Indiana Law Review


Recent Developments in Property Law

Walter W. Krieger*

I. Adverse Possession

In order to acquire title to land by adverse possession, the possession

must be actual, visible, notorious, exclusive, under claim of ownership,

hostile to the true owner, and continuous for the ten year statutory

period. 1 In addition, in Indiana, the claimant must have paid all taxes

and special assessments falling due during the period the land was

possessed adversely. 2 Several decisions decided during this survey period

discuss in detail the "elements" of adverse possession. 3

In Davis v. Sponhauer 4 the Sponhauers owned a lot with a cottage

and boat house on Lake Wawasee. The land was bordered on the south

and east by lake channels and on the west by Davis's land. A large
portion of the disputed area was originally a roadway, thought to be

the boundary between the Sponhauer and Davis properties. The parties'

predecessors-in-interest vacated the roadway in 1957. From 1973 to 1977,
a gravel lot in the disputed area was used by the Sponhauers and the

Vances (Davis's predecessor-in-interest) for parking their vehicles. In

1977, the Sponhauers and the Vances blacktopped the gravel area, each

paying half the cost. The Sponhauers maintained the blacktopped area

after that time. In addition to parking their vehicles on the blacktopped

lot, the Sponhauers and the Vances used the area for basketball and

other activities.

When Davis acquired title in 1986, a survey required by Davis's
lender revealed that the platted boundary ran along the eastern edge of

the vacated road. Until this time everyone believed the boundary line

ran through the middle of the blacktopped parking area. In 1989, relations

between the Sponhauers and Davis began to deteriorate, and when Davis

* Associate Professor of Law, Indiana University School of Law—Indianapolis.
A.B., 1959, Bellarrhine College; J.D., 1962, University of Louisville; LL.M., 1969, George

Washington University.

1. Estate of Mark v. H.H. Smith Co., 547 N.E.2d 796, 799 (Ind. 1989). Indiana

Code § 34-1-2-2(6) (1988), establishes a 10 year statute of limitation for the recovery of

real estate.

2. Ind. Code § 32-1-20-1 (1988).
3. In addition to the two decisions discussed under this topic, the reader may

wish to examine the discussion of the acquisition of a prescriptive easement by adverse

use discussed infra notes 26-31 and accompanying text.

4. 574 N.E.2d 292 (Ind. Ct. App. 1991)



1376 INDIANA LAW REVIEW [Vol. 25:1375

erected a fence six inches west of the platted boundary, the Sponhauers

brought an action to quiet title. 5 The trial court found that the Sponhauers
had acquired title by adverse possession and by a property line agreement. 6

On appeal, Davis argued that the Sponhauers failed to prove the
common-law and statutory elements of adverse possession. First, Davis
argued that the Sponhauers' possession was not open and notorious.
The court observed that "notorious possession" is possession so con-
spicuous that it is known or talked about by people in the vicinity of
the premises. It must be such "that the owner ought to have known
that a stranger was asserting dominion over his land." 7

In reviewing the record, the court noted that the Sponhauers had

parked their vehicles in the disputed area since 1957 and that they and
the Vances had agreed to blacktop the area, splitting the cost. In addition,

the Sponhauers had placed a pier, constructed a birdhouse, and done
landscaping in the disputed area. Neighbors testified to their under-

standing of the location of the property line based upon the Sponhauers'
use of the property. The court found that the Sponhauers' use was
more than "casual maintenance" which the Indiana courts have found
to be insufficient to support a claim of adverse possession. 8

Davis also argued that the Sponhauers' possession was not exclusive. 9

The court responded by pointing out that from 1973 until 1986 the
Sponhauers and the Vances recognized the property line as running

approximately through the middle of the blacktopped area and that those

renting the cottage from the Sponhauers parked their vehicles on the

east part of the lot. 10

Next, Davis claimed that the Sponhauers' possession was not hostile

or adverse to the Vances. The court acknowledged that "the claim of

5. The Sponhauers also sued for slander of title, injunctive relief, damages, and

attorney's fees; however, these issues are beyond the scope of this survey.

6. Davis, 574 N.E.2d at 299. Both the Vances and the Sponhauers were shown

the boundary line between the two properties by the Claytons (Sponhauers's predecessor-

in-title) in 1973. Vance testified that he had an understanding with the Sponhauers as to

the location of the property line and the court found that the sharing of the costs of

improving the blacktopped area was further evidence of the agreement. The trial court

placed the property line where the Sponhauers and the Vances agreed that it was located.

7. Id. at 297 (quoting McCarty v. Sheets, 423 N.E.2d 297, 301 (Ind. 1981)).
8. Id. at 297-98. Periodic or sporadic acts of ownership in a disputed area are

not sufficient to establish adverse possession. See, e.g., Beaver v. Vandall, 547 N.E.2d

802, 803 (Ind. 1989); McCarty v. Sheets, 423 N.E.2d 297, 300 (Ind. 1981); Green v.

Jones, 490 N.E.2d 776, 779 (Ind. Ct. App. 1986).

9. Exclusive possession is possession of such a character that it operates as an

ouster of the owner of legal title. Beaver, 547 N.E.2d at 804 (quoting Philbin v. Carr,

129 N.E. 19, 28 (Ind. Ct. App. 1920)).

10. Davis v. Sponhauer, 574 N.E.2d 292, 298 (Ind. Ct. App. 1991).



1992] PROPERTY 1377

ownership must be based on some ground justifying the adverse claimant's

belief that he is the owner, and that claim must be communicated to

the true owner." 11 Here, however, the court observed that the Sponhauers

and the Vances were both shown what was believed to be the boundary

line between the two properties by the Claytons, the Sponhauers' pre-

decessors-in-interest, and Mr. Vance and his son testified that the Spon-

hauers' use of the property was consistent with the boundary line as

they believed it to exist. It was under a claim of right which was clearly

communicated to the true owner. The court further remarked that even

if it believed Davis's claim that on a few occasions after 1989 the

Sponhauers requested his permission to use the disputed area, it would

be irrelevant because title had already vested in the adverse claimant. 12

Davis also contended that the Sponhauers failed to pay the taxes

on the disputed area during the statutory period as required by Indiana

Code section 32-1-20-1. In response, the court observed that the Indiana
courts have not applied this statute in cases involving boundary line

disputes. The purpose of the statute was to provide the owner with

notice that someone had paid the taxes on the land and was claiming

an interest in the property. In the case of a boundary line dispute,

however, both parties pay the taxes on their part of the property and

the improvements thereon. Thus the statute would not give notice to

the record owner of the claim. 13

Finally, Davis maintained that assuming arguendo that the Spon-

hauers had proven the elements of adverse possession, their claim to

the disputed area must fail because they could not establish the quantity

of the land involved. 14 In rejecting this contention, the court observed

that the Claytons, the Sponhauers' predecessor-in-interest, pointed out

the boundary line to both the Sponhauers and the Vances, and it was

not error for the trial court to use this evidence to determine the quantity

of the land. 15

In Snowball Corp. v. Pope, 16 the court once again addressed the

elements of adverse possession. The Snowball Corporation owned ap-

11. Id. (citing Estate of Mark v. H.H. Smith Co., 547 N.E.2d 796 (Ind. 1989)).
12. Id. (citing Kline v. Kramer, 386 N.E.2d 982, 987 (Ind. Ct. App. 1979)).

13. Id. at 298-99 (quoting Kline v. Kramer, 386 N.E.2d 982, 989 (Ind. Ct. App.

1979)).

14. A number of Indiana decisions have held that the claim must be limited to
that portion over which the claimant exercises continuous acts of ownership and that

"where the quantity is small the rule as to the location of the line is exacting." McCarty
v. Sheets, 423 N.E.2d 297, 300 (Ind. 1981). See also Carter v. Malone, 545 N.E.2d 5,
7 (Ind. Ct. App. 1989).

15. Davis v. Sponhauer, 574 N.E.2d 292, 299 (Ind. Ct. App. 1991).

16. 580 N.E.2d 733 (Ind. Ct. App. 1991).



1378 INDIANA LAW REVIEW [Vol. 25:1375

proximately 8,000 square feet of land in Brownsburg, Indiana, which

at one time was a swamp. The swamp was filled in by the Popes in
1957 and became an extension of the lawn at their residence. Snowball
brought an action to quiet title to the unimproved tract of land, and
the Popes counterclaimed under the theory of adverse possession.

