WILSON v. MASS. INSTITUTE OF TECHNOLOGY

Equitable Restrictions. Massachusetts Institute of Technology. St. 1861, c. 183, which incorporated the Massachusetts Institute of Technology, granted to that corporation the right to hold and occupy the westerly portion of a certain square of land then belonging to the Commonwealth between Newbury Street and Boylston Street in Boston "to the extent of two thirds part thereof, free of rent or charge by the Commonwealth," and provided in § 3 that the square in question should "be reserved from sale forever, and kept as an open space, or for the use of" the educational institutions named in the act, and in § 7 that the corporation above named, and another educational corporation to which a similar grant was made as to the remaining third of the square, should "not cover with their buildings more than one third of the area granted to them respectively." These grants were made in pursuance of a scheme, proposed by the petitioners for the grants, that the square in which the rights were granted should be dealt with in such a way as to enhance the value of the surrounding lots belonging to the Commonwealth, so that their increase in value should equal the value which the reserved square had before the adoption of the plan, and the Commonwealth thus should be reimbursed for the space withdrawn from sale. This scheme was carried out, and the lots surrounding the square belonging to the Commonwealth, after having been reserved under § 8 of the act until the square was built upon and improved by the two educational corporations, were sold at auction in accordance with a plan signed by the commissioners of public lands, which was referred to in the advertisements, and a copy of which was pasted in the catalogues of the sales. On this plan the reserved square was shown with the buildings of the two corporations and the open spaces drawn upon it. St. 1903, c. 438, released to the Massachusetts Institute of Technology all the right, title and interest of the Commonwealth by way of right of re-entry or otherwise in the westerly two thirds of the square, and provided that that corporation "subject to the rights, if any, of other parties" might erect upon all or any part of the premises buildings conforming to the building laws of the city of Boston and in accordance with certain restrictions set forth in the act. The owners of two lots on one of the streets facing the square, which had been purchased respectively at two of the suction sales above described, brought suits in equity against the Massachusetts Institute of Technology to restrain that corporation from covering with its buildings more than one third of the land assigned to it by St. 1861, c. 188. Held, that the provisions of §§ 3 and 7 of the last named act, that the square should be reserved from sale forever, and kept as an open space, or for the use of the educational institutions named in the act, and that these institutions should not cover with their buildings more than one third of the area granted to them respectively, were addressed to the future purchasers of the surrounding lots as the basis on which those lots were to be sold, and the lots of the plaintiffs having been bought on the faith of these declarations, an equitable contract was created which could be enforced specifically as a restriction on the land held by the defendant, and that the plaintiffs were entitled to decrees enjoining the defendant from erecting any building or buildings covering more than one third of the area assigned to it by St. 1861, c. 183.

LORING, J.

The contest here is on the application of well settled principles of law to new surroundings.

Counsel for both parties agree that it is not necessary to decide whether the effect of St. 1861, c. 183, was to convey to the two societies the fee in the square in question or only certain rights of occupation, the fee being retained in the Commonwealth. If we speak of the grant as one or the other, it will be for convenience only and not as expressing any opinion on this point.

We agree with the counsel for the defendant in their contention that if St. 1861, c. 188, was not intended to give to persons buying the surrounding lots under it the right here claimed by the plaintiffs, they cannot make out a case because of the form given to the transaction by the officers of the Commonwealth. If St. 1861, c. 183, was not intended to give such a right, such acts of these officers would not bind the Commonwealth on the principle lately enforced in Wormstead v. Lynn, 184 Mass. 425.

In construing this act the first fact and the most important consideration is that the grant to these two societies was not to cost the Commonwealth a penny, and that this was to be effected by dealing with the square granted to the societies in such a way as so to enhance the value of the surrounding lots that they would yield as much as or more than the aggregate value the two had under the conditions prevailing before St. 1861, c. 183, was enacted. It is perhaps of some interest that this scheme was suggested to the Commonwealth by the petitioners for these grants, including among them the petitioners for the incorporation of the defendant.

It is stated in the report of the committee of the Legislature to whom these petitions for a grant of land were referred: "According to the plan of the Memorialists, sufficient space is to be reserved to leave wide openings around the buildings of the societies." And again: "Common experience shows that such open ornamental grounds surrounding the buildings, together with the attractive exterior of the latter, could not fail to increase the value of the adjacent lands, and to this extent would reimburse the treasury for the space withdrawn from sale. As regards the amount of this enhancing influence your committee have been furnished by the Memorialists with a large array of facts derived from the sales of lands on the Back Bay and other open parts of the city, going to show that improvements of the kind contemplated have been found in every case not only to hasten the sale and occupation of the adjacent lands, but to add very largely to their market value, making the net proceeds of the adjacent lands in most cases as great or even greater than the value of the total area supposing no such reservation to have been made."

St. 1861, c. 183, adopted to carry into effect this scheme of the "memorialists," (including the defendant Institute,) provided (first) that the square in question "shall be reserved from sale forever"; (second) "and kept as an open space, or for the use of" the two societies; and (third) "The above named societies shall not cover with their buildings more than one-third of the area granted to them respectively." The plaintiffs contend that these declarations were addressed to the purchasers of the surrounding lots as the basis on which those lots were to be sold, and were made for the benefit of such purchasers; and that having bought on the faith of them these purchasers are entitled to have them specifically enforced.

