Johnson v. State ex rel. Highway Division

SCHWAB, C. J. Plaintiffs appeal from a declaratory judgment that a covenant given by their predecessor in interest runs with the land plaintiffs now own and is therefore binding upon plaintiffs. In 1943, Robert and Lula May Brown conveyed to the State of Oregon in fee simple a 60-foot-wide strip of land bordering Highway 58 in Pleasant Hill. The deed described the land conveyed and the larger tract of land of which the conveyed land was once a part, and contained a covenant which provided: "The real property herein conveyed is a part of the above described larger tract. The consideration of $2,940.00 includes the cost of moving and reestablishing the residence located on the above described larger tract, which residence when moved must necessarily be moved at a date subsequent to the execution and delivery of this deed and the payment of the said consideration. Said residence is now located within forty-eight feet of the right of way line of the highway as located prior to January, 1941. Should the state, by and through its Highway Commission, or the successors in interest of the Highway Commission, at any time subsequent to the date of this deed and prior to the removal of said residence from its present site require additional right of way for the highway abutting on the above described larger tract, then the State shall not be required to pay for the removal of said residence or for damage to the same if said residence at such time occupies an area within thirty-five feet of the right of way line of said highway as the same is now located * * The Browns conveyed the larger tract by warranty deed to one Rash in 1944, who in turn conveyed the land by warranty deed to plaintiff in 1946. Neither deed contained any reference to the 1943 covenant. In 1973 plaintiffs attempted to sell the remaining property, but were unable to do so because the prospective purchaser’s bank loan application was refused due to the 1943 covenant. Plaintiffs then instituted this proceeding seeking a declaration that the covenant that the state will not at some future time be required [584] to pay for the removal or destruction of the house does not run with the land. Before a covenant may be said to run with the land and be binding upon a promisor’s successors in interest, four requirements must be met: (1) there must be privity of the estate between the promisor and his successors; (2) the promisor and promisee must intend that the covenant run; (3) the covenant must touch and concern the land of the promisor; and (4) the promisee must benefit in the use of some land possessed by him as a result of the performance of the promise. Huff v. Duncan, 263 Or 408, 411-12 and n 2, 502 P2d 584 (1972); see Updegrave v. Agee, 258 Or 599, 484 P2d 821 (1971); Hudspeth v. Eastern Oregon Land Co., 247 Or 372, 430 P2d 353 (1967). See generally 5 Restatement, Property (Servitudes) § 537 (1944). The rationale for the fourth requirement is stated in the comment to the Restatement of Property concerning the running of covenants: “* * * There is a social interest in the utilization of land. That social interest is adversely affected by burdens placed on the ownership of land. * * * Unless a burden has some compensating advantage which prevents it from being on the whole a deterrent to land use and development, the running of the promise by which it was created is not permitted. * * *” 5 Restatement, Property (Servitudes) § 537 at 3219 (1944). See also Huff v. Duncan, 263 Or 408, 502 P2d 584 (1972). Here the fourth requirement is not met. While the state as a whole is benefited by the operation of the covenant in that if the state should later need to expand and utilize its right-of-way along Highway 58 it would not be required to move plaintiffs’ house or to compensate them for the destruction of their house, that benefit is in no way tied either to the land which the state purchased in 1943 from plaintiffs’ predecessor or to any other parcel of land now possessed by the state. It is tied rather to the parcel of land now owned by plaintiffs which the state may need to condemn at a [585] future date. As this land is not possessed by the state, the covenant cannot run with the land.1 Reversed. Footnotes [1] As plaintiffs’ complaint requested a declaratory judgment only as to whether the 1943 covenant ran with the land, we need not consider now whether the 1943 deed created any other type of servitude upon plaintiffs’ land.