Nelson v. Atlanta, Knoxville & Northern Railway Co.

Lumpkin, J.

(After stating the foregoing facts.) The definitions of personal covenants and covenants running with land are. not difficult, but sometimes it is a matter of no small difficulty to declare whether a particular covenant belongs to the one class or to the other. The difference in consequences between a covenant the obligation of which remains fixed upon particular contracting parties and one in which a conveyance of the land is accompanied by the obligation, is great. In the case before us a proposition was made for the purchase of land on certain stated “terms, covenants, and conditions.” After stating them, it was added: “the covenants and agreements herein stated to be incorporated in the deed to said property, so as to run with the land sold.” The proposition was accepted. Both parties assumed that the covenants were of such a character that they could be made to run with the land sold, and agreed that this should be done. We deal with the case accordingly, without questioning the correctness of the assumption. If the deed had been made to the party contracting to purchase, and had included the covenants and agreements stated in the preliminary contract as running with the land, it would hardly be contended that such party would be bound both by the covenants in the preliminary contract, as personal, and also by the same covenants in the deed, as running with the land, at least unless such a purpose plainly appeared. Upon the making of such a deed containing these covenants, as the parties agreed, the preliminary contract would have been extinguished and merged into the deed. Nor is that result prevented because the proposed purchaser assigned his interest to another, and the deed containing the covenants was made to such assignee, which was alleged to be also the owner of the land on which Waverly Place was to be “relocated.”

Was it the agreement of the parties that the terms of the preliminary contract of purchase.should be binding upon each person who should succeed to the ownership of the land, pending the holding, as a covenant running with and resting upon the land sold, and also that the original purchaser should remain bound by the “terms, covenants and conditions” of the preliminary contract of purchase, regardless of who owned the land ? Suppose that the adjacent land should pass by sale, private or public, into entirely different hands, was it the legal import of the contract that the Atlanta, Knoxville and Northern Railway Company should nevertheless enter on it, lay out a street, build walls, etc? We do not mean that cases may not exist where a personal contract binds one who is-a party to it, although he has parted with his title, and his grantee or assignee takes cum onere, subject to the covenant, while he holds; but we do not think that the terms of the contract before us have that effect, or are sufficient to save the case from the general rule that terms of purchase are merged into the deed.

There are cases where a contract provided for the making of a deed and also contained some other separate and distinct collateral agreement by one or the other of the parties, and where the 'entire contract was held not to be merged in the deed. Instances of this kind will be found in Morris v. Whitcher, 20 N. Y. 41, and Reid v. Sycks, 27 Ohio State, 285. But these cases are different from one where the preliminary contract provides for its incorporation in its entirety into the deed, so as to make the covenants run with the land, and makes no provision for their being also personal. How can covenants be termed collateral to a deed, which, in pursuance of an express agreement in t;he preliminary contract, are to be and are inserted in the deed? The ground of extinguishment of the contract to convey by the making of the deed has been variously termed performance, satisfaction, or merger ; but the result is practically the same. On the general rule and exceptional eases see 13 Cyc. 616 et seq., and notes; Devlin on Deeds, 850 a, b; Clifton v. Jackson Iron Co., 74 Mich. 183 (41 N. W. 891, 16 Am. St. R. 621, and note); Davis v. Lee, 52 Wash. 330 (132 Am. St. R. 973, 100 Pac. 752); Colvin v. Schell, 1 Grant (Pa.), 225; Fuson v. Chestnut (Ky.), 109 S. W. 1192; Douglas v. Union Mut. Life Ins. Co., 127 Ill. 101 (20 N. E. 51); Oliver Refining Co. v. Portsmouth Cotton Oil Refining Co., 109 Va. 513 (64 S. E. 56).

It was contended that the Atlanta, Knoxville & Northern Bail-way Company could assign its rights under the preliminary contract, but could not assign its liabilities, and that its obligations remained of force. The agreements in that contract were mutually binding upon the parties to it. Certain things were set out as covenants and conditions of the purchase and sale of the land, and one of the agreements, binding on both, was that these covenants were to be written in the deed, “so as to run with the land.” When the, deed was executed to the Louisville Property Company, which is alleged to have been the assignee of the interest of the railway company, those agreements and covenants were written into it, but there was also inserted a clause which very materially changed the right of enforcement of them, making such right contingent, instead of absolute. It read: “ Said conditions shall not be enforcible, except as to removal of the round house, until the City of Atlanta allows exchange of streets, exchange of engine-house property and other changes shown in the blueprint drawing of the proposed enlargement of railroad terminals referred to in said proposal of February 20, 1904.” There was no allegation that the City of Atlanta had allowed these changes, which allowance was thus made a condition, precedent to the enforcement of the covenants included in the preliminary contract and copied into the deed. Clearly, as against the Louisville Property Company, an effort to enforce the covenants, without alleging such allowance on the part of the city, must fail. If it were conceded that, as between the two parties who entered into the preliminary contract, the making of the deed to the assignee of the purchaser did not satisfy the contract as a whole, but only to a lesser extent, and that both parties were bound by it except to that extent, the provision of the deed on the subject of the covenants which were to be made to run with the land was different from the provision of the contract on that subject. If it should be suggested that it might be inferred that there was an agreed modification of the original terms in the respect' mentioned, then this should enure to the benefit of the railway company also. If there was no such assent or agreement on the part of the latter-company, the plaintiff would not be in a position to claim against it specific performance of the contract. If the preliminary contract is binding on the railway company as written, but not enforcible as against the Louisville Property Company, except upon another express condition, the two have been so segregated as to make their liability to suit stand upon different bases.

It is no sufficient answer to the want of any allegation on the subject of the allowance of the exchanges on the part of the city, to say that it was alleged that the Louisville & Nashville Railroad Company was in possession of the land sold and that Vaverly Place, as it existed when the contract was made, was in the possession and exclusive use of the defendants, in connection with other terminal facilities, when the suit was brought. If the allegations that the Louisville & Nashville Railroad Company was the successor in interest of the Atlanta, Knoxville & Northern Railway Company and was in possession of the' land covered by the contract, and that the Louisville Property Company held the legal title for the first-mentioned company, are to be taken as meaning that the Louisville & Nashville Railroad Company stands in the same position as the Louisville Property Company, then the above-mentioned provision inserted in the deed would enure to its benefit.

It was contended that the contract agreed to give to the plaintiff an easement of way, regardless of the public street. A person may have an easement, without reference to the rights of the public. But the contract here involved was not merely for an easement, lmt included the abandonment of a public highway in a city and the opening of another in its stead, or, as it is called, “relocating” it. The contract and deed stated that the property purchased wüs to be used in connection with other property owned or controlled by the railway company, for railroad purposes, in a comprehensive plan for freight terminals, substantially shown by a ground plan, a blueprint of which “is exhibited herewith.” No blueprint was set out in the record, 'and this general reference to some con-, templated comprehensive plan was left to stand alone.

The presiding judge did not err in sustaining the demurrer and in dismissing the petition.

Judgment affirmed, on main hill of exceptions. Gross-bill dismissed.

All the Justices concur, except Fish, G. J., absent.