Annual Survey of Massachusetts Law

Volume 1964 Article 6

1-1-1964 Chapter 3: Property and Conveyancing William Schwartz

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Recommended Citation Schwartz, William (1964) "Chapter 3: Property and Conveyancing," Annual Survey of Massachusetts aL w: Vol. 1964, Article 6. Schwartz: Chapter 3: Property and Conveyancing

CHAPTER 3 Property and Conveyancing WILLIAM SCHWARTZ

§3.1. Federal taxation of real estate: The Revenue Act of 1964. Real estate plays a key role in our national economy because more than 60 percent of the total national wealth is represented by land resources and improvements.1 As a result, real estate has become an attractive and durable investment vehicle. To a considerable extent, the Federal Government, through its tax policies, has increased the financial opportunities afforded by real estate.2 In the 1964 SURVEY year there were a number of interesting developments pertaining to real estate taxation. The Internal Revenue Code grants the owner of real property used in a trade or business or held for the production of income an annual allowance for depreciation.s The availability of this deduc­ tion enables the real estate owner to amortize his mortgage indebted­ ness at the expense of the Federal Government. In addition, the realty owner can convert ordinary income into capital gain by utiliz­ ing a method of accelerated depreciation.' By deducting greater amounts annually (through accelerated depreciation), the realty owner reduces the amount of his ordinary income. Although the depreciation deduction reduces his basis and results in a greater capital gain upon a subsequent sale, this would appear to be. a small enough price to pay for the larger depreciation deductions taken in prior years against ordinary income.1I The Revenue Act of 1964 closes this loophole with respect to depreciable property held for less than ten years.4I If there is a sale, exchange, or other disposition of depreciable realty (called "Section 1250 property") held for less than ten years, a per­ centage of the gain resulting from the taking of additional deprecia­ tion is treated as ordinary income. One of the interesting problems posed in the area of depreciation is the question of who is entitled to the depreciation deduction. The

WILLIAM SCHWARTZ is Professor of Law at Boston University Law School. He is the author of Future Interests and Estate Planning (1965).

§5.l. 1 Benson. North. &: Ring. Real Estate Principles and Practices 16 (4th ed. 1954). 2 Casey and Lasser. Tax Sheltered Investments 80 (1951). S Int. Rev. Code of 1954. §167(a). 'Anderson. Tax Planning of Real Estate 47 (1957). lId. at 48. 41 Revenue Act of 1964, §251. adding Int. Rev. Code of 1954. §1250.

Published by Digital Commons @ Boston College Law School, 1964 1 Annual Survey of Massachusetts Law, Vol. 1964 [1964], Art. 6

§3.1 PROPERTY AND CONVEYANCING 23 problem appears to be particularly poignant when there is a landlord­ tenant relationship and the landlord has contributed money for the acq~isition of improvements. Generally speaking, a contributor or credItor who transfers money to another for the acquisition of prop­ erty does not have a depreciable interest unless the contribution or loan was made on such terms as to give it an investment status in the property.7 Thus, in Commissioner of Internal Revenue v. Revere Land Co.,s a lessor which had contributed more than a million dollars to the cost of a building erected by its lessee was denied a depreciation allowance. The lessor was to receive by way of rental an annual fixed return of 6 percent of an amount equal to the cost of the land plus the contribution. This problem recurred in the recent case of Buzzell v. United States.9 In Buzzell, the lessor and lessee agreed that the lessee should erect an eleven story building, and that to accomplish that end the lessor would lend the lessee the necessary funds, which the lessee would repay at defined times. It was further agreed that the lessee could surrender the premises and be discharged from liability under the lease at any time after the building had been completed, provided he had been (until that time) in "full performance of all his convenants and agreements under said lease." At a time when the tenant was in default, a question arose as to whether the lessor or lessee had a depreciable interest. The court held that the tenant, and not the landlord, was entitled to the depreciation allowance. Since he was in default, the tenant could not surrender the premises and be discharged from liability. Hence, the tenant remained a debtor, and as such the "investor" in the building. The Revenue Act of 1964 has opened up a new vista in the real estate field.10 An individual who is sixty-five years or older may .exclude from his gross income any capital gain attributable to the first $20,000 of the sale price of his personal residence, provided it has been owned and used by the taxpayer as his principal residence for at least five years during the eight-year period preceding the sale. This exclusion may induce older homeowners to sell their present residences which are now too large for their needs. If they are then interested in acquiring housing that combines apartment living with many of the advantages of individual home ownership, they may ac­ quire an interest in a condominium.11 Furthermore, by re-investing the proceeds of the sale of the old residence in a condominium unit, the tax bite is further soothed by the fact that gain will be recognized only to the extent that the taxpayer's adjusted sales price exceeds the cost of purchasing the condominium unit.12

