Warner v. Grayson

200 U.S. 257, 26 S. Ct. 240, 50 L. Ed. 470, 1906 U.S. LEXIS 1475

• Court: Supreme Court of the United States
• Decided: January 8, 1906
• Docket: 89, 90, 439
• Status: Published

Opinion

Mr. Justice Day,

after making the foregoing statement, delivered the opinion of the court.

These appeals raise practically three questions:

1st. Was the Warner trust entitled to an easement, and. .if so, to what extent, in the lands on the south and west of the flats building?

■ 2d. Was the Grayson trust entitled to a like easement in the same premises? and,

3d. Was the property properly authorized to be sold as an entirety in the discretion of the trustees?

As to the first proposition, the Supreme Court was of opinion that the Warner trust was entitled to ten feet on the- south and west sides of the property. The Court of Appeals was of the opinion 'that as the lots-were not built upon at the time-when the deed of trust was executed, and it was not then, known that an easement would be necessary to- the enjoyment of the property as constructed, the Warner trust took only the conveyances of the land by metes -and bounds, without an easement, which that court held arose from tjie manner- in which the building and its appurtenancés- were subsequently constructed, and used.

The record discloses that the loan secured by the Warner trust was made for the purpose of erecting a hotel or apartment building. It is established that the first purpose of the proprietor was to construct the building so as to leave an adjacent space and way for its accommodation and use, between its outer walls' and the lot lands adjacent on the west and south. This purpose was changed upon notification that restrictions in the title of the property required the building to be set back from the streets. The building was thereupon constructed by the mortgagor in the manner shown. The deed of trust was a mortgage security and Haller continued to be the owner of the property to the full extent of the lots. The building was constructed in such wise that the use of some of the .adjacent property, even independent of an easement for light and air, Ivas absolutely necessary to the use and enjoyment of the building as constructed. ,It did not'need the expert testimony which was introduced in the case to establish the fact that if another structure should be erected, practically even with the wall of the building, it would prevent access to and greatly impair the use of the south and west sides thereof. It would require the closing of the areaways, the shutting of the windows and doors, and must necessarily greatly depreciate the value of the property. The Warner trust contained the language (above quoied), conveying the described premises, with all and singular the improvements, w'ays, easements, rights, privileges and.appurtenances to the same belonging or in anywise appertaining, eic., to have and to hold to the second parties, their heirs and assigns. It is true that there was no building upon the property at the time when this deed of trust .was executed, but it is equally true that it was within the knowledge and purpose; of the parties that a building should be constructed, which would be the principal security for the money loaned. And no one disputes that when Haller constructed the building upon the property it became immediately subject to the mortgage. He was, the owner of the adjacent premises, and when lie abandoned the design to leave süfficient space -about the building* for its proper use and enjoyment, and erected it. in such manner and so close to, and overlapping upon, other parts of his own property as to require the use of an easement therein in order to occupy the building and “permit the enjoyment and. use of it as constructed, we see no reason why the express language of the conveyance above quoted would not carry with the building thus constructed the improvements, ways, appurtenances, rights and privileges necessary to the enjoyment of the .same. • The prin- ' ciple upon which subsequent buildings and fixtures annexed to the realty become a part thereof for the benefit of the mortgagee is thus stated in Butler v. Page, 7 Metcalf (Mass.), 40:

“All'buildings erected and fixtures placed on mortgaged premises, by the mortgagor, must be regarded as permanently annexed to the freehold. They go to enhance the value of the estate, and will therefore inure to the benefit of the mortgagee so far as they increase his security for his debt; and to the ’ same extent they enhance' the. value of the equity .of redemption, and thereby inure to the benefit of the mortgagor. Winslow v. Merchants' Ins. Co., 4 Met. 306. There is no necessity to adopt any liberal rule in regard to fixtures, to enable the mort-' gagor to remove what he has erected at his own expense;'because. he has the full benefit of all such improvements when he regains the. estate by redemption, which he may do, simply by payment of his actual debt. The general rule of the common law, therefore, that what is fixed to the freehold becomes part of the realty, and passes with it, has its full effect, in regard to things-erected on the land by an owner, who subsequently mortgages the land, and also in regard to things erected ; by the mortgagor after, the mortgage. ”