The defendant on the contrary insists that on a fair construction of the provisions of the act the Legislature intended to keep and did keep the control of all restrictions in its own hands, that the value of the surrounding lots was to be enhanced by the square in question being physically laid out before they were sold, and that the square was to continue in that condition so long as the Commonwealth, having regard to the interests of all concerned, should think it ought so to continue and no longer; that St. 1903, c. 438, was an exercise of the control so reserved, and brought to an end as of right the advantages for which the purchasers of the surrounding lots paid an enhanced price.

When the defendant contends that in St. 1861, c. 183, the Legislature kept the control of the whole situation in its own hands, it relies on the fact that, having regard to the words "further conditions" in § 6, what are called "stipulations" in § 4 are really conditions, and being conditions the subject matters covered by them are matters between the Commonwealth and the grantees, and between them alone.

Were that the whole story the result would not necessarily follow. The fact that a provision in a deed is put in the form of a condition and in no other form, even when coupled with an express statement that the "non-fulfilment or breach . . . shall work a forfeiture of the estate hereby conveyed, and reinvest the same in the grantor," is not decisive against its operating as an equitable restriction in addition to its operating as a common law condition. That was decided in Hopkins v. Smith, 162 Mass. 444, and is laid down in the recent case of Welch v. Austin, 187 Mass. 256, 258. The same principle would govern in case of a grant made by act of the Legislature.

The doctrine of Hopkins v. Smith is that in spite of the parties to a deed having put the thing agreed upon in the form of a common law condition and a common law condition only, the question whether it does not operate also as an equitable restriction is one of intention. The fact that the thing agreed upon has been put in the form of a common law condition, and in that form alone, is of itself a matter to be taken into consideration in arriving at the intention of the parties. But that fact has no greater or further effect. The opposite results severally reached in the cases of Peck v. Conway, 119 Mass. 546, and Clapp v. Wilder, 176 Mass. 332, are examples of the application of this rule.

The cases of Episcopal City Mission v. Appleton, 117 Mass. 326, and Skinner v. Shepard, 130 Mass. 180, (as to which see Welch v. Austin, 187 Mass. 256, 259,) would raise an additional difficulty in construing the matters covered by § 4 to be equitable restrictions as well as conditions, had the plaintiffs put their case on the ground that it was by force of the provisions of that section that they were entitled to an equitable restriction. That additional difficulty consists in the fact that § 4 deals alike with matters with which the purchasers of surrounding lots have nothing to do, and with inclosing, adorning and cultivating the open ground around its building and thereafter keeping said grounds and building in a sightly condition. We refer to the "stipulation" that "persons from all parts of the Commonwealth shall be alike eligible as members of said institute, or as pupils for its instruction; and its museum or conservatory of arts, at all reasonable times, and under reasonable regulations, shall be open to the public." But as we shall see, § 4 and its provisions are not what the plaintiffs rely upon.

"Section 4. If at any time within one year after the passage of this act, the said Institute of Technology shall furnish satisfactory evidence to the governor and council that it is duly organized under the aforesaid charter, and has funds subscribed, or otherwise guaranteed, for the prosecution of its objects, to an amount at least of one hundred thousand dollars, it shall be entitled to a perpetual right to hold, occupy and control, for the purposes herein before mentioned, the westerly portion of said second square, to the extent of two thirds parts thereof, free of rent or charge by the Commonwealth, subject nevertheless, to the following stipulations, namely: persons from all parts of the Commonwealth shall be alike eligible as members of said institute, or as pupils for its instruction; and its museum or conservatory of arts, at all reasonable times, and under reasonable regulations, shall be open to the public; and within two years from the time when said land is placed at its disposal for occupation, filled and graded, said institute shall erect and complete a building suitable to its said purposes, appropriately inclose, adorn and cultivate the open ground around said building, and shall thereafter keep said grounds and building in a sightly condition."

We come then to the question of the true construction of the act, St. 1861, c. 183.

In the first place, it is provided (and this provision is in § 3 and is not one of the "stipulations" of § 4 nor one of the "further conditions" of § 6) that the square in question "shall be reserved from sale forever."

It is true that the only thing here complained of is a threat by the defendant Institute to build over more than one third of the area granted to it. But the right to build over more than that area and the right to sell the whole area to others to be built over by them is treated in St. 1861, c. 438, as one and indivisible, and no distinction is made in St. 1903, c. 438, between the right to build over the whole area and the right to sell the whole area to others to be built over by them. The two rights alike are granted to the defendant Institute by the act of 1903. The true construction of St. 1861, c. 183, cannot be determined without considering the validity of the provision of St. 1903, c. 438, which permits the sale by the defendant Institute of the whole area to others, to be built over by them.

In construing St. 1861, c. 183, we start first with a declaration that this square was to "be reserved from sale forever." And having in mind the purpose for which St. 1861, c. 183, was enacted, we are of opinion that this was a declaration addressed to future purchasers of surrounding lots, to induce them to pay for those surrounding lots more than they otherwise would pay for them.

