Northwestern Improvement Co. v. Lowry

• Decision Date: 22 March 1937
• Docket Number: 7671.
• Parties: NORTHWESTERN IMPROVEMENT CO. v. LOWRY.
• Court: Montana Supreme Court

66 P.2d 792

104 Mont. 289

NORTHWESTERN IMPROVEMENT CO. v. LOWRY.

No. 7671.

Supreme Court of Montana

March 22, 1937

Appeal from District Court, Sanders County, Fourth District; Asa L Duncan, Judge.

Action to secure an injunction by Northwestern Improvement Company against R. B. Lowry. From a judgment for defendant, the plaintiff appeals.

Reversed and remanded, with directions.

Gunn Rasch & Hall, of Helena, for appellant.

A. S Ainsworth, of Thompson Falls, for respondent.

ANDERSON Justice.

This action was brought to secure an injunction against the defendant from using a certain lot in the town of Paradise, and the buildings thereon, as a place for the sale of vinous, spirituous, or fermented liquors as a beverage. After the case was at issue it was submitted to the trial court for judgment and decision upon an agreed statement of facts.

The plaintiff corporation was duly authorized to transact business within the state. In the year 1907 it acquired title in fee and the possession of certain lands which it purchased for the purpose of platting into a townsite and establishing a town on the line of the Northern Pacific Railway Company, where the selling of vinous, spirituous, and fermented liquors would not be permitted. These lands were acquired for the additional purpose of establishing a tie-treating plant on the lands where the sale of these liquors would not be allowed. In June, 1908, plaintiff platted a part of the lands described in the complaint and agreed statement of facts as a townsite and divided the same into blocks, lots, streets, and alleys. This plat was filed for record in the office of the county clerk and recorder of Sanders county on June 13, 1908. Since the platting and recording of the townsite the plaintiff has sold a large number of lots to various persons, giving them deeds for the lands sold; however, plaintiff still owns in fee and has possession of a large number of lots in the town which are not sold, and has possession of other portions of the land thus acquired which are not embraced in the townsite. The Northern Pacific Railway Company has established a division point at Paradise and a large number of its employees reside in the town of Paradise, and the tie-treating plant has been established and a large number of men are there employed. Many persons who have purchased lots have erected dwellings and business buildings thereon and are now occupying the same.

In each deed and conveyance executed and delivered by the plaintiff to purchasers for lots in the townsite and for the lands not embraced within the townsite the plaintiff inserted the following covenant and condition: "The grantor has made and recorded a plat of the townsite of Paradise, which contains the premises in question and proposes to deed other premises in the plat to other purchasers. It inserts in all the conveyances of lots therein the covenant and condition following, which is also made a part of this conveyance, viz.: It is agreed that the premises conveyed shall not be used as a place for the sale of vinous, spirituous or fermented liquors as a beverage, nor for gambling, nor for any immoral purpose. The observance of this covenant is made a condition and if at any time the grantee, his assigns, heirs, or legal representatives, shall use the premises contrary to the terms of this covenant, then this conveyance shall be void, the premises immediately revert to the grantor, and the grantor may forthwith enter upon and take possession of the same."

In March, 1910, the plaintiff for a valuable consideration executed and delivered a deed to one Louis M. Linden for lot No. 13, in block 2, of the townsite of Paradise, which was recorded on December 28, 1911. This deed contained the covenant quoted supra. In December, 1935, and in January, 1936, the defendant completed the construction of a building on this lot and is now using the building for the sale of fermented liquor as a beverage--namely, beer--and has continued, since January 15, 1936, to sell fermented liquor without the consent of the plaintiff. Prior to the erection of the building on the lot of the defendant, he had knowledge of the covenants and conditions contained in the deed executed by the plaintiff, and prior to the erection thereof defendant was notified that plaintiff would not waive any of the conditions and covenants in the deed relating to the sale of liquor in Paradise, and would not grant the defendant permission to operate a beer parlor on this lot or in the town. The defendant refused to stop selling beer as a beverage in the building erected on his lot.

In the year 1925 Sanders county, through its proper officers, made a legal assessment and levy for state, county, school, and other taxes upon this lot. Due notification was made of the assessment and levy upon the owner of the lot. In November of that year these taxes became delinquent. The lot was sold for delinquent taxes and, after due and legal notice, on September 30, 1929, a tax deed was regularly issued by the treasurer of Sanders county to the county for the lot. Thereafter, on May 6, 1930, the county, as the owner of the lot, sold and conveyed it to one John F. Hauge; he thereafter sold it to the defendant, who has since December 10, 1935, been, and now is, in actual and exclusive possession.

The court found as conclusions of law that the conditions and covenants set forth in the deed were not binding upon the defendant, and therefore plaintiff could not enforce the same and that defendant was entitled to a decree of court dismissing the action upon the merits. Thereafter judgment of dismissal was entered in conformity with these conclusions. The appeal is from the judgment. Error is assigned upon the making of the conclusions of law, and the rendering and entering of the judgment.

The agreed statement of facts discloses that the levy of the tax and all proceedings leading up to the tax deed were in all respects regular and binding. The primary question for solution in this case is whether, as the result of the issuance of the tax deed, the restrictive covenants contained in the deed from the plaintiff to the original purchaser of this lot are thereby rendered of no force and effect as against the defendant.

In the case of State ex rel. City of Great Falls v. Jeffries, 83 Mont. 111, 270 P. 638, 640, this court said: "However, 'the Legislature has power to provide either that a tax sale shall create a new title, cutting off all prior liens, incumbrances and interests, or to provide that the tax purchaser shall acquire the interest only of the person in whose name the land was assessed or of the real owner.' 3 Cooley on Taxation (4th Ed.) 2930, § 1492. By the enactment of section 2215, Revised Codes 1921, providing that a tax deed conveys absolute title 'free from all incumbrances, except the lien for taxes which may have attached subsequent to the sale,' our Legislature adopted the first course. The tax deed mentioned is not derivative, but creates a new title in the nature of an independent grant from the sovereignty, extinguishing all former titles and liens not expressly exempted from its operation." The court adhered to its pronouncement in the Jeffries Case in the case of Richardson v. Lloyd, 90 Mont. 127, 300 P. 254.

It will be observed that in this case no attempt is made to assert the right by the plaintiff as contained in the covenant, to claim title to the property in question. Such right was a possibility of reverter. 1 Tiffany on Real Property (2d Ed.) 473. The possibility of reverter, under the decisions cited supra, was annihilated by the tax deed proceeding. Still the question remains as to whether plaintiff may secure injunctive relief. Section 6749, Revised Codes, provides: "The following land burdens, or servitudes upon land, may be attached to other land as incidents or appurtenances, and are then called easements: *** 6. The right of transacting business upon land." Easements are sometimes divided into affirmative and negative. An "affirmative easement" is one which authorizes the doing of acts which, if no easement existed, would give rise to a right of action. A "negative easement" is one the effect of which is not to authorize the doing of an act by the person entitled to the easement, but merely to preclude the owner of the land subject to the easement from doing that which, if no easement existed, he would be entitled to do. 2 Tiffany on Real Property (2d Ed.) 1179-1199. The common illustration of an affirmative easement is a right of way over the land of another. The common illustrations of negative easements are the right to have light passing to one's building over another's land, and the right to have one's building supported by such land. The nature of easements is well explained in an article in 27 Yale Law Journal, pp. 71, 72.

The lands to which an easement is attached is called the "dominant tenement"; the land upon which the burden or servitude is...