DETERMINATION AS TO WHETHER. A COVENANT RUNS WITH THE LAND.

Court of Appeals for Harrison County.

#### Ina J. Johnson v. The American Gas Company.

Decided, November 28, 1917.

*Covenants Running With the Land*— May *he Created Without the Use of Particular Words*— Consistency *of the Bu/rden and an Intention to Impose It Are the Determining Factors*— Basement *for a Pipe Line in Consideration of Free Cas.*

1. The use of the word “assigns” or “heirs and assigns” are not necessary or essential to create a covenant running with the land, and in determining whether a covenant will run with the land the material inquiries are whether the parties intended to impose such burden on the land, and whether it is one that may be imposed consistently with principle and equity.

2. Where the owner of farm lands grants to a compahy, its successors and assigns, -the right to lay and maintain a pipe line over said farm for the purpose of transporting gas, in consideration of one dollar and that said company will furnish gas free for one fire in the residence of said owner, and said company lays said pipe line, and it and its successors in title maintain the same, and furnishes free gas in said residence to the then owner, and continues to furnish such gas for a number of years .to his first and second successor in title, such covenant runs with the land, and the successor to said company will be required to furnish free gas to the successor or successors in title of said land according tO' the provisions of such contract, so long as the successor of said company continues to use such right-of-way to transport gas.

*W. B. Stevens,*and *Rowland & Pettay,*for plaintiff.

*W. L. Handley,*contra.

Pollock, J.

In November of 1899, John McLandsborough entered into a contract in writing with the Scio Gas 'Company, by which he granted to said company a right-of-way for a pipe line to convey *514gas across his farm in North township, this county. Said contract reads as follows:

> "Right-of-Way.

> “John McLandsborough to the'Scio Gas Company.

> “Agreement.

> “Know all men that I, John McLandsborough, of the county of Harrison and state of Ohio, in consideration of the sum of one dollar to me in hand paid by the Scio Gas Company of Scio, Ohio, do hereby grant to the said the Scio Gas Company, its successors and assigns, the right to lay and maintain a pipe line for transporting gas across my farm in North township, said county, and described'as follows:

> “Said line to be laid in a course and at a place on said farm to be agreed upon by the parties hereunto before the same is laid. The said the Scio Gas Company, its successors and assigns, shall have the right to enter the premises described herein at all times to repair and maintain said gas lines.

> “It is further agreed that the Scio Gas Co. is to furnish free gas for one fire in the residence of said John McLandsborough, said John McLandsborough making his own connections with said gas line. „

> “Also all damages to growing crops and to fence caused by laying and maintaining said gas line shall be paid for by the Scio Gas Company.

> “It is further agreed that when the Scio Gas Co. shall procure more gas that they will furnish free gas for a second fire under the same conditions as above.

> “Said gas line shall be buried if so required by John McLandsborough or assigns.”

This contract is signed by the parties, witnessed by two witnesses and .acknowledged before a notary public, and duly recorded as before stated.

In pursuance of the foregoing, said company soon thereafter laid its line for a considerable distance across said premises, and from which line the said John McLandsborough constructed a domestic line to his residence upon said premises and gas was furnished as in said contract provided. In 1904, John McLandsborough died and Seigel McLandsborough, a son, by will took title to said real estate, and said company continued to furnish gas through said domestic line to said residence. In 1911, *515the Seio Gas Company sold and assigned said “right-of-way” to the American Gas Company, which continued to furnish gas to said residence. On January 2, 1913, Seigel McLandsborough conveyed said premises to Ina J. McLandsborough, now Ina J. Johnson, the plaintiff herein, and said American Gas Company continued to furnish gas to said residence until the 26th day of May, 1917, when said company disconnected said domestic line and refused longer to furnish gas in said residence, although it and its predecessor had continuously used .said right-of-way since the date of said grant and is still using the same. Soon thereafter ,a petition was filed in the court of common pleas of this county, asking that a mandatory injunction issue requiring said company to again connect said domestic line with said main line and to furnish gas to said residence; to this petition an answer was filed alleging that said contract or “right-of-way” was merely personal in character between the original parties, and that the covenant as to free gas did not run ivith the land. To the answer a reply was filed denying the averments thereof, and so the issue was made up, trial had and a decree entered granting said mandatory injunction, from which an appeal was taken to this court. The only issue to be determined here is whether or not the agreement to furnish gas in said residence was a covenant running with the land, or merely personal, inuring to the benefit of John McLandsborough only. The subject of “covenants running with the land” has elicited a wide range of discussion in this and many other jurisdictions, and in these discussions it has been a subject of much concern whether a covenant concerning a thing not *in esse*will under any circumstances inure to the benefit of or bind the assignee, and, also, whether it was necessary to use the word “assigns” or “heirs and assigns” to make a covenant concerning a thing not *in esse*run with the land. One of the earliest discussions, and possibly the most notable, is found in *Spencer’s Case, 5*Coke, 16, and probably no other has attracted more, if quite so much, attention. This was a series of seven resolutions passed by the judges concerning covenants, and which of them run with the land, and which were collateral, and where the assignee should be bound *516without naming him, and where not, and where he should not be bound though named, and where not. The first and second of said resolutions are of interest here. The first reads as follows:

