
    Court of Common Pleas for Montgomery County.
    Refiners Oil Co. et al. v. Low.
    
      McMahan, Corwin, Landis & Markham, for plaintiffs.
    
      Burkhardt, Heald & Pickerel, for defendants.
   Snediker, J.

This is an action in injunction. The plaintiffs seek to prevent the defendant from competing with the plaintiff company upon certain tracts of ground, hereinafter referred to, by erecting, operating, or maintaining upon either or both a service station for the sale of gasoline, motor oil, etc., and from using either or both of the tracts for entrance to or exit from any such service station, and from selling or permitting to be sold any petroleum products upon either; and the plaintiffs pray for such other and further relief as is just and equitable.

The facts are these: The Refiners Oil Company is a corporation organized under the laws of the state of Ohio and has for some years been engaged in the- distribution and sale of gasoline, motor oil, and petroleum products at wholesale and retail in this county. Robert M. King is a stockholder, director, and officer of that company. Since May, 1920, the Refiners Oil Company has operated a service station for the sale of its products at the northeast corner of Second and St. Clair streets on premises leased by it from, Adelaide Sleight. This tract of ground is immediately upon the corner, extending along both streets.

The defendant, H. H. Low, was originally in the business of the sale of automobile tires and accessories. This business he carried on on St. Clair street, a short distance north of the property leased by the Refiners. Adjoining the Refiners’ plant on St. Clair street is a lot of ground 33 feet in width fronting thereon, which was owned by the plaintiff King. Defendant, desiring to use that lot in connection with his business, negotiated a lease with King which ran for a period of thirteen years from May 10, 1920. . One of the terms of that lease reads as follows: “Fourth': The lessee shall not use the premises herein demised for the sale of gasoline, oils, or motor fuels, without the written consent of the lessor.”

' During the life of the lease, King sold this property to the Emmons Company, “subject to a lease to Herbert H. Low which is recorded in Lease Record Vol. 15,. p. 546.” Afterwards, on July 10, 1929, Low purchased the fee of the King tract from the Emmons Company and is now the owner thereof.

. East of the property occupied by the Refiners Oil Company on Second street there was a lot of ground 22.85 feet wide, extending north the full length of the Refiners’ property and adjoining the King property, owned by Hagerman. This tract was leased by Hagerman on May 16, 1924, to Charles Whalen for the period of fifteen years from May 1, 1924, and there was included in that lease an option to purchase. Afterwards, on May 16, 1924, the Refiners secured an assignment of the Hagerman lease to it, and on May 31, 1928, reassigned that lease to Low. In that instrument of reassignment there was this clause:

“In further consideration of said assignment of this lease to him, Herbert H. Low, for himself, his executors or. assigns, agrees and covenants that he will not- during the term of. this lease or any renewal thereof, while he is in possession of the within property, use said premises or any part thereof for a gasoline and oil service station, or sell or permit to be sold thereon or therefrom any gasoline, kerosene, oil, or any kindred product other than the products of the Refiners Oil Company, or in any manner come into competition with Refiners Oil Company, the assignor herein.”

Later, in July of 1929, Low purchased the fee of the Hagerman tract.

It is the contention of the plaintiffs that by virtue of the King lease, and of its' terms, and by virtue of the reassignment of the Hagerman lease and of the terms contained in it, this defendant ought now to be enjoined by this court from engaging in a business which in its nature is competitive with the business of the plaintiff company.

There has been an intention on the part of the defendant to engage in such business. Recently he erected upon property owned by him on Second street, known as the Uihlein tract, a large and fully equipped building, in and from which and from the surrounding property owned by him he proposes, in order to complete his service and make it more effective for his business, to engage in the sale of gasoline and petroleum products. This came to the knowledge of the plaintiff company and things proceeded so far that the agents of that company visited the defendant and had entered into a tentative contract to supply those products for retail sale by him. Upon knowledge coming to the main office of that fact this controversy arose. Conferences were held and eventually this suit was brought.

