Indiana Law Review


XIIL Property

Walter W. Krieger*

During this survey period there were more than eighty decisions

by state and federal courts that, to some degree, touched upon In-

diana property law.^ Many of these decisions, however, do not change
or clarify existing law, nor do they present interesting applications

of the law. These cases have either been excluded or summarized

without extensive comment. The more significant cases are discussed
under the following headings: (A) Adverse Possession; (B) Bail-
ment; (C) Easements and Restrictive Covenants; (D) Landlord and

Tenant; (E) Mines and Minerals; (F) Real' Estate Trans-
actions; and (G) Slander of Title. Cases not discussed under the above

headings involved the following subjects: eminent domain,^

*Associate Professor of Law, Indiana University School of Law — Indianapolis. A.B.,
Bellarmine College, 1959; J.D., University of Louisville, 1962; LL.M., George Washington

University, 1969. The author wishes to extend his appreciation to Joseph Maguire for

his assistance in the preparation of this Article.

'There were no significant statutory developments during this survey period.

'In Oxendine v. Public Service Co., 423 N.E.2d 612 (Ind. Ct. App. 1980), the first

district court of appeals held that Public Service Company of Indiana, Inc. (PSD had
made "good faith offers" prior to filing eminent domain actions against two landowners.

The trial court granted PSI's request for easements for a transmission line across

two properties. On appeal, the landowners argued that the precondemnation offers
were not made in good faith because the amounts offered were not based on actual
characteristics, including improvements on the land. Id. at 615. The landowners fur-
ther argued that the offers were not based on good faith opinions of fair market values,

as required by Indiana Code section 32-11-1-2.1 (1982). Id.

The court of appeals rejected the landowners' first argument holding that failure
to consider factors which affect damages and value "does not render the offer invalid

as not being in good faith." 423 N.E.2d at 620 (citing Wyatt-Rauch Farms, Inc. v. Public

Service Co., 160 Ind. App. 228, 311 N.E.2d 441 (1974)). Additionally, the court noted

that PSI employed an independent appraiser who applied certain accepted techniques
to arrive at an offer and that although PSI made numerous contacts with the land-
owners, the landowners never expressed an opinion of value at the negotiation stage

or at trial. 423 N.E.2d at 620.

The court of appeals also rejected the landowners second argument holding that
the adoption in 1977 of the Uniform Land or Easement Acquisition Offer, which is
found in Indiana Code section 32-11-1-2.1 (1982), did not require a precondemnation of-

fer to be based upon fair market value. 423 N.E.2d at 621. The court came to this
conclusion though the offer form in the statute contains the following sentence: "It

is our opinion that the fair market value of the (property) (easement) we want to ac-
quire from you is $ , and, therefore, (condemnor) offers you

$ . . ." Ind. Code § 32-11-1-2.1 (1982).
Thus the court concluded that a precondemnation offer must be based only upon

the reasonable value of the property, but not necessarily the fair market value. 423

N.E.2d at 619 (citing Wampler v. Trustees of Indiana University, 241 Ind. 449, 172
N.E.2d 67 (1961)); See also Chambers v. Public Service Co., 265 Ind. 336, 355 N.E.2d
781 (1976).

In Unger v. Indiana & Michigan Electric Co., 420 N.E.2d 1250 (Ind. Ct. App. 1981),
the first district court of appeals was faced with the same "good faith offer" issue

283



284 INDIANA LAW REVIEW [Vol. 16:283

joint bank accounts,^ and the Occupying Claimant

addressed in Oxendine. This time the court of appeals reached a different conclusion.

In linger, Indiana & Michigan Electric Co. (I. & M.) sought an easement over the pro-
perty of Ruby Unger. I. & M. made Unger several offers before they tendered a uniform
offer in accordance with Indiana Code section 32-11-1-2.1 (1982). The uniform offer was

rejected and I. & M. filed an eminent domain action. At trial, the evidence showed
that the I. & M. offers were determined by reference to a standard schedule of land
values. 420 N.E.2d at 1251. The evidence further showed that an I. & M. agent based
his opinion of the fair market value of the Unger property on the value which was

accepted by other persons along the same route. Id. at 1252. There was no other

appraisal of the Unger property.

The landowners appealed the trial court's denial of objections to the condemna-
tion action. The critical issue before the court of appeals was "whether the trial court
erred in concluding I. & M. made a good faith effort to purchase." Id. at 1254. As
in Oxendine, the landowners argued that by enacting Indiana Code section 32-11-1-2.1

(1982) the legislature intended the condemnor to form an opinion of the fair market

value of the land sought and to submit an offer based on that opinion prior to filing

a condemnation action. The court in Unger agreed and held that "a condemnor must
base its offer upon a stated opinion of the fair market value of the property sought."

420 N.E.2d at 1260. However, the court noted that a precondemnation offer need only

be reasonable and a "conflict in opinion as to fair market value will be insufficient

to sustain an objection to the complaint in condemnation." Id. The court concluded
that reference to a state-wide schedule of damages without reference to the particular

real estate was not a good faith offer to purchase. Id. at 1261. Therefore, the court
in Unger held that "the trial court erred in overruling the landowners' objections that

I. & M. had not made a good faith effort to purchase" and the trial court's order was
reversed with "orders to dismiss the complaint in condemnation." Id.

'In Blaircom v. Hires, 423 N.E.2d 609 (Ind. 1981), Marie Van Blaircom and Maude
A. Hires established a joint saving account. The deposit contract with the bank in-

dicated that Maude and Marie were joint tenants with right of survivorship. Id. at
610. All the deposits were made with the funds of Maude, but the funds were physically
deposited by Marie who retained the passbook. In 1974, Alva Hires was appointed
guardian of the person and estate of his wife, Maude, and in January 1975, Alva demand-

ed possession of the passbook. Instead, Marie withdrew all the funds from the account.

Alva, as guardian, brought suit to recover the funds. The trial judge, now a judge
on the Indiana Supreme Court, entered judgment in favor of the guardian. In an
unpublished Memorandum Decision, the court of appeals reversed finding that where
the rights of the parties are clearly established in a joint bank account by unequivocal

language, the clear meaning of the language can not be varied by the admission of

parol evidence. The court of appeals held that Marie and Maude had acquired all the
rights incident to joint ownership and awarded Marie one half of the funds. In response

to a petition to transfer, the Indiana Supreme Court divided equally on whether a
petition to transfer should be granted; Justice Pivarnik, who was the trial judge below,
disqualified himself. This left the decision of the court of appeals in full force and effect.

Id. at 610.

In a dissenting opinion in which Justice Hunter concurred, Chief Justice Givan

pointed out that Indiana Code section 28-1-20-1 (repealed 1980) was designed to pro-

tect the banks and was not intended to prevent designation of joint account interests

by separate agreement between the parties. 423 N.E.2d at 611. Chief Justice Givan

noted that, in some jurisdictions, parol evidence is not admissible after the death of

one of the parties, but in the case at bar both parties were alive when the action
was commenced. Id. at 611-12 (citing 10 Am. Jur. 2d Banks § 389 (1963)). This case was
decided prior to the effective dates of Indiana Code sections 32-4-1.5-1 to -14 (1982)

which now govern joint bank accounts. Under the current law, during the lifetime of



1983] SURVEY-PROPERTY 285

Act/

A. Adverse Possession

A frequent factual situation arising in the area of adverse posses-
sion involves boundary line disputes between adjoining property

the cotenants, the account belongs to the parties in proportion to the net contribu-

tions by each to the sums on deposit. Id. § 32-4-1.5-3(a) (1982). At the death of one

of the cotenants, the statute provides that "[s]ums remaining on deposit at the death

of a party to a joint account belong to the surviving party or parties as against the

estate of the decedent unless there is clear and convincing evidence of a different in-

tention at the time the account is created." Id. § 32-4-1.5-4(a). It would thus appear

that the dissenting opinion will be followed in cases arising after the effective date

of the statute.

'In Freson v. Combs, 433 N.E.2d 55 (Ind. Ct. App. 1982), Millard and Fanny Combs
brought an action to quiet title and for damages alleging that Ronald and Peggy Freson
had unlawfully occupied and improved the Combs' property by building a house thereon.

Id. at 57-58. The Combs also filed suit against John and Corabel Hopkins, who had
deeded the land to the Fresons, and the Harrison Building & Loan Association, apparent-
ly a mortgagee. In their answer, the defendants asserted that under the Indiana Occupy-

ing Claimant Act, Indiana Code sections 34-1-49-1 to -12 (1982), they would be required

to pay the Combs the fair market value of the land in its unimproved state if there
was a judgment for the Combs. The court then tried the case under the Occupying
Claimant Act. The jury returned a verdict in favor of the Combs and valued the land
at $2,000, which on appeal was reduced to $1,500 to conform to the evidence. 433 N.E.2d

at 58, 60-62. The Occupying Claimant Act is far more complicated than suggested by
this case, and the particular way in which it was applied by the court in Combs might
have been in error except for a post-trial motion filed by the Combs stating that it
was never their intention to eject the Fresons from their home and that they only
desired to be paid the value of their land which the Fresons occupy. Id. at 58.

The Occupying Claimant Act states that before the true owner can recover posses-

sion of his land against an occupying claimant who made improvements to the land
in good faith and under color of title, the owner must comply with certain provisions

of the Occupying Claimant Act. Ind. Code § 34-1-49-1 (1982). The court or jury trying

the case must assess: (1) the value of the lasting improvements made by the occupy-
ing claimant; (2) the damages to the land caused by waste or cultivation by the occupy-

ing claimant; (3) the value of any rents and profits which might have been received

by the occupying claimant from the land in its unimproved state (without improvements);

(4) the value of the land without the improvements made by the occupying claimant;
and (5) the taxes with interest paid by the occupying claimant and those under whose

title he claims. Id. § 34-1-49-3. The court shall then give the true owner the option
of paying the occupying claimant the value of his improvements plus the taxes paid,

with interest, less the value of rents and profits received and any damages as assessed
on the trial. Id. § 34-1-49-4. If the true owner shall fail to do so within a reasonable

time fixed by the court, the occupying claimant can take the property by paying the

true owner the value of the land without the improvements. Id. § 34-1-49-5. If this
is not done within a reasonable time fixed by the court, the true owner and occupying

claimant will be held as tenants in common. Id. § 34-1-49-6. In the case at bar, it

is not clear whether all the assessments were made by the jury, and the court did
not give the owner the first option as required by the statute. Nevertheless, the post-

trial motion corrected any error by waiving the right to pay the Fresons the value

of their improvements, and thus the Fresons had the option of paying the Combs the
value of the land. For further discussion of this case see Karlson, Evidence, 1982 Survey

of Recent Developments in Indiana Law, 16 Ind. L. Rev. 191, 200 (1983).



