Drye v. Eagle Rock Ranch, Inc.

SMITH, Justice.

I respectfully dissent. The area of dis.-agreement is primarily narrowed to challenging the Court’s holdings:

(1) That the doctrine of equitable estop--pel does not apply; and

(2) That the lot owners can not recover because such owners have failed to establish rights in the 1000-acre ranch. The basis for this holding being that the lot owners have failed to bring their case within one of the exceptions to the rules requiring a writing for the creation of rights in land. In other words, the Court is saying ■that the lot owners are barred from a recovery by the statutes of frauds and of •conveyances.

The Court assumes that this is a proper •subject for a class action, but argues against ■ •said assumption, whereas, this dissent not ’ •only assumes it to be, but points out why • ■.it is a proper subject for such action.

This suit was properly brought as a class action by representative lot owners. Drye and eight other lot owners brought this suit to establish and declare their rights to use the Eágle Rock Ranch (1000 acres) for pleasure and recreational purposes. Their rights to such use arose out of the activities of James, the former owner, which he is estopped to deny and which acts were also tantamount to a private dedication of the ranch and the park area for such purposes. James represented to Drye et al. at the time of their purchase of lots that such rights accrued to each lot owner. Implicit in such dedication and representation was the concept that the right to so use the ranch would be common to all lot owners. Each purchaser of a lot was promised more than the right to ride, fish, swim, and picnic alone and in solitude. He was promised, in effect, that all other lot owners would have the same right so that each could share and enjoy the company of any or all of his neighbors at Eagle Rock Ranch. Joint participation in the recreational use of the ranch by all residents of Eagle Rock was of the essence of the plan offered to each prospective lot owner.

Drye et al. thus sued not only to establish their several individual rights to the use of the ranch, but also to establish a right, as represented to them, that the use of the ranch would be common to all lot owners. The position of Drye et al. is simply this: That when James made the agreement with the initial lot purchaser or purchasers that the use of the ranch would be common to all lot owners, then Drye et al. had the right to not only establish their several individual rights to the use of the ranch, but also to establish a right, as represented to them, that the use of the ranch would be common to all lot owners. I agree with Drye et al. The' rights run to each lot owner. The very nature of each lot owner’s position is that other lot owners derive through him a right to use the land for recreational purposes. By this one suit a multitude of common questions are settled for the class, and the character of the rights was established *214in the trial court as being common to all lot owners as a class. These common rights became irrevocable when the owner made his first sale pursuant to representations of that character relied on by the first purchaser. Therefore, allegation, proof and jury findings respecting one person who bought on promises of common rights for all amounts to specific proof and findings as to every member of the entire class. Naturally, the class are those whose rights became irrevocable upon the sale to various persons relying on the easement representations, and whose rights arise out of the principles of estoppel inherent in any type of dedication.