> “When the covenant extends to a thing *in esse,*parcel of the demise, the thing to be done by force of the covenant is *quoddmnado*annexed and appurtenant to the thing demised, and shall go with the land, and shall bind the assignee, although he be not bound by express words; but when the covenant extends to a thing which is not in being at the time of the demise made, it can not be appurtenant or annexed to a thing which hath no being. As if the lessee covenants to repair the houses demised to him during the term, that is parcel of the contract, and extends to the support of the thing demised, and is therefore *quoddamado*annexed and appurtenant to houses, and shall bind the assignee, although he be not bound expressly by covenant.”

In the instant case the covenant concerns a thing which was not *in esse*at the time of the demise made, but to be “newly built after ’ ’ and therefore would seemingly bind the covenantor and not the assignee, for “the law will not annex the covenant to a thing which hath no being; this, however, is the provision of said first resolution only. The second resolution reads as follows:

> ‘ ‘ It was resolved in this case that if the lessee had covenanted for him and his assigns that they would make a new wall upon some part of the thing demised, that, for as much as it is to be done upon the land demised, that it should bind the-assignee; for although the covenant doth extend to a thing to be newly made, yet it is to be made u¡>on the thing demised, and the assignee is to take the benefit of it, and therefore shall bind the assignee by express words.”

Recognizing the inconsistency in the above resolutions, the courts have been gradually abandoning the position that it was necessary to use the word “assigns” to make a covenant concerning a thing not *in esse*run with the land, and have been coming to regard the intention of the parties, as gathered from the whole instrument, the governing principle, and not the use or meaning of mere technical words. Moreover, it is exceedingly doubtful whether the court so decided in Spencer’s case.

*517In the English notes to said ease in 15 English Ruling Cases, 244, it is observed that anonymous ease in F. More, 159, 300, has been identified and approved as a report of the final determination of Spencer’s case. It is there stated that the court held that:

> “Notwithstanding that the covenant lacks words (assigns), yet each by the acceptance of the possession has made himself subject to all covenants concerning the land, 'but not to collateral covenants, and covenants of reparation, etc., # ® are covenants inherent to the land with which the assignee, .without special words, shall be charged.”

The foregoing seems all the more likely to have been the court’s conclusion in view of the observations of Chief Baron Pollock, speaking for the Court of Exchequer in *Minshall*v. *Oakes,*2 Hurlst & N., 793, where it is said:

> “The explanation may be that Lord Coke is reporting a variety of arguments and opinions expressed, while More gives the ultimate decision.”

Attention is also directed to the fact that the resolutions were never acted on, and that according to Moore the decision was the other way in *Smith*v. *Arnold,*3 Salk., 4.

Therefore, so far as Spencer’s case is concerned, and it is the notable one in iall early jurisprudence, it seems safe to say that the use of “assigns” as a technical word is not now nor never has been essential to the running of a covenant with the land at common law.

It is indeed difficult to reconcile the first and second resolutions in Spencer’s case, and the conclusion must be that many of the courts have practically repudiated the first by following the second; and that the word “assigns” is not necessary to make a covenant concerning a thing not *in esse*run with the land, and so it is held in *Sexaner*v. *Wilson,*113 N. W., 941, the first paragraph of the syllabus of which reads as follows:

> “The use of ‘assigns’ as a technical word has never been essential to the running of a covenant with the land at common law.”