286 INDIANA LAW REVIEW [Vol. 16:283

owners. Through mutual mistake, a fence or other monument is treated
as the true boundary line, and as a result one of the parties has been

in possession of a strip of land belonging to the other for a period

of time sufficient to invoke the doctrine of adverse possession. Two
such cases were decided during this survey period.

In Dowell v. Fleetwood,^ the plaintiffs, Everett and Karen
Fleetwood, purchased a one-acre tract of land in 1960. They regularly
mowed the grass, cleared brush, and generally maintained their prop-
erty to an existing fence which they believed to be the true boundary

line. In 1975, the defendants, Alva and Evelyn Greathouse, purchased

a contiguous five-acre tract. A survey conducted by the county
surveyor established that the existing fence encroached 50.59 feet onto

the Greathouses' property. The plaintiffs brought suit to quiet title.
The trial court found in favor of the plaintiffs based on the theory
of adverse possession, and the defendants appealed.

The first argument presented by the defendants was based on the
fact that the plaintiffs had not paid taxes on the disputed strip of

land. The defendants argued that the plaintiffs could not prevail
because Indiana Code section 32-1-20-1 requires that the adverse

possessor pay all the taxes on the land during the period he claims

to have possessed the same adversely. This argument, as it relates
to boundary line disputes, has been repeatedly rejected by the In-

diana courts. Citing Echterling v. Kalvaitis,^ the Fleetwood court pointed

out that if there has been an open, continuous, exclusive, adverse, and

notorious possession of a contiguous strip of land for the statutory

period of time, and if the taxes have been paid according to the tax

duplicates, even though the duplicate does not include the disputed

strip, then adverse possession is established to the strip. The adverse
possessor who meets these criteria will be successful, though tech-
nically the taxes on the strip of land have not been paid by the adverse

possessor.^ The court declined the Greathouses' invitation to overrule
Echterling, noting that the Echterling decision preserves continuity

of possession and supports stability in real estate titles.^

The second argument advanced by the defendants dealt with the
sufficiency of the evidence. The defendants argued that mowing grass
and general maintenance of the disputed area was not the type of
open, continuous, exclusive possession that is necessary to acquire title

by adverse possession. The court declined to reweigh the evidence
and pointed out that mowing and maintaining property to a fence for
the full period of the ten year statute of limitation for the recovery

^420 N.E.2d 1356 (Ind. Ct. App. 1981).
«235 Ind. 141, 126 N.E.2d 573 (1955).
'420 N.E.2d at 1358.

'Id.



1983] SURVEY-PROPERTY 287

of possession of real property has previously been held sufficient in

Indiana.^

The second case, McCarty v. Sheets,^^ presented a somewhat dif-
ferent factual situation than that involved in Fleetwood. The plaintiff,

Russel McCarty, and the defendants, Carl and Anna Sheets, owned
adjoining tracts of land. In 1937, a garage was erected on the defend-

ants' land by their predecessor in title. The garage, situated on the
side boundary line approximately midway between the front and rear
lot lines, encroaches upon the McCarty property 1.4 feet at the rear
end of the building and 2 feet at the front end. The eaves of the garage

encroach an additional 1 foot. The evidence showed that from 1956

until 1973 the defendants cut the grass, maintained the area around

the garage, and paid all taxes on their property including the taxes

assessed against the garage. When McCarty brought an action to re-
quire the defendants to move their garage, the defendants
counterclaimed to quiet title. The trial court entered judgment against
the plaintiff and for the defendants on their counterclaim, quieting

title to a strip of land 4 foot 2 inches wide and 150 feet in length

along the entire east side boundary of the plaintiff's land. The court
of appeals affirmed the judgment of the trial court and the plaintiff

filed a petition to transfer. ^^ The Indiana Supreme Court vacated the
decision of the court of appeals, affirmed the denial of relief to the

plaintiff, but reversed and remanded the case as to the relief granted
the defendants.

^^

Both the supreme court and the court of appeals found relevant
the testimony of the defendant, Carl Sheets, regarding the acts of

possession upon which his claim was based. After examining this
testimony, the supreme court concluded, ^^ as had the dissent in the
court of appeals decision,^'' that at best the testimony indicated that

Sheets did some yard work on the side of the garage and behind the
garage, but that there was absolutely no evidence that he did anything
to the strip of land along the whole side of McCarty's land. The court
found that the evidence only supported awarding the defendants the

land actually occupied by their garage and a prescriptive easement

to maintain the eaves of their garage as presently located. ^^ While

'Id. at 1359 (citing Ford v. Eckert, 406 N.E.2d 1209 (Ind. Ct. App. 1980)).
"'423 N.E.2d 297 (Ind. 1981).

''Id. at 298.

'Ud. at 301.

''Id. at 300.

'"McCarty v. Sheets, 391 N.E.2d 834, 838 (Ind. Ct. App. 1981) (Hoffman, J., dissent-

ing). For a discussion of the court of appeals decision in McCarty, see Krieger, Prop-
erty, 1980 Survey of Recent Developments in Indiana Law, 14 Ind. L. Rev. 459, 466-67
(1981).

'M23 N.E.2d at 301.



288 INDIANA LAW REVIEW [Vol. 16:283

the decision in McCarty rests on a narrow point, that is the failure
to prove acts of possession along the entire boundary line, there is

language in the decision that suggests that the court will not find

maintenance activities in a residential area sufficient to support a claim

to adverse possession where there are no fixed or established bound-
ary lines such as a fence or other monument. 16

B. Bailment

Carr v. Hoosier Photo Supplies, Inc.,^'^ decided during this survey

period, establishes that the Uniform Commercial Code will not extend

to cases involving bailment for services. John Carr, an attorney and

amateur photographer, puchased ten rolls of Eastman Kodak Company
film to be used on a trip to Europe. Each roll of film had a "notice"

printed on the package that stated that if the film was defective or
if "damaged or lost by us or any subsidiary company even though
by negligence or other fault," the film would be replaced. "Except

for such replacement," the notice continued, "the sale, processing, or

other handling of this film for any purpose is without other warranty

or liability
."^«

Upon returning home from the European trip, Carr took nine rolls
of exposed Kodak film to Hoosier Photo for processing. The receipt
for the film which Carr received from Hoosier Photo also contained

a "notice" on the back. The notice stated that

[although film price does not include processing by Kodak,

the return of any film or print to us for processing . . . will

constitute an agreement by you that if any such film or print

is damaged or lost by us or any subsidiary company, even
though by negligence ... it will be replaced . . . and except

for such replacement, the handling by us ... is without other

warranty or liability.^^

Only five of the nine rolls of Kodak film were returned to Carr;
the others were lost by either Kodak or Hoosier Photo. Carr filed
suit against Kodak and Hoosier Photo asking for $10,000 in damages,
which would include the cost of returning to Europe to retake the

'Hd. at 300-01. Cf. Penn Cent. Transp. Co. v. Martin, 170 Ind. App. 519, 353 N.E.2d
474 (1976) (erecting permanent structures and thereafter mowing grass and erecting
improvements held sufficient to establish adverse possession); Smith v. Brown, 126
Ind. App. 545, 134 N.E.2d 823 (1956) (establishing hedge fence, trimming shrubbery,
mowing grass and planting flowers held sufficient to establish adverse possession).

"422 N.E.2d 1272 (Ind. Ct. App. 1981), rev'd. No. 1182 S 426 (Ind. Nov. 12, 1982).
For further discussion of this case see Bepko, Commercial Law, 1982 Survey of Recent
Developments in Indiana Law, 16 Ind. L. Rev. 83, 90 (1983).

'«422 N.E.2d at 1274.

''Id.



1983] SURVEY-PROPERTY 289

photos. Kodak and Hoosier Photo claimed that because of the limita-
tion of liability clauses contained on both the film packages and the

receipt, Carr's recovery should be limited to $13.60.^" The trial court
awarded Carr $1,013.60 and all parties appealed. The court of appeals
affirmed the judgment of the trial court.^^

The primary issue addressed by the court of appeals was whether
the film processing transaction should be governed by the Uniform

Commercial Code as was claimed by the defendants, Kodak and
Hoosier Photo. The defendants advanced two arguments to support
this contention. The first argument was that the limitation of liabili-
ty clause on the film box, which related to film processing, was suffi-

cient to bring the processing transaction within the ambit of the UCC.
The court of appeals summarily rejected this argument.^^

The second argument advanced by the defendants was that this
service transaction is analogous to a leasing arrangement, which type

of arrangement has been held in Indiana as covered by the UCC.^^

The court of appeals, however, found that "there is a distinction be-
tween a bailment which arises from the lease of personal property

and a bailment which arises from the service transaction."^'^ The
distinction the court drew lies in the fact that one who leases per-
sonal property has the use of that property for a specified time. The
bailee who is to perform a service upon the personal property in his
possession, however, does not have the use of the personal property.

The court of appeals thus found that to extend the scope of the, UCC
to cover service transactions would be to "distort the language of the

U.C.C."''

Hoosier Photo and Kodak advanced a separate argument on the
damages question. The argument was that neither defendant accepted
the images on the film for bailment and that it would be unfair to

hold them liable for the value of the exposed film. In rejecting this
argument, the court noted that this was not a case where unexpectedly

valuable objects are placed in a car trunk or left inside a suitcase

without the knowledge of the bailee, in which case the bailee would

not be liable for the loss.^^ In this case, both Hoosier Photo and Kodak

''Id.

''Id.

'Ud. at 1275.

''Id. at 1277. See McDonald's Chevrolet, Inc. v. Johnson, 176 Ind. App. 498, 376
N.E.2d 106 (1978).

^"422 N.E.2d at 1275.

'Ud. at 1276. But see Mieske v. Bartell Drug Co., 92 Wash. 2d 40, 593 P.2d 1308
(1979). In Mieske, the Supreme Court of Washington held that the UCC applied to film
processing. Id. at 47-48, 593 P.2d at 1312. The court in Mieske found that the UCC
application to "transactions in goods" was intended by the drafters to include a broad
spectrum of sales and transactions including a bailment for services. Id.

'«422 N.E.2d at 1278.



290 INDIANA LAW REVIEW [Vol. 16:283

were aware that the film was exposed and that the images on it made
it more valuable than unexposed film.

