This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
At common law, at a time at which assignment of contract rights was not given any recognition, contracts which were intended by the parties thereto to operate between them by reason of their ownership of their respective estates in realty, or by reason of their respective relations to realty, were regarded as assignable not by themselves alone, but in connection with the transfer of the realty with reference to which they were made. The fact that such a contract could be enforced by the grantee of the promisee in some cases, or against the grantee of the promisor in other cases, made this class of contracts a distinct and well-marked class at common law. They were known as covenants running with the land, since the rights in some cases, the liabilities in others, and both rights and liabilities in still other cases, passed with the transfer of the land. At a time when ordinary contracts could not be assigned at law, this was a very important class at common law. Its importance has greatly decreased because of the general adoption of the rule permitting assignment of contracts generally. If land is conveyed under circumstances which show an intention to convey the benefits of a contract which in itself is assignable, it makes little difference at modern law whether such contract passed with the land at common law or not. From the nature of the rights and liabilities which are involved, a detailed discussion of these covenants is unnecessary in a treatment of the general subject of contracts. They are discussed here for the purpose of illustrating a special class of cases to which the common-law rule against assignment did not apply. If the benefit or liability of a covenant passed to a grantee, to whom the original grantee might convey the realty, such covenant was said to run with the land.1 To be distinguished from these two classes of contracts are those which are intended to operate between the parties thereto without reference to their estates in realty, though such contract may be part of the transaction whereby such realty is conveyed by one party to the other. Such covenants are said to be personal covenants.2 A right of action on a covenant running with the land can not be assigned apart from the land.3 So if A conveys to B by warranty deed, and B conveys to C without warranty, C may enforce A's warranty. B can not retain the benefit of such covenant apart from the land, nor can he assign it without such realty.4 To run with the land the covenant must show in some form the intent that it shall inure to the benefit of ultimate grantees. However, if the habendum clause is to the grantee, his heirs and assigns, a covenant of warranty will run with the land, even if the word "assigns" is not in the covenant.5
4 Wenisrer v. Fourteenth Street Store, 191 N. Y. 423, 84 N. E. 394.
5 Blakistone v. Bank, 87 Md. 302, 39 Atl. 855; Herter v. Goss, etc., Co., 57 N. J. L. 42, 30 Atl. 252.
6 Herter v. Goss, etc., Co., 57 N. J. L. 42, 30 Atl. 252; Greene v. Duncan, 37 S. Car 239, 15 S. E. 956
7 Williams v. Gallyon, 107 Ala. 439, 18 So. 162; Moody v. Newmark, 121 Cal. 446, 53 Pac. 944.
8 Smith v. Trust Co., 12 D. C. App. 192; Baker v Dobbins, 87 Ga. 545, 13 S. E. 524.
9 Porte v. Chicago & N. W. Ry. Co 162 Wis. 446, 156 N. W. 469.
As the law is laid down by Lord Coke in Spencer's case, a covenant which extends to a thing which is not in being, does not bind the assignee unless express reference to the assignments of the covenantor is made.6 The actual decision in this case,7 seems to be at variance with this resolution; and it has been suggested that the report in Coke gives the arguments and opinions which were expressed, while the case in Moore gives the ultimate decision.8 In a number of American jurisdictions the resolution has been followed as being a final and authoritative statement of the common law.9 It has, however, been frequently criticized;10 and in a number of jurisdictions the courts have refused to follow the distinction and have held that a covenant which concerns the thing granted or leased runs with the land and binds the assignees, although they are not expressly named.11
1 Lyman v. Ry., 100 111. 320, 52 L. R. A. 645. 60 N. E. 515; Miller v. Clary, 210 N. Y. 127, L. R. A. 1918E, 222, 103 N. E. 1114; Hickey v. Ry., 51 O. S. 40, 46 Am. St. Rep. 545, 23 L. R. A. 396, 36 N. E. 672; Hennen v. Deveny, 71 W. Va. 629, L. R. A. 1917A, 524, 77 S. E. 142.
See, Covenants Running with the Land, by A. E. Randall, 25 Law Quarterly Review, 280; Contractual Obligations Attaching to Land, by W. Strachan, 23 Law Quarterly Review, 432; The Running With the Land of Agreements to Pay for a Portion of the Cost of Party Walls, by Ralph W.
Aigler, 10 Michigan Law Review, 187 2 Lisenby v. Newton. 120 Cal. 571, 65 Am. St. Rep. 203, 52 Pac. 813; Lincoln v. Burrage, 177 Mass. 378, 52 L. R. A. 110, 59 N. E. 67; Brown v. Southern Pacific Co.. 36 Or. 128, 78 Am. St. Rep. 761, 47 L. R. A. 409. 58 Pac. 1104; Clement v. Bank, 61 Vt. 208, 4 L. R A. 425, 17 Atl. 717.
3 Ravenal v. Ingram, 131 N. Car. 549, 42 S. E. 967.
4 Ravenal v. Ingram, 131 N. Car. 549, 42 S. E. 967.
5 Wiggins v. Pender, 132 X. Car. 628 61 L. R. A. 772, 44 S. E. 362.
6Spencer's Case, 5 Coke, 16a.
7 Anonymous, F. Moore, 159, 300. See also, Smith v. Arnold, 3 Salk. 4.
8Minshull v. Oakes, 2 Hurl. & N., 793.
9Illinois. Hansen v. Meyer, 81 111. 321, 25 Am. Rep. 282.
Maryland. Maryland & Pennsylvania Ry. v. Silver, 110 Md. 510, 73 Atl. 297.
Massachusetts. Bronson v. Coffin, 108 Mass. 175, 11 Am. Rep. 335.
Tennessee. Bream v. Dickerson, 21 Tenn. (2 Humph.) 126.
Texas. Gulf, Colorado &Santa Fe Ry. v. Smith, 72 Tex. 122, 2 L. R. A. 281, 9 S. W. 865.
10 Purvis v. Shuman, 273 111. 286, L. R. A. 1917A, 121, 112 N. E. 679; Sex-auer v. Wilson, 136 la. 357, 14 L. R. A. (N.S.) 185, 15 Am. & Eng. Ann. Cas. 54, 113 NW. 941; Bald Eagle Valley Ry. v. Nittany Valley Ry., 171 Pa. St. 284, 50 Am. St. Rep. 807, 29 L. R. A. 423, 33 Atl. 239.