## Facts

- A landowner (Buffalo Academy of the Sacred Heart) owed a creditor (Boehm Bros.) money and agreed to convey specified subdivision lots to satisfy the debt.
- The contract provided that if the lots’ title was not “good and marketable,” the landowner would instead pay \$60,000 in cash.
- The landowner tendered a deed; the creditor refused, claiming the title was unmarketable due to alleged restrictions affecting the subdivision.
- The creditor asserted (1) a subdivision-wide uniform building plan limited lots to residential use, and (2) a deed to Kendall Refining Company prohibited gasoline filling stations and related fuel/oil sales on subdivision lots other than Kendall’s four lots.
- The subdivision maps on file did not state any general restrictive plan, and the common grantor’s deeds reflected varied restrictions (some allowing stores; some limiting residential density) and often included clauses denying that restrictions created rights in other lots.
- The landowner’s chain of title contained no covenant barring gasoline stations, and it had no actual notice of any general scheme or Kendall-based restriction.

## Issues

1. Whether a uniform building plan restricted all subdivision lots to residential use, burdening the tendered lots and rendering title unmarketable.
2. Whether the gasoline-station language in the Kendall Refining Company deed created an enforceable covenant or equitable servitude burdening the tendered lots and rendering title unmarketable.
3. Whether a purchaser is bound by restrictive covenants contained only in deeds to other lots from a common grantor when the purchaser lacks actual notice and the restriction is outside the purchaser’s chain of title.

## Decision

- The Court of Appeals of New York held the landowner’s title was marketable.
- The court found no subdivision-wide uniform building plan restricting all lots to residential use.
- The court construed the Kendall deed’s gasoline-station language as, at most, a personal covenant by the grantor, not a restriction running with the land that burdened the remaining lots.
- Because the asserted restrictions did not bind the tendered lots (and were not in the landowner’s chain of title or otherwise known to it), the creditor could not invoke the \$60,000 alternative payment clause.
- The judgment awarding \$60,000 to the creditor was reversed, and judgment was directed requiring acceptance of the deed.

## Legal Principles

- Title is not unmarketable based on asserted restrictions that are not enforceable against the land being conveyed.
- A subdivision-wide restrictive scheme requires clear evidence of a general plan; inconsistent and individualized deed restrictions, and clauses disclaiming reciprocal rights, negate an inference of a uniform plan.
- A grantee of a subdivided tract is not bound by restrictive covenants appearing only in deeds to other lots from the common grantor unless the grantee has actual notice or the restrictions appear in the grantee’s chain of title.
- A covenant will not be treated as running with land, or as burdening other parcels, absent clear intent and a basis to bind successors consistent with notice and title-record principles.

## Conclusion

The court determined that neither an alleged uniform building plan nor a gasoline-station restriction found only in a deed to another lot created an enforceable encumbrance on the lots tendered, so the title was marketable and the creditor was required to accept the deed rather than receive the contract’s \$60,000 cash substitute.


Buffalo Acad. of the Sacred Heart v. Boehm Bros., 267 N.Y. 242, 196 N.E. 42 (N.Y. 1935)