C. Easements and Restrictive Covenants

Two easement cases decided during this survey period warrant
comment.^^ In Hartwig v. Brademas,^^ there was an express easement

for drainage of surface water that was reserved in a deed from 100

Center Company to T. Brooks Brademas in favor of Sedgwick House,
a limited partnership that had previously purchased an apartment

house on an adjoining tract of land from 100 Center Company. When
the apartment house owned by Sedgwick was built, a subterranean
spring was uncovered. Therefore, a drainage system was constructed

to carry off the spring water, the runoff from the roof, and the water

from the floor drains. The system ended north of the apartment house,

on land now owned by Brademas. When the land was sold to
Brademas, the deed created an easement in favor of Sedgwick "for

the drainage of surface waters and waters discharged from the roof

and floor drains of 'Sedgwick House' over, along and across the follow-

ing described real estate: [The description of Easement Z]."^^

^^Another case in this area is Ellis v. George Ryan Co., 424 N.E.2d 125 (Ind. Ct.
App. 1981). Suit was brought by George Ryan Co., Inc. for declaratory judgment to
determine the validity of a restrictive covenant that, if valid, would prohibit Ryan
from building a proposed six-story condominium. Id. at 126. The trial court found for
Ryan on two separate grounds: the covenant was void because it was not signed by
all of the property owners, and there had been a waiver of the enforcement of the

restrictions because of the acquiescence of the property owners in numerous viola-

tions of the covenant. Id. The court of appeals affirmed. Id. at 127.
Prior to Ellis, the court of appeals had held that, absent a showing that the con-

tract is not to be deemed complete unless signed by all the parties, the parties sign-
ing may be bound even though others have not signed. Curtis v. Hannah, 414 N.E.2d
962, 963 (Ind. Ct. App. 1981). In Ellis, the court found that the covenant was void because
it "speaks in terms of 'all parties hereto.' " 424 N.E.2d at 126. Moreover, the court

noted that the intent that the contract was not complete unless signed by all parties

can be found from the fact that the parties did not comply with the convenants. Id.

at 127.

What is troublesome about the court's conclusion that the parties had waived
the covenant because of prior violations is the fact that the violations were of a minor

nature. The violations cited by the court were: occasional use of a mobile home as
a residence, building of an additional house on one of the lots, building a doghouse

and garages, construction of various outbuildings, use of a chicken house, use of a house

as an office, and holding church meetings in a residence. Id. at 126. What property
owner who is living in an area restricted to single family dwellings would believe that
he must bring legal action against a neighbor who occasionally parked a mobile home
on his lot, held church meetings in his home, raised a few chickens, or built a garage

on his lot in order to assure that he has not "waived" a covenant which could result

in the construction of a six-story condominium?

2M24 N.E.2d 122 (Ind. Ct. App. 1981).

''Id. at 123.



1983] SURVEY-PROPERTY 291

The drainage system, however, crossed through Easement Z and
deposited the water north of Easement Z preventing the development
of the land. Brademas brought an action seeking injunctive relief and
damages. The trial court permanently enjoined Sedgwick from
trespassing on the property of Brademas and awarded Brademas

$8,800 damages for the two years he had been unable to develop the
land. Sedgwick appealed.^"

Sedgwick argued that the easement should not be limited to the

area described in Easement Z. In a rather novel argument, Sedgwick
claimed that in addition to the reserved easement, there was also an
implied easement that was created at the time the land was severed
because there was an apparent and obvious servitude in favor of the
dominant estate, Sedgwick House, which was reasonably necessary
for its use and enjoyment. The court noted that in order to find an
implied easement "the servitude must be (1) obvious, (2) permanent,

(3) in use at the time ownership in the land is severed, and (4)
reasonably necessary for the fair enjoyment of the party benefited,

not merely convenient or beneficial."^^ The court found that Sedgwick
had failed to prove two essential elements: that the servitude was
permanent, and that it was reasonably necessary.^^ As to its
permanency, the court noted that the testimony of the construction

superintendent for the apartment house indicated that allowing the

water to dissipate onto the Brademas land was only a temporary situa-
tion, which would be remedied when an open ditch could be con-
structed to the river.^^ As to whether the servitude was reasonably
necessary for the enjoyment of the estate, the court remarked that
several alternative methods were available to Sedgwick for disposing
of its water.^''

Sedgwick also argued that the reserved easement should not be
limited to the described area. This argument was summarily rejected
by the court of appeals. If an area outside the described easement
was intended, it should have been included in the area of the drainage
easement. The court in Brademas found that the inclusion of one area
as an easement is the exclusion of all others.^^ Therefore, based on

its findings, the appellate court affirmed the judgment of the trial
court.^^

One of the more factually complicated decisions reported during

''Id.

''Id. at 124 (citing Searcy v. LaGrotte, 175 Ind. App. 498, 372 N.E.2d 755 (1978)).

^M24 N.E.2d at 124.

'Ud.

''Id. at n.4.

''Id. at 124.

"Id. at 125.



292 INDIANA LAW REVIEW [Vol. 16:283

this survey period is Enderle v. Sharman.^'^ While the legal issues

raised are not themselves complicated, the factual context of this case

is difficult. William and Sallie Ijams were the common owners of a
tract of land subsequently divided into four tracts. In 1916, the Ijams

entered into an agreement with an adjoining property owner, Julia

Donham, for an easement across the Donham property. The purpose
of the Ijams-Donham agreement was to provide the Ijams with an ac-
cess to a public road, now State Highway 41. The easement express-
ly stated that the Ijams desired to subdivide the land into lots, streets,

and alleys and to sell the land for residential purposes, and for

establishment of a country club. In 1917, the Ijams conveyed a por-

tion of the land, now Tracts III and IV, to the Terre Haute Country
Club and retained title to the remaining portion of the land, now
Tracts I and II. At the time of this conveyance, there was a road
running through the Ijams' land which is now known as Country Club
Road. The deed provided that both the grantor and the grantee, their
heirs and assigns, could use the roadway, "each having a common and
not exclusive right to use same perpetually."^* The deed also incor-
porated by reference the Ijams-Donham agreement, and a copy of the
agreement was attached to the deed. While the facts only discuss
Country Club Road in relation to the Ijams' land, it would appear that
the road continues in a westerly direction across the Donham's land

to Highway 41, and that its use by the owners of Tracts I and IV
is necessary in order to use the right of way set forth in the Ijams-
Donham agreement.

The Ijams died intestate and the land retained by them. Tracts
I and II, passed to their three children, Jessee Ijams, Alice Ijams Ben-

bridge and Frank Ijams. In 1929, Jessee Ijams and Alice Ijams Ben-

bridge, together with her husband, conveyed their interests in Tract

II to Helen Ijams, the wife of Frank Ijams, but the conveyors

specifically retained an easement over Country Club Road. Frank Ijams

later died and his interest in Tract II passed to Helen Ijams, his wife.

In 1937, the Country Club conveyed Tract III to Helen so that Helen

Ijams ultimately became the owner of Tracts II and III.
The history of Tract I was different. In 1930, Jessee Ijams con-

veyed his interest in Tract I to other cotenants, Frank Ijams and Alice
Ijams Benbridge. In 1956, Frank Ijams and Alice Ijams Benbridge con-

veyed Tract I to Alice Ijams Williams and her husband, John Williams.
Alice Ijams Williams subsequently divorced her husband and

reconveyed her interest to herself under the name Alice I. Sharman.
Alice Sharman's exact relation to the Ijam family is not stated, but

^M22 N.E.2d 686 (Ind. Ct. App. 1981).
''Id. at 693.



1983] SURVEY-PROPERTY 293

the facts indicate that she was co-executor and heir of the estate of
Helen Ijams.

When Helen Ijams died, the plaintiffs, Frank and Kay Enderle
purchased Tract H from the co-executors of her estate and subsequent-
ly purchased Tract HI from the Helen Ijams' estate. Later, when Alice
I. Sharman died, Fereydoon B. Boushehry entered into an agreement
to purchase Tract I from the co-executors of her estate. Boushehry

claims an easement over Tracts II and III appurtenant to Tract I,

and the Enderles brought this action to quiet title. The action was
referred to a special master. The co-executors of the estate of Alice
Sharman and Boushehry moved for summary judgment and, after a
hearing was held, the master recommended the motion be granted.
The trial court adopted the findings of fact and conclusions of law
recommended by the master and the Enderles appealed.

The major substantive issue raised on appeal was the trial courts
finding that there was an easement over Tracts II and III appurte-
nant to Tract I. The trial court found that the conveyance to the Coun-
try Club in 1917 created an easement over Tract III.^^ It is important

to remember that the Ijams retained title to Tract I and the deed
expressly reserved the right to use the road by the grantors. The
court noted, however, that the 1917 deed did not create an easement

across Tract II since this tract was still owned by the Ijams and it
is a rule of law that an owner cannot possess an easement in his own
land.''''

The trial court found an easement over the portion of the road
which lies in Tract II on two separate grounds. First, there was an
easement by reservation contained in the 1929 deed from Jessee Ijams

and Alice Ijams Benbridge conveying Tract II to Helen Ijams.''^ In

a rather confusing argument, the Enderles claimed that the deed did

not create an easement by reservation because there can be no reser-

vation in a stranger."^ While the court answers this argument by citing

Brademas v. Hartwig,*^ which recognizes the right of a grantor to con-
vey an easement by reservation to a party who is a stranger to the
transaction, the fact is that the persons from whom defendants claim
title to Tract I were not strangers to the transaction but were the
grantees. The Enderles also argued that the reservation was not
effective because one of the cotenants did not convey his interest in

Tract I. This is further complicated by the fact that this cotenant is

the husband of the grantee. The court could not see how the reserva-

''Id. at 692.

''Id. at 693.

''Id. at 690.

'Hd. at 693.

'^75 Ind. App. 4, 369 N.E.2d 954 (1977).