To the same effect is Graeme v. Cullen, 23 Gratt. (Va.) 266. Had Haller not owned-.the surrounding premises, but acquired the adjacent ten-foot strip with a view of remedying the'faült which he had committed in putting the building flush upon the fine, and constructed his building so as to make the easement necessary to its use, we think there could be no question'that the easement thus acquired would inure to the benefit of the mortgagee. Such is the principle stated in Hankey v. Clark, 110 Massachusetts, 262, In that case tenants in common owned two adjoining-tracts of land oh a river, the'lower one subject to a mortgage. They sold the upper tract, reserving to themselves, their heirs and assigns, the right to draw water from a reservoir on the upper for the use of the lower (mortgaged) tract. The equity of redemption of one'ox them in the lower tract was sold and vested in A, who also acquired title in that tract through mesne conveyances under a foreclosure of the mortgages.- The court held that A was vested with the title to draw water from the reservoir, under the reservation. •The court said: “Incorporeal rights of this description, acquired by the mortgagor subsequent to the date of the mortgage, for the permanent improvement of the estate, and annexed by the terms of the conveyance to the realty,. may be considered as passing to the mortgagee by the foreclosure, to be exercised by Mm at his election. There is no reason why incorporeal rights and annexed to the realty should not inure to the benefit of the mortgage security in the same manner as improvements in the nature of fixtures inure. Winslow v. Merchants’ Ins. Co., 4 Met. 306, 310. Until foreclqsure the mortgage is deemed a iien or charge, subject to which the estate may be conveyed, improved and in other respects dealt with as the estate of the mortgagor.’’, We cannot see.that it makes any difference in principle that the easement in the present case is annexed by the mortgagor by necessity, as the result of the manner in which he has improved the property. It is not contended that, as against the McReynolds trust, created at the same time with the Warner trust, and before the erection of the building, an easement was acquired in this strip, but we are now dealing with rights in the property as between Haller and the mortgagee, and we think the granting clause quoted above included not only the improvements, ways and easements upon the prop: erty at the time; but such as became necessarily appurtenant thereto xxpon the adjacent property of the grantor, because of the structure which he-,has placed upon the premises, to the enjoyment of which these privilegas and rights are essential. As to the extent of-this easement, the conduct of the parties in undertaking to acquire fen feet, for the obvious purpose of this easement, the overhangng porches, the encroaching areas, seem to us to make ten feet a reasonable width, and no more than is properly necessary. The unloading of coal, the carrying away of garbage and other necessary usages, could hardly be accomplished in a narrower space. In this vew of the case we find it unnecessary- to treat this as an easement, exclusively for light and air, or to enter upon a discussion of the doctrine of easements by implication. Nor is it an answer to the effect ' of this annexation to the property of the casement and rights resulting from the manner of improving the premises conveyed to say that Haller, as the owner, could not create an easement for himself in his own land. The question here is, what is the effect of his conveyance, and. what has he added to the realty in favor of his grantee in the mortgage? Wc think he annexed' not only the building but the rights and privileges in his adjacent land essential to its enjoyment.

2. As to the Grayson trust. In addition to the discussion already had as to the right of the Warner trust to have an easement in this strip, it is admitted that when the Grayson trust was executed the building was up, the easement was in actual use, and it is apparent had become necessary to the building as constructed. The .purpose of Haller to use this part of the property for the purposes stated is manifested in what he had done, and the subsequent purchasers of the equity took with full notice not only of the language of the recorded deed of trust, but had actual notice of the condition of the property. We think this feature of the case comes clearly within the doctrine ruled in Shepherd v. Pepper, 133 U. S. 626, 650. It is important to note in this connection that counsel for the Gray-son trust do not dispute the right of the Warner trust to have a.lien upon the easement in the ten-foot strip, and states that he does not desire to be heard upon that subject. The persons contesting that right , (and as well the right of Grayson) in this, court are Wood and Talbott, the successors of Haller, and upon the facts shown, standing in his shoes and with full notice of the necessity of this right of way or easement to the use of the property and Haller’s attempt to\ obtain it by release from the McReynolds and Meriweather trust. It was subsequently speT cifically. covered in the conveyance in trust for Haller and Wood to Duke, ,and it is admitted in the answer of Wood and, Talbott that it was the original intent to so place the building as to give room about it; the rights of Wood and Talbott are no higher or better as against either Warner or Grayson than Haller’s from the facts presented" in this case. ' .

3. Was the decree right in ordering the sale of the property in its entirety in the discretion of the trustees? Sales are thus ordered in entirety when the interests,of the mortgagors •and incumbrancers require it. Shepherd v. Pepper, 133 U. S. 626, 651, and the authorities there cited. In this case counsel; for .the Grayson trust states in his brief that he does not insist tipon such sale as an entirety, and in the draft of a' decree, as submitted by him, no such sale is provided for. In the view we have, taken of this case we cannot see that the first incum-brance, the Warner trust, requires such a sale to protect that interest., There is no dispute as to the lien of the McReynolds trust upon the property described in their deed; as against it no easement is.claimcd. We see no reason why, with adequate protection for the McReynolds trust, in a sum to be found suf- ' ficient in the court .executing the decree, to be retained out of the purchase money of the flats property with an easement in ’ the ten-foot-strip, the flats may not be sold with the ten-foot strip as one piece and the remainder of the property as another. Such a form of decree is,suggested in the brief of the. counsel for the Grayson trust, and'no incumbrancer seems to object to it, and the hqlders of the equity of redemption insist upon, a .separate sale. We think it would be ''the fairer way to‘all’ concerned to order the sale of the property as herein indicated.

We, therefore, upon the whole case modify the decree of the • Court of Appeals in respect to the Warner trust and ‘the ten-foot strip, and as to the sale of the property as an entirety, as hereinbefore stated. - In other respects the judgment of the Court of Appeals is

Affirmed.

This disposes of the appeals in Nos. 89 and 90, which were taken from the last and final decree in the Court of Appeals. The appeal in No. 439 was taken from the decree of the Court of Appeals remanding the' case to the Supreme Court, which was not final, and is therefore dismissed. The other appeals raise all the questions made in the case.