Capstar Radio Operating Co. v. Lawrence

Justice EISMANN,

Concurring in Part II.B. and in the Result in Part II.C.

In 1975 Harold and Marlene Funk sold certain real property to Human Synergistics, Inc., under a real estate contract. The contract provided that the sale was:

5. Subject to and including an ingress egress easement over this and adjoining property in said sections 21 and 22 owned by the grantor and including an ingress egress easement over portions of Section 21 heretofore granted to the grantors.

The contract recited that the Funks had executed a deed conveying the property to Human Synergisties and provided that a copy of the contract and a warranty deed would be placed in escrow. That apparently was not done because the Funks later executed a warranty deed on November 18, 1992. That deed did not reserve or grant any easement. The district court held that the above-quoted sentence in the real estate contract created an easement. The district court did not explain how it could have done so.

Under the doctrine of merger, any recitals in the real estate contract were merged into the deed. As we stated in Jolley v. Idaho Securities, Inc., 90 Idaho 373, 382, 414 P.2d 879, 884 (1966) (quoting Continental Life Ins. Co. v. Smith, 41 N.M. 82, 64 P.2d 377 (1936)), “When a deed is delivered and accepted as performance of the contract to convey, the contract is merged in the deed. Though the terms of the deed may vary from those contained in the contract, the deed alone must be looked to determine the rights of the parties____” There is no question that the deed in this case was delivered and accepted in performance of the real estate contract. It recites that it was.

This deed is given in fulfillment of those certain contracts between the parties hereto dated July 1, 1975 and conditioned for the conveyance of the above described property, and the covenants and warranty herein contained shall not apply to any title, interest or encumbrance arising by, through or under the purchaser in said contract, and shall not apply to any taxes, assessments or other charges levied, assessed or becoming due subsequent to the date of said contract.

The recital does not incorporate the contract by reference, but merely excludes from the warranties of title, quiet enjoyment, and against encumbrances any defect arising out of the purchaser’s conduct during the time from the contract of sale to the issuance of the warranty deed. Thus, under the doctrine of merger, any purported reservation or grant of an easement in the real estate contract would be irrelevant. The district court erred in attempting to create an easement based upon the real estate contract.