7 Mertens, Law of Federal Income Taxation §23.06 (1960). 8169 F.2d 469 (3rd Cir. 1948), cert. denied, 335 U.S. 853 (1948). 9326 F.2d 825 (1st Cir. 1964). 10 Revenue Act of 1964, §206, adding Int. Rev. Code of 1954, §121. 11 See 1965 Ann. Surv. Mass. Law §1.5. 12 Int. Rev. Code of 1954, §1034.

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24 1964 ANNUAL SURVEY OF MASSACHUSETTS LAW §3.2 The Revenue Act of 1964 has an important impact on other phases of real estate planning and counseling. The use of multiple corpo­ rations to own realty (as well as other assets) is discouraged.1s In addition, rental income may be personal holding company income even when it represents 50 percent or more of adjusted gross income, if other personal holding company income represents more than 10 percent of the company's ordinary gross income.14 §3.2. Percentage leases: Implied covenant to continue operations. The percentage lease has manifold advantages.l Its obvious and most fundamental purpose is to gear the landlord's return, and conversely the tenant's rent, to the productivity of the leased premises.2 In order to attain these ends adequately, it is imperative that the lease be prudently drafted.s In Stop 6- Shop, Inc. v. Ganem,4 decided during the 1964 SURVEY year, the Supreme Judicial Court was concerned with a percentage lease that failed to deal explicitly with the question of whether the lessee had an obligation to continue operations. The question posed for the Court's consideration was whether there was an implied covenant to continue operations. In concluding that there was no such implied covenant, the Court relied upon the fact that there was an apparently substantial minimum rent provided for and an absence of a showing of disparity between the fixed rent and the fair rental value. IS The Court further held that the burden of showing a dis­ parity between fixed rent and fair rental value was on the lessor.6 The approach adopted by the Court parallels that followed else­ where. Thus, when no guaranteed minimum rental is provided for in the lease, the courts have generally found an obligation on the part of the tenant to occupy and use the leased premises.7 A similar result has been reached when the guaranteed minimum rental was inadequate to meet the landlord's overhead costs.s Conversely, the existence of an implied covenant to continue operations has been denied when the guaranteed D,linimum was obviously more than was

IS Revenue Act of 1964, §235, adding Int. Rev. Code of 1954, §§1561-1563. 14 Revenue Act of 1964, §225(d), amending Int. Rev. Code of 1954, §543(a) and (b).

§3.2. 1 McMichael & O'Keefe, Leases, Percentage, Short and Long Term 36 (5th ed. 1959). 2 Note, 44 Com. L.Q. 251, 254 (1959). S See Landis, Problems in Drafting Percentage Leases, 36 B.V.L. Rev. 190 (1956); Van Doren, Some Suggestions for the Drafting of Long Term and Percentage Leases, 51 Co1um. L. Rev. 186 (1951); Note, 61 Harv. L. Rev. 317 (1948); Annota­ tion, 38 A.L.R.2d 1113 (1954). 41964 Mass. Adv. Sh. 1049, 200 N.E.2d 248. IS Id. at 1052, 200 N.E.2d at 251. 6 Ibid. 7 See Note, 44 Com. L.Q. 251, 256 (1959). See also cases cited in 1 American Law of Property §3.66, nn.9-11 (Casner ed. 1952); Schwartz, Lease Drafting in Massachusetts §6.11, n.5 (1961). 8 Schwartz, supra note 7.

