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(182 N.Y.S.) 9. Covenants Om 84—May be enforced against alienee aside from existence of

an easement.

Equity will sometimes impose the burden of a covenant relating to land on the alienee of such lands, on principles altogether aside from the existence of an easement, or the capacity of a covenant to adhere to the title, when equities arising from the facts and circumstances of the particular

case warrant the court in so doing, 10. Covenants On 53~Easements w2Cannot be created unless recognized

by law.

Owner cannot create new kinds of easements, or covenants running

with the land, which are not authorized or recognized by law. 11. Injunction Om58Restrictive covenants not enforced by equity, if contra

ry to public policy or interest.

Though equity is not controlled entirely by the strict rules of law relating to easements and covenants running with the land, and will depart therefrom if the equities of a particular case require it, it will never interfere by way of injunction or in any manner to enforce restrictive covenants, when convinced that they could receive no support or countenance

at law, because contrary to its policy and in conflict with public interest. 12. Injunction C 62 (1)-Covenants as to use of land not to be enforced,

where contrary to public policy.

Covenant forbidding the use of land for certain business, made for bene. fit of adjoining owner engaged in such business, will not be enforced by

injunction, since to so do would be to give adjoining owners a monopoly. 13. Injunction 24—Not to be granted, where contrary to public interest.

Injunctive relief may be refused, where the granting of it would be d?trimental to public interest and welfare.

Action by Rubel Bros., Incorporated, and another, against the Dumont Coal & Ice Company, Incorporated. Judgment of dismissal.

See, also, 110 Misc. Rep. 32, 180 N. Y. Supp. 662.
S. A. Telsey, of Brooklyn, for plaintiffs.

Joseph H. Kutner and Alfred G. Reeves, both of New York City, for defendant.

SCUDDER, J. This action is brought to enjoin defendant the Dumont Coal & Ice Company, Incorporated, from carrying on a coal and ice business on a piece of land owned by it. The action is based upon an agreement entered into on September 16, 1916, between a prior owner of defendant's land, the Empire City Lumber Company, and the respective owners of two adjacent parcels of land, namely, the plaintiff Albert H. Ackerman, and the Rockview Coal & Ice Company, the predecessor in title of the land owned by the plaintiffs, Rubel Bros., Incorporated.

The recital of this agreement contained a description of each of the parcels of land of the parties to it, and a statement to the effect that it was the desire of the parties to restrict the use of the land of the Empire City Lumber Company against the use of said land for the conduct of any business for the vending of coal and ice, for the benefit, respectively, of the lands of the two other parties to the agreement, and that the lands of each of said parties should become dominant tenements, and the land of the Empire City Lumber Company should become the servient tenement. The consideration reFor other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

cited was $1 and other good and valuable consideration. By this agreement the Empire City Lumber Company, for itself, its successors, and assigns, covenanted in substance and effect that there should not be maintained upon its land any track, switch, or siding for transporting or conveying of coal or ice, and that no structure would be erected or maintained thereon for the transacting of any coal or ice business, and that neither coal nor ice would be kept or stored upon the land for the purpose of dealing therein, and that no coal or ice business, wholesale or retail, would be conducted on said land, until January 1, 1937. It was further covenanted that the aforesaid covenant should be binding upon the Empire City Lumber Company, its successors and assigns, and inure to the joint benefit of the other parties to the agreement, their successors and assigns, and should be binding upon and run with the land of the Empire City Lumber Company, and should be in each and every respect a covenant running with the land. The agreement was under seal, and was recorded shortly after its execution.

In order to understand the meaning and the purpose of the agreement, and the relation to it of the parties to the action, it is necessary to give an outline of the facts and circumstances which attended its execution and the subsequent events. The properties of the several parties to the agreement were located in a section of the borough of Brooklyn known as East New York. They adjoined the Long Island Railroad, and, by reason of the fact that they could be connected with the railroad by sidings, all of them were peculiarly available for conducting upon them of a coal and ice business.

The Rockview Coal & Ice Company, one of the parties to the agreement, was owned and controlled by two brothers, Samuel and Isidore Rubel. They, in the name of the corporation, conducted on its premises a large retail coal business. Although the plaintiff Ackerman was a party to the agreement, he seems to have acted at the instigation or in aid of Rubel Bros. During the pendency of the present action, he conveyed his premises to the plaintiff Rubel Bros., Incorporated, and he is no longer a party in interest. It would therefore seem unnecessary to consider its connection with the transaction. The Empire City Lumber Company, the covenantor in the agreement, conducted a lumber business on its premises, and was not engaged in the coal and ice business. At the time of entering into the agreement, it was in an insolvent condition, and had a $10,000 mortgage on its property.