On appeal from a judgment in favor of the Popes, Snowball argued
that because it was unaware of its ownership of the disputed tract, its
lack of knowledge should prevent the ten year statute of limitations

from running. Snowball cited two cases in support of this argument,

both of which the court found inapposite. The cases involved situations
in which the true owners were unaware of the adverse activities on the
land, not situations in which the owners were unaware of their interests

in the land itself. 17 The court concluded that if it tolled the ten year

statute of limitations simply because the true owner was unaware of its

interest in the land "the entire doctrine of adverse possession would be

abrogated." 18

Snowball next contended that the Popes failed to establish that their

possession was sufficiently notorious, exclusive, and open and visible to
satisfy the elements of adverse possession. With regard to Snowball's

contention that the Popes' possession was not "notorious," the court

observed that the reason for requiring that the possession be "notorious"

is that the true owner will be alerted that a stranger is asserting a claim

to his land. The court then defined the term as possession "so conspicuous
that it is generally known and talked of by the public—at least by people
in the vicinity of the premises." 19 Here, several residents of Brownsburg

testified that they believed the tract belonged to the Popes. In fact, the

Brownsburg Town Board required the Popes to fill in the swamp located
on the land. Thus, the trial court was not in error in finding the

possession to be notorious. 20

With regard to the argument that the possession was not exclusive,

the court observed that exclusive means claiming the title to the exclusion

of others: "The possession must be exclusive also as against persons
other than the owner of legal title; and where the claimant occupies the

land in common with third persons, or with the public generally, the

17. In Marengo Cave Co. v. Ross, 10 N.E.2d 917 (Ind. 1937), the possessor's

activities in an underground cave were not observable by the surface owner, and in Able

v. Love, 143 N.E. 515 (Ind. Ct. App. 1924), the issue was whether the possession met

the elements requisite for adverse possession.

18. Pope, 580 N.E.2d at 735 (citing Craven v. Craven, 103 N.E. 333, 335 (Ind.

1913) (holding that the mere fact the true owner is unaware of his rights to the land will

not prevent the statute of limitations from running)).

19. Id. (quoting McCarty v. Sheets, 423 N.E.2d 297, 301 (Ind. 1981)).

20. Id.



1992] PROPERTY 1379

possession is not such exclusive possession as will constitute the basis

of title." 2 ' Snowball argued that the Popes had failed to prove exclusive

possession because children ice skated on the swamp in the winter,
pedestrians were allowed to walk across the property on their way to
a nearby restaurant, and there were no fences or "no trespassing" signs.
The court found these facts "irrelevant" because these activities did not

suggest that the Popes intended to share the ownership to the land, but

rather, if anything, it suggested a license had been granted.22

Next, the court addressed the element of "open and visible" pos-

session, which requires that the possession be of such a nature and

character as to apprise the world that the land is being occupied and

by whom. The purpose of this element is to provide the true owner
with notice that someone has taken possession and is claiming ownership

of the land. 23 Snowball claimed that the Popes did nothing to the land

other than cut the grass. The court observed that the nature and character

of the land must be considered when determining the sufficiency of the
acts of ownership. Here, the swamp was not completely filled and the
area was not spacious enough for much development. In short the court
found the land was not suited for most purposes and that the use was

consistent with the nature of the land. 24 The court concluded that the

use by the Popes met the requirements for adverse possession and

affirmed the judgment of the trial court. 25

II. Easements

A. By Prescription

A prescriptive easement can be established by showing actual, hostile,
open, notorious, continuous, uninterrupted, and adverse use for a period

of twenty years under a claim of right or such continuous, adverse use

with the knowledge and acquiescence of the owner.26

In Larch v. Larch,21 William Larch and DMB Agricorp, Inc. (DMB)
brought suit to quiet title to a drainage tile connection on adjoining

21. Id. at 736 (quoting Philbin v. Carr, 129 N.E. 19, 28 (Ind. Ct. App. 1920)).

22. Id.

23. Id.

24. Id.

25. Id.

26. Ind. Code § 32-5-1-1 (1988); Greenco, Inc. v. May, 506 N.E.2d 42, 45 (Ind.
Ct. App. 1987); Searcy v. LaGrotte, 372 N.E.2d 755, 757 (Ind. Ct. App. 1978).

27. 564 N.E.2d 313 (Ind. Ct. App. 1990).



1380 INDIANA LAW REVIEW [Vol. 25:1375

land owned by Ruth Larch, Edward Larch, and Velma Barrett. The
trial court granted partial summary judgment in favor of DMB, finding
that DMB had acquired a prescriptive easement. 28

On appeal, the defendants argued that the use of the tile by DMB
was "permissive." While recognizing that the use of land with the

permission of the owner is insufficient to establish an easement by adverse

use, the court observed that "[o]nce open and continuous use of another's

land commences with knowledge on the part of the owner, such use is
presumed to be adverse to the owner."29 Deposition testimony indicated

that DMB had connected the tiles in 1947 and that the defendants'
predecessor-in-title was present, saw DMB make the connection, and did
not object. No evidence was introduced to rebut the presumption that
the use was adverse.

The defendants further argued that DMB did not acquire a pre-
scriptive easement because DMB failed to pay taxes on the easement,
citing Indiana Code section 32-1-20-1, which provides the following:

[I]n any suit to establish title to lands or real estate no possession

thereof shall be deemed adverse to the owner . . . unless such
adverse possessor or claimant shall have paid and discharged all

taxes and special assessments of every nature falling due on such

lands or real estate during the period he claims to have possessed

the same adversely. 30

In rejecting the defendants' argument, the court noted that the explicit

language of the statute limits its application to suits to acquire "title

to lands" by adverse possession. The court could find no case applying

the statute to a suit to establish an easement and affirmed the trial

court's granting of partial summary judgment. 31

B. By Implication

Implied easements can arise in different situations. First, an implied

easement can arise from a prior use of the property:

Where, during the unity of title, an apparently permanent and

obvious servitude is imposed on one part of an estate in favor

of another, which at the time of the severance is in use, and

is reasonably necessary for the fair enjoyment of the other, then,

upon a severance of such ownership . . . there arises by impli-

28. Id. at 315.

29. Id. at 317.

30. Ind. Code § 32-1-20-1 (1988).
31. Larch, 564 N.E.2d at 317.



1992] PROPERTY 1381

cation of law a grant or reservation of the right to continue

such use. 32

If the benefited portion of the land is conveyed to the grantee, the

right to continue the use of the part of the land retained by the grantor

is called an implied grant. If the grantor retains the benefited portion

of the land, the right of the grantor to continue to use the part of the

land conveyed to the grantee is called an implied reservation. 33 Implied

grants are favored by the law because they benefit the land being

conveyed, and most courts require that the continued use be only a

reasonable necessity to the enjoyment of the dominant estate. Implied

reservations, on the other hand, are not favored by the law because

they burden the land being conveyed.34

A second situation in which an easement by implication may arise,
regardless of any prior use of the land, is by way of necessity to prevent
a tract of land from becoming landlocked. When the conveyance of a
portion of the land would result in either the part being conveyed or

the portion retained by the grantor becoming landlocked, the court will

imply a way of necessity across the other portion of the land to reach
a public highway. 35 Most cases require strict necessity to impose an

implied way of necessity across the land of another. 36 Scholars have
warned that a failure to distinguish between the implied easement by

necessity and the implied easement based on prior use when discussing
the requirement of necessity "can lead to a confusion of tongues." 37

Despite this warning, the Indiana courts have consistently used the phrase

"way of necessity" to describe both types of implied easements. 38 The
Indiana courts continue to state that when there is an obvious and
permanent servitude on one part of the land at the time ownership is

severed, an easement will be implied if the use is reasonably necessary

32. John Hancock Mut. Life Ins. Co. v. Patterson, 2 N.E. 188, 191 (Ind. 1885).

See also Shandy v. Bell, 189 N.E. 627 (Ind. 1934); Searcy v. LaGrotte, 372 N.E.2d 755

(Ind. Ct. App. 1978); Krueger v. Beecham, 61 N.E.2d 65 (Ind. Ct. App. 1945). For a

discussion of the implied easement based on prior use, see Roger A. Cunningham et
al., The Law of Property § 8.4, at 444-46 (1984).

33. John E. Cribbet & Crowin W. Johnson, Principles of the Law of Property
371-72 (3rd ed. 1989).

34. Id. at 372. See also Cunningham, supra note 32, § 8.4, at 446.

35. See, e.g., Shandy v. Bell, 189 N.E. 627 (Ind. 1934); Dudgeon v. Bronson, 64
N.E. 910 (Ind. 1902). For a discussion of the implied way of necessity, see Cunningham,
supra note 32, § 8.5, at 447-49.

36. Cribbet & Johnson, supra note 33, at 371-72.
37. Jesse Dukeminier & James E. Krier, Property 848 (2d ed. 1988).
38. See, e.g., McConnell v. Satterfield, 576 N.E.2d 1300 (Ind. Ct. App. 1991);

Hunt v. Zimmerman, 216 N.E.2d 854 (Ind. Ct. App. 1966); Krueger v. Beecham, 61
N.E.2d 65 (Ind. Ct. App. 1945).



