Case brief

Recorder name: / Gabriela Chavez
Case name: / Neponsit Property Owners’ Association, Inc. v. Emigrant Industrial Savings Bank
Citation; Date: / 278 N.Y. 248; 15 N.E.2d 793; 1938 N.Y. LEXIS 1292; 118 A.L.R. 973; May 24, 1938
Court: / Court of Appeals of New York
Name (if specified) and description of litigants at the original trial court level
Plaintiff: / Neponsit Property Owners’ Association claims that the covenant runs with the land and therefore, Oldner must pay.
Defendant: / Emigrant Industrial Savings Bank claims that Neponsit could not collect the fees because the covenant was no longer apart of the land.
Facts of the case:
Neponsit Property Owner’s Association established a covenant to pay for the maintenance of the land. Robert Oldner and his wife are the current owners of the land that contains the covenant. Oldner does not want to pay the $4 dollars that is part of the covenant.
Procedural history (remedy sought, prior rulings, grounds for appeal, etc., as available):
November 17, 1937 the Appellate Division of the Supreme Court in the second judicial department unanimously affirmed an order of Special Term denying a motion by defendant for judgment on the pleadings.
Court opinion (key issues and arguments):
One issue was finding out if the covenant met the legal requirements. The legal requirements of a real covenant are that it must be that both parties intended that the covenant should run with the land, the covenant needs to touch or concern land with which runs, and there needs to be “privity of estate” between the party claiming the covenant will be beneficial and the right to enforce it and the party that needs to abide by the covenant. The arguments were that the covenant did not fulfill these requirements since some of the land was outside Neponsit’s property. Neponsit clearly intended for the covenant to run with the land. Since the money from the covenant benefited the land, it did fulfill the requirement to touch and concern the land. Privity of estate seems to be present between the plaintiff and the defendant.
Dissenting opinion, if any (key issues and arguments):
N/A
Disposition of case:
Order affirmed, the defendant paid the $4 and the costs of the trial.

ANALYSIS OF THE CASE

1. Course topic of the case: / Transferability of restrictive covenants.
2. How does the case relate to the course topic?
The courts ruled, in this case, that the covenant by Neponsit was a transferable restrictive covenant. This is due to the old rule that restrictive covenants “run with the land” if they “touch and concern” the land.
3. Which previously assigned cases, if any, are related to this case, and how does this one differ?
Sanborn vs. McLean and Neponsit vs. Emigrant are related because the defendants both fail to understand the relationship between their previous owners and themselves. They both claim that their contracts did not contain the easement (Sanborn vs. McLean) or the covenant (Neponsit vs. Emigrant) that was in the original contract.
They differ because the covenant was only deemed applicable because it “touched and concerned” the land whereas the easement was applicable only because of the original ownership of the lot (and all of the adjacent lots).
4. How does the case affect economic incentives and efficiency?
This case provides landowners with the incentive to have restrictive covenants that actually maintain or improve the land. They aren’t just empty covenants. This also deals with and fixes the free rider problem that was occurring in this case. Efficiency has increased by making the free rider pay and also by improving the roads, paths, beach, parks, and sewers on the land.