294 INDIANA LAW REVIEW [Vol. 16:283

tion of an easement over Tract II by the two cotenant grantors in
any way diminished the rights of the third cotenant, who did not need
an easement because he still retained an interest in both tracts.**

In addition to an easement by reservation, the trial court found

that an implied easement across Tract II existed, based on the Ijams-

Donham agreement.*^ Citing John Hancock Mutual Life Insurance Co.
V. Patterson,*^ the court of appeals noted that where there exists, dur-

ing the unity of title, a permanent and obvious servitude that is im-

posed on one part of an estate in favor of another, and, at the time

of severence, the servitude is in use and is reasonably necessary for

the fair enjoyment of the other part of the estate, there arises by

implication of law a grant or reservation of the right to continue such

use."^

The Enderles objected to the trial court's use of the Ijams-Donham
agreement to find an intent to create an easement over Tract III in

the 1917 deed to the Country Club and to find an implied easement

across Tract II. While the court of appeals agreed with the Enderles

that the Ijams-Donham agreement only created an easement over the

Donham's land and not the Ijams' land, which was the dominant estate,
the court did not agree with the Enderles' conclusion that it was er-
roneous to rely upon the agreement in construing the other

conveyances.** It is hard to follow the Enderles' argument on this point.

Clearly Country Club Road exists because of the easement and, from
the facts, exists for no other reason. Without the Ijams-Donham agree-

ment, the use of Country Club Road would not be reasonably necessary

for the use and enjoyment of Tract I.*^

Finally, the Ijams-Donham agreement became relevant with regard

to the scope of the easement. The Enderles argued that to allow
Boushehry to subdivide Tract I would create an undue burden of the
servient estates, Tracts II and III. In answering this argument, the

court noted that the Ijams-Donham agreement provided that the Ijams

intended to subdivide the land into lots and streets for residential

purposes. Because the agreement is incorporated by reference into

many subsequent conveyances, residential development must have
been contemplated by the parties when the easement was created.^"

^M22 N.E.2d at 694.

*'Id.

n03 Ind. 582, 2 N.E. 188 (1885).
*^422 N.E.2d at 694.

''Id. at 693.

*'It does not appear that Tract I is landlocked. Otherwise, the parties would have

argued a way of necessity.
^"422 N.E.2d at 695.



1983] SURVEY-PROPERTY 295

D. Landlord and Tenant

There are three types of leasehold estates recognized at common
law: an estate for years, an estate from period to period, and an estate

at will.^^ An estate at will is created whenever the lease can be ter-
minated at the will of the lessor.^^ While it can be created by express

contract, if often occurs when a person takes possession of the land
with the consent of the owner under an oral lease or a contract for
sale which can not be enforced because of the statute of frauds.^^ One
of the most important common law characteristics of the tenancy at
will is that it can be terminated at any time by either party without

notice.^*

The second type of leasehold estate is the estate for years or
tenancy for a term of years. Any lease for a fixed term is called an
estate for years even though the length of the terms is less than a

year, such as a week or six months.^^ At the end of the term, the
estate automatically comes to an end, and, absent a provision in the

lease to the contrary, no notice of termination is required by either

landlord or the tenant.^®

The third type of leasehold estate is known as the estate from
period to period or periodic tenancy. It is also referred to as a tenan-

cy from year to year, even though the period may be from week to
week or month to month." This type of tenancy has no fixed termina-
tion date and will continue from period to period until one of the par-

ties gives notice of termination. At common law, if the tenancy period
was six months or longer, a six months notice was required, and if
the tenancy period was less than six months, the notice had to be
as long as the tenancy period itself and given at the beginning of a

new period.^ Today in most states the notice requirements are covered
by statute.^^

The case of Edward Rose of Indiana v. Fountain^^ emphasizes a

^'W. BuRBY, Handbook of the Law of Real Property 123-34 (3d ed. 1965); J.
Cribbet, Principles of the Law of Property 53-56 (2d ed. 1975).

A fourth type of estate, a tenancy at sufference, was really not an estate but
a term used to describe the situation in which a tenant remains in possession after
the termination of a leasehold estate. C. Moynihan, Introduction to the Law of Real
Property 85-86 (1962).

^Tribbet, supra note 51, at 56-57.

^^BuRBY, supra note 51, at 125-126; Moynihan, supra note 51, at 85-86.
^Cribbet, supra note 51, at 56.

''Id. at 53.

""Id.

"BuRBY, supra note 51, at 128.

^Tribbet, supra note 51, at 54.

'^See BuRBY, supra note 51, at 132; Moynihan, supra note 51, at 80.
««431 N.E.2d 543 (Ind. Ct. App. 1982).



2'96 INDIANA LAW REVIEW [Vol. 16:283

potential problem in the wording of the Indiana statutes that govern

notice of termination and also raises other interesting issues regard-

ing the termination of leasehold estates. The plaintiff, C. Wayne
Fountain, leased an apartment from the defendant, Edward Rose, for
a term of six months. Normally, no notice of termination would have
been required, but the written lease provided that "before the ex-

piration of the term of this lease, the tenant shall give the Landlord

at least thirty (30) days written notice in any one calendar month of
his intention to surrender said premises."^^ The lease further provid-
ed that if such notice was not given, the tenant would be liable for
an additional month's rent.

To understand the purpose for the notice provision, it should be
noted that the lease did not operate like a tenancy for a fixed term.

At the end of the term, the lease became a tenancy from month to
month requiring both parties to give notice of termination, and the
lease gave the lessee rights in addition to those he would have had

as a tenant at sufferance.®^ Thus, there was a valid reason why the
landlord needed notice because the tenancy would not automatically

terminate at the end of the six-month period.

Prior to the end of the term, Rose notified Fountain by letter of
his obligation under the lease to give notice of termination.*^ Fountain

ignored the letter and moved out at the end of the term without giv-
ing notice. Rose retained Fountain's $150 security deposit as liquidated

damages for breach of the notice of termination covenant in the lease.
Fountain brought suit to recover his security deposit, and the trial

court entered judgment in favor of Fountain, holding that notice was
not required by statute.*^ Rose appealed and the court of appeals

reversed.®^

The court of appeals noted that even if Indiana Code section
32-7-1-7 applied, the parties were free to provide for notice of termina-
tion in the lease agreement. Moreover, the court noted that this code

section deals solely with the landlord's obligation to give notice to

the tenant. In fact, the court pointed out that **[a]bsent from those

"'Id. at 544 n.2.

^^See BuRBY, supra note 51, at 128; Moynihan, supra note 51, at 85.

^^It is not clear if the letter was sent in time to inform Fountain of his duty while
there was still time to comply with the provision. If not, then an issue of unconscionabil-
ity could have been raised. A person signing a lease for a fixed term would assume
that the lease would come to an end automatically and would not be looking for such
a clause in the lease. A court might find such a notification provision unconscionable
unless the provision was clearly labeled and not buried in fine print, or brought to
the attention of the lessee. See Weaver v. American Oil Co., 257 Ind. 458, 276 N.E.2d
144 (1971).

"431 N.E.2d at 545 (citing Ind. Code § 32-7-1-7 (1982)).
«^431 N.E.2d at 546.



1983] SURVEY-PROPERTY 297

code provisions is any reference to a tenant's obligation to give notice

of his intent to surrender leased premises."^^

Thus, the court in Fountain calls to our attention a potentially

serious problem regarding notification requirements that surprisingly

has existed for over 100 years. Clearly, the problem could arise in

two situations. Indiana Code section 32-7-1-2 changes the common law
rules regarding a tenancy at will and provides that "[a] tenancy at

will can not arise or be created without an express contract"^^ and

Indiana Code section 32-7-1-1 provides that the landlord may terminate
an estate at will "by one (1) month's notice in writing, delivered to

the tenant."^^ Because there was no notice requirement at common
law to terminate a tenancy at will,^^ and the statute seems to exclude
any notice requirement on the part of the tenant, it is difficult to see

how a court would impose such a duty on the tenant.
The problem could be more serious when dealing with periodic

tenancies. Indiana Code section 32-7-1-3 provides that *'[a]ll tenancies
from year to year, may be determined by at least three (3) months'
notice given to the tenant prior to the expiration of the year; and

in all tenancies ... of less than three (3) months' duration, a notice

equal to the interval between such periods shall be sufficient."^"

Although the statute again fails to impose any duty on the part of

the tenant to give notice, in this instance the statute is in derogation

of the common law.^^ While there are no cases that directly address
this problem, in a 1978 Indiana Attorney General's Opinion, the

Attorney General stated that the notice requirements in the statute

on termination of periodic tenancies applies equally to the tenant and

the landlord.'^

Perhaps the problem caused by the wording of the statutes gover-

ning notice of termination has not arisen because most standard leases

creating a periodic tenancy contain a provision requiring the tenant

to give notice of termination, or because in situations where there

is not a written lease, the amount of money involved is so trivial that
the landlord suffers the loss or keeps the security deposit as liquidated

damages, and neither party is willing to adjudicate the issue. It should

**/d. at 545. Landlord and tenant relations are covered in Indiana Code sections
32-7-1-1 to -18 (1982). Code sections pertaining specifically to notices to quit are covered

in Indiana Code sections 32-7-1-3 to -8 (1982).
•iND. Code § 32-7-1-2 (1982).

««M § 32-7-1-1.

•'See Cribbet, supra note 51, at 56.

™lND. Code § 32-7-1-3 (1982).

"As a general rule, where a statute is found to be in derogation of the common
law, it should be construed so as not to change the common law. See Helms v. American
Sec. Co., 216 Ind. 1, 6, 22 N.E.2d 822, 824 (1939).

'^978 Op. Att'y Gen. 61, 62.



298 INDIANA LAW REVIEW [Vol. 16:283

be noted that in the case at bar there was a provision in the lease

allowing the landlord to apply the security deposit "upon rent or other

charges in arrears or upon damages for Tenant's failure to perform

the said covenants, conditions or agreements."^^ The court in Fountain

stated that such provisions, which require the lessee to deposit with

the lessor a sum of money as security for the performance of covenants
of the lease, are valid and enforceable.^'^

E. Mines and Minerals

Two significant cases involving the interpretation of mineral deeds
were decided during the survey period.^^ The first case, Lippeatt v.

'^431 N.E.2d at 545 n.3.

'*Id. at 546.

^^There were two United States Supreme Court decisions in this area which

deserve mention, although the cases deal primarily with constitutional law issues. In

Texaco, Inc. v. Short, 102 S. Ct. 781 (1982), aff'g 406 N.E.2d 625 (Ind. 1980), the Court

upheld the constitutionality of Indiana's Dormant Mineral Act (Act), Ind. Code §§
32-5-11-1 to -8 (1982). (Note that sections -4, -5, -7, and -8 of the Act were amended
in 1982 to include minor language changes.) The Act provides that a mineral interest
that has not been used for a period of twenty years shall be extinguished and shall

revert to the surface owner, unless the owner of the interest files a statement of claim

in the Dormant Mineral Interest Record in the county recorder's office prior to the
expiration of the twenty year period of nonuse. Ind. Code §§ 32-5-11-1 to -8 (1982).
However, there is a provision in the Act that exempts from the operation of the Act

those owners with ten or more separate mineral interests in a county who have made
a good faith effort to record all the interests. Ind. Code § 32-5-11-5 (1976) (amended 1982).

