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Buffalo Academy of the Sacred Heart v. Boehm Bros.
Court of Appeals of New York
196 N.E. 42 (1935)
Buffalo Academy of the Sacred Heart (plaintiff) agreed to discharge a debt to Boehm Brothers (defendant) by giving it title to some lots of real estate. The contract provided that if the title to the real estate were unmarketable, Buffalo Academy would pay Boehm Brothers $60,000 in cash. Boehm Brothers refused to accept a deed from Buffalo Academy, claiming that the title was unmarketable. Buffalo Academy brought suit to compel performance. Boehm Brothers claimed the title was unmarketable because the lots, which had been subdivided from a larger lot, (1) were subject to a uniform building plan restricting the use of the lots to residential buildings, and (2) restrictions in the deeds for some of the other lots prevented any of the lots from being used to operate a gasoline station. The deeds to the other lots contained various restrictions, but there was no common building plan. Four of the other lots were deeded to the Kendall Refining Company allowing it to operate a gasoline station. The deeds for those lots provided that the grantor would not use the other lots to operate a gasoline station, but did not state that the restriction would run with the land. When it purchased the land, Buffalo Academy was not aware of any uniform building plan or prohibition on operating a gasoline station. The intermediate appellate court held that Buffalo Academy did not have marketable title to its lots because there was a restriction against using the lots to operate a gasoline station, but found that there was no uniform building plan that restricted the lots. The court held that Boehm Brothers was entitled to $60,000. Buffalo Academy appealed to the state supreme court.
Rule of Law
Holding and Reasoning (Finch, J.)
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