Neponsit Prop. Owners' Ass'n, Inc. v. Emigrant Indus. Sav. Bank

• Decision Date: 24 May 1938
• Citation: 278 N.Y. 248,15 N.E.2d 793
• Parties: NEPONSIT PROPERTY OWNERS' ASS'N, Inc., v. EMIGRANT INDUSTRIAL SAV. BANK.
• Court: New York Court of Appeals Court of Appeals

278 N.Y. 248

15 N.E.2d 793

NEPONSIT PROPERTY OWNERS' ASS'N, Inc.,

v.EMIGRANT INDUSTRIAL SAV. BANK.

Court of Appeals of New York.

May 24, 1938.

Action by the Neponsit Property Owners' Association, Incorporated, against the Emigrant Industrial Savings Bank, to foreclose a lien upon land. From an order of the Appellate Division, 252 App.Div. 876, 300 N.Y.S. 1341, which affirmed orders of Special Term granting plaintiff's motion to dismiss counterclaim and strike out affirmative defenses, and denying defendant's motion for judgment on the pleadings, defendant appeals. The Appellate Division certified the following questions, 253 App.Div. 722, 300 N.Y.S. 1353:‘1. Should the motion of the defendant for judgment on the pleadings have been denied? 2. Should the motion of the plaintiff to strike out the seven defenses and the one counterclaim in the defendant's answer have been granted?’

Affirmed, and certified questions answered in the affirmative. Appeal from Supreme Court, Appellate Division, Second Department.

Walter E. Warner, Jr., William E. Grady, Jr., R. O'Gorman, and E. J. O'Gorman, all of New York City, for appellant.

Ralph S. Hein and Rosenblum & Sommer, all of New York City, for respondent.

LEHMAN, Judge.

The plaintiff, as assignee of Neponsit Realty Company, has brought this action to foreclose a lien upon land which the defendant owns. The lien, it is alleged, arises from a covenant, condition or charge contained in a deed of conveyance of the land from Neponsit Realty Company to a predecessor in title of the defendant. The defendant purchased the land at a judicial sale. The referee's deed to the defendant and every deed in the defendant's chain of title since the conveyance of the land by Neponsit Realty Company purports to convey the property subject to the covenant, condition or charge contained in the original deed. The answer of the defendant contains, in addition to denials of some of the allegations of the complaint, seven separate affirmative defenses and a counterclaim. The defendant moved for judgment on the pleadings, dismissing the complaint pursuant to rule 112 of the Rules of Civil Practice. The plaintiff moved to dismiss the counterclaim pursuant to rule 109, subdivision 6, and to strike out the affirmative defenses contained in the answer pursuant to rule 103, as well as pursuant to rule 109, subdivision 6, of the Rules of Civil Practice. The motion of the plaintiff was granted and the motion of the defendant denied. The Appellate Division unanimously affirmed the order of the Special Term and granted leave to appeal to this court upon certified questions.

Detailed analysis of the allegations contained in the ‘separate defenses' would serve no useful purpose. In part, they are merely argumentative denials of allegations of the complaint which the court might properly strike out pursuant to rule 103, as ‘redundant, repetitious [and] unnecessary,’ for those allegations of the complaint are put in issue by direct denials in the answer. Upon this appeal the defendant contends that the land which it owns is not subject to any lien or charge which the plaintiff may enforce. Its arguments are confined to serious questions of law. Some of these questions are properly raised by the defendant's challenge of the sufficiency of the complaint; other questions are raised by the plaintiff's challenge of the sufficiency of the separate defenses. The two motions, indeed, involve, in general, the same questions. The form in which the questions are raised is unimportant. On this appeal we may confine our consideration to the merits of these questions, and, in our statement of facts, we drew indiscriminately from the allegations of the complaint and the allegations of the answer.

It appears that in January, 1911, Neponsit Realty Company, as owner of a tract of land in Queens county, caused to be filed in the office of the clerk of the county a map of the land. The tract was developed for a strictly residential community, and Neponsit Realty Company conveyed lots in the tract to purchasers, describing such lots by reference to the filed map and to roads and streets shown thereon. In 1917, Neponsit Realty Company conveyed the land now owned by the defendant to Robert Oldner Deyer and his wife by deed which contained the covenant upon which the plaintiff's cause of action is based.

