOLDMAN, trustee, et al.

Supreme Judicial Court of Massachusetts, Essex.

Argued Feb. 5, 1970.

Decided May 5, 1970.

Albert P. Zabin, Boston, for Paul Realty, Inc.

Herbert P. Wilkins, Boston, for Essex Company.

Before SPALDING, KIRK, SPIEGEL and REARDON, JJ.

KIRK, Justice.

The plaintiff, the Essex Company, brought this bill in the Land Court for declaratory relief under G.L. c. 231A. It requested a declaration that the several defendants were obligated to pay certain rent. The defendant Paul Realty, Inc. (Paul Realty) appeals from a final decree in favor of the plaintiff.

The plaintiff was incorporated pursuant to St.1845, c. 163, to construct a dam, locks and canals across the Merrimack River, and to create water power and use it, or lease or sell it to others, for manufacturing and mechanical purposes. The Essex Company constructed a dam and two canals, the North Canal and the South Canal, which the company owns and maintains. The dam causes water to flow into the canals and down the penstocks of the premises of those landowners who use the water, and then back into the river at various locations below the dam. See generally Essex Co. v. County Commrs. of Essex, 7 Gray 450; Essex Co. v. City of Lawrence, 214 Mass. 79, 100 N.E. 1016.

The land which is the subject of the controversy consists of about 145,000 square feet, located in Lawrence and bounded on the north by the Merrimack River and on the south by a line which runs parallel to the South Canal, fifty feet north of the north wall of that canal. The premises were conveyed in three separate parcels by the Essex Company between 1876 and 1895. The first grant was to Nathaniel W. and John W. Farwell in 1876, and conveyed a parcel of land and one 'mill power.' It was in the form of an indenture between the Farwells and the Essex Company, with certain 'proposals' attached. The indenture between the parties provided that the grant was '(s)ubject to the agreements, terms, conditions and all other matters and things in the * * * annexed proposals * * *.' The proposals included among other things a definition of the term 'mill power' as 'the right to draw from the nearest canal or water course of the grantors, and through the land to be granted so much water as shall give a power equal to thirty cubic feet of water per second, when the head and fall is twenty-five feet,' subject to certain limitations.

The proposals further provided that the plaintiff was to maintain the dam and canals, and that in order to provide a fund to insure the maintenance and repair of the dam and canals, 'each mill power with the land to which it is annexed shall forever be subject to a perpetual annual rent * * * and a perpetual annual rent * * * shall be reserved for every mill power hereafter sold * * *.' An annual rent of $1,200 was agreed upon, payable semiannually in equal instalments. In the event of the sale of a mill power and the land originally granted with the power, the assignees or purchasers were to be bound 'to pay the rent of the mill power and land so sold, and to perform all the agreements, covenants and conditions relating thereto and connected therewith and the grantors (the Essex Company) will not hold the original grantees responsible therefor * * * provided, such assignee or purchaser shall in some legal mode satisfactory to the grantors bind himself to the said grantors * * * to perform, fulfill, keep and observe, all the terms, conditions, covenants, and all other matters and things touching the property and estate assigned which were obligatory upon the original grantee * * *.' The failure of the grantees or their successors to pay any rent owed within ninety days after a 'judgment' had been obtained in a 'suit' for the rent would entitle the Essex Company to declare the land and the mill power forfeited.

In 1886, the Farwells sold the first parcel to the Farwell Bleachery. The Essex Company assented to the deed, and released the Farwells from their obligations on the 1876 deed. In 1888, the Essex Company conveyed an adjoining parcel to the Farwell Bleachery. In 1895, a third parcel, adjoining the other two, was conveyed by the Essex Company to the Farwell Bleachery. A condition of the deed was that the one mill power which had been originally convyed to the Farwells and which had been conveyed to the Farwell Bleachery be held and operated by the Farwell Bleachery as appurtenant to all three parcels then held by the Bleachery, the whole to constitute one estate or mill site subject to the proposals attached to the indenture of 1876.

Through mesne conveyances, title to the premises and mill power vested in 1953 in the defendants, Benjamin B. and Ethel I Goldman as trustees of Jeds Realty Trust. Shortly thereafter, those defendants, for themselves as trustees and for their successors and assigns, agreed with the Essex Company to perform the obligations of the 1876 indenture and the annexed proposals, and of the deeds of 1888 and 1895 to the Farwell Bleachery, 'including especially the obligation to pay from and after the delivery hereof the perpetual annual rent of $1200.00 payable semiannually on account of said Mill Power * * *.'

In 1957 the Goldmans as trustees of Jeds Realty Trust conveyed 8,200 square feet of the premises to the Demers Realty Company. The deed stated that no part of the mill power rent was to be allocated to that portion of the premises; the entire rent was to remain the responsibility of Jeds Realty Trust.

On June 29, 1962, the Goldmans as Trustees of Jeds Realty Trust conveyed the remainder of the premises and the mill power to the defendant Paul Realty, 'subject to and with the benefit of: the agreements, terms and conditions set forth or referred to in * * * (the deeds of 1876, 1888 and 1895) which the grantee (Paul Realty), by the acceptance of this deed, covenants to assume, perform, fulfill, keep, and observe.'

The last payment of rent for the mill power was received by the Essex Company from the Goldmans as trustees of Jeds Realty Trust on May 7, 1962, for the rent period of September 1, 1961, to March 1, 1962. The Essex Company has since sent semiannual bills to the Goldmans on the first day of each rent period but has received no payment. Paul Realty leases its parcel to a firm which manufactures plywood and plywood furniture. The water from the canal is not used for power or for any other purpose.

The judge determined that the Goldmans, as trustees of Jeds Realty Trust, are obligated to pay the Essex Company all rents due on and after March 1, 1962, pursuant to their agreement with the Essex Company in 1953. He ruled that the covenant to pay an annual rent of $1,200, payable semiannually, runs with the land and with the mill power appurtenant to the land. The final decree declared that the Goldmans were bound by the 1953 agreement and were obligated to pay the rent; that the Goldmans, Paul Realty, the successors of the Demers Realty Company and various other interested parties were bound by the provisions of the 1876 indenture and the deeds of 1888 and 1895, and by the provisions of the 1953 agreement between the Goldmans and the Essex Company, all of which instruments created a covenant running with the land; and that as a consequence all of the defendants are obligated to pay the rent. Paul Realty is the only defendant to appeal.

1. Paul Realty argues that it is not obligated to pay the rent for the mill power because it made no agreement with the Essex Company to pay the rent, and because the covenant to pay it is personal in character and does not run with the land. The argument assumes that the Essex Company would not be entitled to a declaration on or enforcement of the 1962 covenant between Paul Realty and the Goldmans in an equity suit to which the Goldmans were parties. We need not now pause to explore the validity of the assumption (see Boston & Maine R.R. v. Construction Mach. Corp., 346 Mass. 513, 521, 194 N.E.2d 395, and authorities cited at fn. 5) since the facts of the case before us show that the covenant to pay the rent does run with the land. The terms of the original conveyances by the Essex Company to the Farwells and the Farwell Bleachery are virtually identical to the terms considered in Holyoke Water Power Co. v. Whiting & Co. Inc., 276 Mass. 528, 534--535, 177 N.E. 568. There, as here,...