Published by Digital Commons @ Boston College Law School, 1964 3 Annual Survey of Massachusetts Law, Vol. 1964 [1964], Art. 6

§3.3 PROPERTY AND CONVEYANCING 25 required to pay the fixed charges.9 This method of handling the problem is consistent with the function that the parties intended the guaranteed minimum to serve.10 In the case being reviewed, the minimum rent in the lease appeared to be substantial in comparison to the lessor's fixed charges. The minimum rent was $22,000, and the lease fixed as a base real estate tax figure the 1946 tax of $3744.90.11 It is unfortunate, however, that the Court did not come to grips with certain arguments in favor of implying a duty on the lessee's part to occupy and use the premises, arguments that are applicable even in the absence of a percentage lease.12 Damages for waste may not provide an adequate remedy, and allowing premises to remain vacant has an adverse effect upon rental value. Non-occupancy could constitute an added hazard under a fire insurance policy, resulting in an increase in the premiums or avoidance of the policy. In addition, there is a question of a public policy in favor of promoting the use of property. Nevertheless, considering the facts of the case and the fact that the lessor could have protected himself by insisting upon inserting in the lease a term requiring the tenant to use the premises,18 the result reached appears to be sound. The Ganem opinion does leave a number of areas uncharted. Thus the Court assumes, without deciding, that the landlord's interest could be protected against certain acts of the tenant, such as discontinuance of operations for spite or to inflict harm,14 and that had the lessee opened a competing store in the same location, there might be a basis for requiring the lessee to regard the lessor's interest under the per­ centage rent provision in its conduct of the two stores.15 It would, of course, be wise to deal explicitly with these problems in the lease. §3.3. Tenancy at sufferance: Creation by termination of an exist­ ing tenancy upon a taking. In Lowell Housing Authority v. Save­ Mor Furniture Stores, Inc.,1 the novel question of the impact of a taking by eminent domain upon a tenancy was presented for the Supreme Judicial Court's determination. The Court held that the taking of the fee automatically terminated the tenancy and that simultaneously with the taking, the lessee became a tenant at suf­ ferance of the governmental authority exercising the power of eminent domain. Although the transfer of title from the lessor to the author­ ity was not voluntuy, but rather in the exercise of the power of con­ demnation, the requisite privity of estate between the lessor and the

9 Ibid. 10 See Note, 44 Com. L.Q. 251, 255 (1959). 11 1964 Mass. Adv. Sh. 1049, 1054,200 N.E.2d 248, 252. 12 See 1 American Law of Property §1!.41 (Casner ed. 1952). 13 See Lincoln Tower COIp. v. Richter's Jewelry Co., 152 Fla. 542, 12 So.2d 452 (19411). 14 1964 Mass. Adv. Sh. 1049, 1055, 200 N.E.2d 248, 254. 151d. at 1056, 200 N.E.2d at 254.

§11.11. 11146 Mass. 426, 1911 N.E.2d 585 (19611).

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26 1964 ANNUAL SURVEY OF MASSACHUSEITS LAW §3.4 authority was deemed to be established so that the lessee became a tenant at sufferance of the authority. Being a tenant at sufferance, the lessee was held liable to the authority for use and occupancy.2 As a prerequisite to the recovery of rent, the Court has consistently imposed the condition that the tenant at sufferance be notified of the termination of his prior tenancy.8 Although notice must be actual, no formal method of communication is required.4 The requirement of notice, or awareness on the part of the tenant of a change in owner­ ship, was deemed to have been satisfied in Save-Mor since there was an identity of ownership and management of the lessor and the lessee. With respect to damages, the Court correctly held that uncertainty of occupancy was a legitimate factor in determining fair rental value. Although the rent fixed in the lease is evidence of fair value,1I it should not be binding. "The prospect of a going concern being re­ quired to vacate on short notice is one of several factors which prop­ erly could be considered by the judge as tending to diminish the rental provided in the lease ...."6 In our era of road building and construction, the power of eminent domain is being exercised with greater frequency. A taking by eminent domain may give rise to numerous other problems, such as the disposition of the award between the landlord and the tenant.7 Therefore, the effect of a taking by eminent domain upon the rights of the lessor and lessee should be carefully considered by the drafts­ man.8 §3.4. Double descriptions. General or blanket descriptions in deeds are litigation breeders. The problems created are not too acute when the sole description of the land is an indefinite one, such as a reference to the land conveyed simply as being all of the lands of the grantor in a described district. Although in poor form, such a de­ scription is generally held sufficient to pass title to lands shown by the records to be encompassed by it.1 Greater difficulty is encountered when there is a detailed, specific description that is followed by a general description. This creates a double description and necessi­ tates a determination as to which controls. The general rule appears to be as follows: " ... if one of the de­ scriptions be exact and certain and the other be uncertain, the more certain will control."2 The leading case in Massachusetts adopting