*518The foregoing is in point with the instant ease and is somewhat similar as to facts. The covenant related to a division fence which was not shown by the testimony to be in existence at the time of the execution of the deed, and yet it was held that the word "assigns” was not necessary to create a covenant running with the land.

Again in the case *Doty*v. *Railway Co.,*53 S. W., 944, it is held that:

> "A deed conveying a right-of-way for a railroad in consideration of five dollars and an agreement by the grantee to run daily passenger trains on and along the right-of-way, with provision that, if it is abandoned for non-user for six months, title shall revert to the grantor, contains a covenant running with the land as to the running of trains, though the road was not built when the deed was made, and the word ‘assignee’ is not used; so that a purchaser of the road is liable thereon for a breach subsequent to the purchase, though there had been breach of the covenant before the transfer. ’ ’

The foregoing is similar in principle with the case at bar and somewhat similar as to facts. And holding squarely to the same effect is *Denman*v. *Prince et al,*40 Barbours, 213; *Teachout*v. *Capital Lodge I. O. O. F.,*104 N. W., 440; *Norman*v. *Wells,*17 Wend., 149, 150, 153; *Beddoe’s Ex’r*v. *Wadsworth,*21 Wend., 120; *Bally*v. *Wells,*3 Wils., 25; and in *Masury*v. *Southworth et al,*9 O. S., 341, it is held in the third paragraph of the syllabus as follows:

> "3. When such a covenant to insure has for its object a building to be erected after the date of the lease, but which, when erected, is to be used by the lessee, and is an essential ingredient in the agreement of the parties for the creation of the estate, it is not indispensable to make such a covenant run with the land that ‘assignees’ should be expressly named; but the covenant being one which 'may be annexed to the estate, and run with the land, equivalent words, or a clear intent shown by the whole instrument, may suffice.”

The foregoing is supported by the later case of *Huston*v. *R. R. Co.,*21 O. S., 236. This was an action to appropriate private property for railroad purposes; after a jury had been *519impaneled all claim for damages for fencing was withdrawn from the consideration of the jury, upon the agreement of the company to make convenient crossings and forever maintain fences along said right-of-way across said premises. The land owner conveyed said property to another who, in turn, conveyed to still another, and said railroad w.as sold to another company, which refused to maintain said fences. The court held in the second paragraph of the syllabus:

> *“2.*It is an agreement which runs with the land, so as to be binding between the assignees or grantees of both the parties thereto,” and yet the word “assigns” or “heirs and assigns” was not used.

Numerous other cases might be cited in support of the general proposition, and while it is true that some courts have elected to follow the first resolution in Spencer’s case, yet a greater number by far have elected to follow the second.

In determining whether a covenant runs with the land the material inquiries are:

1. Whether the parties meant to charge the land, and

2. Whether the burden is one that can be imposed consistently with policy and principle.

And it is so held in the above ease of *Sexauer*v. *Wilson et al,*113 N. W., 941, second paragraph of the syllabus.

In the instant case John McLandsborough received but one dollar consideration for said right-of-way; beyond question the real consideration was the gas to be furnished for *one*fire and *two*if more gas was procured, and this “in the residence of John McLandsborough.” Not *to*or *for John McLandsborough,*but in the residence; therefore, the name “John McLandsborough” is descriptive of the residence in which the gas was to be furnished. Wherefore, the contention that John McLandsborough being dead, the obligation was discharged, is not justified.

The intention of the parties in the instant case as disclosed by their conduct is of some value here in construing their contract; the gas was furnished by the Ohio Gas Company in said resi*520deuce until the death of John McLandsborough; after his decease to his son Seigel; then by the American Gas Company, the successor of the Ohio Gas Company, to Seigel, and later to Ina J. McLandsborough Johnson, and-until last May without a question; the parties so construed this contract themselves and the case of *Mosier et al*v. *Parry,*60 O. S., 388, is applicable. The first paragraph of the syllabus reads as follows:

> “1. Where the language of a contract is of doubtful import, it is proper to ascertain the circumstances which surrounded the parties at the time it was made, the object intended to be accomplished, and the construction which the acts of the parties show they gave to their agreement, in order to give proper construction to the words they have used in the instrument, and to determine its legal effect.”