It seems that prior to the securing of this restrictive agreement by the Rubel Bros. from the Empire City Lumber Company, some 30 small coal dealers or peddlers, who were customers of Rubel Bros. and had become dissatisfied, associated themselves together for the purpose of organizing a company of their own from which to purchase coal. They obtained a contract for the purchase of the property of the Empire City Lumber Company, with the object of using it as the place of business of the proposed company, and thereafter incorporated a company under the name of the Municipal Coal Company, and assigned the contract to it. Shortly prior to the time set for the closing of this contract of sale, on the day before or the same day,

(182 N.Y.S.) the Empire City Lumber Company executed the above-mentioned agreement restricting the use of its property for a coal and ice business.

It seems to me that the evidence establishes that Samuel Rubel, who acted for the covenantees in procuring the restrictive agreement, had knowledge of the contract of the Empire City Lumber Company with the associated small dealers, and that the principal purpose or object of the restrictive agreement was to defeat the consummation of the sale of the land and the conveyance to the Municipal Coal Company. The Empire City Lumber Company was insolvent. Its property was subject to a first mortgage of $10,000. It was under contract to sell its property to the Municipal Coal Company subject to that mortgage only. For three thousand dollars paid to it by the Rubels, the insolvent Empire City Lumber Company was induced to not only execute the restrictive agreement on the use of its property, but also a second mortgage for $3,000, thereby placing itself in a position where it could not perform its contract with the Municipal Coal Company and of willfully violating that contract. The Municipal Coal Company rejected title, and at once commenced an action against the Empire City Lumber Company for specific performance, with the alternative relief in money damages. The action resulted in a judgment in favor of the Municipal Coal Company for little over $1,700. This judgment was docketed on April 20, 1917.

On November 26, 1917, an action was commenced by one Belanowsky to foreclose the $10,000 first mortgage. Before the foreclosure action had proceeded to judgment, said Rubel Bros. purchased the mortgage and caused it to be assigned to a person designated by them. The assignee was substituted as party plaintiff, and judgment was entered, directing the referee to sell the premises subject to the restrictive covenant. At the sale the Municipal Coal Company filed a written protest against having the property sold subject to the restriction. The bidding was between Rubel Bros., Incorporated, and the Municipal Coal Company. Rubel Bros., Incorporated's, last bid was $13,450, a sum apparently sufficient to cover the $10,000 first mortgage, the $3,000 second mortgage and the foreclosure expenses. The Municipal Coal Company had its $1,700 judgment to protect; the judgment having been recovered subsequent to the making and recording of the second mortgage.

On a bid of $13,500, the property was struck down to the Municipal Coal Company.

After such purchase the Municipal Coal Company made appiication to the court to direct the referee to give it a deed without the provision that the premises were conveyed subject to the restrictive covenant. This application was denied, and thereafter the Municipal Coal Company accepted a referee's deed conveying the premises subject to the restriction. In the surplus money proceeding which followed the foreclosure sale, priority was given to the judgment of the Municipal Coal Company over the second mortgage, on the ground that Rubel Bros. had caused said mortgage to be placed upon the,

property in fraud of the rights of the Municipal Coal Company under its contract with the Empire City Lumber Company.

The Municipal Coal Company recorded its deed of the property from the referee on March 7, 1918. It did not attempt to carry on a coal and ice business upon the property. On December 17, 1918, it conveyed the property to one Moses Molach, and on February 13, 1919, Molach conveyed it to the defendant, the Dumont Coal & Ice Company. Both the conveyance to Molach and the conveyance to the Dumont Coal & Ice Company were made in the interest of, and to carry out the purposes of, the same associated small coal dealers who controlled the Municipal Coal Company. Neither the deed to Molach nor the deed to defendant contained a provision

that the premises were conveyed subject to the restrictive covenant. Both of these grantees, however, had actual and constructive notice of that covenant.