2 G.L., c. 186, §5. 8 See Note, 44 B.U.L. Rev. 215,226-227 (1964). 4 Ibid. II Schwartz, Lease Drafting in Massachusetts §6.1, n.10 (1961). 6546 Mass. 426, 451, 195 N.E.2d 585, 588 (1965). '7 See 1 American Law of Property §5.54 (Casner ed. 1952). 8 See id. §5.55; Schwartz, Lease Drafting in Massachusetts §7.8 (1961); Note, 44 B.U.L. Rev. 215, 225 (1964).

§U. 1 Patton, Titles §125 (2d ed. 1957). 2 Partridge, Deeds, Mortgages and Easements 94 (Sd 00. 1947). See also Patton, Titles §158 (2d ed. 1957).

Published by Digital Commons @ Boston College Law School, 1964 5 Annual Survey of Massachusetts Law, Vol. 1964 [1964], Art. 6

§3.5 PROPERTY AND CONVEYANCING 27 this approach is Crabtree v. Dawson.8 There a lease of a hotel de­ scribed the premises as "buildings numbered 625 to 6S1 inclusive on Washington Street, Boston, Mass., together with the basement under said premises ... meaning thereby all real estate I now own on Wash­ ington Street excepting the building known as the Park Theatre." The lessor also owned a passageway leading from Washington Street. It was held that the lease included only the building on Washington Street, and that the lessee could not prevent the lessor from using the passageway in conjunction with the theatre. "The general rule is that where real property is described by a particular and definite description, the addition of an inconsistent general description does not enlarge the grant."4 The Supreme Judicial Court adhered to this general rule during the 1964 SURVEY year in W. M. Gullicksen Manufacturing Co. v. MacNeiU' In this case, the deed described the land conveyed by specific reference to three parcels shown on a plan, and the deed also referred to the cumulative area being conveyed. The total area given in the deed was the sum of the areas of the three parcels shown on the plan. The plan did not embrace the lots in dispute (which were also in the town of Wellesley). The deed contained an omnibus clause wherein the grantor stated that the land was "all of the real estate belonging to the said Robert Bishop in the said Town of Wellesley." It was held that the deed did not transfer title to lots not specifically described in the deed. §3.5. Affirmative covenants running with the land. Generally speaking, courts are more prone to permit the running of the benefit of a covenant with the land than they are to sanction the running of the burden of a covenant with the land.1 The reluctance of the courts to authorize the running of the burden has been especially strong where affirmative covenants are concerned.2 A number of rationales have been offered for denying the running of affirmative duties.8 It has been suggested that it is anomalous to enforce a promise against one not a party to the contract creating the duty.4 It has also been contended that an affirmative duty unlimited in duration offends the policy against perpetuities.1I Furthermore, it is feared that the enforcement of such interests will result in a reduced alienability of the encumbered land.6 In addition, the possibility

8194 Mass. 123,80 N.E. 225 (1907). 41d. at 126, 80 N.E. at 226·227. II 1964 Mass. Adv. Sh. 901, 199 N.E.2d 195.

§3.5. 1 2 American Law of Property §9.14 (Casner ed. 1952); Annotation, 68 A.L.R.2d 1022, 1024 (1959). 22 American Law of Property §9.16 (Casner ed. 1952). 8 See Note, 35 N.Y.U.L. Rev. 1344, 1360 (1960). 4 Rundell, Judge Clark on the American Law Institute's Law of Real Covenants: A Comment, 53 Yale L.J. 312, 325 (1944). II See Note, 35 N.Y.U.L. Rev. 1344, 1360, n.120 (1960). 6 Ibid.

