May Term, 1900.
William S. MacDonald, for the appellant.
Charles A. Hawley, for the respondent.
Upon the foregoing facts the counsel for the defendant contends that the provision of the Phœnix Mills deed for furnishing power to Howe, its grantee, should be treated simply as a personal contract or covenant to sell power from an appliance then upon the premises; that while possibly it might be regarded as in the nature of an easement to take from the wheel in the Stone Mills force or energy to the extent of certain specified horse power, it was in no sense a grant of realty or of any interest therein. In short, that the provision, by whatever name it may be called, does not amount to a covenant which runs with the land, and that, consequently, the defendant, while she may be enjoined from interfering with the plaintiff's enjoyment of such privileges as it was designed to confer, cannot be compelled to perform any affirmative act for their maintenance.
This contention was supported by an exceptionally forceful argument, in the course of which it was asserted that inasmuch as no privity of estate existed between the covenantor and covenantee, and none was created at the time the covenant was made, the case falls directly within the principle of Cole v. Hughes ( 54 N.Y. 444) and Scott v. McMillan (76 id. 141).
Upon the other hand, however, it was quite as earnestly contended that all the elements which are essential to the creation of a running covenant, including a privity of estate, were present at the time the agreement in question was entered into, and that, consequently, the burden or liability arising therefrom is not confined to the original covenantor, but passes to subsequent grantees as an incident to the land conveyed.
The controversy thus formulated presents a most interesting question, in the discussion of which counsel have certainly displayed a vast amount of labor and research, and did we suppose that a determination of the issues presented upon this appeal would impose upon us the necessity of defining the term "privity of estate," as that term is here used, we should shrink from a task which would bring to our judgment "a judicial quarrel almost as venerable as the common law itself and open yet to vigorous dispute." (FINCH, J., in Mygatt v. Coe, 142 N.Y. 78, 82; Rawle Cov. [5th ed.] § 203, n. 2.) But haply, in the view which we are inclined to take of the case, a discussion along the lines pursued by counsel becomes a work of supererogation.
The purpose and intent of the parties to the original agreement are, we think, perfectly obvious. The Phœnix Mills was the owner of a valuable water privilege as well as of the means and appliances for utilizing the same. It was also the owner of a tract of land for which it had no particular use. To meet this condition of affairs it subdivided its surplus land into parcels and then sold the same to various parties. In order, however, to enhance the value of the land thus placed upon the market and induce purchasers to buy, the company agreed to furnish a certain amount of power with each parcel sold. As a consequence the land, with this incident attached to it, found ready sale, and the purchasers thereof immediately set about to erect buildings for manufacturing purposes upon their respective parcels, in reliance, doubtless, upon the right to the water power which their several grants secured to them. In these circumstances, if, as claimed by the plaintiff, there was a community of interest or a privity of estate between the original grantor and grantees, the covenant made by the former would unquestionably be one which would run with the land and one for the breach of which an action at law could be maintained by the covenantee or his grantees.
But even in the absence of any community of interest or privity of estate, it has been held that the owners of land may by agreement create mutual easements for the benefit of each other's land which will be enforced in equity that an easement of this character can be created by grant, and that the right to its enjoyment will in like manner pass as appurtenant to the premises in respect of which it was created. In discussing a similar proposition in the American note to Spencer's Case (1 Smith L.C. [6th Am. ed.] 167) it was said: "But although the covenant, when regarded as a contract, is binding only between the original parties, yet, in order to give effect to their intention, it may be construed by equity as creating an incorporeal hereditament (in the form of an easement) out of the unconveyed estate and rendering it appurtenant to the estate conveyed; and when this is the case, subsequent assignees will have the right and be subject to the obligations which the title or liability to such an easement involves."
The principle thus enunciated has, we believe, been recognized and enforced by the courts with great uniformity from an early day down to the present time; and when it is applied to the facts of this case, it seems to dispose of the defendant's contention, regardless of her major proposition, as to which we express no opinion. ( Norman v. Wells, 17 Wend. 136; Parker v. Nightingale, 6 Allen [Mass.], 341; Morse v. Aldrich, 19 Pick. 449; Trustees v. Lynch, 70 N.Y. 440; Phœnix Ins. Co. v. Continental Ins. Co., 87 id. 400; Hart v. Lyon, 90 id. 663; Nye v. Hoyle, 120 id. 195.)
In this connection it is proper to suggest that in the case last cited it was said that the views there expressed do not conflict with Cole v. Hughes and Scott v. McMillan ( supra). A distinction is, however, sought to be drawn between the cases above referred to and the one under review, because, as it is asserted, in the former the covenants were in terms between the parties and their respective heirs and assigns, and they were connected with the subject of the grant and entered into the value thereof, while in the latter all these elements are absent. It is true that the covenant in the deed to Howe does not in express terms bind the grantor, its "heirs and assigns," but the defendant took possession of the premises burdened with the covenant, and she thereby became subject, as grantee or assignee, to its terms and conditions, although not bound by express words. ( Denman v. Prince, 40 Barb. 213; Mygatt v. Coe, supra.)
As regards the other distinguishing features which are said to exist it is necessary only to advert to the fact, which we think sufficiently appears, that the covenant in question was connected with and without doubt entered into the consideration of the grant from the Phœnix Mills to Howe.
The defendant took her title to the premises owned by her with actual and full notice of the covenant in the Howe deed and of all the equities arising therefrom. Moreover, she and her predecessors in title gave practical construction to the language and obligations of that covenant by sustaining the burden which it imposed for a long term of years, and, in view of these circumstances, it would, as was said by ALLEN, J., in Trustees v. Lynch ( supra), "be unreasonable and unconscientious to hold (her) absolved from the covenant in equity for the technical reason assigned, that it did not run with the land so as to give an action at law."
We think the interlocutory judgment appealed from should be affirmed, with the usual leave to answer.
Interlocutory judgment affirmed, with costs, with leave to the defendant to withdraw her demurrer and answer upon payment of the costs of the demurrer and of this appeal.