1382 INDIANA LAW REVIEW [Vol. 25:1375

for the fair enjoyment of the part benefited. 39 However, the meaning

of "reasonably necessary" appears to be restricted by the use of the

phrase "way of necessity" to describe the easement. This confusion of
tongues is dramatically illustrated in McConnell v. Satterfield. 40

In 1972, the Satterfields, who owned lots A and B, built a garage
on the northern portion of lot B and constructed a driveway across lot
A leading to the side of the garage. In 1986, the Satterfields divorced
and Margaret became the owner of the two lots. The McConnells bought
lot B at a sheriff's sale in 1989. At the time, they were aware that the
driveway was on lot A, but they continued to use it to reach the garage,

despite Satterfield's objection. Satterfield constructed a fence to prevent

the McConnells from using the driveway, and when the McConnells tore
down the fence, Satterfield brought an action for damages, ejectment,
and to quiet title. The McConnells counterclaimed, alleging an implied
easement by necessity. The trial court found for Satterfield and against

the McConnells on their counterclaim.41

On appeal the court made the following observation:

Generally, an easement will be implied where during the unity

of title, an owner imposes an apparently permanent and obvious

servitude on one part of the land in favor of another part, and

the servitude was in use when the parts were severed, if the

servitude is reasonably necessary for the fair enjoyment of the

part benefited.
42

Here, the driveway was the only way to reach the garage. The McConnells
would be required to tear out part of the pool deck and retaining wall

or construct the driveway over a septic system. Nevertheless, the court

found that the easement was not necessary:

The requirement of reasonable necessity does not do away with

the requirement that some necessity be shown. The McConnells

admit that they are not landlocked and that they have means

of access to their lot from the southern side which fronts on

a public highway. The McConnells acknowledge that Indiana

39. See, e.g., John Hancock Mut. Life Ins. Co. v. Patterson, 2 N.E. 188 (Ind.

1885); Shandy v. Bell, 189 N.E. 627 (Ind. 1934); Searcy v. LaGrotte, 372 N.E.2d 755

(Ind. Ct. App. 1978); Hunt v. Zimmerman, 216 N.E.2d 854 (Ind. Ct. App. 1966); Krueger

v. Beecham, 61 N.E.2d 65 (Ind. Ct. App. 1945).

40. 576 N.E.2d 1300 (Ind. Ct. App. 1991).

41. Id. at 1301.

42. Id. at 1302.



1992] PROPERTY 1383

has not granted a way of necessity when only a portion of the

land is inaccessible. 43

The court then cited Hunt v. Zimmerman*4 for the rule that a right

of way by necessity cannot apply to property which is already accessible

to the landowner. 45 In Hunt, the court refused to find an implied easement

across the back yard of the land retained by the grantor even though

the garage on the grantee's lot opened onto the land retained by the

grantor and, because of the shape of the grantee's lot, the garage could

not be reached by car except across the land retained by the grantor.

In refusing to find an implied easement the court remarked that the lot

itself was accessible from the street:

A right of way by necessity cannot apply to property which is
already accessible to the landowner. ... It may be true that he
had no ingress or egress for the use of his garage in the manner

for which it had been designed, but this is not our concern.

We are concerned only with the land as a whole, and not as
to the use of a particular building located on the land. 46

In light of the language in Hunt, it is not surprising that the court in

McConnell came to the conclusion that there was no implied easement

to use the driveway. What is not clear, in light of these Indiana decisions,
is the meaning of the phrase "reasonable necessity." The decisions suggest

that there is little if any distinction between the necessity required for

a way of necessity and that required for an implied easement based on
prior use.

C. Riparian Rights

There were three reported cases during this survey period dealing

with the riparian rights of access easement holders. In Klotz v. Horn,41

the Horns, who owned a single tract of land abutting Eagle Lake,
conveyed the rear portion of the lot, which did not abut the lake, to

Nedra Sainer in 1975. The deed granted Sainer a six foot wide easement

appurtenant "for the purpose of access to Eagle Lake." Ten years later

Sainer conveyed her tract to the Klotzes, who subsequently erected a
pier at the lake end of their easement (the easement being appurtenant

passed with the conveyance of the dominant estate from Sainer to the

Klotzes). The Horns sought a permanent injunction to prevent the Klotzes

43. id.

AA. 216 N.E.2d 854 (Ind. Ct. App. 1966).

45. McConnell v. Satterfield, 576 N.E.2d 1300, 1302 (Ind. Ct. App. 1991).

46. Hunt, 216 N.E.2d at 856-57.

47. 558 N.E.2d 1096 (Ind. 1990).



1384 INDIANA LAW REVIEW [Vol. 25:1375

from placing a pier or other structure on the easement. The trial court

granted the Horns' motion for summary judgment finding that, as a
matter of law, the Klotzes had no right to place a pier at the end of

the easement. The court of appeals affirmed, holding that no riparian
rights were expressly granted to Sainer under the warranty deed. The
Indiana Supreme Court granted transfer and reversed. 48

The supreme court began with the observation that the issue is not
whether the Klotzes themselves have riparian rights, but whether they

are entitled to use the riparian rights of the Horns, i.e., whether the

language "access to the lake" gave them the right to place a pier on

the Horns' servient estate. Although the right to maintain a pier was

not expressly granted in the deed, if the language of the grant is

ambiguous, then parol or extrinsic evidence is admissible to determine

the intent of the parties who created the easement "taking into consid-
eration all of the surrounding circumstances."49 Here, the evidence re-

vealed that the bottom of the lake was "very murky and weedy" at
the end of the easement, making swimming, wading, fishing, and boating

extremely limited without a pier to reach deeper water. 50

The court distinguished Brown v. Heidersbach, 51 upon which both
the trial court and court of appeals relied, in finding that there was no

right to maintain a pier on the easement. The supreme court noted that

in Brown, the easement was granted for the benefit of a number of lot

owners to be used in common. Additionally, unlike the present case,
there was a beach available to the lot owners in Brown which made it
possible for them to enjoy their easement without a dock or pier. More
importantly, in Brown, the court considered the surrounding circum-

stances in reaching its conclusion that no riparian rights were intended

to be granted: "An instrument creating an easement must be construed
according to the intention of the parties, as ascertained from all facts

and circumstances, and from examination of all its material parts." 52

The court admonished the trial court that on remand it "should likewise

hear evidence to determine the intent of the parties who created the
easement and then balance the interests of the present titleholders of

the dominant and servient estates." 53

In a dissenting opinion, Justice DeBruler concluded that the granting

of a six foot wide path for access to the lake did not indicate that the

48. Id. at 1100.

49. Id. at 1098.

50. Id. at 1099.

51. 360 N.E.2d 614 (1972).

52. Id. at 620.

53. Klotz v. Horn, 558 N.E.2d 1096, 1100 (Ind. 1990).



1992] PROPERTY 1385

parties intended its use for cars or the transportation of large watercraft.
54

Furthermore, the attachment of a pier at the end of the easement would

require a construction on and alteration of the bank which would severely

restrict the right of the landowners to enter and leave the lake or to

tie up boats of their own. Justice DeBruler would affirm the summary
judgment based on the physical evidence surrounding the granting of

the easement. 55

Hunter v. Kellogg* presented a somewhat similar factual situation.

The Scheeles conveyed property abutting Lake Wawasee, but reserved

a five foot strip "for ingress and egress to and from the roadway to

the water's edge of the Lake." 57 Nothing was said about the right to

construct a pier at the end of the easement, but the grantors constructed

a pier immediately following the conveyance, and it remained in seasonal

use for approximately fifty years until this suit was brought. The trial

court found that although the deed did not expressly reserve riparian

rights, the dominant tenants (the Scheeles) intended to reserve the right

to place a pier in the lake.

Hunter, the current owner of the servient estate, argued that the

language in the deed was unambiguous and that it was error for the

trial court to have considered surrounding facts and circumstances to

determine the grantors' intent. The court of appeals, citing Klotz, agreed
with the trial court that the language in the instrument was ambiguous. 58

Furthermore, the court found that because the easement was created by

reservation, rather than by grant, there was even more of an ambiguity. 59

The trial court judgment was affirmed.60

In Bromelmeier v. Brookhart,61 the question of riparian rights was

raised in the context of an easement acquired by prescription. Since

about 1962, the Bromelmeiers and their predecessors in title had used

a ten foot wide strip located between the lots of Brookhart and Stellhorn

for access to Crooked Lake. In 1987, Brookhart and Stellhorn purchased

the ten foot strip and commenced this action. The trial court found
that the Bromelmeiers had acquired a prescriptive easement, but that it

did not include the right to maintain a pier. The court reached this

conclusion based on two factors: (1) the easement did not give the

dominant tenant riparian rights and (2) during two summers the Bro-

54. Id. (DeBruler, J., dissenting).

55. Id.

56. 563 N.E.2d 1338 (Ind. Ct. App. 1990)

57. Id. at 1339.

58. Id. at 1340.

59. Id.

60. Id. at 1340-41.

61. 570 N.E.2d 90 (Ind. Ct. App. 1991).



1386 INDIANA LAW REVIEW [Vol. 25:1375

melmeiers had elected not to place a pier in the lake, thus interrupting

the prescriptive period. 62

As to the first point, the court of appeals noted that in Klotz, the
Indiana Supreme Court had determined that an access easement may
include the right to maintain a pier.63 Although Klotz involved an express

easement, the court determined that the purpose and intent of the parties

has no less of a bearing on the scope of an easement by prescription.

Here the facts indicated that Robert Seely, a predecessor in the Bro-

melmeiers' title, had used the strip in 1962 for swimming, walking, and

boating and had placed a pier in the lake at the end of the easement.

