so that the original purpose could no longer be given effect. In properly denying an injunction the court, as is usual in such cases, speaks in terms of specific performance, saying:

"The right and duty of a chancery court to enforce restrictions under its equitable jurisdiction is not absolute. In the exercise of such jurisdiction the same general equitable considerations and rules are recognized as move the court in passing upon applications to compel specific performance of contracts." 36

Bull v. Burton 37 involved the question whether a title was marketable where there were such restrictions but the situation. had changed radically. A majority of the Court of Appeals (four judges, three dissenting) treated the question in the same way, saying that the decisions on this subject do not hold "that the restrictive covenants should be ignored," but "do hold that a court of equity should not do inequity, and that if the granting of an injunction to enforce restrictive covenants will result in inequity it will be denied." 38 Yet in other connections this same court has consistently taken the view that such restrictions create servitudes and give rise to proprietary rights. Courts have hesitated to admit the proprietary theory in the present connection because while a sound instinct leads them to feel that relief should be denied, an equally sound instinct leads them to feel that a court of equity should not have discretion to deprive a man of his property. Hence some courts have sought a way out by allowing or suggesting a recovery of damages after denial of the injunction,39 while others

36 172 N. W. (Mich.) 32 (1919). But in another part of the opinion we are told that the restrictions had "become obsolete." It is noteworthy that however much courts strive to think and speak of equitable interests in terms of the personal theory, they continually lapse into the language and modes of thought of a real theory. 37 124 N. E. (N. Y.) 111 (1919).

38 Id., 115.

39 Jackson v. Stevenson, 156 Mass. 496, 31 N. E. 691 (1892); McClure v. Leaycraft, 183 N. Y. 36, 75 N. E. 961 (1905); Amerman v. Deane, 132 N. Y. 355, 30 N. E. 741 (1892).

In Bull v. Burton the majority of the court argue that the title was not marketable because although no injunction would be granted to enforce the restrictions yet the purchaser with notice would be liable to an action for damages upon the covenant. The proposition that damages may be recovered in these cases is open to two decisive objections. If the damages are to be recovered at law, it must be because the burden of the restrictions runs with the land on conveyance of a fee simple. If the damages are to be awarded in equity it must be on the theory that the plaintiff has something subsisting and of value in the eyes of a court of equity which is taken from him and

have turned to the contract theory and treated these cases on lines. of specific performance.40 It is submitted that the sound course is to hold that when the purpose of the restrictions can no longer be carried out the servitude comes to an end; that the duration of. the servitude is determined by its purpose. If imposed for a fixed time, it will last no longer, but it may not last so long if the purpose becomes unattainable in the meantime. When the original purpose can no longer be carried out, the same reasons that established its existence are valid to establish its termination. There is then nothing left to protect by injunction and nothing for which to award damages.

41

Analogous questions are raised by covenants not to compete with a business sold by covenantor to covenantee. In such cases as Abergarw Brewery Co. v. Holmes 42 similar covenants for the benefit of a business impose restrictions upon the use of property and may be said to create equitable servitudes in such property appurtenant to the business. But in cases like Francisco v. Smith 43 we cannot think in such terms. Sickles v. Lauman 44 is a recent case of the same type as Francisco v. Smith. Defendant had sold a business to plaintiff's assignor with a covenant not to compete with that business in the locality in question for five years. As in Francisco v. Smith the plaintiff, purchaser of the business from the covenantee, took an express assignment of the covenant. Also, as in Francisco v. Smith, the court considered that no express assignment was necessary; that the covenant could have no existence apart from the business it was intended to protect, and that whoever acquired that business was in equity entitled to enforce the for which he is to be compensated. In that view the judicial award of damages amounts to condemnation of the servitude without legislative authority and for a private use. When the Massachusetts legislature sought to provide for such condemnations in the Land Court, the Supreme Court was compelled to hold the proceeding unconstitutional. Riverbank Improvement Co. v. Chadwick, 228 Mass. 243, 117 N. E. 244 (1917).

40 In addition to the cases just cited see Sanford v. Keer, 80 N. J. Eq. 240, 83 Atl. 225 (1912); Orne v. Fridenberg, 143 Pa. St. 487, 22 Atl. 832 (1891).

41 Knight. Simmonds, [1896] 2 Ch. 294, 297; McArthur v. Hood Rubber Co., 220 Mass. 372, 109 N. E. 162 (1915); Riverbank Improvement Co. v. Chadwick, 228 Mass. 243, 117 N. E. 244 (1917). See fuller discussion of this matter in 31 HARV. L. REV. 876-879.

[1900] 1 Ch. 188. Compare Wilkes v. Spooner, [1911] 2 K. B. 473, and the note in 24 HARV. L. REV. 574. 44169 N. W. (Ia.) 670 (1918).

43 143 N. Y. 488, 38 N. E. 980 (1894).

covenant.45 In other words, the restriction was held to be appurtenant to the business. But if we think of it in this way, what is the servient property in such a case as Francisco v. Smith or Sickles v. Lauman? Certainly we cannot talk about a restriction on the covenantor's general substance as the French would say, upon his patrimony. Servitudes exist only in specific things. Nor can we think of such restrictions as imposing a servitude upon the name considered as property. Obviously in such a case as Sickles v. Lauman covenantor would not be allowed to compete in the same locality under another name. What we really have here is an application of the doctrines of equity that the incident will pass with the principal thing without any formal assignment. Hence the right to enforce the personal promise made by the vendor for the benefit of and to protect the business and good will passes to the assignee of the business without requiring any assignment of the covenant. There is no more than a personal claim against covenantor, but that claim is an incident of the business and will pass therewith because its purpose and intent can only be carried out in that way and equity looks to that as the substance, and not to its form. It is significant that continental commercial law has reached the same result.46