It is not necessary for us to enter into a detail of all the past transaction between the plaintiff company and this defendant, nor to put a construction upon the evidence relating thereto, if we are able to find that because of the present status of the defendant as owner of the respective properties — the King plat and the Hagerman plat — he is legally entitled to engage in such business. The rights of the plaintiffs, if any they have, can only arise out of the restriction found in the King lease and the condition which is contained in the assignment of the Hagerman lease. We have already quoted both of these. That restriction and that condition are not covenants which run with the land and are in no sense a lien on the freehold; they relate only to the occupancy under the respective leases to which they refer and which, in and of themselves, are but a chattel interest. The recognition found in that clause of the deed from King to the Emmons Company, that King’s deed was made subject to the lease of Low,' was intended to protect Low in his enjoyment of that property and to protect King from any claim on the part of the Emmons Company because of that occupancy. The clause found in the reassignment of the Hagerman lease, restricting the use of that property in the hands of Low as lessee was, as it is expressed, one of the considerations under which that reassignment was made, and was intended to protect the plaintiff company from any such use as was there prohibited “during the term of this lease.” When, however, Low purchased the fee simple of both of these properties, when he became the absolute owner thereof, the Hagerman lease’ which had been assigned to him, and the King lease, in which he was the lessee, were both merged in his fee.

As is said by Tiffany in his work on Landlord & Tenant:

“In case the tenant’s estate and the estate in reversion come together in one person the former estate is, ordinarily at least, merged in the latter and the tenancy comes to an end.”

This language is supported by the quotation of numerous authorities.

In the case of Carroll, Appellant, v. Ballance, Appellee, 26 Ill., p. 1, the Supreme Court specifically hold that:

“A lease of the premises becomes merged in the fee when they both unite in the same person.”

In the body of the opinion we find the following:

“As to other points made by the appellant that he was in possession under a lease theretofore executed by the appellee, it appeared in evidence that the premises were many years previous to the suit leased by the appellee to one Cole, who assigned to Thompson, and. he to one Gregg, and he to Kellogg, who afterwards purchased the fee and executed a mortgage, the lease then being owned by Kellogg mergéd in the deed of the fee to him, and no person thereafter could claim under that lease— it was extinct.”

In the 70 Ind. (Leibschutz v. Moore), p. 142, the Supreme Court say:

“A lessee of certain real estate sublet the same to one who subsequently, but before the expiration of the lease, became the owner of the leased premises in fee simple by warranty deed from the' lessor and then sued the lessee for rent.
Held: That the lease was terminated by the conveyance, and that the action cannot be maintained.”

Quoting, the court use this language:

“All inferior estates and interests in land are derived out of the fee simple. Therefore, whenever a particular estate or limited interest in land vests in the person who has the fee simple of the same land, such particular estate or limited interest becomes immediately drowned or merged in it upon the principle that omne majus continet in se minus.”

And in another place the court say:

“The appellant could not fill the characters of both landlord and tenant in one and the same estate. The maxim is, ‘Nemo potest esse et dominus et tenens.’ Thus, if A leases to B, and before the rent becomes due conveys the reversion to C, and C conveys it to B, the rent is thereby extinguished.”

These are quoted from all of the authorities referred to by Tiffany, in order to make clear the principle of merger which controls leasehold interests where they come into the possession of the owner of the fee.

If, under those circumstances the tenancy comes to an end, then when the merger occurred with respect to the interest in and title to these properties, the term of the King lease and of the Hagerman lease terminated by operation of law, the reassignment of the Hagerman lease became ineffective and the restriction found in the King lease was thereafter unenforceable. Neither was essential to Low for purposes of control and use; nor could they be availed of to invade his absolute ownership of the property. When the terms of these leases came to an end, the leases themselves were extinguished, and any agreement to do or not to do a certain thing during those terms could no longer be insisted upon. Equity follows the law and does not extend its remedies to a violation of law. No prior obligations encumber the title or the right of an owner upon purchase of the fee except such as he then assumes, or which run with the land, or are imposed by the law itself.

After carefully considering the questions involved in this case our finding is for the defendant. An entry may be drawn accordingly.  