In addition, he stored the pier sections on the strip of land during the

winter. The pier was used continuously except for a two year period in

1971 and 1972.

The trial court found that the Bromelmeiers had failed to establish
a continuous twenty year use of the easement for storing and attaching

a pier. However, the court of appeals did not agree. In 1971, the pier

was in disrepair and the then owners of the Brookhart property (the

Conrads) testified that they allowed the Bromelmeiers to use their pier

until they could get a new one. The Bromelmeiers purchased a new pier
in 1973 and the use resumed uninterrupted until 1988. The court con-

cluded that "mere intermissions in use of reasonable durations" will

not prevent the establishment of a prescriptive easement.64 To stop the
adverse period from running, there must be an interruption of the use

by the owner of the servient estate or a voluntary abandonment of the

easement by the adverse user. Here, there was no evidence of an intent

to abandon the easement.

In light of these facts, the court of appeals held it was "clearly

erroneous" for the trial court to fragment the use and purpose of the

easement by recognizing a right of access to the lake but denying a

right to maintain the pier. 65 The part of the judgment denying the

Bromelmeiers the right to maintain the pier was reversed. 66

III. Landlord and Tenant

A. Clauses Limiting Right of Tenant to Assign or Sublet

The tenant's interest in a lease is freely alienable unless the lease

contains a covenant against the transfer of the tenant's interests. 67 Rather

62. Id. at 91.

63. Id.

64. Id. at 92 (relying on Griffith v. Neff, 196 N.E.2d 757 (Ind. Ct. App. 1964)).

65. Id.

66. Id. at 92-93.

67. Because such clauses restrict the free alienation of property, they are not



1992] PROPERTY 1387

than prohibiting such transfers, clauses more commonly require the tenant
to obtain the landlord's consent to an assignment or sublease.68 Under

the traditional common-law rule, the landlord can arbitrarily and ca-
priciously refuse to consent to an assignment or subletting for any reason

unless the language of the covenant provides that such consent shall

not be unreasonably withheld. 69 Recently, however, a number of juris-
dictions have abandoned the common-law rule and have adopted a
commercially reasonable standard requiring the landlord to show rea-
sonable grounds for the refusal to consent to the transfer unless the

language of the covenant provides that such consent may be arbitrarily
withheld. 70

During the last survey period, the Indiana Court of Appeals, in

First Federal Savings Bank v. Key Markets, /«c.,71 rejected the traditional
common-law rule and adopted a construction of the covenant based
upon the contractual duties of the parties to act reasonably and in good
faith. In so doing the court used the rationale set forth in Fernandez

v. Vasquez: 72

[A] lease is a contract and, as such, should be governed by the

general contract principles of good faith and commercial rea-

sonableness. One established contract principle is that a party's
good faith cooperation is an implied condition precedent to

performance of a contract. Where that cooperation is unrea-
sonably withheld, the recalcitrant party is estopped from availing

herself of her own wrongdoing. A withholding of consent to
assign a lease which fails the tests for good faith and commercial

reasonableness, constitutes a breach of the lease agreement. 73

The Indiana Supreme Court granted transfer and reversed. 74

In reversing the court of appeals decision, the supreme court refused

to accept the contractual construction of the covenant adopted by the

court of appeals:

favored by the law and are narrowly construed. See Cunningham, supra note 32, § 6.69,
at 386. Thus, a clause prohibiting the "assignment" of the lease without the consent of

the landlord would not prohibit the tenant from subletting the premises, nor would a

provision prohibiting "subletting" without the landlord's consent prohibit an assignment.

See F.W. Woolworth Co. v. Plaza North, Inc., 493 N.E.2d 1304 (Ind. Ct. App. 1986).

68. Cunningham, supra note 32, § 6.69, at 386.

69. Id. at 387-88.

70. Cribbet & Johnson, supra note 33, at 275.
71. 532 N.E.2d 18 (Ind. Ct. App. 1988).

72. 397 So. 2d 1171 (Fla. Dist. Ct. App. 1981).

73. Id. at 1173-74.

74. First Fed. Sav. Bank v. Key Markets, Inc., 559 N.E.2d 600 (Ind. 1990).



1388 INDIANA LAW REVIEW [Vol. 25:1375

These broad general statements of contract construction do not
accurately describe the duties and responsibilities of courts in

interpreting contracts, or they should at least be applied in very

limited and specific instances where such a question of con-
struction is apparent, particularly when one uses such expressions
as "good faith cooperation," "recalcitrant party" and "wrong-
doing."75

Instead, the court held that when the wording of the consent to assign
provision does not specifically provide that the landlord's consent "shall

not be unreasonably withheld," such language should not be implied,

and the contract shall be enforced as written. The parties to a contract
are free to agree to limit the assignability of a lease, and when they
so choose, the court should look to the language used by the parties

to express their intent. If the parties desired to limit the landlord's right

to withhold consent they could have done so by including the phrase

"which consent shall not be unreasonably withheld." When the language
used by the parties is clear and unambiguous, the court will require the
parties to perform consistently with the bargain they made.76 The court
concluded with the following observation:

It is not the province of the courts to require a party acting

pursuant to such a contract to be "reasonable," "fair," or show
"good faith" cooperation. The proper posture for the court is
to find and enforce the contract as it is written and leave the

parties where it finds them. It is only where the intentions of

the parties cannot be readily ascertained because of ambiguities

or inconsistency in the terms of the contract or in relation to

extrinsic evidence that a court may have to presume the parties
were acting reasonably and in good faith in entering into the
contract.77

Neither of the parties required "paternalistic protection" because they

were experienced in business enterprises and "entered into a lease clear

in its terms and well understood in the business community." 78

B. Rent Acceleration Clause

A rent acceleration clause allows the landlord to advance the due
date on future rent installments in the event of the tenant's breach of

75. Id. at 603.

76. Id. at 603-04.

77. Id. at 604.

78. Id. at 606.



1992] PROPERTY 1389

any of the covenants in the lease. 79 Many courts see no problem with
such a provision because the landlord could have made the entire rent
payable in advance in the lease. The landlord is simply making the rent

payable in advance upon the happening of a condition, the tenant's

default.
80 A problem arises, however, when the landlord chooses to evict

the tenant because of the default and also attempts to recover the entire

rent for the remainder of the term under the acceleration clause. When
the lease is terminated, the court may view the tenant's duty to pay
rent as ending and the provision for acceleration of the rent as a liquidated

damages provision or an unenforceable penalty.81

In Indiana the problem is further confused by a recent decision,

Nylen v. Park Doral Apartments*2 which holds that rent may be re-
covered for the remainder of the term, even after an eviction of the

tenant, when a "saving clause" so provides. 83 Finally, under traditional

landlord-tenant law, when the tenant voluntarily vacates the premises
before the end of the term, the tenant's duty to pay rent continues,

and a rent acceleration clause, if enforceable, would simply make future
rent payable immediately. Today, however, in a growing number of

states, including Indiana,84 when the tenant abandons the premises before
the end of the term, the landlord is under a duty to mitigate his damages

by making reasonable efforts to relet the premises. 85 Thus, the landlord

will not be entitled to the full rent for the remainder of the term under

an acceleration clause.

The validity of an acceleration clause was raised in Parrish v. Toth.*6

Less than one year after leasing commercial property for a term of three

years, the tenant (Parrish) vacated the premises and ceased paying rent.

The landlord (Toth) filed suit seeking the rent for the remainder of the
term, clean-up costs, and attorney's fees. The court found that the lease
had been breached and issued a partial summary judgment in favor of
Toth. A hearing was held on the issue of damages, and Parrish raised
Toth's failure to mitigate damages. The court found that Toth had made

79. Robert S. Schoshinski, American Law of Landlord and Tenant § 5.40,
at 351 (1980).

80. Id. See also Cunningham, supra note 32, § 6.52, at 365.

81. Cunningham, supra note 32, § 6.52, at 366. See also Schoshinski, supra note

79, § 5.40, at 351-53.

82. 535 N.E.2d 178 (Ind. Ct. App. 1989).

83. Id. at 182-83. The saving clause in Nylen provided the following: "Eviction

of tenant for a breach of lease agreement shall not release tenant from liability for rent

payment for the balance of the term of the lease." Id. at 181.

84. See, e.g., State v. Boyle, 344 N.E.2d 302 (Ind. Ct. App. 1976); Hirsch v.

Merchants Nat'l Bank & Trust Co., 366 N.E.2d 833 (Ind. Ct. App. 1975).
85. Schoshinski, supra note 79, § 10.12, at 675-81.

86. 559 N.E.2d 369 (Ind. Ct. App. 1990).