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28 1964 ANNUAL SURVEY OF MASSACHUSE'ITS LAW §3.6 (that such an understanding may subject the promisor to obligations \t?at exceed the value of the land involved, coupled with the tradi- tional hesitancy of equity courts to issue mandatory injunctions, also xPlains the severity with which affirmative covenants have been dealt.7 It is refreshing to report that Massachusetts, in the 1964 ~SURVEY year, has held that the burden of an affirmative covenant may run with the land. In Boston and Maine R.R. v. Construction Machinery Corp.,s the railroad had conveyed a parcel adjoining its right of way to X. In the deed, X agreed to remove snow and ice from the railroad's ramps and platforms and to light them. X sold the parcel to Y, and the railroad sought to compel Y to perform these undertakings. The Court held that the covenants touched and concerned both parcels of land and affirmed a decree granting specific enforcement. The Court noted that the presence of the ramps and platforms and their proximity to Y's parcel added value to Y's land. "[M]ercantile tenants of buildings upon parcel 1 [Y's land] might gain advantage from accessibility to the railroad and from the convenience with which railroad patrons could reach parcel I from the platforms and ramps."Q §3.6. Title registration. The Supreme Judicial Court has in the past displayed considerable ambivalence with respect to the scope and extent of the search and investigation expected of purchasers of property. Thus, in Ayer v. Philadelphia and Boston Face Brick CO.,1 the Court required the title examiner to check the grantor index for even the period of time prior to the date upon which the record discloses the grantor acquired title. Yet, in Morse v. Curtis,2 the Court adopted the sympathetic and realistic attitude that the title examiner need not extend his search in the grantor index beyond the date when the record shows a transfer out of the grantor. In Butler v. Haley Greystone Corp.,s decided this SURVEY year, we have a some­ what anomalous situation in that these inconsistent philosophies find expression in different aspects of a single case. One of the issues involved in Butler was whether the material con­ tained in a petition for title registration formed a part of the registra­ tion decree, so as to. be binding upon subsequent purchasers. In holding that a registration decree is to be a reasonably self-contained document and that the petition does not constitute part of such a decree, the Court appears to have adopted the sympathetic attitude displayed in Morse v. Curtis. An inconsistent philosophical attitude is displayed, however, with

7 Annotation, 68 A.L.R.2d 1022, 1024, n.15 (1959). S 346 Mass 513, 194 N.E.2d 395 (1963). Q Id. at 520, 194 N.E.2d at 400. §3.6. 1159 Mass. 84, 34 N.E. 177 (1893). See Johanson, Estoppel by Deed and the Recording System: The "Ayer Rule" Reexamined, 43 B.U.L. Rev. 441 (1963). 2140 Mass. 112. 2 N.E. 929 (1885). a 1964 Mass. Adv. Sh. 791, 198 N.E.2d 635.

Published by Digital Commons @ Boston College Law School, 1964 7 Annual Survey of Massachusetts Law, Vol. 1964 [1964], Art. 6

