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Capitol Federal Savings & Loan Association v. Smith

    Brief Fact Summary. The Plaintiffs, black people, assert ownership in this quiet title action of property which is purported to be under a racially restrictive covenant, Plaintiffs were seeking to have the cloud on title removed. The Defendants are property owners in the neighborhood who claim the Plaintiff’s property based on the forfeiture provisions in the racially restrictive covenant which provide that forfeiture will be made upon placement of a notice of claim, which Defendants did. The trial court found for the Plaintiffs and stated that to enforce this agreement would have been a per se violation of the Fourteenth Amendment.

    Synopsis of Rule of Law. Based on the case of Shelley v. Kraemer, infra, and its progeny, the state courts may not enforce such private racially restrictive covenants and the Plaintiffs title is thereby quieted.

    Facts. The Plaintiffs, black people, assert ownership in this quiet title action of property which is purported to be under a racially restrictive covenant, Plaintiffs were seeking to have the cloud on title removed. The Defendants are property owners in the neighborhood who claim the Plaintiff’s property based on the forfeiture provisions in the racially restrictive covenant which provide that forfeiture will be made upon placement of a notice of claim, which Defendants did. The trial court found for the Plaintiffs and stated that to enforce this agreement would have been a per se violation of the Fourteenth Amendment.

    Issue. Does the private racially restrictive covenant apply such that the Plaintiff’s property is subject to forfeit under the covenant’s provisions?

    Held. No. The judgment is affirmed.
    The Defendants claimed that Shelley v. Kraemer, infra, was not controlling due to the fact that the court was not considering provisions relating to forfeiture or future interests in the land, which Defendants claimed were created by the terms of the racially restrictive covenant.
    The Court found that regardless of how the Defendants sought to characterize the effects or operation of the covenant, the attempt was to deprive the Plaintiffs of a right protected by the U.S. Constitution.
    The racially restrictive covenant is a nullity under Shelley v. Kraemer, infra, and its progeny, and no claim can ever be supported by law which would violate the protections of the Fourteenth Amendment.

    Discussion. This case is only tangentially related to future interests. As this Court noted, the case was probably brought to provide some rules for title abstractors to follow when faced with a racially restrictive covenant.


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