In July, 1919, the defendant began doing a coal business on the land. The plaintiffs thereupon began this action, and obtained an injunction pendente lite restraining defendant from carrying on such business. Defendant was not a party to the restrictive agreement upon which this action is based. There is no privity of contract between plaintiff and defendant. Plaintiffs seek to impose on defendant the obligation to observe the agreement, on the ground that it creates a negative easement, that its covenants are covenants running with the land, and that there are equities arising from the facts and circumstances surrounding the agreement and the purchase of the property by defendant which require defendant to observe the agreement.

[1, 2] The question of easement and that of covenants running with the land, which are involved in this case, do not require separate consideration. The covenants in the agreement cannot run with the land and bind defendant, unless privity of estate exists between plaintiffs and defendant. Cole v. Hughes, 54 N. Y. 444, 13 Am. Rep. 611. Such privity can be spelled out only in case the agreement is or can be regarded as an instrument of conveyance or grant of an easement. If it is an instrument conveying an easement, there is a privity between plaintiffs and defendant, in that they have common source of title in the Empire City Lumber Company. The grant of an easement is in nature and substance a covenant running with the land. It would be difficult, if not impossible, to express a grant of a negative easement, except in the form of a covenant.

[3] It is apparent from the context of the agreement that it was the intent and purpose of the parties to it to create an easement, and it is expressly provided in the agreement that the covenants therein shall be covenants running with the land. So far as form and intention of the parties to it are concerned, the agreement is a good and sufficient deed to grant an easement. The use of the word "grant' is not essential. Langdon v. New York City, 93 N. Y. 129, 181.

[4] If, however, the right granted by the agreement lacks any of the qualities which the law makes essential to an easement, it does not convey an easement, and is void so far as defendant is concerned, notwithstanding the intention of the parties to the agreement to create an easement, and the agreement itself is formally suffi(182 N.Y.S.) cient to grant it. That which is essentially a personal contract cannot be made into either an easement or a covenant running with the land by a stipulation between the parties to the contract that it shall

be an easement or covenant running with the land. Keppel v. Bailey, : 2 Mylne & Keene, 517; Harsha v. Reid, 45 N. Y. 415; Pierce v. Keator, 70 N. Y. 419, 26 Am. Rep. 612.

[5] It is elementary law that easement rights are not such rights as would be of merely personal benefit to one who happens to be owner of the dominant tenement, but must be necessary or useful to the enjoyment of that tenement itself, whoever may be the owner of it. 2 Washburn on Real Property, § 1225; 19 Corpus Juris, 864; Pierce v. Keator, 70 N. Y. 419, 422, 26 Am. Rep. 612. It seems very clear to me that the restriction which the agreement seeks to place upon defendant's land against its use for a coal and ice business is in no way necessary or beneficial to the use of plaintiffs' land. Access to plaintiffs' land, the use of the railway siding, and the coal pockets will not be either aided or interfered with by the not carrying on, or the carrying on, of a coal and ice business on the defendant's land. Damages for the breach of the restrictive covenant could not be recovered for injury to plaintiffs' land, for there would be none; the only damages which could possibly be occasioned by a breach of the covenant would be plaintiffs personal loss from the carrying on of a competitive business on the defendant's land.

[6] This case, therefore, is not within the class of cases (of which the well-known case, reported on the first appeal as Trustees of Columbia College v. Lynch, 70 N. Y. 440, 26 Am. Rep. 615, and on the second appeal as Trustees of Columbia College v. Thacher, 87 N. Y. 311, 41 Am. Rep. 365, is an example) that uphold restrictive covenants against the use of property for business, when made for the benefit of residential property. Such covenants have the essential quality of easements, in that they are for the benefit of the dominant tenement. The theory on which equity proceeds in this class of cases is that the covenants enforced create easements and are therefore of a nature to run with the land. In the Columbia College Case above referred to the court says (70 N. Y. 447, 26 Am. Rep. 615):

“The purpose clearly disclosed was, by the restrictions mutually imposed by the owners respectively upon the use of their several properties, to make the lots more available and desirable as sites for residences, and the agreement professes to, and does in terms, impose, for the common benefit, the restrictions in perpetuity, and to bind the heirs and assigns of the respective covenantors. This should be construed as a grant by each to the other in fee of a negative easement in the lands owned by the covenantors.”

The fact that the covenants in that case were mutual and furnished consideration for each other is a mere incident, and does not serve as a ground for distinguishing the Columbia College Case from the present case. The question of privity of estate is also unimportant. Easements of all kinds may be created, irrespective of any privity of estate, and for any good and valuable consideration.

182 N.Y.S.-14

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