§3.7 PROPERTY AND CONVEYANCING 29 respect to the question of whether protection is afforded under the Torrens Act to a purchaser with notice of an unregistered interest. The original. recording acts in the United States were silent as to notice, but the courts construed them as excluding protection to pur­ chasers with notice.4 Similarly, in Killam v. March,l> the Court held that one purchasing registered land took subject to an unregistered lease for more than seven years, if he had actual notice of it. Thus, the Court's treatment of the purchaser with notice under the Torrens Act is similar to that accorded him by the early decisions under the original recording acts .. This result impairs the stability and cer­ tainty which title registration was designed to provide and introduces the necessity of ascertaining the bona fides of a purchaser, a fact not revealed by an examination of the records. In Butler the Court unfortunately reaffirmed Killam v. March.6 §3.7. Oral trust of insurance policy. One of the more interesting cases of the 1964 SURVEY year is Cooney v. Montana.1 In this case involving the question of an oral trust of an insurance policy, the insured named his sister as beneficiary of a life insurance policy containing a provision affording double indemnity in case of death by accident. The insured told his sister that she "was to take care of Sharleen and Kathleen [his children] after their high school. That Social Security would take care of them until then. . .. [T]hat she was to use her discretion and judgment in reference to any school they might attend. . " [T]hat she was to use her discretion and judgment in the spending of this money. . .. [H]e suggested that she spend $5,000.00 for Kathleen, $2,500.00 for Sharleen, and after paying the funeral and other expenses that she spend the balance on Callista Vassar (his step-daughter). . .. [T]hat Callista might want to study to be a hairdresser, that ... Mrs. Montana might pay her tuition. . .. [T]hat she use the same discretion and ... judgment in super­ vising them as if they were her own. He stated that she spend $10,000.00. . .. He was particularly worried about his daughter Kathleen. . .. Her future was necessarily vague."2 The insured was subsequently killed in a plane crash. At the trial, the insured's stepdaughter testified that her stepfather had told her about the policy with which his sister as the beneficiary "was to take care of the children, if anything should happen to him." This testimony was corroborated by the testimony of the children's aunt, who related a similar conversation that the insured had had with her. The probate judge entered a decree that the entire proceeds of the policy were the absolute property of the insured's sister. On appeal, the

44 American Law of Property §17.5 (Casner ed. 1952). Subsequently the statutes were amended in conformity with the judicial construction. I) 316 Mass. 646, 55 N.E.2d 945 (1944). 61964 Mass. Adv. Sh. 791, 798,198 N.E.2d 635, 640.

§3.7. 1 1964 Mass. Adv. Sh. 265, 196 N.E.2d 202. 2Id. at 266-267,196 N.E.2d at 205.

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30 1964 ANNUAL SURVEY OF MASSACHUSETTS LAW §3.8 Supreme Judicial Court held that a trust had been created for the benefit of the children. This decision is noteworthy in three respects. First of all, the decision is consistent with the desirable trend in Massachusetts which "confines"8 and erodes the unique and anachronistic Massachusetts rule that a declaration of trust is ineffective if the settlor fails to in­ form the beneficiary of the creation of the trust.4 The rule's vitality appears to be limited to certain types of "informal trusts."11 In the present case the Court continues this "confining trend" by holding that the rule is not applicable when the holder of the legal title, instead of attempting to declare himself a trustee, transfers title to another person as trustee. The Court also appears to recognize that the rule is indefensible if there is sufficient evidence of an intent to create a trust.6 Thus, it also distinguishes this case on the basis of the evidence of the conversations the donor had with his sister, his stepchild, and the children's aunt.7 The present case is significant in a second respect. It illustrates that words, which would ordinarily be deemed precatory, may be deemed, in the circumstances of the case, to impose a legal duty to carry out the desired purpose.8 Because the beneficiary of the policy was his sister and was extremely close to him, "it was not to be ex­ pected that he would reduce his wishes to words of command."9 Another factor favorable to a trust construction was the circumstance that the alleged beneficiaries of the trust were natural objects of the insured's bounty. The Court's decision is also noteworthy in concluding that the trust extended to the double indemnity payment, even though no discussion relative to it occurred " ... [I]t is clear that he intended that the entire proceeds of his policy be held in trust."10 §3.8. Easement by custom. The English courts have recognized the existence of public rights, vested in the inhabitants of a partic­ ular community, based upon immemorial custom.1 Included within such public rights are the customs of the inhabitants of a town to dance or play games on a particular piece of land belonging to an individual, to go thereon in order to get water, or to dry fishing nets thereon.2 Such a right differs from an easement by prescription in that it belongs to the inhabitants of a particular place, whereas an easement by prescription is a right belonging to a particular person 81963 Ann. Surv. Mass. Law §1.9. 4Day Trust Co. v. Malden Savings Bank, 328 Mass. 576, 105 N.E.2d 363 (1952); Boynton v. Gale, 194 Mass. 320, 80 N.E. 448 (1907); Clark v. Clark, lOB Mass. 522 (1871). II New England Trust Co. v. Sanger, 337 Mass. 342,1148, 149 N.E.2d 598, 601 (1958). 8 See 1 Scott, Trusts §36 (2d ed. 1956). 71964 Mass. Adv. Sh. 265, 272, 196 N.E.2d 202, 207. 81 Scott, Trusts §25.2 (2d ed. 1956). 91964 Mass. Adv. Sh. 265, 271,196 N.E.2d 202, 207. 10 Id. at 272, 196 N.E.2d at 208. §3.8. 12 American Law of Property §9.57 (Casner ed. 1952). :I 3 Tiffany, Real Property §935 (1939).