Likewise the case of *Kling, Admr.,*v. *Bordner,*65 O. S., 86, is well in point. Also *New Pittsburg Coal Co.*v. *N. Y. Coal Co.,*31 C. D., 458, the second paragraph of the syllabus of which reads as follows:

> “Evidence showing the practical construction which either party has placed upon a coal mining contract and the acquiescence therein by the other party, may be considered for the purpose of aiding in its proper construction. ’ ’

In harmony with the foregoing is *M. E. Church Society*v. *Ashtabula Water Co.,*10 C. D., 648, and another case worthy of notice in this connection is *Railway Co.*v. *Porter,*12 N.P.(N.S.), 353. Resting the interpretation of the contract upon the conduct of the parties, it is conclusively shown that they understood the covenant as to free gas to be one running with the land.

■Second. Is the burden one that can be imposed consistently with policy and principle? As above observed the pecuniary consideration for said “right-of-way” was one dollar. It could not be successfully maintained for a moment that this, within itself, was a full and fair consideration for the enjoyment of said right by said company or its successors .and assigns so long as they might care to use it. In fact, the 'intention as gathered from said contract is exactly to the contrary, because the cove*521nant as to free gas is inserted, which no doubt was then recognized by all parties as the real consideration. The one dollar, being merely nominal, negatives the theory that it was' the principal consideration or that it was so considered by the parties, whose conduct clearly indicates that they understood it to be a covenant running with the land. And so it is observed by Welch, C. J., speaking for the court in the above case of *Huston*v. *Railway Co.,*beginning at page 246, as follows:

> "Does the contract run with the land? Undoubtedly it does. It was an agreement to erect structures upon the land appropriated, and to keep them up so long as that was enjoyed.”

That is to say, that so,long as the right-of-way was used or enjoyed the fences were to be maintained. It is also provided in said agreement that the Scio Gas Company, its successors and assigns, shall have the right to enter said premises at all times to repair and maintain said gas lines; thereby all the rights granted originally to the Ohio Gas Company were saved to its successors and assigns; why not likewise to the owner of the freehold, which carries the burden of the easement and which the gas company is insisting it shall continue to carry? It is only fair and reasonable that free gas be furnished in said residence so long as said right-of-way is enjoyed. And such obligation may be consistently imposed upon the defendant company or its assigns while it continues to exercise such right. When the defendant company purchased said "right-of-way” it necessarily acquired it subject to all the conditions imposed .and by its acceptance of the contract was bound by the conditions thereof; and so it is held in *Hickey*v. *Railway Co.,*51 O. S., 40, the first paragraph of the syllabus reading as follows:

> "1. That the grantee, by accepting the deed, will be deemed to have entered into .an express undertaking to perform the condition contained in the deed, and such undertaking will run with the land, and become obligatory upon a subsequent owner by purchase from the grantee of the company. ’ ’

Likewise it is held in *Railroad Co.*v. *Priest et ux,*31 N. E., 77, and so it is held in the anonymous case, F. Moore, 159, 300, as *522.above quoted, and where it is said that acceptance of possession makes one liable for all covenants except collateral.

The defendant company knew or is charged with knowledge of this covenant relating to free gas, because said contract is a matter.of record in this county (Lease Record 11, pp. 113, 114), and it was the purchaser of said right-of-way from the Ohio Gas Company.

In 11 Cyc., 1080, there is a helpful discussion of "covenants running with the land” in which it is observed:

> ‘ ‘ In order that a covenant may run with the land, that is, that its benefit or obligation may pass with the ownership, it must respect the thing granted or demised, and the act covenanted to be done or omitted must concern the land or estate conveyed.”

Further discussion will be found at pages 1051 and 1081. The instant case comes well within the above definition.

Further discussion is superfluous here, in view of the fact that for eighteen years free gas was furnished in the said John Mc-Landsborough residence by the Scio Gas Company and its successor, the defendant here, during the occupancy of John Mc-Landsborough and that of his son, and until recently that of -his daughter; the defendant company took said right-of-way with a full knowledge of the conditions; it is still using it and must be bound thereby. The word "assigns” is not necessary or essential in order to make a covenant run with the land, and judgment must therefore be entered for plaintiff.

Farr, J., concurs.