That covenant provides:

‘And the party of the second part for the party of the second part and the heirs, successors and assigns of the party of the second part further covenants that the property conveyed by this deed shall be subject to an annual charge in such an amount as will be fixed by the party of the first part, its successors and assigns, not, however exceeding in any year the sum of four ($4.00) Dollars per lot 20x100 feet. The assigns of the party of the first part may include a Property Owners' Association which may hereafter be organized for the purposes referred to in this paragraph, and in case such association is organized the sums in this paragraph provided for shall be payable to such association. The party of the second part for the party of the second part and the heirs, successors and assigns of the party of the second part covenants that they will pay this charge to the party of the first part, its successors and assigns on the first day of May in each and every year, and further covenants that said charge shall on said date in each year become a lien on the land and shall continue to be such lien until fully paid. Such charge shall be payable to the party of the first part or its successors or assigns, and shall be devoted to the maintenance of the roads, paths, parks, beach, sewers and such other public purposes as shall from time to time be determined by the party of the first part, its successors or assigns. And the party of the second part by the acceptance of this deed hereby expressly vests in the party of the first part, its successors and assigns, the right and power to bring all actions against the owner of the premises hereby conveyed or any part thereof for the collection of such charge and to enforce the aforesaid lien therefor.

‘These covenants shall run with the land and shall be construed as real covenants running with the land until January 31st, 1940, when they shall cease and determine.’

Every subsequent deed of conveyance of the property in the defendant's chain of title, including the deed from the referee to the defendant, contained, as we have said, a provision that they were made subject to covenants and restrictions of former deeds of record.

There can be no doubt that Neponsit Realty Company intended that the covenant should run with the land and should be enforceable by a property owners association against every owner of property in the residential tract which the realty company was then developing. The language of the covenant admits of no other construction. Regardless of the intention of the parties, a covenant will run with the land and will be enforceable against a subsequent purchaser of the land at the suit of one who claims the benefit of the covenant, only if the covenant complies with certain legal requirements. These requirements rest upon ancient rules and precedents. The age-old essentials of a real covenant, aside from the form of the covenant, may be summarily formulated as follows: (1) It must appear that grantor and grantee intended that the covenant should run with the land; (2) it must appear that the covenant is one ‘touching’ or ‘concerning’ the land with which it runs; (3) it must appear that there is ‘privity of estate’ between the promisee or party claiming the benefit of the covenant and the right to enforce it, and the promisor or party who rests under the burden of the covenant. Clark on Covenants and Interests Running with Land, p. 74. Although the deeds of Neponsit Realty Company conveying lots in the tract it developed ‘contained a provision to the effect that the covenants ran with the land, such provision in the absence of the other legal requirements is insufficient to accomplish such a purpose.’ Morgan Lake Co. v. New York, N. H. & H. R. R. Co., 262 N.Y. 234, 238, 186 N.E. 685, 686. In his opinion in that case, Judge Crane posed but found it unnecessary to decide many of the questions which the court must consider in this case.

The covenant in this case is intended to create a charge or obligation to pay a fixed sum of money to be ‘devoted to the maintenance of the roads, paths, parks, beach, sewers and such other public purposes as shall from time to time be determined by the party of the first part [the grantor], its successors or assigns.’ It is an affirmative covenant to pay money for use in connection with, but not upon, the land which it is said is subject to the burden of the covenant. Does such a covenant ‘touch’ or ‘concern’ the land? These terms are not part of a statutory definition, a limitation placed by the State upon the power of the courts to enforce covenants intended to run with the land by the parties who entered into the covenants. Rather they are words used by courts in England in old cases to describe a limitation which the courts themselves created or to formulate a test which the courts have devised and which the courts voluntarily apply. Cf. Spencer's Case, Coke, vol. 3, part 5, 16a; Mayor of Congleton v. Pattison, 10 East 130. In truth such a description or test so formulated is too vague to be of much assistance and judges and academic scholars alike have struggled, not with entire success, to formulate a test at once more satisfactory and more accurate. ‘It has been found impossible to state any absolute tests to determine what covenants touch and concern land and what do not. The question is one for the court to determine in the exercise of its best judgment upon the facts of each case.’ Clark, op. cit. p. 76.

Even though that be true, a determination by a court in one case upon particular facts...