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§3.9 PROPERTY AND CONVEYANCING 31 or to the owner of a particular parcel of land.s Since the existence of the right is based upon a domicile in a given area, an individual loses the right when he ceases to be an inhabitant.4 On the whole, the American courts have denied the existence of a public right based upon custom.1I New Hampshire appears to be the only jurisdiction recognizing such easements by custom.6 Various justifications have been offered for the denial of such a right. It has been contended that the newness of this country prevents the existence of any immemorial custom.7 Similarly, it has been urged that since the establishment of recording acts there can be no immemorial cus­ tom in America.8 As an added policy rationale for denying the existence of such a right it has been suggested that easements by custom impose a clog on the use and alienability of land that far outweighs any advantage that could be acquired from them. They are said to form perpetuities of the most objectionable character since they cannot be released, for no inhabitant or body of inhabitants is entitled to speak for future inhabitants.9 In Massachusetts there are some early cases recognizing the possi­ bility of the existence of such a right in this Commonwealth.10 How­ ever, in the 1964 SURVEY year case of Ivons-Nispel, Inc. v. Lowe,u the Supreme Judicial Court held that "persons of the local community" and "the general public" are "too broad a group to acquire by pre­ scription an easement to use private beaches for bathing and for recreational purposes."12 §3.9. Condominium: Priority of liens. In the 1963 ANNUAL SUR­ VEY, the author questioned the constitutionality of General Laws, Chapter 183A, Section 6(c), on the ground that it constituted dis­ criminatory class legislation.1 To some extent, this objection has been disposed of by an amendment2 which includes all first mort­ gagees of record, and not merely banks and insurance companies, within the class of Henors whose liens have priority. It may still be subject to attack, however, upon the ground that lenders holding second mortgages of record, and lenders holding unrecorded first mortgages of whose existence the unit owners have actual notice, are not so favorably treated under the amendment.

S Gray, The Rule Against Perpetuities §5711 (4th ed. 1942). 4Id. at §574. IISee Gillies v. Orienta Beach Club, 248 App. Div. 62l1, 288 N.Y. Supp. 1116 (2d Dept. 19116); 2 American Law of Property §9.57 (Casner ed. 1952); Note, 21 Minn. L. Rev. 107 (19116). 6 Knowles v. Dow, 22 N.H. 1I87 (1851); Nubb v. Hobb, 17 N.H. 524 (1845). 72 American Law of Property §9.57 (Casner ed. 1952). 8 Note, 21 Minn. L. Rev. 107 (19116). 9 Gray, The Rule Against Perpetuities §586 (4th ed. 1942). 10 Waters v. Lilley, 4 Pick. 145, 146 (Mass. 1826); See Sullivan, History of Land Titles in Massachusetts 125-1110 (1801). 111964 Mass. Adv. Sh. 1121, 200 N.E.2d 282. 12Id. at 1122, 200 N.E.2d at 284. §lI.9. 119611 Ann. Surv. Mass. Law §1.4 at 12. 2 Acts of 1964, c. 7111. http://lawdigitalcommons.bc.edu/asml/vol1964/iss1/6 10