We next come to the declaration that the square which is to "be reserved from sale forever" is to be "kept as an open space or for the use of" the two societies, and that "the above named societies shall not cover with their buildings more than one-third of the area granted to them respectively." These provisions state the details of what is to be done with this square which is to "be reserved from sale forever," and like that declaration are addressed to future purchasers of surrounding lots. Being details the duration of them is fixed by that of the main provision of which they are details, unless there is something to control that result.

It is of importance that these provisions are not found among the "stipulations" of § 4, nor among the "further conditions" of § 6,^fn_ but are in separate sections (§§ 3 and 7) which are not put directly or indirectly in the form of conditions. The case now before us therefore is not such an extreme one as Hopkins v. Smith, where there was no provision outside of or in addition to a condition coupled with an express defeasance and right of re-entry.

In the case at bar the broad principles on which the surrounding lots are to be sold are stated in sections (§§ 3 and 7) addressed to the purchasers of them; and these are not put in the form of conditions. In addition we have §§ 4 and 6 which are put in the form of conditions. These sections deal (inter alia) with the machinery adopted for carrying into effect the details of the broad principles stated in §§ 8 and 7.

Apparently the Legislature thought that the best results could not be secured to the purchasers of surrounding lots unless some one person or body could act for them all in matters of detail, and for that reason it entrusted the matter of dealing with the details to the Governor and Council. Apparently the Legislature further thought that the best way of enforcing compliance with directions as to details so made was to give to the Governor and Council a right of re-entry on non-compliance with the directions adopted by them; and it gave such a right of re-entry. But that did not interfere with the declarations (on which these surrounding lots were to be sold) constituting a right in the purchasers of them, namely, that this square was to "be reserved from sale forever," and, if not used as an open space, it was not to be covered by buildings to an extent greater than one third of its area. The result is that the design of the buildings to be erected, the laying out of the grounds and the proper maintenance of both are matters left to the discretion of the Governor and Council. But the broad principles were not left to them. Under St. 1861, c. 183, the Governor and Council were authorized to approve such a building as they saw fit without regard to what might be thought of it by others; they might give their approval to what might be thought by others to be the laying out of the grounds in a way injurious to the surrounding residences, and they might allow the grounds to fall into what might be thought by others to be a deleterious state of maintenance. On these matters of detail their decision, honestly exercised, is final. But they have not now and never had jurisdiction to abridge the rights of the purchasers of surrounding lots (first) to have the square "reserved from sale forever," and, (second,) in case it is not used as an open space, to have the buildings of the two societies not cover "more than one-third of the area granted to them respectively." In our opinion such was the intention of the Legislature in enacting St. 1861, c. 183, and that is what the Legislature provided by that act.

It is true that St. 1863, c. 226, repealed §§ 8 and 9 of St. 1861, c. 183, requiring the two societies to make good the deficit in case the amount realized from the sale of the surrounding lots under St. 1861, c. 183, did not equal the value of those lots plus the value of the square here in question before St. 1861, c. 183, was enacted; and that all the lots (with the exception of those on Berkeley Street sold before the enactment of St. 1861, c. 183) were sold after the repealing act of 1863. But the repeal of these sections was not intended to change the scope of the act (St. 1861, c. 183). It was intended to release the societies from a burden which was assumed and rightly assumed to have ceased to exist. As was said by the commissioners in their report of 1863, when speaking of the sales made in the previous year, the "policy of this repeal was justified by the sale" on account of the great rise above the appraised values, — a rise which was created by the scheme of St. 1861, c. 183, in favor of the surrounding lots.

We are of opinion that on the facts stated the plaintiffs have sustained the burden of proving that the surrounding lots generally and the lots now owned by them in particular, were sold and bought under St. 1861, c. 183; and that they became entitled by such purchase to the benefits granted to them by that act, including the right to have the buildings of the defendant corporation confined to an area not exceeding one third of the land assigned to it by St. 1861, c. 183.

Although the Commonwealth is a sovereign State, it can no more change the grant thus made than can an individual. That has been the law, at least since Dartmouth College v. Woodward, 4 Wheat. 518.

We see nothing in the agreement of the parties^fn_ that should disentitle the plaintiffs from having this agreement specifically enforced. What that agreement amounts to is that the square in question would have a greater market value than it has if the surrounding lots had not been sold on the terms on which they were sold. The plaintiffs have a right to use their property as they please, even if that property would have a greater value if devoted to another use. The facts agreed to do not bring the case within the doctrine of Jackson v. Stevenson, 156 Mass. 496, nor within the concluding paragraph of the opinion in Parker v. Nightingale, 6 Allen, 341, 349.

The plaintiffs are severally entitled to a decree with costs enjoining the defendant from proceeding with the erection of any building or buildings covering more than one third of the area assigned to it by St. 1861, c. 183.

So ordered.

Justice MORTON and HAMMOND dissent. They think that the square occupied in part by the defendant is not subject to any equitable or other restrictions in favor of the plaintiffs or surrounding lot owners, and that the bills should be dismissed.