The court found that Indiana had legitimate state goals, such as the encouragement
of mineral development and the collection of property taxes, that justified enactment

of the statute. 102 S. Ct. at 792. Because owners of multiple interests are more likely

to be able to engage in the actual production of mineral resources, there was justifica-

tion for giving those owners special treatment under the Act; therefore, the Act did

not violate the equal protection clause. Id. at 797. The Court also concluded that there
was no violation of the fourteenth amendment because there was no "taking" of prop-
erty without just compensation; it was the nonuse by the owner and his failure to
file a statement of claim which caused the abandonment of the interest and not state

action. Id. at 792. In resolving this case, the Court seemed to emphasize the fact that

the Act provided a two-year period of grace after the effective date to file claims,

which would otherwise have been extinguished. Id. at 788-89.

The Indiana Marketable Title Act may be of interest to abstractors and others
conducting title searches. The Act, Ind. Code §§ 32-1-5-1 to -10 (1982), provides that a
person shall have marketable record title to any interest in land if he can trace an

unbroken chain of title back to a root of title at least fifty years old. Ind. Code §
32-1-5-1 (1982). Interests in the land created prior to the root of title, with some important

exceptions, were void unless recorded within the chain of title in the Notice Index
in the county recorder's office. Ind. Code §§ 32-1-5-2 to -6 (1982). This Act does not appear
to cover mineral "interests" created prior to the root of title because the mineral estate

would exist separate and apart from the surface estate. The Dormant Mineral Act
may prove useful in clearing title to property by extinguishing old, unused mineral
claims.



1983] SURVEY-PROPERTY 299

Comet Coal & Clay Co.,''^ illustrates the classic case of a latent am-
biguity in the terms of a deed.^^ In 1919, the Vandalia Coal Company
executed a deed to plaintiff's grandfather conveying "[t]he sixth (6th)

or surface vein of coal only" underlying certain land in Sullivan County,

Indiana.^^ The grantor retained title to all other seams of coal in and
under the above described lands, together with the right to mine and

remove them. Comet Coal and Clay Company, Inc., (Comet) and the
other defendants eventually acquired title to the other veins of coal.

Later, it was determined that there were seven veins of coal
underlying the land involved in the 1919 conveyance so that the sixth

vein and the surface vein were not the same. Lippeatt filed suit claim-

ing the deed conveyed the surface vein, and Comet argued the deed
conveyed only the sixth vein; however, all parties agreed that only

one vein of the coal was conveyed in the deed.^® Both parties moved
for summary judgment, and the trial court granted summary judg-
ment in favor of Comet holding that the deed conveyed only the sixth
vein as a matter of law.®"

Lippeatt appealed arguing that the deed was ambiguous, and that
the trial court should have considered extrinsic evidence. In reaching

its decision, the trial court concluded that the words "sixth (6th) vein"

were more specific than the words "surface vein," and that if any am-
biguity existed, it must be resolved in favor of Comet because the
habendum clause only referred to the sixth vein. In affirming the judg-
ment of the trial court, the court of appeals looked to the rules of
construction applied by the trial court.®^ However, it is questionable
whether the rules of construction relied upon by the court of appeals

were correctly applied.
The court of appeals appears to have agreed with the trial court's

determination that the term "sixth vein" is more specific than the
term "surface vein" because the surface vein can be composed of coal
from the fifth, sixth, seventh, or eighth veins but there is only one

In Hodel v. Indiana, 452 U.S. 314 (1981), the State of Indiana, the Indiana Coal

Association and others challenged the constitutionality of the "prime farmland" provi-

sions of the Surface Mining and Reclamation Control Act of 1977. Id. These provisions

require the applicant for a permit to mine on prime farmland which is historically used

as cropland, to show that he has the capacity to restore the land to prime farmland
within a reasonable period of time after completion of mining operations. Id. The Court
held that the provision of the Act did not violate the commerce clause because the
production of coal for interstate commerce cannot be at the expense of agriculture,
the environment, public health or safety. Id.

^«419 N.E.2d 1332 (Ind. Ct. App. 1981).

''See, e.g., Hauck v. Second Nat'l Bank, 153 Ind. App. 245, 286 N.E.2d 852 (1972).
^«419 N.E.2d at 1333.

''Id. at 1334.

"^Id.

'Ud. at 1336.



300 INDIANA LAW REVIEW [Vol. 16:283

vein that can be the sixth vein.®^ While it is true that specific words

control general words, it is unclear why the court found the term
"sixth vein" to be more clear because, for reasons of geographical
uncertainty, it is difficult to determine if a vein is the sixth or seventh

vein of coal, but the surface vein is always the vein nearest to the

surface.^^

The court of appeals also approved the trial court's application
of the "four corners" rule of construction. The rule states that in
interpreting an instrument, parol evidence is inadmissible to expand,

vary, or explain the instrument unless there is evidence of fraud,

mistake, illegality, duress, undue influence, or ambiguity.®'' Further-

more, even if an ambiguity is shown, extrinsic evidence is not ad-

missible " 'until the four corners have been searched to ascertain

whether the instrument itself affords a reasonably clear understanding

of what the drafters intended.' "*^ Assuming that the meaning of the
disputed terms could be determined by reference to all parts of the

instrument, the trial court looked to the habendum clause in the deed,
which can be used to explain, qualify, lessen, or enlarge the estate

granted in the premises or granting clause of a deed.** The trial court
noted that while the granting clause used the terms "sixth (6th) vein"

and "surface vein," the habendum clause of the deed clarified the
granting clause by twice referring to the sixth vein of coal without
mentioning the surface vein.

The court's reliance upon the habendum clause to clarify the grant-
ing clause is questionable. As the court itself points out, that grant-
ing clause usually controls the habendum.*^ In addition, numerous cases
hold that if there is an irreconcilable conflict between the granting
clause and the habendum, which renders intention doubtful, the grant-

ing clause will control.*® Thus, the court in Lippeatt looked to the

habendum clause, without first establishing whether there was an irre-
concilable conflict between the terms of the granting clause and the
terms of the habendum.

The court also rejected Lippeatt's argument that the surface vein
should control because it is a natural monument. The court noted that

''Id. at 1335.

''Id.

""See, e.g., Hauck v. Second Nat'l Bank, 153 Ind. App. 245, 260, 28a N.E.2d 852,
861 (1972).

''419 N.E.2d at 1335 (emphasis deleted) (quoting Hauck v. Second Nat'l Bank, 153
Ind. App. 245, 263, 286 N.E.2d 852, 862 (1972)).

'M19 N.E.2d at 1334-35. For a discussion of this rule, see Prior v. Quackenbush,
29 Ind. 475 (1868).

''419 N.E.2d at 1335. See also Shoe v. Heckley, 78 Ind. App. 586, 593, 134 N.E.
214, 217 (1922).

''See Pointer v. Lucas, 131 Ind. App. 10, 169 N.E.2d 196 (1960); Long v. Horton,
126 N.E.2d 568 (1956); Richards v. Richards, 60 Ind. App. 34, 110 N.E. 103 (1915).



1983] SURVEY-PROPERTY 301

the rule that monuments control over course and distance is a rule
used for determining the location and boundaries of land and "is of

limited usefulness to determine the extent of the conveyance."*® It

could be argued that the rule of construction, that where the grant-

ing clause is indefinite, the habendum can be used to clarify the grant-
ing clause, could have been used to determine the type of estate con-

veyed and not just the extent of the conveyance.®"

As exemplified in LippeatU some of the rules of construction are
inconsistent with each other, and the decision in a given case can vary

depending upon which rules of construction are chosen.®^ For example,

the court in Lippeatt chose to ignore a basic rule of construction; that

is, the deed should be construed most strongly against the grantor.®^

While the application of the rules of construction in Lippeatt may be
less than perfect, it is not clear that the admission of extrinsic evidence

to determine the intent of the parties to a 1919 deed would have

proven any more satisfactory.
The second decision involving mineral deeds, Richardson v. Citizens

Gas & Coke Utility,^^ presents a similar deed interpretation problem
as that encountered in Lippeatt. The plaintiffs, Claude and Elma
Richardson, brought an action against Citizens Gas & Coke Utility
and others, collectively referred to as Citizens, claiming an inverse

condemnation as a result of Citizens' improper seizure of the Richard-

sons' interest in coal and other minerals lying beneath the land of

Section 10 in Green County, Indiana, which was conveyed to Claude
Richardson by deed in 1933. Citizens argued that the Richardsons' 1933

deed conveyed title only to the coal and hard minerals lying beneath

the land, and that it did not convey any interest in oil or gas. Therefore,

Citizens claimed the rights to the oil and gas interests as well as the

rights to underground storage, by virtue of leases and assignments

of leases that were executed by the surface owners of Section 10. In
addition. Citizens claimed a way of necessity through the Richardsons'
coal strata to reach the oil and gas lying beneath the coal, and Citizens

argues that such drilling through the coal strata would not constitute

a taking of Richardsons' interest. This argument implies that coal min-

ing and gas removal and/or storage are compatible.®^

«M19 N.E.2d at 1336. See also Cribbet, supra note 51, at 169-70.

^See Cribbet, supra note 51, at 165 n.34.

^Tor a discussion of various rules of construction, see Cribbet, supra note 51, at

169-70.

''See Davenport v. Gwilliams, 133 Ind. 142, 31 N.E. 790 (1892); Shoe v. Heckley,

78 Ind. App. 586, 134 N.E. 214 (1922).

^^422 N.E.2d 704 (Ind. Ct. App. 1981).

®*It is not clear from the facts whether only native gas, only injected gas, or a

mixture of native and injected gas is involved. The facts indicate that Citizens is us-
ing the land in connection with its Linton gas storage field, and the Richardsons are



302 INDIANA LAW REVIEW [Vol. 16:283

The facts show that the mineral rights in Section 10 were severed
from the surface rights by a series of thirteen mineral deeds executed

between 1899 and 1905. Ten of the deeds conveyed coal and other
minerals, two of the deeds conveyed only coal, and one deed conveyed

"coal, clays, minerals and mineral substances."^^ The three grantees
who purchased these rights consisted of two incorporated coal com-
panies, whose articles of incorporation did not authorize the explora-
tion or development of oil or gas properties, and one individual who
dealt only in coal properties. Historical documents showed that at the
time the severance deeds were executed, oil or gas had not been

discovered in Green County.