1390 INDIANA LAW REVIEW [Vol. 25:1375

reasonable efforts to relet the premises, and a judgment was entered

awarding Toth twenty-nine months rent, clean-up costs, and attorney's

fees, less set-off for common area maintenance charges. 87

The court distinguished Roberts v. Watson,
,

88 which held that rent

installments not yet due and owing cannot be recovered by the landlord

upon the tenant's default. Here, the court reasoned, the rent for the

entire balance of the term had become due upon the tenant's default

under the acceleration clause. 89

It should be noted that the court awarded the landlord the full

amount of the future rent installments, even though there were more

than twenty months of the lease term remaining. What would happen
if the landlord leased the premises at the same or a higher rent the

next month? Could the landlord receive double rent for the remaining

nineteen months? It has been suggested that the defaulting tenant, if

he has been found liable for the rent for the remainder of the term

under an acceleration clause, should be able to recover any additional

rent received by the landlord, less expenses and damages.90

C. Self-help Eviction

At early common law the landlord could use as much force as
necessary to evict a holdover tenant, but today it is generally held that

the landlord may only regain possession without judicial process by
peaceable means. 91 The key issue becomes what is a "peaceable means."

One effective method used by some landlords to force the holdover
tenant to vacate the premises is to cut off the utilities. Unfortunately,

disconnecting utilities, particularly in the winter months, can lead to

serious health problems.92 Because of the danger to the health and general

welfare of the tenant, a number of modern landlord-tenant statutes now
prohibit the landlord from disconnecting utilities in occupied dwellings. 93

The constitutionality of two City of Evansville ordinances prohibiting

landlords from disconnecting utilities in rental units was raised in Chand-

ley Enterprises v. Evansville. 9* When the tenant failed to pay the rent,

87. Id. at 370.

88. 359 N.E.2d 615 (Ind. Ct. App. 1977).

89. Parrish, 559 N.E.2d at 372.

90. Schoshinski, supra note 79, § 5.40, at 352.

91. Id. § 6.5, at 399-403. See also Calef v. Jesswein, 176 N.E. 632 (Ind. Ct. App.

1931).

92. See, e.g., Welborn v. Society for Propagation of Faith, 411 N.E.2d 1267 (Ind.

Ct. App. 1980).

93. See, e.g., Unif. Residential Landlord and Tenant Act § 4.207, 7B U.L.A.
427 (1985).

94. 563 N.E.2d 672 (Ind. Ct. App. 1990).



1992] PROPERTY 1391

the landlord (Chandley) disconnected the utilities. The tenant complained

to the Evansville Department of Code Enforcement, which ordered the

landlord to reconnect the utilities. Chandley complied with the order,

but subsequently brought an action for a declaratory judgment to have

the two ordinances declared illegal.

Chandley first argued that the ordinances violated the constitutional

prohibition against impairment of contractual obligations. The lease

contained the following provision:

B. Lessor further reserves the right to use whatever self-help it

deems appropriate and necessary to effectuate re-entry and taking

of possession of premises including, but not limited to, discon-

nection of all gas, electric, water and other utility services as

well as changing of locks and removal of personal property

located upon said premises. 95

In rejecting this argument, the court observed that the city ordinance

was adopted in 1962, that the lease was entered into in 1988, and that

the constitutional prohibition against impairment of contracts does not

apply to contracts entered into after a statute is already in force. 96

Chandley also argued that the ordinances interfered with his right

to contract now and in the future. Chandley argued that to justify the
impairment of contracts, an ordinance must be necessary and reasonable

under the circumstances. 97 The court agreed, but concluded that the

ordinances in question were a reasonable exercise of the city's police

power: "These ordinances may be intended to preserve the health and
safety of dwellers, to prevent landlords from constructively evicting

tenants, and to preserve the status quo pending a judicial determination

of the parties' rights." 98 The court also rejected Chandley's argument

that the ordinances force landlords to pay a trespasser's utilities, finding

that "a landlord has other options for removal of a trespasser including

the pursuit of court action." 99

Chandley also claimed that, as a penalty statute, the ordinances

"must be sufficiently explicit so as to inform individuals of the con-

sequences of the contemplated conduct." 100 The court, however, did not

find the language vague because it simply prohibited the landlord from

95. Id. at 674.

96. Id.

97. Id. at 674-75 (relying on Wencke v. City of Indpls., 429 N.E.2d 295 (Ind.
Ct. App. 1981)).

98. Id. at 675.

99. Id.

100. Id.



1392 INDIANA LAW REVIEW [Vol. 25:1375

disconnecting utilities in an occupied dwelling. 101 Likewise, the court

rejected Chandley's argument that the statute was overbroad and inter-

fered with the legitimate rights of lessors to remove trespassers from

their property. The court held that landlords do not have an absolute
right to use self-help. 102

Finally, Chandley argued that a municipality may not alter the law
governing civil actions between private individuals. The court agreed that
the police powers of a municipality are restricted to the protection or

promotion of a public interest or welfare, but that when the ordinances,
as here, are found to be for the health and safety of tenants, they will

not be declared invalid merely because they affect private relationships. 103

The right of the landlord to resort to self-help was also discussed
in Adami-Saenger Partnership I v. Wood. 104 Wood, a tenant in a shopping
center mall, leased space from Adami-Saenger Partnership I. Lee, the

mall manager, "took exception to Wood's behavior while a tenant of
the Mall" 105 and refused to renew Wood's lease when it terminated on
July 31, 1988. However, the landlord's attorney, Bieberstein, verbally

offered Wood a three year lease of a vacant space in the mall on July
18, 1988. Wood accepted the offer and waited for a copy of the lease.
Subsequently, Bieberstein notified Wood that he had withdrawn his offer
and reminded her that the lease was to end on July 31. Wood refused
to vacate. Lee, after consulting with the mall's attorney, decided she

did not want to wait another sixty to ninety days to remove the tenant

by judicial process and resorted to self-help on August 1, 1988. After

the mall closed, the tenant's property was removed from a kiosk space

and placed in another space (Marsh space) in the mall also being used

by the tenant. The lock on the Marsh space was changed, thus preventing

the tenant access to her property for one day. In addition, during removal

of the property from the kiosk space, some merchandise was damaged.

The court permitted the tenant to recover compensatory damages, in-

cluding lost profits, 106 but denied punitive damages:

To recover punitive damages for breach of contract, a plaintiff
is required to prove by clear and convincing evidence, that the

101. id.

102. Id.

103. Id. at 675-76.

104. 568 N.E.2d 1112 (Ind. Ct. App. 1991).

105. Id. at 1113.

106. Id. at 1113-15. Judge Conover, in a dissenting opinion, argued against awarding

lost profits, pointing out that Wood was no longer a mall tenant since her lease had
expired. It would appear, however, that the majority viewed the verbal offer of a three

year lease by Adami's attorney and Wood's acceptance as a new lease justifying the

awarding of future profits.



1992] PROPERTY 1393

defendant's actions in breaching the contract were accompanied

by malice, fraud, gross negligence or oppressive conduct. . . .

Moreover, the plaintiff must produce some evidence "that is

inconsistent with the hypothesis that the tortious conduct was

the result of a mistake of law or fact, honest error of judgment,

overzealousness, mere negligence or other such noniniquitous

human failing." 107

Here, the court found that while Lee's decision to use self-help was

"improvident," "the evidence was not inconsistent with the hypothesis

that Adami's conduct was the result of mere overzealousness." 108

D. Landlord's Liability for Criminal Acts of Third Parties

Traditionally, the landlord has not been held liable for injury to

the tenant caused by the criminal acts of a third party. However, in

the past few years there has been some chipping away at the landlord's

immunity. 109

In Nails v. Blank, u0 the tenant was assaulted when she entered her

third floor apartment by an individual who had gained access to the
apartment building and the third floor by vandalizing a key retaining

box affixed to the outside of the building. In the tenant's suit against

the landlord for negligence, the trial court entered summary judgment

in favor of the landlord and the tenant appealed.

The landlord made an interesting argument by claiming that the
utilization of a key retaining box could not be considered negligence

because it is one of three alternative methods of access to apartment

house mail boxes required by U.S. postal regulations to be provided by

owners of apartment houses with self-closing, automatic locking street

doors. 1 " The court responded by noting that compliance with an ad-

ministrative regulation does not establish as a matter of law that due

care was exercised." 2 The regulation was adopted to provide the mail

carrier with access to the mail boxes and had nothing to do with the

safety of the tenant. Furthermore, the regulation did not require that

the receptacle provide access to any part of the building other than

where the mail boxes were located. It may not have been reasonable

107. Id. at 1115.

108. Id.

109. See Schoshinski, supra note 79, § 4.15, at 217-23. See also Center Management

Corp. v. Bowman, 526 N.E.2d 228 (Ind. Ct. App. 1988).
110. 571 N.E.2d 1321 (Ind. Ct. App. 1991).

111. Id.

112. Id. at 1323.



1394 INDIANA LAW REVIEW [Vol. 25:1375

for the landlord to leave a key in the receptacle which provided access

to other parts of the building.

Although it is the traditional common-law rule that the landlord is
under no duty to protect the tenant from criminal acts, the court noted

the following exception:

[A] duty may be imposed upon one who, by affirmative conduct
or agreement, assumes to act, even gratuitously, for another. . . .