In connection with equitable servitudes attention should also be called to Barker v. Stickney,17 involving the question of restrictions upon chattels, which was fully discussed in a prior issue of this REVIEW.48

IO. CONVERSION

An old question came up in a new form in Re Boshart's Estate.49 There vendor in North Dakota contracted to sell lands in New

45 To the same effect, Didlake v. Roden Grocery Co., 160 Ala. 484, 49 So. 384 (1909); Fairfield v. Lowry, 207 Mass. 352, 93 N. E. 598 (1911); Gompers v. Rochester, 56 Pa. St. 194 (1867); Public Opinion Pub. Co. v. Ransom, 34 S. D. 381, 148 N. W. 838 (1914); Palmer v. Toms, 96 Wis. 367, 71 N. W. 654 (1897); Parnell v. Dean, 31 Ont. 517 (1899).

46 "The obligation of the first seller has an intimate relation to the business; it contributes to augment its value. One would naturally suppose that in reselling it the first buyer intended to guarantee the sub-purchaser against the acts of the first seller and to assign to the sub-purchaser his right to proceed against the vendor." 3 LYON CAEN ET Renault, TraiTÉ DE DROIT COMMERCIEL, 4 ed., § 249 ter. 47 [1918] 2 K. B. 356. 32 HARV. L. REV. 278.

49

48

107 Misc. 697, 177 N. Y. Supp. 567 (1919), aff'd 188 App. Div. 788, 177 N. Y. Supp. 574 (1919).

York to a purchaser, the latter to take possession and pay in installments and conveyance to be made when all was paid. At vendor's death, purchaser was in default. The question was whether the land was subject to a "transfer tax" in New York as being "tangible property" left by the deceased vendor. Both courts held rightly that it was not; that the deceased left a claim against purchaser for the purchase money which was "intangible property." Although purchaser was in default, vendor could have made him take and the chose in action upon the contract went to his representative, who could assert that the legal title was held as security therefor. Moreover, although time was expressly made of the essence, the contract provided only for termination at the option of vendor in case of default and this option had not been exercised at the time of his death. As this condition subsequent had not operated to terminate the vendor-purchaser relation, in any view a court of equity must have held that vendor left a chose in action, not land, and that the tax did not attach thereto.

In Miedema v. Wormhoudt 50 a contract by purchaser to sell to a third person, while purchaser's contract with vendor was still executory, was treated as a conveyance of purchaser's equitable ownership, the same as an assignment. In that view, in such a case as Bird v. Hall,51 it would have made no difference whether purchaser in the original contract assigned his contract to the second purchaser or made a new contract with the latter to sell him the land. This ought to be the law. Such a view is also significant for cases where cestui que trust declares himself trustee for a second cestui and thereafter assigns to another.52 If second cestui became equitable owner, there was no interest to give to the assignee and, as the right of first cestui was equitable only, assignee got no legal power. On the other hand, we are told in Bishop v. Barndt 53 that purchaser by contracting to convey to a third person could not "create a privity of contract" between subpurchaser and vendor, and that without an assignment subpurchaser could not

52 See Phillips v. Phillips, 4 De G. F. & J. 208 (1861); Cave v. Mackenzie, 46 L. J. Ch. 564 (1877); Cave v. Cave, 15 Ch. D. 639 (1880); Hill v. Peters [1918] 2 Ch. 273. But compare Dean Ames's view, "Purchase for Value without Notice," I HARV. L. REV. 1, 8-12.

63 29 Cal. App. Dec. 747, 184 Pac. 901 (1919).

object to a decree of strict foreclosure as entailing a forfeiture. In that case time was expressly made of the essence and under the decisions in California timely performance was a condition precedent." Hence, there was no equitable ownership to convey to subpurchaser.

Conversion by condemnation proceedings was involved in New York R. Co. v. Cottle.5 55 Land was in course of condemnation for a railroad. The owner died after accepting the report of the commissioners and confirmation of the report on his motion. Afterwards the damages awarded were claimed by creditors on the one hand and by the state on the other hand as having succeeded to the legal title of which the landowner had not been actually divested at the time of his death. The court held properly that after confirmation of the report the landowner had only a claim against the railroad company for money, that the latter was then equitable owner of the land and that the money should go to the creditors. A group of recent cases present different aspects of the effect of conditions precedent to the vendor-purchaser relation. In Pickens v. Campbell 56 the purchase money was to be paid in installments and, in accordance with prior decisions in that jurisdiction, time was of the essence, although no words of that import were expressly used. Accordingly the court held payment of each installment at the time fixed a condition precedent, so that there was no vendorpurchaser relation at vendor's death when installments remained unpaid and hence the contract was not part of the vendor's personal estate. Assuming that there was really a condition precedent and not a condition subsequent working a forfeiture,57 the case would be similar to an option contract and the result would be right. In Vigars v. Hewins 58 purchaser in an option contract borrowed of assignee the money with which to exercise the option by making the required payment and (1) delivered the written contract to assignee, (2) agreed with assignee to execute a written assignment to him. Three months later purchaser executed a written assignment accordingly, but in the meantime a creditor had obtained a judgment against purchaser which by statute was a lien

54 Glock v. Howard & Wilson Co., 123 Cal. 1, 55 Pac. 713 (1898).

55 187 App. Div. 131, 175 N. Y. Supp. 178 (1919).

57 The position of the Kansas courts on this point will be considered later. 58 169 N. W. (Ia.) 119 (1918).