Sterling v. Blackwelder

• Decision Date: 26 June 1968
• Docket Number: Civ. A. No. 3207.
• Parties: John R. W. STERLING, Plaintiff, v. Leroy J. BLACKWELDER et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

302 F. Supp. 1125

John R. W. STERLING, Plaintiff, v. Leroy J. BLACKWELDER et al., Defendants.

Civ. A. No. 3207.

United States District Court E. D. Virginia, Alexandria Division.

June 26, 1968.

Richard M. Millman, Washington, D. C., for John R. W. Sterling.

Hazel, Beckhorn & Hanes, Fairfax, Va., for Mary Louise Blackwelder.

Alfred Hiss, Arlington, Va., for Leroy Blackwelder.

Miller, Brown & Gildenhorn, Washington, D. C., for Wallace F. Holladay.

MEMORANDUM ORDER

KELLAM, District Judge.

On August 28, 1967, Wallace F. Holladay (Holladay) submitted a contract offer for the purchase of the property described in this suit as the "Moorefield Farm" (Farm), and including Parcels A, B, C, D and E as shown on survey of Herman L. Courson, C.S., dated May 19, 1967, to Plato Cacheris, Special Master (Master), appointed by the Court to receive offers for said property. A deposit of $50,000.00 was made pursuant to the terms of the contract, with balance of $950,000.00 to be paid within ninety days following date of execution of the contract. The contract was subject to confirmation by the Court and, among other things, provided:

The said real estate will be sold free and clear of all liens and encumbrances except the real estate taxes for the current year 1967, which shall be the obligation of the purchaser.

The offer was reported to and accepted by the Court. Some of the parties in interest appealed the Court's action in accepting the offer to the Circuit Court of Appeals for the Fourth Circuit, but it confirmed the District Court's action in accepting the offer. The contract called for settlement within ninety days after the District Court accepted the offer. By letter of November 24, 1967, to Master, Holladay sought an extension of time for settlement so that he would not incur cost of title examination and finder's fee for a loan to finance the purchase while awaiting a decision of the Court of Appeals. Master responded by letter of November 30, 1967, that the appeal had just been disposed of and that settlement would be expected December 20, 1967. On December 20, 1967, after previous telephone conversation Holladay's counsel wrote Master that there were numerous encumbrances upon the property, "including nine rights-of-way" and as a result thereof, it was "not economically feasible to develop the property in the manner which he originally intended." He requested a return of the deposit.

It appears from the evidence presented at a hearing on Holladay's petition for return of the said deposit, and the exhibits, that there are some nine separate easements or rights-of-way in and over the subject property. Holladay did not know of their existence until December 1, 1967. Said easements or rights-of-way are perpetual and exist in favor of the following.

1. In Deed Book V-15, page 279, dated May 26, 1942, in favor of Virginia Public Service Company, for a pole line in its present location, with ingress and egress to the easement for maintenance, and right to cut and trim, and keep trimmed, from the land of the owner such limbs, trees, etc., likely to interfere with operation of the line.

2. In Deed Book 1138, page 232, dated October 27, 1953, to Virginia Electric and Power Company, to construct, etc., pole line for electricity, telephone, with desired attachments, with full ingress and egress from and over property of owners to construct, maintain, etc., with right to cut all trees, etc., interfering with the line.

3. In Deed Book 1799, page 576, dated August 10, 1959, to Chesapeake and Potomac Telephone Company, for communication system consisting of poles, wires, cables, fixtures, with ingress and egress over owner's land, right to cut down trees, etc., within 15 feet of the Company's facilities.

4. In Deed Book 1996, page 398, dated January 31, 1961, to Virginia Electric and Power Company, for pole lines, etc., 25 feet in width, with right of ingress and egress, right to cut trees, etc.

5. In Deed Book 1987, page 420, dated March 27, 1961, taking by Commonwealth of Virginia of 3.7078 acres of land for highway purposes, with right to use such additional areas as may be necessary for proper construction and maintenance of channel change as indicated on plans.

6. In Deed Book 2009, page 30, dated May 29, 1961, taking by Commonwealth of 12.59 acres, with right to use such additional areas as may be necessary for proper construction and maintenance of channel change as indicated on plans.