In this case, defendant provided self-closing, self-locking steel

doors both at the street level entrance to the apartment building

and at the entrance to the third floor where plaintiff's apartment

was located. The trier of fact could reasonably infer that de-

fendant had undertaken to provide security to plaintiff against

criminal attack by a third party. 113

Since the jury could reasonably find that it was not necessary to provide

the mail carrier with access to the upper floors of the apartment building

or to leave a key in the receptacle which would allow access to all

floors, the granting of summary judgment was deemed inappropriate,
and the case was reversed and remanded. 114

IV. Mineral Estates — Strip Mining115

With technological advances in the methods of extracting minerals,

one of the more controversial issues has become the degree to which

the owner of the mineral estate may damage or destroy the surface
estate in removing the underlying minerals. 116 Often, the deed severing

the mineral estate from the surface estate is written in broad language

conveying "all minerals" or "all coal" to the grantee and waiving liability

for damage to the surface." 7 Although such deeds are generally silent

regarding the specific right to strip mine, some courts have interpreted

the broad language in the grant of the mineral estate as a waiver of

113. id.

114. Id. at 1324.

115. The term "strip mining" is used to describe any type of mining in which the

surface of the earth is removed to enable extraction of the underlying minerals.

116. See generally Donald N. Zillman & J. Russell Tyler, Jr., The Common Law
of Access and Surface Use in Mining, 1 J. Min. L. & Pol'y 267 (1985); Michael V.
Withrow, Comment, Broad-form Deed—Obstacle to Peaceful Co-existence Between Mineral
and Surface Owners, 60 Ky. L.J. 742 (1972).

117. The term "broad form deed" is often used to describe such an instrument.

Normally such a deed contains a long and detailed description of the rights granted to

the owner of the mineral estate and reserves to the grantor only such surface rights as

are consistent with the mineral rights conveyed. See Akers v. Baldwin, 736 S.W.2d 294,

298 (Ky. 1987).



1992] PROPERTY 1395

the common-law right to support of the surface" 8 and have suggested

that the conveyance of "all minerals" (or "all coal") carries with it the

right to remove all the minerals (or coal) even if the only economically

feasible way to do so results in the destruction of the surface estate." 9

Other courts, however, look at the circumstances existing at the time

of the conveyance to determine whether the parties intended to permit

surface mining. An important factor in determining the intent of the
parties is whether, at the time of the conveyance, shaft mining was the

only method used for extracting minerals in the area. 120 Finally, some

courts hold that the right to strip mine minerals should be permitted

only when the right to do so is clearly expressed in the deed. 121

The nature and extent of the right of the owner of the mineral

estate to use the surface estate in extracting the underlying coal was

raised in Consolidation Coal Co. v. Mutchman.m The action was brought
by a lessee to determine the nature and extent of the title and interests

of the owners of a number of coal estates purchased in fee simple from

Gibson County in 1943. The trial court found that except in instances

where the deeds limited the grant to specific seams or veins of coal or

where the grant conveyed all but a certain vein or seam, the deeds "were

unambiguous and were intended to convey 'all coal' regardless of the

methodology which might be employed to remove it or the depth where

the coal could be found." 123 The court also found that ownership of

"all coal" carried with it the right to remove the coal by reasonable

and necessary methods, but a factual question existed concerning the

extent of the use of the surface reasonably necessary for the removal

118. Zillman & Taylor, supra note 116, at 280-82.
119. See, e.g., Buchanan v. Watson, 290 S.W.2d 40 (Ky. Ct. App. 1956); Department

of Forest & Parks v. George's Creek Coal & Land Co., 242 A.2d 165 (Md.), cert, denied,
393 U.S. 935 (1968); Western Energy Co. v. Genie Land Co., 635 P.2d 1297 (Mont.

1981).

120. These courts interpret the deed in light of existing circumstances and conclude

that the parties only intended to allow extraction of the minerals under then accepted

mining methods. See, e.g., Smith v. Moore, 474 P. 2d 794 (Colo. 1970); Christensen v.

Chromalloy Am. Corp., 656 P. 2d 844 (Nev. 1983); Franklin v. Callicoat, 119 N.E.2d 688
(Ohio Com. PI. 1954); Stewart v. Chernicky, 266 A.2d 259 (Pa. 1970); Doochin v. Rackley,
610 S.W.2d 715 (Tenn. 1981); DuBois v. Jacobs, 551 S.W.2d 147 (Tex. 1977); Phipps v.

Leftwich, 222 S.E.2d 536 (Va. 1976); West Virginia-Pittsburgh Coal Co. v. Strong, 42

S.E.2d 46 (W. Va. 1947). Kentucky attempted to adopt this construction by statute, Ky.

Rev. Stat. § 381.930-.947 (Baldwin 1984), but the statute was struck down by the Supreme
Court of Kentucky as unconstitutional. Akers v. Baldwin, 736 S.W.2d 294 (Ky. 1987).

121. See, e.g., Franklin v. Callicoat, 119 N.E.2d 688 (Ohio Com. P. 1954); West
Va.-Pittsburgh Coal Co. v. Strong, 42 S.E.2d 46 (W. Va. 1947); Stewart v. Chernicky,

266 A.2d 259 (Pa. 1970).

122. 565 N.E.2d 1074 (Ind. Ct. App. 1990).

123. Id. at 1081.



1396 INDIANA LAW REVIEW [Vol. 25:1375

of the coal which precluded the granting of partial summary judgment

on this issue. The lessee appealed the denial of the partial summary

judgment.

On appeal, the surface owners contended that the coal deeds were
intended only to convey so much of the coal as was minable at the
time of the conveyance, i.e., by shaft mining and not by strip mining. 124

The court of appeals examined three Indiana decisions dealing with the

right of the owners of the mineral estate to use the surface 125 and reached

the following conclusion: "From this trilogy of cases, we deduce that
in Indiana the question is not so much whether the deed is ambiguous
but whether strip mining, even though not contemplated by the parties,

is reasonably necessary to effectuate the grant." 126 Although the court

found that this rationale applied to the majority of deeds involved, it

did not apply in those situations "where the grantor expressly set out

to preclude use of the surface or required immediate payment of damages

for injury to crops." 127 In such cases, "'all coal' may not have been

124. The surface owners cited decisions from Pennsylvania, West Virginia, and Ohio

for the position that strip mining is not an incident to ownership of the mineral estate.

125. Consolidation Coal, 565 N.E.2d at 1082-83. In Ingle v. Bottoms, 66 N.E. 160,

163 (Ind. 1902), the Indiana Supreme Court held that the surface owner had no right to

interfere with the construction of a railroad switch on the surface by the owner of the

mineral estate. Ownership of the coal carried with it as a necessary incident, not only

the right to penetrate the surface, but also the means and processes for mining and

removing the coal as may be reasonably necessary including the construction of roads

and railroad tracks.

In Drake v. Durreger, 11 N.E.2d 88 (Ind. Ct. App. 1937), the surface owners brought

suit to prevent the coal owners from stripping the dirt above the coal, claiming that the

coal could be removed by shaft mines and that the surface was best suited for agriculture.

The Drake court, citing Ingle, held that the existence of a right to surface mine was a

question of fact, i.e., whether the method used was unreasonable and unnecessary.

In Creasey v. Pyramid Coal Corp., 61 N.E.2d 477 (Ind. Ct. App. 1945), the coal

owners constructed an electric transmission line on the surface even though the grant did

not expressly include the right to erect a transmission line and even though the use of

electricity to operate mining equipment was unknown at the time of the grant. The court

found that the grant was so broad that it was clear the grantors intended to give the

grantees the right to make whatever use of the surface as was reasonably necessary in

removing the coal from beneath the land. It should be noted that both Ingle and Creasey

involve the right to use the surface incident to shaft mining of coal and do not involve

the right to strip mine coal. Although Drake does involve the removal of a portion of

the surface to reach the coal, the court refers to the dig as "a 'drift' shaft into the

hillside to reach a rider vein." Drake, 11 N.E.2d at 90. Furthermore, in the reservation

of the mineral estate in Drake the grantor expressly reserved "the right to dig, mine, and

remove said coal and minerals . . . without liability for caving in or subsidence of the

surface incident to mining and removing the coal." Id.

126. Consolidation Coal, 565 N.E.2d at 1083.

127. Id. There were 116 deeds involved which the court grouped into five sets



1992] PROPERTY 1397

intended to include the coal removable only by destroying the surface,"

and extrinsic evidence may be introduced to aid in construction. 128 How-
ever, with regard to the unambiguous deeds, the trial court should have

entered partial summary judgment in favor of the lessee. 129

This decision appears to recognize that when "all coal" is conveyed
by a mineral deed which does not contain language limiting the use of

the surface, strip mining is permitted if this method of mining is rea-

sonably necessary to remove the minerals.

V. Vendor and Purchaser

A. Inquiry Notice

If an interest in land is not properly recorded, a subsequent purchaser

will take the property free and clear of the unrecorded interest provided

he is a bona fide purchaser "in good faith and for a valuable consid-
eration, having his deed, mortgage or lease first recorded." 130 In order

to qualify as a bona fide purchaser, the subsequent grantee must be
without actual or constructive notice of the unrecorded interest at the

time of the purchase. In Indiana, inquiry notice is a type of actual

notice which occurs when the purchaser has information which would
lead a reasonable person to make an inquiry. The purchaser will be
charged with actual knowledge of all interests or claims which the inquiry

would have disclosed. 131 Inquiry notice issues were raised in two cases

decided during this survey period.

