Eagle Enterprises, Inc. v. Gross

Brief Fact Summary.

The New York Court of Appeals ruled that a covenant is enforceable against all subsequent owners if the covenant runs with the land. 

Synopsis of Rule of Law.

A covenant runs with the land if there is privity of estate between both parties, and the covenant touches and concerns the land in which the land runs and therefore is enforceable against all subsequent owners. 

Facts.

The Baums acquired a property from Orchard Hill Realties. The deed stipulated that the owners of the property would need to purchase water during a certain time of year from a specific vendor and for a yearly price. The deed emphasized that this covenant was to run with the land. Gross (Defendant) now owns the property and refuses to pay for the water as stipulated in the deed. Eagle Enterprises (Plaintiff) now the successor of Orchard Hill files suit for Defendant’s failure to abide by the covenant. Plaintiff filed a motion to compel. 

Issue.

If the previous owners of the land intended to impose a covenant that ran with the land, is the covenant enforceable against all subsequent owners? 

Held.

No. The covenant is only enforceable against all subsequent owners if the covenant was created between parties is privity of estate and if the covenant touches and concerns the land. The court determines the covenant to pay a yearly fee for water and obtain water from a specific source for a specific time throughout the year does not touch and concern the land because it does not affect the ownership of the property but merely inconveniences the owner of the property. Appellate Division affirmed.

Discussion.

the court notes that the intent and the privity were present however the required element of touching and concerning the land was not present. The court hints that in order for the covenant to touch and concern the land the covenant must affect the ownership of the property.