The rights under these deeds eventually were acquired by the
United Fourth Vein Coal Company (United). United subsequently
became bankrupt, and its coal and mineral rights in Section 10 were

sold to Claude Richardson. The first deed from United conveyed only
unmined coal. It was later discovered that United did not own title
to the entire tract conveyed and as a compromise, Richardson accepted

a second deed conveying all right and title "to coal and minerals lying

in and under (Section 10)."^^ Richardson did not explore for oil and

gas until 1943 when he executed a gas and oil lease with Sun Oil Com-
pany. Natural gas was discovered by Sun Oil in 1947, but due to lack
of interest in natural gas, the well was capped and Richardson was
released from the lease.

In 1921, Ferd Bolton purchased oil and gas leases from the

grantors and/or their successors in interest of the thirteen original

severance deeds. In 1961, Citizens received assignments of these gas

and oil leases from the surface owners of Section 10. The assignment
granted Citizens not only the right to remove existing gas, but the
right to ''inject, store and remove gas, whether native or other-
wise . . . regardless of the source of such gas."^^

The Richardsons became aware of Citizens' interest in 1963 when
they discovered Citizens drilling exploratory wells on Section 10. The

claiming an inverse condemnation under Indiana Code section 32-11-4-5 (1982) (Title

32, article 11, chapter 4 of the Indiana Code is entitled, "Eminent Domain for Gas
Storage"). Thus, it is not clear whether the Richardsons' claim, apart from the claim

with regard to the taking of their coal interest, is based on Citizens' taking of native

gas to which the Richardsons claim the right to explore under the 1933 deed, or whether

the Richardsons, as the owners of the mineral rights, including oil and gas, are claim-

ing an interest in the strata for storage rights once the native gas has been removed,

or whether they are claiming both. The decision of the court of appeals resolving the
ownership of oil and gas rights against the Richardsons renders these issues moot.

422 N.E.2d at 704.
'5422 N.E.2d at 707.

^Id. at 708 (emphasis in original).

^Ud. (emphasis in original).



1983] SURVEY-PROPERTY 303

Richardsons attempted to lease their interests to Citizens, but when
negotiations failed, the Richardsons filed suit.

Three issues were presented at the trial, and the trial court ruled

on them at three separate hearings. At the first hearing, the trial

court found that Citizens owned title to the gas and oil exploration
rights and gas storage rights and thus granted a partial summary judg-
ment in Citizens' favor. At a second evidentiary hearing, the court
found that coal mining and gas storage are compatible but did not

expressly find that Citizens had an easement through the Richardsons'

coal strata to reach the gas. At a third hearing, final arguments were
held and the court ruled that no compensable taking of the

Richardsons' coal interests had occurred, thus impliedly finding an

easement through the coal strata.^* The Richardsons appealed.
In affirming the judgment of the trial court,^ the court of appeals

considered the three issues raised at the trial. In discussing the owner-

ship of gas and oil rights, the court of appeals stated that a conveyance

of "coal and other minerals" plus "coal, clays, minerals and mineral

substances" is interpreted "to include gas and oil unless a contrary

intention of an ambiguity is manifested by the language of the in-

strument as a whole."^"" The case cited as authority by the court,
Monon Coal Co. v. Riggs,^^^ does not appear to support this position.
In fact, several leading authorities have cited the case for the pro-

position that, in Indiana, when the term "minerals" is used in a mineral
deed, the term "minerals" is found to be ambiguous with regard to

whether oil and gas are conveyed, and extrinsic evidence on this issue

is freely admitted.
^"^

Despite this misleading reference, the court of appeals went on
to examine the circumstances surrounding the original conveyances

to ascertain the grantors intent because the phrase "coal and other

minerals" was ambiguous. The court of appeals also noted that Ind-
iana takes the position that oil and gas are substances ferae naturae

and, unlike hard minerals, are subject to the rule of capture. ^°^ This

characterization of oil and gas adds an element of ambiguity to the

deed because title to the oil and gas cannot be conveyed by the owner
of the land, and a conveyance of minerals raises the question of

whether the grantor intended to also convey the right to explore for

''Id. at 706-07.

''Id. at 713.

•""/d at 709 n.4 (citing Monon Coal Co. v. Riggs, 115 Ind. App. 236, 56 N.E.2d
672 (1944)).

'm5 Ind. App. 236, 56 N.E.2d 672 (1944); See Annot., 37 A.L.R.2d 1435 (1959).
^°^See R. Hemingway, The Law of Oil and Gas § 1.1, at 2 n.5 (1971); lA W. Summers,

The Law of Oil and Gas § 135, at 275-76 n.32 (1954); 1 H. Williams & C. Meyers, Oil
AND Gas Law § 219.4, at 275 n.l (1981).

"'^422 N.E.2d at 711.



304 INDIANA LAW REVIEW [Vol. 16:283

oil and gas and thereby allow the grantee to acquire title by reduc-
ing it to possession/"^ After examining the circumstances existing at
the time of the conveyance to determine the intent of the parties,

the court concluded that there was no material issue of fact in dispute
and that the trial court had properly granted a partial summary judg-
ment on the issue. ^°^

The second issue relating to the compatibility of coal mining and
gas storage was decided on the evidence and presents no problem.
However, had they not been compatible, the Richardsons' interest

could have been condemned for underground storage of gas.^°^
The third issue discussed by the court of appeals relates to the

easement through the coal field to reach the gas strata. The court
found that because the original deeds conveyed only the right to the

coal, the grantors retained the gas and oil exploration rights and, thus,

impliedly reserved an easement through the coal for drilling
purposes.^"^ In reaching this finding, the court relied upon Pyramid
Coal Corp. v. Pratt,^^^ one of the leading cases on this point. Pratt

holds that where the owner of land conveys coal beneath his land but
retains title to everything beneath the coal, the surface owner has
the right of access to the strata beneath the coal, even though the

deed does not expressly reserve such a right.^°® The Richardson court
found that the easement was 300 feet in diameter, basing this finding
on a federal law requiring a 300 foot safety barrier around each well.^^°

For some unknown reason, the court of appeals concluded that
the easement was an easement in gross and criticized the trial court
and the parties for using the phrase "way of necessity" to describe
the easement."^ While not wishing to appear petty, one could argue

that the term "easement in gross" may be even less accurate than
the term "way of necessity." In the leading case in this area. Char-
tiers Block Coal Co. v. Mellon,^^^ the term "way of necessity" was re-
jected by the majority of the court because its use in this context
would require a major modification of the common law rules regard-
ing a surface right of way."^ Nevertheless, the Mellon court did find

that the owner of the land who retained oil and gas rights had a "right

"^Id. (quoting Monon Coal Co. v. Riggs, 115 Ind. App. 236, 240, 56 N.E.2d 672,
673 (1944)).

^"^422 N.E.2d at 710.

"^See Ind. Code §§ 32-11-4-1 to -5 (1982).
•°M22 N.E.2d at 713.
^•'«229 Ind. 648, 99 N.E.2d 427 (1951).

"^Id. at 652-53. 99 N.E.2d at 429.
""422 N.E.2d at 713. See 30 U.S.C. § 877 (1976).
•"422 N.E.2d at 706 n.2.

"^52 Pa. 286, 25 A. 597 (1893).
''Ud. at 298, 25 A. at 599.



1983] SURVEY-PROPERTY 305

of access" to these minerals through a superjacent coal strata which
he had previously conveyed/^" Many subsequent decisions have used
the term "way of necessity" to describe this right of access."^ The
term "easement in gross," however, is misleading when applied to such
a right of access because it suggests that the easement is personal
and that there is no dominant estate."^ It is important to note that
the right of access through the superjacent strata by the owner of
the subjacent mineral interests is a right which exists without any
express grant or reservation. ^^^ Thus, the subjacent owner's estate is
dominant in the sense that he has the right to drill wells as may be
reasonably necessary for production even though the wells penetrate
superjacent estates. ^^^

Perhaps what led the court of appeals to use the term "easement
in gross" is the the fact that in Richardson the right to drill through

the coal strata was connected, in part, with the right to store gas
in the strata. As the court stated, "[b]y introducing evidence that the
gas storage fields were below the coal. Citizens established the need

for utilizing these easements reserved by the original grantors which

were conveyed to the subsequent surface owners and leased by
Citizens.""® Perhaps the court of appeals was not sure if an implied
easement exists to drill through a superjacent strata to inject gas into

a subjacent strata. In fact, where there has been a severence of the
surface and mineral estates, which includes oil and gas, there is

disagreement as to who has the right to use a strata for the storage
of gas.^^° Some courts have held that only the minerals are conveyed
by a mineral deed, and that the space, once the minerals have been

removed, remains with the surface estate.^^^ Other courts have held

that the owner of the mineral estate, which includes oil and gas, should
be considered as having the right to use the strata for all purposes

relating to minerals whether native or injected, absent contrary

language in the deed.^^^ Had the court in Richardson found that the
deed to Richardson conveyed to him the oil and gas interest, an inte-

resting question would have arisen in the condemnation action as to

''Id.

"'5ee, e.g.. Pyramid Coal Corp. v. Pratt, 229 Ind. 648, 99 N.E.2d 427 (1951);
also Annot., 25 A.L.R.2d 1245 (1952).

"*"An easement (or profit) is in gross when in its creation it is not intended to
benefit the owner or possessor of land as such but is intended to exist without a domi-
nant tenement." R. Boyer, Survey of the Law of Property 561 (3d ed. 1981).

'''See Pyramid Coal Corp. v. Pratt, 229 Ind. 648, 651-52, 99 N.E.2d 427, 429 (1951).
"""See Chartiers Block Coal Co. v. Mellon, 152 Pa. 286, 296, 25 A. 597, 598 (1893).
"M22 N.E.2d at 713.
'"""See 1 H. Williams & C. Meyers, Oil and Gas Law § 222, at 332-33 (1981).
'^'E.g., Tate v. United Fuel Co., 137 W. Va. 272, 71 S.E.2d 65 (1952).
'"^E.g., Central Ky. Natural Gas Co. v. Smallwood, 252 S.W.2d 866 (Ky. 1952).



306 INDIANA LAW REVIEW [Vol. 16:283

the Richardsons' claim for compensation with regard to the injected

gas and storage rights.