In Guthrie v. National Advertising Co., 132 Guthrie purchased land

subject to an unrecorded ground lease. At the time of the sale, Guthrie
was informed by the auctioneer and the seller that there was an advertising

according to the language of the grant. The court indicated that the deeds varied greatly:

Some simply granted "all coal" underlying the estate, with and without the
provision "grantee not liable for damages to the surface," while others contain

rights to use the surface within limits, as may be necessary for shafts, "granting
all such rights as may be necessary for the best operation of the coal mines,"
without liability for subsistence of the surface. Some contain options to purchase
surface; others require payment for the use of the surface taken. Two sets
appear to severely limit surface use [by denying any surface rights or requiring

the accommodation of farming or payment of damages for destruction of crops].

Id. at 1082.

128. Id. at 1083.

129. Id. at 1086.

130. Ind. Code § 32-1-2-16 (1988).
131. White v. Foster, 77 Ind. 65 (1881); Willard v. Bringolf, 5 N.E.2d 315 (Ind.

Ct. App. 1936) (holding that actual notice embraces all degrees and grades of evidence
from the most direct and positive proof to the slightest circumstances from which a court

or jury would be justified in inferring notice).

132. 556 N.E.2d 337 (Ind. Ct. App. 1990).



1398 INDIANA LAW REVIEW [Vol. 25:1375

sign on the land, although he may not have been aware of the name
of the lessee. Later, at the closing, Guthrie was informed by the seller

and his attorney that National Advertising owned and maintained the
advertising sign on the property. Furthermore, Guthrie had the oppor-

tunity to inspect the sign, and if he had done so, he would have seen

the National 3M logo displayed on both sides. The trial court found
that Guthrie had knowledge of facts which should have led a reasonable

person to inquire about the lease. Guthrie appealed the finding that he

had actual notice of the lease.

In Indiana, an unrecorded lease for more than three years is not
valid against a subsequent purchaser of the land "other than the grantor,

his heirs and devisees, and persons having notice thereof."™ The court

observed that had the lease been recorded, the recording would have

been constructive notice of its existence, but when the lease is not
recorded, subsequent purchasers will be bound only if it is proven that

they had actual notice of its existence. 134 Thus the court turned to the

doctrine of inquiry notice: "A purchaser who has notice of facts making
it incumbent upon him to make inquiry is bound by all the knowledge
that a reasonable inquiry would have imparted and actual notice may
be implied therefrom."™ The court of appeals concluded that the trial

court's determination that Guthrie had actual notice of facts sufficient

to put a reasonable person on inquiry was supported by the facts and

affirmed the judgment. 136

In Lamb v. Lamb™ Vera Lamb conveyed a one-ninth undivided
interest in a twenty acre tract of land to her eight children and a

daughter-in-law, retaining a life interest in the property. Subsequently,

eight of the grantees conveyed their interests to Johnny Lamb as trustee.
Johnny was to either reconvey or sell the property and distribute the

proceeds to the grantees upon Vera's death. At Vera's death, her son,

Francis Lamb, and the Lovealls both expressed an interest in purchasing

the entire twenty acre tract. Johnny entered into a contract to sell Francis

an undivided eight-ninths interest. Soon thereafter, with Francis's consent,

Johnny conveyed two and one-half acres to the Lovealls. The Lovealls

were not told of the contract for sale between Johnny and Francis.

When Francis approached Johnny about completing the contract,
Johnny, who was ill and operating under the belief that he needed the
consent of the other grantees to convey the land, advised Francis to

133. Ind. Code § 32-1-2-11 (1988) (emphasis added).

134. Guthrie, 565 N.E.2d at 338.

135. Id. (emphasis added).

136. Id. at 339.

137. 569 N.E.2d 992 (Ind. Ct. App. 1991).



1992] PROPERTY 1399

meet with the other family members and pay each their share. Francis

contacted the other family members and all but two accepted payment.
Johnny then gave Francis a warranty deed for the eleven and one-half

acres he had purchased. In the meantime, the Lovealls obtained the

consent of the other two grantees to purchase their interests, and Johnny

gave the Lovealls a warranty deed to six acres. Francis, having learned

of the sale to the Lovealls, brought this action for specific performance

of the contract. The case turned on whether the Lovealls had notice of
the contract of sale with Francis at the time they purchased the additional

six acres. Francis argued that even though the Lovealls did not have

express notice of the contract between Francis and Johnny, the Lovealls

had implied notice:

[A]ctual notice has been divided into two classes, (1) express

and (2) implied, which is inferred from the fact that the person

charged had means of knowledge which he did not use. Whatever

fairly puts a person on inquiry is sufficient notice, where the

means of knowledge are at hand; and if he omits to inquire,

he is then chargeable with all the facts which, by a proper

inquiry, he might have ascertained. This in effect, means that

notice of facts which would lead an ordinarily prudent man to
make an examination, which, if made, would disclose the ex-
istence of other facts is sufficient notice of such other facts. 138

Francis claimed that the Lovealls were put on notice when they saw
him cutting brush on the six acres which they subsequently purchased
and when they subsequently discovered that Francis had purchased the
remaining eleven and one-half acres. The court disagreed. At the time
the Lovealls observed Francis cutting the brush, he owned an undivided
interest in the property. This action was not so unusual as to require

the Lovealls to inquire further. Likewise, the court held that the Lovealls

did not have implied notice when they became aware that Francis had
approached other family members and that he had acquired eleven and
one-half acres from them. 139 Instead, in the court's view, such actions

were an indication that no contract existed between Francis and Johnny.

Thus, the Lovealls were bona fide purchasers with no notice of Francis's
interest.

140

B. Equitable Conversion

Once the parties have entered into a valid contract for the sale of
real property, equity treats the purchaser as the owner of the real estate.

138. Id. at 994 (citing Mishawaka St. Joseph Loan & Trust Co. v. Neu, 196 N.E.
85, 89-90 (Ind. 1935)).

139. Id.

140. Id. at 994-95.



1400 INDIANA LAW REVIEW [Vol. 25:1375

The seller is viewed as holding "bare" legal title as security for the
payment of the purchase price. In many states, including Indiana, a
judgment creditor can obtain a lien on the judgment debtor's real property

by entering and indexing the judgment in the judgment docket in the

county where the land is located. 141 If the judgment debtor has already

sold the real property under a land contract, a question arises as to

whether under the doctrine of equitable conversion there is any interest

in the real estate for the lien to attach. Clearly the judgment creditor

can obtain a garnishment order requiring the purchaser to pay the unpaid

purchase price to the judgment creditor, but once the purchaser has

paid the full purchase price to the seller without the judgment creditor

asserting his rights, does the purchaser take the land free and clear of

the judgment lien?

The right of the judgment creditor of a contract vendor to a lien
on the real property after the full purchase price has been paid by the
purchaser was raised in Cook v. City of Indianapolis.™1 Clyde Realty
sold real estate to Cosby under a land contract. On June 9, 1977, Blakley
obtained a judgment in the amount of $4,063.75 against Clyde Realty
which was recorded in the judgment docket. At the time the judgment

was recorded and indexed, Cosby still owed $5,190.53. Cosby made his
final payment to Clyde in July 1977. By a series of conveyances, Cook
became the owner of the real estate. In a condemnation action by the

City of Indianapolis to acquire title to Cook's property, Blakley inter-

vened and was awarded $10,783.68 of the condemnation proceeds to

satisfy his judgment. Blakley had renewed the judgment against Clyde

in 1987, naming Cook as garnishee-defendant. One of the issues raised
on appeal was whether the trial court erred in awarding part of the
proceeds to Blakley.

In reversing the trial court on this issue, the court of appeals held

that under a land contract, title vests in the purchaser at the time the

contract is consummated. 143 The majority cited Rural Acceptance Corp.

v. Pierce*
44 for the position that the vendee's equitable interest is superior

to the judgment lien, and the judgment creditor could not reach the

property "other than by asserting the vendor's remaining rights." In

Rural, the court ordered the vendee to pay the balance of the contract

to the judgment creditor, but in this case the creditor never asserted its

rights to the balance due under the contract; therefore, Cosby took the

property free of the lien upon payment of the balance of the contract

141. See, e.g., Ind. Code § 34-1-45-2 (1988).
142. 559 N.E.2d 1201 (Ind. Ct. App. 1990).

143. Id. at 1203.

144. 298 N.E.2d 499 (Ind. Ct. App. 1973).