I would reject respondent’s contention that each lot owner has a separate and distinct cause of action which cannot be joined with the causes of action of other lot owners to establish the easements by estop-pel or by dedication. Respondent would require proof that each lot purchaser individually relied on the easement or on the “dedication.” In making such contention, they fail to recognize that the common rights of all lot owners were fixed when the owner made his first sale pursuant to representations of that character relied on by the first purchaser. For authorities supporting the position that this suit was properly brought as a class action see: Rule 42, Texas Rules of Civil Procedure; Southern Ornamental Iron Works v. Morrow, Tex.Civ.App., 101 S.W.2d 336 (Ft. Wth., 1937, err. ref.); Gray et al. v. Moore, Tex.Civ.App., 172 S.W.2d 746 (Amarillo, 1943, err. ref., w. m.); Richardson et al. v. Kelly, 144 Tex. 497, 191 S.W.2d 857; Smith v. Swormstedt (1853), 16 How. 288, 57 U.S. 288, 14 L.Ed. 942, (often cited by the Texas courts); Charles et al. v. Crestview Properties, Inc. et al., 15 Pa.Dist. & Co.R.2d 568, 71 Dauph.Co.R. 172 (Penn., 1957); Allen v. Thousand Island Park Corporation, 18 Misc.2d 1079, 186 N.Y.S.2d 861 (1959); Mills v. Carolina Cemetery Park Corp., 242 N.C. 20, 86 S.E.2d 893 (1955); Sheets v. Thomann, 336 S.W.2d 701 (Full Edition), (Mo.Ct. of App., 1960); Greer v. Smith, 155 App.Div. 420, 140 N.Y.S. 43 (1913); City of Birmingham v. Fairview Home Owners Association et al., 259 Ala. 500, 66 So.2d 775 (1953); Kelly v. Tiner, 91 S.C. 41, 74 S.E. 30 (1912); Conner v. Heaton et al., 205 Ark. 269, 168 S.W.2d 399 (Full Ed.) (1943); Weeks et al. v. Bareco Oil Company et al., 125 F.2d 84 (7th Cir., 1941); Fanucchi v. Coberly-West Co, 151 Cal.App.2d 72, 311 P.2d 33 (1957).

This leads us into a consideration of the question of whether equitable estoppel applies. I take the position that it does. Intent of the owner of the servient estate is immaterial on an easement by estoppel but is material on an easement by dedication. In either event, the result is the same as to the purchase of the dominant estate. Easements by estoppel and by dedication in the present case arise for pleasure and recreational purposes exactly in the same manner as easements by estoppel and by dedication for any other purpose, such as for streets (private or public), parks, or any other uses designated as being for the benefit of purchasers. See Wolf v. Brass, 72 Tex. 133, 12 S.W. 159. To this writer, the Wolf case is actually saying that a dedication ordinarily involves public usage, but that regardless of terminology, individual lot owners acquire easement rights by acts on the part of the owner and that this result occurs when the first lot is sold and' thereafter runs in favor of all who purchase in the same subdivision.

Equitable estoppel should certainly apply in the present case.

“Equitable estoppel is the effect of the voluntary conduct of a party whereby he is precluded, both in law and equity, from asserting rights of property, contract or remedy against one who has in good faith relied upon his conduct, and by reason thereof has acquired some corresponding right of property or remedy.” Simpkins on Equity, 2nd Ed. 1911, at p. 669. Simpkins, went on to say that equitable estoppel' “ * * * gives triumph to right and justice-when nothing else known to our jurisprudence can secure those ends.”

*215The word “dedicate” in the present case was given a precise definition in the court’s charge to the jury. Since neither the definition nor the special issues mentioned the public in any way, there could have been no confusion in the minds of the jury about what the definition meant. Where a sub-divider of land indicates on a map, or by other unequivocal acts or declarations that certain land is to be applied to a particular use for the benefit of the lot owners, it is immaterial what label is applied to the owners’ acts. See Lamar County v. Clements, 49 Tex. 347. In the Lamar County case, the Court expressly recognized that “dedication” may be to others than the public when it said that “where a dedication is clearly manifested by unequivocal acts or declarations, upon which the public, or those interested in such dedications, have acted, the owner’s intention is immaterial.” Emphasis added.

The dedication in the present case operates by way of an estoppel. The respondents, under the record in this case, are estopped by the act of James and his agents to deny that an easement over the 1000 acres exists for pleasure and recreational purposes. In the case of City of San Antonio v. Sullivan, 23 Tex.Civ.App. 619, 57 S.W. 42, 44, (1900), wr. ref., the Court said, “[T]he sale of lots in accordance with a map vests in the purchasers the right to use the streets appearing upon such map, and the right so vested cannot be defeated by the act of the vendor, because by the sale, under such circumstances, he is es-topped to deny or impeach rights thus acquired.” The analogy to the present case is apparent. Regardless of whether a subdivision map shows lots and streets or the subdivision map shows only the lots and no streets, if the subdivider or owner points out a street (here bridle paths, roads, etc.) then open on the ground adjoining the subdivision and represents that it is a street, he being either the owner of the area occupied by the street or his authorized agent, this effectually constitutes a dedication which is accepted when a person relies upon the representations, whether shown on the map or on the ground, and purchases a lot bought with reference to such street.

