Decision of the Court Filed June 17, 1938

These briefs, I might say in the beginning, are certainly very studiously prepared. I read them with the greatest of interest and enjoyment, and enjoyed the use of language that has been employed in presenting your respective views. I would regard some of it as almost classical.

I have varied back and forth in my views as to how this litigation should be decided. I might say [page 265] that it wasn't until, oh, I would say the last hour -- I worked until about fifteen or twenty minutes ago to finish my study of the problem -- that I definitely made up my mind as to how this case should be decided. I know it doesn't make a great deal of difference which way it is, because whichever way I decide, it will have to be reviewed by a reviewing Court.

The first argument that has been made by the defense why the restrictive agreement in question is not valid, I do not believe has any merit. I think that question has been unqualifiedly decided in the Corrigan case, and the language particularly by the United State Court of Appeals, wherein they say, "We are not dealing with the validity of a statue, or municipal law, or ordinance," answers the contention which is made by the defense in the first case cited in their brief where it involved the enactment of an ordinance which prohibited the settlement of colored people in a block or in a vicinity which was predominantly white. I think that situation is obviously distinguishable from the situation that we have here, and from the situation which was present in the Corrigan case, namely, where a number of white people banded themselves together in an agreement to prohibit the sale, alienation, leasing, and so forth of property to the colored race.

And the Appeals Court, the United States Appellate Court passes on it, saying: "We are not dealing with the validity of a statute, or municipal law, or ordinance; nor are we concerned with the right of a negro to acquire, own and use property; nor are we confronted with any pre-existing rights which are affected by the covenant here in question. The sole issue is the power of a number of landowners to execute and record a covenant running with their land, by which they bind themselves, their heirs and assigns, during a period of twenty-one years, to prevent any of the land described in the covenant from being sold, leased to, or occupied by negroes.

"The constitutional right of a Negro to acquire, own and occupy property does not carry with it the constitutional power to compel sale and conveyance to him of any particular private property. The individual citizen, whether he be black or white, may refuse to sell or lease his property to any particular individual or class of individuals. * * * Such a covenant is enforceable, not only against a member of the excluded race, but between the parties to the agreement."

Now, the reasons which have been presented by counsel for defense in their ably prepared brief on the various reasons why such an agreement would be in violation of the various sections of the Constitution, the Fourth, Fifth and Fourteenth Amendments, and against public policy, and unlawful restraint, were all arguments no doubt that were presented to the Court when they rendered that decision. Apparently the well-considered law of the Court where they have passed upon such covenant has been to sustain such.

But the more serious problem that has confronted me in making up my mind as to how this issue ought to be determined as arisen out of the fact that this agreement was not signed by ninety-five per cent of the owners of the frontage in the restricted area. I think the proof unquestionably shows that it was not. I did not check up the exact figures, but counsel in their brief indicate it was some fifty-five per cent instead of ninety-five per cent.

One of the provisions, of course, of the agreement was that that was a prerequisite to its enforceability. In other words, there is an invalid agreement which is now sought to be enforced. And the answer that the plaintiffs make to that contention is not to try to show that it was properly signed by the requisite number of property owners, but that its validity has already been sustained by several Courts: the Superior Court and the Appellate Court on three or four occasions.

So, I think, practically the sole question that the Court has to determine is as to whether or not, if this agreement has been held valid in such a proceeding, that it may properly held to be "res judicata," and that the defendants are estopped from urging the irregularities which appear from the proof to exist which, were it not for such decisions, the agreement or covenant would not be binding.

We have a man named Burke whose personality and activity the picture. It is urged, and I think with a good deal of merit, that the lawsuit which he brought to test out the validity of the agreement was more or less a dummy proceeding, and it can be easily seen that although it appears on the face of it to be representative and class in its character, still it was conceived by him and prosecuted by him for the sole purpose of establishing the integrity and the unvulnerability of the district that is under the covenant; in other words, to make it unassailable. And, to make it unassailable he wanted to bring a proceeding in Court so as to test out its validity, and to have judicial determination of that fact.

Now, then, on the other side of the picture, we have this same villian, Burke, falls out with the Association he created, that he had lived off for years, and undertakes to stay that he is the breathing, inspiring force behind the agreement in its conception, in its origination and beginning, and he was the principal force in bringing it about and in bringing about the lawsuit that he thought sustained its validity. Then we have him getting mad at these people and saying: "Now, I am going to bust it up."

You may say what you please about the Hansberry case and the others, the evil half of Burke unquestionably appears; and he in effect says, through himself and through those that he was working with to bring about the dissolution or to bring about the destruction of this agreement, he says in effect that, "That lawsuit that I brought was all a fraud, and I had no authority to represent the class. It was my own personal lawsuit. I obtained the stipulation of the fact that the agreement contained the signatures of more than ninety-five per cent of the frontage, and that was all a fraud."

And we know it was a fraud, because the proof now shows that there wasn't ninety-five per cent.

Burke is not in a Court of equity with clean hands. He committed a fraud when he brought this lawsuit, and he is just the same sort of wrong-doer and evil minded person when he threatened to and did carry out his threats that he was going to see that colored people were allowed to purchase property in this area.

I have analyzed the authorities with the greatest of care in trying to make up my mind as to whether or not the defense of res judicata is applicable or is available to the plaintiffs in this case. I think we must all agree that there is a great conflict in the authorities. You can find similarity between cases cited by the defense and the plaintiffs, and it is very, very easy to arrive at two different conclusions.

It was true that the constitutionality in the original case of Burke v. Kleiman was not urged; and on the other hand, the plaintiff cites authorities which have a good deal of weight and force, which says that res judicata applies not only to issues that were raised and actually litigated or adjudicated, but all that might properly have been, under the issues in the case. There is no doubt but what the issue as to whether or not it was constitutional for this agreement to exist and be enforced against all classes could have been presented, and should have been presented. We would never know when a subject-matter is adjudicated if such were not the rule.

Being rather in doubt about the matter, and unpersuaded definitely on the one side or the other, I have arrived at the conclusion that the Appellate Court, or whatever reviewing court takes jurisdiction of this matter when it goes up, will probably follow the Burke against Kleiman case, and follow the Lee vs. Hansberry case which was passed on recently, when each of them said very definitely that the validity of this agreement has been sustained.

I am further convinced that that would be the view that a reviewing court would take on account of the fact that the position of the defense in this case is tainted with a certain amount of fraud that grows out of the conduct of Burke.

So, it will be the finding of the Court that the plaintiffs' bill is sustained. I suppose the natural result will be that the temporary injunction be made permanent. And what other relief is there you ask for pursuant to that?


This WWW page was created by Wendy Plotkin (wendy.plotkin@asu.edu) in 1998 and updated on 1 September 2003.