Eagle Enterprises, Inc. v. Gross

Brief Fact Summary.

Plaintiff and Defendant’s predecessors in title covenanted that Defendant’s predecessor in title would receive and pay for water from Plaintiff’s predecessor in title. The deed by which the covenant was created stipulated that the covenant would run with the land. Plaintiff sued Defendant because Defendant refused to pay for or accept delivery of water from Plaintiff.

Synopsis of Rule of Law.

Plaintiff and Defendant’s predecessors in title covenanted that Defendant’s predecessor in title would receive and pay for water from Plaintiff’s predecessor in title. The deed by which the covenant was created stipulated that the covenant would run with the land. Plaintiff sued Defendant because Defendant refused to pay for or accept delivery of water from Plaintiff.

Facts.

In 1951, Orchard Hill Realities, Inc. conveyed the property in question through a deed to the Baums, which contained a provision that required the Baums to purchase water from Orchard Hill in May to October of each year for an annual fee of thirty-five dollars. The deed recited that the covenant was to run with the land. Gross (Defendant) is the successor in title to the Baums. Eagle Enterprises, Inc. (Plaintiff) is the successor to Orchard Hill. Defendant had constructed his own well and therefore refused to pay for or accept delivery of the water from Plaintiff.

Issue.

Whether a covenant runs with the land and is enforceable against subsequent owners merely because the original grantor and grantee intended it to run with the land.

Held.

No. The appellate court’s ruling is affirmed. A covenant runs with the land only if: 1) the original grantor and grantee so intended; 2) there is “privity of estate” between the parties presently contesting the covenant; and 3) the covenant “touches and concerns” the land with which it runs.