Since a dedication need not be in writing, and an easement need not be public, it certainly follows that a dedication . can be made by oral representation and that the oral representation can be made to something less than the public or specifically, to all prospective purchasers of lots in a given development. It seems to me that the case of San Antonio v. Grandjean, 91 Tex. 430, 41 S.W. 477, 44 S.W. 476, recognized that private rights may arise even though there has been no public acceptance. The Court said:

“It is generally said that the dedication operates by way of estoppel. In many cases the law of estoppel applies without doubt. A grantor, by conveying to his grantee a lot in a town or city, and in the description calling for a street, upon which it is asserted to abut, may estop himself to deny, as against his grantee, that such a street exists, although the town or city may never accept it as such.”

Article 974a, Vernon’s Annotated Civil Statutes, while not being involved here since Eagle Rock Ranch is not in an incorporated city or within five miles of one, is persuasive authority for showing that there can be a dedication for a limited group of persons. Section 1 of the Article, in describing what must be shown on a plat, states that the owner among other things must show thereon “all streets, alleys, squares, parks or other portions of same intended to be dedicated to public use, or for the use of purchasers or owners of lots fronting thereon or adjacent thereto.” However, be that as it may, respondents are in no position to assert the statutes of frauds and conveyances. This applies not only to James, but to all of the respondents as they had notice of the easements and therefore were bound the same irrevocable status of the rights of Drye et al. and those of the same class.

*216The cases relied upon by the Court of Civil Appeals and this court have no application here. From the very nature of estoppel and dedication, none of the statutes or rules considered in those cases can or should be applied to the present case. See Handal v. Cobo, Tex.Civ.App., 225 S.W. 67, wr. ref.; Newman v. Nellis, 97 N.Y. 285, 289.

The cardinal principle for disregarding the statutes of frauds and of conveyances, the oral evidence and merger rules in es-toppel and dedication cases is that to do so would perpetrate a fraud. See Callahan v. Walsh, Tex.Civ.App., 49 S.W.2d 945, wr. ref.; Halsell et al. v. Scurr, Tex.Civ.App., 297 S.W. 524, (1927), wr. dis’m., w. o. j.; Texas Co. v. Burkett, 117 Tex. 16, 296 S.W. 273, 54 A.L.R. 1397.

Thus far I have been dealing with easements by estoppel and by dedication. There is still another reason, however, why the lot owners should .recover. In this case, Drye et al. rights were also pleaded to be appurtenant easements. The evidence, in my judgment, fully suports this form of easements. The Court here assumes, without deciding, that the Venetian Blind Company, Conso Realty Company, the Eagle Rock Ranch' Club Corporation were the same as Edward James. Therefore, I do not go into the mass of evidence which conclusively shows that such corporations were his alter ego. I cannot, however, agree with the Court where it says that our “decision shall rest, then, upon the rights, or lack of them, which the lot owners got or failed to get, under the statutes and decisions of this state dealing with the conveyance of real property.”