F. Real Estate Transactions

1. Real Estate Broker. — There were three cases decided during
this survey period dealing with real estate brokers and listing

agreements.^^^ The first case involves the interpretation of an exten-
sion clause in a listing agreement. In Barrick Realty Co. v. Bogan,^^^

Nick Adams, an agent for Barrick Realty Company (Barrick) was con-
tacted by Herbert Gehring regarding commercial real estate in
Valparaiso, Indiana. Gehring expressed interest in purchasing the

Lembke Hotel. Adams contacted Charles Bogan, who represented the
hotel owners. Bogan signed an exclusive listing agreement on the hotel

with Adams and Barrick for a two-day period. The asking price for
the property was $275,000 and provided for the payment of a ten per-
cent commission of the gross sale price. The Hsting agreement contained
an extension clause which provided that if the hotel were sold within
six months after the expiration of the agreement to any person with
whom negotiations had taken place during the exclusive listing period,
the commission would still be paid to the realtor.

After touring the hotel, Gehring did not accept Bogan's offer nor

did he make any counter offers. However, within six months, Gehring,
Gehring's partner, and Gehring's brother purchased the hotel for

$220,000. Adams and Barrick filed suit for their commission and appeal-
ed from a negative judgment. The court of appeals found that the
word "negotiations" suggested something more than "discussions" but
less than a sale, and that there was evidence to support the trial
court's findings that negotiations had not taken place.^^^ The appellate
court suggested that if the parties had intended a commission to be

payable upon the sale during the extension period to any buyer to
whom the property was shown and with whom "discussions" had en-
sued, the agreement should have provided for this contingency. ^^^ In

a situation where there is only one prospective buyer, as in this case,
the court suggested that the parties' agreement might provide

specifically for a commission if the property is sold to the named in-
dividual within the period of the extension agreement.^^^

The other two cases in this area illustrate a problem which arises

'^^See also Plymale v. Upright, 419 N.E.2d 756 (Ind. Ct. App. 1981) (representa-

tions by the broker regarding the sale are an opinion and do not give legal effect

to an offer to purchase).
^^"422 N.E.2d 1306 (Ind. Ct. App. 1981).

'^'Id. at 1308-09.

'''Id. at 1308.

''Ud. at 1308 n.l.



1983] SURVEY-PROPERTY 307

in brokerage agreements. This problem concerns the interpretation

of when a broker has found a buyer "ready, willing and able" to pur-
chase the property on the terms listed in the brokerage agreement.

In Wilson v. UpchurcK^^^ Upchurch, a veterinarian, was interested in

selling his veterinary hospital, its equipment and a two-bedroom apart-

ment located on 1.11 acres of land. The property was listed with
Marion and Joanne Loser. The asking price was $290,000 with a
$40,000 down payment, and the balance to be paid over twenty years
at a ten percent interest rate. The Losers found a potential buyer,
James Wilson, who made a counter offer to purchase for $280,000.
The Upchurches eventually signed a purchase agreement with Wilson,

but the sale was never completed because the parties could not agree

on the terms of two contracts that were conditions for the sale. In

a suit for specific performance the trial court found for Upchurch, and

the Losers appealed for their sales commission.

Both the trial court and court of appeals found that the agree-

ment was not meant to be binding on the parties because there were
at least two conditions precedent contained in the agreement: the

drafting of a mutually agreed upon sales contract and an employment
contract whereby Upchurch would work for Wilson at the hospital. ^^^

The court of appeals noted that

Before a broker is entitled to his commission he must prove

1) an actual sale of the real estate or 2) that he had secured

a buyer who was ready, willing and able to purchase the prop-
erty upon the terms listed by the seller and the seller refus-
ed to complete the transaction, or 3) that by and through the

procurement of the broker, a third party had entered into a

valid executory contract with the seller.^^''

Here the parties had not entered into a binding contract because the
purchase agreement was not binding on the parties, the counter offer
by Wilson was not upon the terms listed by the sellers, and there
was no contract entered into by a third party. Thus, the Losers had
not fulfilled one of the prerequisites for earning their commission.

As with Upchurch, Blue Valley TurfFarms v. Realestate Marketing
& Development, Inc.,^^^ adds a gloss to the interpretation of ready,
willing and able as it applies to listing agreements. In July 1974, Blue

Valley Turf Farms, Inc. (Blue Valley) listed certain equipment and real

estate with Realestate Marketing and Development, Inc. (Realestate).
On September 2, 1974, Blue Valley entered into an agreement of pur-

^^M25 N.E.2d 236 (Ind. Ct. App. 1981).

'""'Id. at 239.

'''Id. at 238.

'^^424 N.E.2d 1088 (Ind. Ct. App. 1981).



308 INDIANA LAW REVIEW [Vol. 16:283

chase with a buyer, John Hilger, and agreed to pay Realestate a com-
mission of $9,000. The agreement was conditional upon Hilger obtain-
ing a new mortgage loan with thirty days. On December 10, 1974, Blue
Valley notified Hilger that the agreement was terminated because
Hilger had not obtained the mortgage. Hilger brought suit against

Blue Valley for specific performance and this suit was settled.
Realestate then filed suit against Blue Valley to recover its commis-

sion. The trial court found that Hilger was ready, willing, and able
to purchase the property, and that Blue Valley had failed to perform

pursuant to the agreement. The court of appeals affirmed. ^^^

On appeal. Blue Valley argued that the contract was unenforceable
against Hilger because Hilger had only obtained an oral commitment
from a lender to loan the funds in exchange for a mortgage securing

the loan. In answering this argument, the court of appeals noted that

only parties and privies have the right to plead the statute of frauds

as a defense. ^^^ While the lender might have been able to raise this
defense in a suit instituted by Hilger, Blue Valley could not raise it

for them. The court alluded to, but did not answer, the question
whether an agreement to lend money in exchange for a mortgage in-
terest comes within the statute of frauds. However, this point was
not relevant to the case at bar, because the suit was based on the
agreement between Blue Valley and Realestate and not the contract
between Hilger and his lender.

2. Vendor and Purchaser. — In Lewandowski v. Beverly,^^^ the
buyers of certain real property, the Lewandowskis, brought an action

for specific performance and damages against the sellers, the Beverlys,

for failure to perform a contract for sale. The facts show that the
buyers agreed to purchase for $7,900 a one-acre tract of land located

at the southeast corner of a twenty-two acre tract of land owned by
the sellers. The sellers were to furnish a stake survey and evidence
of title in the form of an owner's guarantee policy in the amount of

the purchase price. The buyers paid $500 down as earnest money. On
the date set for closing, the buyers went to the sellers' home with
a check for the balance of the purchase price, and certain problems

became evident. The sellers had failed to provide evidence of good
title because they mistakenly had believed this provision had been

stricken from the contract. Other evidence indicated that there was

a $66,000 mortgage on the twenty-two acre tract, that the sellers had

not obtained a release of the mortgage on the land to be sold, and

that there were certain unpaid taxes. What subsequent negotiations
ensued are unclear; each party claimed the other failed to cooperate.

'''Id. at 1090.

'''Id.

'^"420 N.E.2d 1278 (Ind. Ct. App. 1981).



1983] SURVEY-PROPERTY 309

Eventually, the sellers returned the buyers' earnest money deposit and
the buyers commenced suit. The trial court found for the sellers and
the buyers appealed.

In reversing the decision of the trial court, the court of appeals

held that the buyers had remained ready, willing, and able to per-

form all obligations under the contract and that the trial court's deci-

sion was "against the logic and effect of the facts."^^^ Although the
sellers contended that any problems surrounding the release of the

mortgage and payment of the taxes would have been resolved at the
closing, the court noted that the evidence of good title was to be ob-
tained five days prior to closing.^^^ The fact that the property had in-
creased in value to between $15,500 and $16,000 was not grounds for
denying relief because the delay was the fault of the sellers.

The sellers argued that material alterations made the contract
unenforceable. This argument was based upon the agreement between

the parties to move the boundary line of the property to account for
an encroachment upon the land, which was discovered in the stake
survey.^^^ In rejecting this argument, the court quoted from an earlier

decision that held that where modifications or alterations are required

to be in writing and oral alterations or modifications are made, the

original contract, unless it is entirely abandoned, still exists and binds

the parties.^^^ In conclusion, the court held that "[t]he contract, as

altered^ is valid and binding on both parties."^^^

If the modification of the contract was in writing, there is nothing
unusual about the court's decision in Lewandowski. One suspects,
however, that the modification was oral and thus the court's decision
is not in accord with the general rule of law that oral modifications

to a contract for the sale of real property are not enforceable.^'^" It

is true that the original contract may still be enforced, ^^^ but the deci-
sion in Lewandowski seems to suggest that the contract as modified
is binding on the parties. Had the court not enforced the contract as
modified, however, a serious problem would have been presented to
the trial court because there is no evidence that the sellers could clear

title to the four-foot strip on which the neighbors' fence encroaches.

'''Id. at 1281.

'""Id. at 1279-80.

''Ud.

'''Id. at 1282 (quoting Foltz v. Evans, 113 Ind. App. 596, 612, 49 N.E.2d 358, 365

(1943)).

^^M20 N.E.2d at 1282 (emphasis added).

'"See 4 S. Williston, A Treatise of the Law on Contracts § 593 (3d ed. 1961).
See also Ward v. Potts, 228 Ind. 228, 91 N.E.2d 643 (1950); Bradley v. Harter, 156 Ind.
499, 60 N.E. 139 (1901).

'*'See Cribbet, supra note 51, at 132. See also Imperator Realty Co. v. Tull, 228 N.Y.

447, 127 N.E. 263 (1920).



310 INDIANA LAW REVIEW [Vol. 16:283

This problem is solved in Lewandowski by enforcing the contract as
altered.

The case of Workman v. Douglas,^^^ one of the more interesting
cases decided during this survey period, is significant because the

court analyzes the doctrines of resulting trust and part performance.

Steven and Betty Douglas, a young married couple who were unable
to finance the purchase of a home, sought aid from a friend, Buford

Workman. Under an alleged oral agreement. Workman purchased a
house in his own name for $15,000. He paid $3,000 as a down pay-
ment and obtained a $12,000 mortgage for twenty-five years at eight
and one-half percent interest with monthly payments of $96.80.
Workman then allowed Steven and Betty to move into the house and
to pay him $96.80 a month. The controversy in this case involves the
classification to be given the arrangement between Workman and the
Douglases. According to Workman, the couple was merely renting the
home; according to the Douglases, they were buying the house from
Workman for $96.80 a month for a term of tweny-five years. Steven
and Betty were divorced in 1979, and by divorce decree Betty received

the property in contention. At that time, the payments were in ar-
rears approximately $1,152, and Workman filed suit for the rent,
damages, and possession. Betty counterclaimed on a resulting trust

theory, alleging that an oral contract existed to purchase the property.

