Wheeler v. Schad
7 Nev. 204 (1871)
Rule of Law:
For the burden of a covenant to run with the land and bind subsequent assignees, there must be privity of estate between the original covenanting parties at the time the covenant is made, meaning they must both have an interest in the specific land sought to be charged by the covenant.
Facts:
- On June 5, 1862, M.S. Hurd, Ferdinand Dunker, and Peter Bossell, who owned a mill-site and water privilege, conveyed a portion of it and the connected water privilege to Charles Doscher, Charles Itgen, Charles D. McWilliams, and William C. Duval.
- The grantees entered possession of the conveyed premises and erected a quartz mill, with the stream first going to Hurd's mill and then to the grantees' mill.
- On June 11, 1862, the original parties entered into an agreement to jointly construct a dam and flume across the river, with Hurd and his associates agreeing to pay $500 more than half the cost, and the dam and flume to be owned and maintained jointly and equally.
- Wheeler later succeeded to Bossell's interest and, along with Hurd and Dunker, continued to own the first mill (Eureka).
- Between January and March 1868, Doscher and his associates mortgaged their mill, and the assignee of the mortgage (defendant) took possession of the property.
- In early 1868, while the defendant was in possession, the dam and flume were significantly damaged, necessitating extensive repairs.
- Plaintiffs notified the defendant of the damage, requested joint repairs, and the defendant agreed, asking plaintiff Wheeler to superintend the work.
- Repairs were completed at an expense of $3,500.
Procedural Posture:
- Plaintiffs M.S. Hurd, Ferdinand Dunker, and Wheeler sought to recover half the cost of repairs to a dam and flume from the defendant, an assignee of the original covenantors.
- The trial court rendered judgment for the defendant.
- Plaintiffs appealed the trial court's judgment.
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Issue:
Does a covenant to maintain a dam and flume run with the land, thereby binding a subsequent assignee who took possession through mortgage foreclosure, when the original covenanting parties did not have privity of estate in the land sought to be burdened at the time the agreement was made?
Opinions:
Majority - Lewis, C.J.
No, a covenant to maintain a dam and flume does not run with the land to bind a subsequent assignee if the original covenanting parties lacked privity of estate in the land sought to be burdened at the time the agreement was made. The Court reasoned that for the burden of a covenant to run with the land, it must (1) relate to and concern the land, and (2) there must be privity of estate between the covenantor and covenantee. The two instruments—the deed of conveyance and the subsequent agreement—were entirely disconnected and independent, thus preventing the covenants from being engrafted upon the deed as running with the land. The court emphasized that privity of estate requires the covenanting parties to both have an interest in the land sought to be charged by the covenant at the time it is made, a relation similar to what would formerly have given rise to tenure. In this case, the plaintiffs (covenantees) had no estate in the land owned by the defendant (assignee of the covenantors) when the agreement was made, nor did the agreement itself create such an interest. The grantors (original covenantors) were mere strangers to the land owned by the defendant at the time the agreement was executed. The Court rejected the argument that the deed and agreement should be considered one instrument because they were executed six days apart and there was no evidence that the agreement was contemplated at the time of the conveyance. Furthermore, the Court found no basis for holding the defendant liable on a separate personal promise because the complaint was exclusively framed on the written agreement, not any personal undertaking, and any such parol promise would likely be barred by the statute of limitations.
Analysis:
This case clearly articulates the common law requirement of privity of estate for the burden of a covenant to run with the land, distinguishing between benefit and burden. It underscores that mere contractual agreement, even if concerning land improvement, is insufficient to bind future landowners without the necessary relationship between the original parties' estates. The decision reinforces the importance of careful drafting, suggesting that for a covenant to be binding on future assignees, it should ideally be integrated into the deed or conveyance instrument itself, and the original parties must share a legal interest in the specific property to be burdened. Future cases must strictly adhere to the privity of estate requirement when seeking to enforce the burden of a covenant against subsequent purchasers.