Besides being easements by estoppel and by dedication, the rights contended for by the lot owners passed as appurtenances by the grant with the deeds to the ranchitos for the reason that the road to the creek, the area along the creek, the creek itself, the club area, and the ranch area beyond were shown to prospective purchasers as being for their use, were being used upon the ground at the time by other ranchito owners, and were reasonably necessary upon the purchase of a ranchito for the enjoyment of the property conveyed. The record is undisputed that numerous roads leading out of the subdivisions and into the ranch were open, usable, apparent, and .reasonably necessary for the enjoyment of the ranchi-tos. None of the roads shown on the recorded map of Section 2 was a dead-end road on the ground. There are roads leading out of both Sections 1 and 2. The several plain and usable roads laid out within Section 2 for instance are not dead-end roads, but they are continuous as they lead on the ground into and out of Section 2 and onto and over various portions of the ranch. Any reasonable stranger, much less the respondents here, all with a unity of interest, would be charged with notice, and either upon inquiry or observation of the-ground, would .readily learn and would be readily lead to believe that this system of existing roads out of the subdivisions and over the ranch was part of the total setup and available for use by those who bought lots. Therefore, in addition to considering-that the entire ranch was represented orally and in writing to be open and available for-the exercise of easement .rights by property owners, there were visible roads, well traveled, during all of the periods pertinent here. Any reasonable person interested in. purchasing a lot or the 1000-acre ranch would conclude that the lot owners did not make valuable improvement on the lots in the form of houses, stables, etc., believing-that they only had the right to enter the-ranch and go to their own ranchitos and thereafter their activities be confined to ■ moving about over the streets in the subdivisions. Since the roads leading out of" the subdivisions and onto the ranch were-well traveled and in use during all pertinent times, they are appurtenant easements, if not ways by implication or of necessity,, to get from the public road and from the-subdivisions to all parts of the ranch. Likewise, the ranch areas reached by these roads-would he appurtenances.

*217In view of the fact showing that there was a unity of interest between James and his Corporations whereby each acted for the other without distinction, it is all the more evident that open and visible roads leading out of the subdivisions and into the ranch areas to which they led, would pass with the deed to each lot as part of the grant as appurtenances. The 1000-acre ranch from the date of sale of the first lot and continuously thereafter has been burdened with an easement in favor of the lot owners, and any sale of the ranch property passes the title subject to such existing easements. This is not in any sense an easement to be enjoyed by the general public. In fact, these lot owners would have the legal right to enjoin the use of the ranch by the general public. According to the record, there was never any intention that the public should have the right to enjoy the property. The ranch was not dedicated for public use.

The case of McCleary v. Lourie, from the Supreme Court of New Hampshire, reported in 117 A., at p. 730, so thoroughly supports my position on the question of es-toppel and easements appurtenant, and the facts are so nearly the same that I have concluded to quote the opinion in full:

“SNOW, J. There being no specific grant to the plaintiffs of an easement in the grove, nor express covenant with respect to its use, the plaintiffs’ interest therein, if any, under the facts in this case, must be established by way of es-toppel.
“[1] Mrs. Thayer, plaintiffs’ grantor, caused the Point to be surveyed and plotted pursuant to a purpose to develop White Birch Point as an exclusive summer colony. It is clear, from the character of such an enterprise and the location and situation of the property, as disclosed by the survey and plan, that the lake was regarded as an essential feature of the proposed development. It was the grantor’s apparent purpose to utilize this feature by means of the grove adjoining the beach, which connected the water front with the system of proposed roads. The advantages of the lake, beach, and grove were accordingly stressed in elaborate advertising matter and proclaimed to patrons as inducements to the purchase of lots. Prospective purchasers were shown the plan and given to understand that the grove and beach were to be kept open for their use. The master has found that these areas were convenient and beneficial to the purchasers, that the representations were made with the intention that they should be acted upon and that they operated as inducements to the several purchasers. Having thus induced the plaintiffs to purchase lots enhanced in value by rights in the grove and beach, the grantor and those claiming under her with knowledge are estopped to deny the existence of those rights. Walker v. Manchester, 58 N.H. 438, 441; Douglass v. Belknap Springs Land, 76 N.H. 254, 256, 81 Atl. 1086, 37 L.R.A. (N.S.) 953.
“[2] The practical construction of the grants by the immediate parties thereto was of such a character as to put any one dealing with the property upon inquiry as to the authority under which the grantees were claiming to exercise rights of control and passage over the grove. The plaintiffs, from the dates of their several deeds, used the grove and beach as common recreation ground. Both grove and beach were in daily and extensive use for the seasonable period of each year. This use left obvious marks upon the ground, in the form of several paths leading from Lake Road across the grove to the lake. In 1912 an association of cottage owners was formed, which from time to time helped to clear up and make improvements upon the grove and beach, and contributed to the construction of a stone pier extending into the lake and of a float moored adjoining the beach. It. is difficult to conceive how such *218indicia of control and dominion could have escaped the attention of one seeking to purchase.
“[3] Each deed in defendant’s chain of title contained a specific reference to the Hutchinson plan. The plan thus became an essential part of each conveyance, and put the purchaser upon inquiry as to all facts which would have been disclosed by an examination of the property in the light of the plan. Inquiry would have elicited information as to the existence and extent of the rights which were being openly and continuously exercised. Under such circumstances, it must be presumed that the several owners in the defendants’ chain of title had knowledge of the rightful use which was being made of the property. Property conveyed passes subject to all existing easements and burdens in favor of other lands which are apparent from the situation and the customary use of the property. Dunklee v. Wilton R. Co., 24 N.H. 489, 495, 496; Horne v. Hutchins, 71 N.H. 128, 136, 51 Atl. 651.
“[4] The acceptance by the cottagers of unusual privileges in the grove by special permission of the proprietor, such as the privilege of holding picnics, did not forfeit or diminish their rightful interest in the easements therein nor excuse a prospective purchaser of the grove from making inquires as to the extent and limitations of such easements. Notices published or posted by the proprietor, forbidding the use of the beach, but which were designed to prevent depredations and to keep out trouble makers, and did not come to the attention of the cottagers, nor affect the customary enjoyment of their easements, are immaterial. The error of the defendants’ immediate grantor in supposing that the beneficiaries of the easement were confined to patrons of the inn did not excuse his failure to inquire ; nor did the recital in his deed to the defendants of his understanding that there were no deeded rights of way over the grove to the lake enlarge the rights conveyed, as against the plaintiffs.
“[5, 6] The defendants, before taking title, examined the Hutchinson plan, and knew it was recorded. They knew of the use of the grove and beach by the cottagers, looked the property over thoroughly, saw the boat landing and float, and the paths leading to them, but sought no explanation of the obvious dominion by the cottagers over the' property of which they were contemplating the purchase. The fact that their proposed use of the property as a site for a girls’ camp depended upon the exclusive use of the beach and grove does not help them, but only renders less excusable their failure to seek an explanation of its open use and occupation by others. It cannot be assumed, that inquiries would have failed to elicit the truth. The finding of the master that the defendants were chargeable with knowledge of the use to which the grove had been put, and were at fault for not making further investigations, seems to be abundantly sustained by the subsidiary findings of fact. They did not escape the effects of their knowledge by .reliance upon the report of their attorney as to the record title; nor were their rights enlarged by the unauthorized admission of the president of the association that it had no legal rights in the grove.
“[7] The ruling of the master that, to constitute a common-law dedication, the property must be set apart for the public generally is sustained by the authorities, 18 Corpus Juris, 46, 50. It is a significant fact that no member of the public, as distinct from the cottage and lot owners who have an easement in the locus in quo, appears to be here claiming any rights. The subsidiary finding of fact of the exclusive character of the enterprise sufficiently sustains the ultimate finding as to the limited *219■character of the appropriation. The limitation of the use of the facilities to the members of the summer colony was presumably one of the inducements to the purchase of lots by them. The main purpose of the promoter and of her patrons would have been thwarted, if the public generally were to be admitted as a matter of right of equal use and enjoyment with them of the grove and beach.”

The trial Court’s judgment was correct ½ the establishment of easements, therefore, under my view, the alternative action for damages by Drye et al. is not reached.

The judgment of the Court of Civil Appeals should be reversed and that of the trial court affirmed.