The trial court found that there was an oral contract to purchase,
and that a formal contract for sale should be prepared using the In-

dianapolis Bar Association or Allen County Bar Association Land Con-
tract. The contract was to supply such terms as who was responsible
to pay taxes and to provide insurance, what amount was due monthly,
and what interest rate was applicable to the monthly installment. The
judgment also provided that if Betty paid Workman the sum of
$1,529.35 on or before May 2, 1980, and the sum of $96.80 on May
5, 1980, she would be entitled to remain in possession; otherwise.

Workman would be entitled to a judgment for such sums and would
have the right to immediate possesison. Workman appealed.

The court of appeals examined the resulting trust theory upon
which the trial court had based its decision and concluded that the

judgment could not be affirmed on this theory. ^''^ The purchase money
resulting trust, as it was known at common law, was abolished by
statute in Indiana except in three distinct situations:

Where the alienee shall have taken an absolute title in his
own name without the consent of the person with whose
money the consideration was paid; or where such alienee, in

^"^19 N.E.2d 1340 (Ind. Ct. App. 1981)

''Ud. at 1345.



1983] SURVEY-PROPERTY 311

violation of some trust, shall have purchased the land with
moneys not his own; or where it shall be made to appear that,
by agreement . . . the party to whom the conveyance was
made . . . was to hold the land or some interest therein in
trust for the party paying the purchase-money or some part
thereof.^**

The court noted that in all of these situations the purchase money
or some part thereof must be furnished by the person claiming a
resulting trust. Since all the purchase money in the instant case was
furnished by Workman, the agreement could not have created a
resulting trust/*^

The court of appeals next addressed the issue of part perfor-

mance. Although the judgment could not be sustained on the theory

of a resulting trust, possession under the oral contract and part pay-

ment of the purchase price by the Douglases appeared to be suffi-

cient acts under the doctrine of part performance to remove an oral

contract from the statute of frauds. ^"^ Thus, if the case were remanded,

the trial court might have reached the same conclusion based on the

doctrine of part performance. However, the court of appeals went on

to find that the oral agreement was not sufficiently definite to be

enforceable.^"^ There had been no agreement as to who should pay
the taxes and insurance during the twenty-five year period, whether

the $3,000 down payment was to be repaid to Workman, what the
rights of the parties were in the event of default, who would make
repairs, and finally what rate of interest would be paid. The court
concluded that these elements are essential in a time-payment con-

tract. ^"'^ In essence, the anomalous proposition advanced by the

Douglases was that Workman, as a reward for helping out the young
couple, would lose the $3,000 down payment and be forced to pay the
costs of taxes, insurance, and repairs for twenty-five years. ^"^

The court of appeals criticized the trial court for attempting to
write a contract for the parties — in other words "to do for the par-
ties what they should have done in the first place."^^° Courts can only
enforce contracts made between the parties, not create new ones, and
in this case the court of appeals found that the oral agreement was

'''Id. at 1344 (citing Ind. Code § 30-1-9-8 (1982)) (emphasis in original).
'"^419 N.E.2d at 1344-45.

'*'See Bastian v. Crawford, 180 Ind. 697, 103 N.E. 792 (1914); McMahan Constr.
Co. V. Wegehoft Bros., Inc., 170 Ind. App. 558, 354 N.E.2d 278 (1976). For a general

discussion of the doctrine of part performance, see 3 American Law of Property §§
11.7.12 (A. Casner ed. 1952).

'^M19 N.E.2d at 1345.

'''Id. at 1346.

"'Id.

'""Id.



312 INDIANA LAW REVIEW [Vol. 16:283

too indefinite to be enforced. While the doctrine of part performance

can remove an oral contract from the statute of frauds, a valid oral
contract is a prerequisite.

G. Slander of Title

In Curry v. Orwig,^^^ the court examines the issue of what con-
stitutes a sufficient "interest" to justify filing lis pendens notice and

to not cause a slander of title. In 1959, Heritage Woods subdivision
was developed by Roger and Carol Curry and the Bryan Corporation.
The area was to be exclusively residential, and all residents were re-
quired to enter into a restrictive agreement with the developers that

was to insure the community's character and to enhance property
values. The restrictive agreement document, which contains a legal
description of the subdivision, was never recorded. The road. Heritage
Woods Road was mentioned in the agreement, and the Currys and
the Bryan Corporation retained legal title to the road and granted

the residents an easement for ingress and egress. The deeds grant-
ing the easements were recorded with specific legal descriptions. When
William and Jane Orwig purchased their lot in Heritage Woods in
1963, Heritage Woods Road ended in a cul-de-sac, and the Orwigs
understood this was to be the permanent end of the road. The Currys,
however, maintained that they had always made clear their intent to
use the land to the east of the subdivision, if it became available. In
1968, the Currys and the Bryan Corporation acquired the land to the

east of Heritage Woods and drew up plans for a subdivision to be
known as Heritage Woods East. The Currys envisioned extending
Heritage Woods Road into this area. They denied that there was any
plan to develop the area to the south of Heritage Woods known as
the Curry-Bryan farm. Despite these assurances, the Orwigs and other

residents became concerned that an expansion to the south might also

occur. In December 1968, the Orwigs filed a declaratory action to
determine their rights in the easement to Heritage Woods Road and
also filed a lis pendens notice, which indicated that a suit had been

filed. In the lis pendens notice, the legal description of the real estate

involved described some 299.5 acres to the east and south of the sub-
divisions owned by the Currys and the Bryan Corporation.

When the Currys attempted to sell part of the land to the south
which was included in the lis pendens notice, they failed because the
purchasers were unable to obtain financing or title insurance. The Cur-

rys then filed this suit for slander of title. The trial court entered
judgment for the Orwigs, finding that they had legal justification for

filing the notice because of the controversy surrounding the interpreta-

'5>429 N.E.2d 268 (Ind. Ct. App. 1981).



1983] SURVEY-PROPERTY 313

tion of the easement and the impact of the proposed extension on the
neighborhood/^^ The Currys appealed.

The court of appeals noted that the elements of slander of title
are: the statements made regarding title must have been false; they
must have been made maliciously; and they must have caused the
plaintiff pecuniary loss/^^

To understand the basis of the Currys' claim, it is necessary to
examine the lis pendens notice statute.^^'' Essentially, the statute pro-

vides that if a person commences a suit in a state court or a federal
district court sitting in Indiana, either by complaint or cross-complaint,

to enforce any lien upon, right to, or interest in any real estate, and

that suit is not founded on an instrument signed by the party having

title of record, and either properly recorded or a judgment recorded

in the county where the land is located, then the person may file a
lis pendens notice. If such a notice is not filed, then the bringing of

the suit will not act as constructive notice of the interest as against

bona fide purchasers or encumbrancers of the property.^^^

The Currys advanced several arguments involving the interest
necessary before lis pendens notice may be filed. The first argument
was that the interest referred to in the statute refers to an interest
affecting title and that an easement is not the type of interest in-

tended to be filed in the lis pendens notice. The easement involves
land referred to in the instruments creating the easement, in the ease-

ment deed, in the deed conveying the Orwigs' property in Heritage
Woods, and in the unrecorded agreement between the residents and
developers. The Currys argued that because the purpose of the lis
pendens statute was to give notice of unrecorded interests, the Or-
wigs' filing of notice was improper because the easement deed, the
only source of the Orwigs' rights, was already properly recorded. ^^®

If there were no interest entitled to be recorded, the Currys argued
that the statements regarding title were false, and thus the Currys
hoped to establish one of the elements of slander of title.^^^

Secondly, the Currys argued that the Orwigs' lack of an interest

in the property described in the lis pendens notice overcame any claim

of privilege. Apparently, the Orwigs were claiming that the filing of
the notice was privileged. This argument is premised on the rule that
ordinarily actionable statements are absolutely privileged when made
in the course of judicial proceedings, and that this rule should be ex-

''Ud. at 270.

'""Id. at 270 n.l.

'^IND. Code § 34-1-4-2 (1982).
^^^IND. Code § 34-1-4-8 (1982).
•^429 N.E.2d at 271-72.

''Ud.



314 INDIANA LAW REVIEW [Vol. 16:283

tended to the filing of notice in the lis pendens records. In Albertson

V. Raboff,^^^ a California case cited by both parties, Judge Traynor ex-

tended such a privilege to lis pendens notices on the theory that the

notices are simply republications of the pleadings. The Currys argued
that a suit involving title to an easement does not affect title to the

land described in the lis pendens notice and thus it is more than a
mere republication of the complaint.^^^ The Currys used similar reason-
ing to conclude that the Orwigs made the statements with malice,
another element of slander of title.

The court of appeals observed that the focal point in the case
was the question of what constitutes an "interest" in real estate as
enunciated in the lis pendens statute.^^" The court noted that there
were no cases defining the term under the statute. The court then
turned to several secondary authorities and concluded that the statute

was designed to protect in rem claims which were not recorded or
perfected.^^^ The court then examined the Orwigs' claim and concluded
that it involved more than just personal rights. ^^^ The court also noted
that while the easement deed was recorded, it was not recorded in
the chain of title of the purchasers in the new addition. Thus, the
only way the Orwigs could put third parties on notice of their rights
was by filing the lis pendens notice.

What is unique about the interest asserted by the Orwigs is that
it is not a claim to an affirmative right in the described land, but

rather a claim to limit the use of the land with regard to the ease-

ment. As the court observed: "Given the terrain surrounding the new
addition, they might arguably proceed on the theory of an easement

by implication or necessity."^^^
Finally, throughout the Currys' argument is the suggestion that

somehow the amount of land described in the lis pendens notice, 299.5
acres more or less, showed bad faith or malice on the part of the
Orwigs. The trial court found that no precise legal description of
Heritage Woods East was even filed and the original plat contained
a description different from a subsequent plat. The court of appeals
believed there was evidence to support the trial court's finding that
the Orwigs were justified in including a description of the land to the
south of the subdivision is the lis pendens notice.'164

^^M6 Cal. 2d 375, 295 P.2d 405 (1956).

'^M29 N.E.2d at 272.

'">Id.

'''Id. at 272-73.

'''Id. at 273.

''Ud.

'''Id. at 273-74.