7. In Deed Book 2244, page 213, dated January 21, 1963, taking by Commonwealth of 0.8926 of an acre, "together with the permanent right and easement to use the additional areas shown as being required for the proper execution and maintenance of the work."

8. In Deed Book 2428, page 663, dated February 10, 1964, to Board of Supervisors of Fairfax County, Virginia, easement for "constructing, operating, maintaining, adding to or altering present or future sewer lines * * * plus necessary manholes, etc.," with right to trim trees, etc.

9. In Deed Book 2733, page 651, dated February 11, 1966, to Board of Supervisors of Fairfax County, easement for sanitary sewer shown on plat.

Copies of the above-mentioned easements are filed as exhibits in this case.

While no plat of the property described in the contract has been submitted to the Court, no one questions the fact that the said easements are in, over and upon the property covered by the contract. Two title examiners so testified. All parties agree there are also some liens by way of deeds of trust and judgments against the property. These liens could be discharged from the proceeds of sale.

The question is, do the above easements constitute encumbrances on the property? Holladay says they do. The contract is clear and provides the property is sold "free and clear of all liens and encumbrances," except real estate taxes for 1967. No attempt was made by Master to remove or eliminate any of the above-mentioned easements. While some comment was made as to whether a deed was tendered, or whether Holladay was ready to settle, it seems clear from the facts the parties understood each other, namely, purchaser would not accept title with the easements thereon, and seller did not offer to (and could not) convey except subject to the easements. The issue is, are they encumbrances?

The language of the easements varies. The rights granted by the easements are paramount to those of a purchaser. They restrict the use of the property over which they extend. They constitute an interest or right in the land, and the value and use of the land is thereby diminished. Experts have often said the value of such easements is equal to the fee simple value of the land over which they extend, with resultant damage to the residue. The right of control, to build up, to sell and dispose of, and use of such easement is restricted. Some rights granted extend to the lands adjoining the easements — to cut trees, etc. — and some of them are not limited to exact width, etc. The contract was made, accepted, was to be enforced in Virginia, and dealt with Virginia realty. The law of Virginia on construction of the contract applies. Hardy-Latham v. Wellons et al., 415 F.2d 674, decided June 4, 1968 (4th Cir.)

The Code of Virginia, 1950, as amended, § 55-72, provides that a covenant "free from all encumbrances" shall have as much effect as the words "and that freely and absolutely acquitted, exonerated and forever discharged, or otherwise by the said grantor or his heirs saved harmless and indemnified of, from and against any and every charge and encumbrance whatever."

Michie's Jur. Vol. 5, page 248 ¶ 25, dealing with covenants against encumbrances, says:

An encumbrance, within the terms of the covenant against them, is said to be "every right to, or interest in, the land, to the diminution of the value of the land, but consistent with the passage of the fee by the conveyance." Thus it is held that, where real estate is conveyed with covenants of general warranty of title, as abutting a public road, but, due to mistake of the parties as to the location of the way, the property actually encroaches thereon, the road constitutes an encumbrance within the meaning of the covenants. Similarly, a private right of way over land is an encumbrance.

Statutes in both states provide, in substance, that a covenant, by any grantor in a deed, containing the words "free from all encumbrances," shall have the same effect as if the grantor had convenanted for himself, his heirs and personal representatives that the premises are freely and absolutely acquitted, exonerated and forever discharged, and the grantee, his heirs and assigns will be saved harmless and indemnified of, from and against any and every charge and encumbrance whatever.

In 20 Am.Jur.2d, page 644, § 81, dealing with covenants, etc., against encumbrances, the author says:

A covenant against encumbrances is a stipulation by the covenantor that there are no outstanding rights or interest to the estate conveyed or any part thereof which will diminish the value of the estate, but which are consistent with the passing of the estate. An encumbrance, within the terms of such a covenant, may be defined as every right to, or interest in, the land, which may subsist in a third party, to the diminution of the value of the land, but at the same time consistent with the passage of the fee thereto.

A covenant against encumbrances does not depend for its existence upon the extent or amount of the diminution in value, but extends to cases where, by reason of the burden, claim, or right, the owner does not acquire complete dominion over the land covered by his conveyance or deed. Thus, a lien or easement is properly viewed as a burden upon land, depreciative of its value, notwithstanding it does not directly conflict with the passage of title thereto. A burden may be only inchoate, yet if it is a right which may be enforced against the property and against the will and consent of the

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