1992] PROPERTY 1401

to Clyde. 145 Blakley argued that he was not aware of the land contract

and thus had no opportunity to assert his rights, but the court held

that the purchaser's possession under the contract was notice to the

world of his claim of ownership. 146

In a dissenting opinion, Judge Sullivan interpreted Rural differently:

"I read [Rural] to hold that liens against real estate are valid against

a contract purchaser to the extent of the unpaid contract balance at the

time the lien attaches." 147 Thus, Judge Sullivan would have awarded

Blakley the amount of the unpaid purchase price at the time of the
recording of the judgment lien. It should be noted that in Rural, the

judgment creditor brought a garnishment proceeding to obtain the unpaid

purchase price. The case does not indicate that a lien attached to the

unpaid proceeds. If the court were to attach a lien on the property in

the amount of the unpaid proceeds, the purchaser would be required

to search the public records each time he made a payment on the contract
to the seller or else run the risk of being forced to pay twice. Since

the purchaser acquired his interest before the judgment lien, it can be

argued that the subsequent recording of the judgment lien is not notice

to the prior purchaser. 148 Furthermore, it can be argued that under the

doctrine of equitable conversion there is no longer a real property interest

in the debtor/vendor for the judgment lien to attach. 149

C. Boundary Overlap in Deeds: Liability of Title Insurer

In Downing v. Eubanks, 150 Mary Spickler conveyed a five acre tract
of land (Tract I) to Lentz who reconveyed it back to Mary the same
day. Mary then conveyed Tract I in July 1984 to Jerry and Anna Spickler
who reconveyed the land to Mary in October 1984. In September 1985,
the guardian of Mary's estate conveyed Tract I to the Downings who
recorded the deed. The Downings purchased title insurance from the
Ticor Title Insurance Company of California.

In August 1977, Mary conveyed a fifteen acre tract (Tract II) abutting
Tract I. Subsequently, a 7.02 acre portion of Tract II was purchased

by the Russells from the Eubanks under a land contract. A survey by
the Russells revealed that their property overlapped Tract I in a strip

100 feet wide and 617.5 feet long. The Russells and the Eubanks then

145. Id. at 502.

146. Id. at 503.

147. Cook v. City of Indpls., 559 N.E.2d 1201, 1205 (Ind. Ct. App. 1990) (Sullivan,
J., dissenting).

148. See Cunningham, supra note 32, § 11.10, at 795.
149. See R. Bruce Townsend, Secured Transactions and Creditors' Rights, 8 Ind.

L. Rev. 234, 260-61 (1974).

150. 557 N.E.2d 1027 (Ind. Ct. App. 1990).



1402 INDIANA LAW REVIEW [Vol. 25:1375

brought this action to quiet title to the disputed strip, and the Downings

filed a third party complaint against their title insurer. The trial court
granted summary judgment to Ticor and following a trial, entered judg-
ment in favor of the Eubanks and the Russells.

On appeal, the Downings argued that they were bona fide purchasers
of Tract I because the conveyance of Tract II was outside their chain

of title, citing Szakaly v. Smith. 1Si The court found the Downings'

reliance on Szakaly to be misplaced. Szakaly does hold that a grantee

cannot be charged with constructive notice of conveyances outside the

chain of title; 152 however, because of the reconveyance of Tract I to

Mary in 1971, Mary was the owner of both Tract I and Tract II at
the time she conveyed Tract II in 1977. Because Mary owned the entire
undivided 53.33 acre parcel "when Downing purchased Tract I, the
history of Tract I's reincorporation into the parent tract was a matter

of record. While remote grantees are not required to search all con-

veyances from a common grantor, they are required to search those
which fall within their chain of title." 153

With regard to the action against the title insurer, the court noted

that the standard preprinted industry-wide form of the American Land
Title Association contains a specific exclusion for overlapping boundaries:

"(2) Encroachments, overlaps, boundary line disputes, and any other

matters which would be disclosed by an accurate survey and inspection

of the premises." 154 Because no survey was conducted the overlap was

not covered. 155

VI. Water Law

A. Surface Water: The Common Enemy Rule

At common law surface water was viewed as a common enemy and
each landowner was free to "deal with it in such manner as best suits

his own convenience." 156 The landowner's right to occupy and improve
his property was not restricted by the fact that the changes might cause

surface water to accumulate or stand on a neighbor's land or pass onto

151. 544 N.E.2d 490 (Ind. 1989)

152. Id. at 492.

153. Downing, 557 N.E.2d at 1029.

154. Id. at 1030.

155. Id. In dicta the court stated that had a survey been conducted which failed

to discover the overlap, then it would have been covered by the policy: "An accurate
survey of Tract I would have resulted in the overlap being covered by the policy." Id.

156. Argyelan v. Haviland, 435 N.E.2d 973, 975 (Ind. 1982).



1992] PROPERTY 1403

or over it, and he was not liable for any injury caused by his actions. 157

In 1981, the Third District Court of Appeals in Rounds v. Hoelscher15 *

rejected the common enemy rule in favor of a "reasonable use" test.
Earlier the same year, the Second District Court of Appeals in Argyelan

v. Haviland, 159 applied the common enemy rule in a surface water case.
The Indiana Supreme Court granted transfer to settle the conflict between

the two districts and reaffirmed Indiana's adherence to the common
enemy rule. 160

During this survey period, the court of appeals was once again

invited to reject the common enemy rule, but declined. In Pickett v.
Brown, 161 the Picketts sued the adjoining landowners (the Browns) for

damages caused by water and mud flowing from the Browns' property
after the Browns constructed a new home on their lot. The trial court
granted a judgment at the end of the Picketts' evidence based on the

common enemy rule. The Picketts argued that they came within the
exception recognized by the supreme court in Argyelan that "Indiana

doubtlessly would not permit a malicious or wanton employment of

one's drainage rights." 162 The court, however, found no evidence to

support the Picketts' claim that the Browns maliciously channeled or

accumulated the water and then cast it upon the Picketts' land. Finally,

the Picketts asked the court to abandon the common enemy rule and
adopt the reasonable use rule, but the court declined to advocate again

the adoption of the reasonable use rule as it had done previously in

Rounds: "[0]ur supreme court promptly pinned our ears back and

reasserted the common-enemy doctrine as the law in Indiana in Ar-
gyelan. . . . Therefore, as we have experience in this area, we respectfully
decline the Picketts' invitation to reverse supreme court precedent." 163

. B. Riparian Rights

In Watson v. Thibodeau, 164 the question was raised as to whether

riparian rights can be withheld by the grantor of land which abuts the

shore of a lake. When the Indianapolis Water Company, who owned
the water and land beneath Morse Reservoir, sold abutting land to
Shorewood Corporation, covenants and deed restrictions provided that

157. Id. at 977. Argyelan did recognize one exception: "[OJne may not collect or
concentrate surface water and cast it, in a body upon his neighbor." Id. at 976.

158. 428 N.E.2d 1308 (Ind. Ct. App. 1981).

159. 418 N.E.2d 569 (Ind. Ct. App. 1981), vacated, 435 N.E.2d 973 (Ind. 1982).

160. Argyelan v. Haviland, 435 N.E.2d 973 (Ind. 1982).

161. 569 N.E.2d 706 (Ind. Ct. App. 1991).

162. Argyelan, 435 N.E.2d at 976.

163. Pickett, 569 N.E.2d at 709.

164. 559 N.E.2d 1205 (Ind. Ct. App. 1990).



1404 INDIANA LAW REVIEW [Vol. 25:1375

the owners of subdivision lots abutting the reservoir would have no

riparian rights.

In a dispute between two neighboring property owners, the Watsons

and the Thibodeaus, the court found that the Watsons' sailboat lift

cradle, placed within the boundaries of their extended property line,

created a nuisance. 165 The Watsons argued that the Indiana Constitution
and statutes granted them riparian rights as abutting landowners despite
the terms of the purchase. In rejecting this claim, the court concluded

that nothing in the Indiana Constitution or statutes prevents a grantor

from withholding riparian rights. Title in Shorewood extended only to
the shoreline of Morse Reservoir and Watson could acquire no riparian

or littoral rights from Shorewood. In concluding that riparian rights

could be withheld, the court also indicated that they could not only be

retained by the grantor but that they could be transferred to a third

party:

[W]hile riparian rights may be transferred by grant and are
generally transferred without special mention in the conveyance,

they may be specially reserved to the grantor. Riparian rights
may be separated from the ownership of the land to which they
are appurtenant, either by grant of such rights to another, or

by a reservation thereof in the conveyance of the land, as did

Indianapolis Water Company here. 166

This language appears inconsistent with the views expressed by the

Indiana Supreme Court in Klotz v. Horn. 161 In Klotz, the court held

that if the parties intended, the dominant tenant of an access easement

to a lake could use the riparian rights of the abutting landowner. 168 The

issue was not whether riparian rights attached to the dominant estate

which did not abut the lake, but whether the dominant tenant could

use the riparian rights of the servient estate. In framing the issue in

this manner, the court noted that at least one court has held that riparian

rights cannot be conveyed to owners of land not abutting the lake or

stream "since riparian rights accrue only to land immediately upon a

lake and not to any other land." 169 The language in Watson suggests

that riparian rights may be reserved by the grantor or conveyed to a
third person separate from the abutting property, thus potentially creating

riparian rights in non-abutting property or even in gross.

165. Id. at 1209.

166. Id. at 1208 (emphasis added).

167. 558 N.E.2d 1096 (Ind. 1990).

168. Id. at 1097-98

169. Id. at 1098 (citing Schofield v. Dingman, 247 N.W. 67 (Mich. 1933)).