Phillips v. Naff Defendants and Appellees' Brief

    STATE OF MICHIGAN
------♦------

In the

SUPREME COURT
------ ♦------

Appeal from the Circuit Court for the County of W ayne  
Honorable Frank B. Ferguson, Circuit Judge

JESSE P A U L PHILLIPS and 
A D A  B LA N C H E  PHILLIPS, his wife, 

Plaintiffs and Appellants,
v.

FARIS N A F F  and 
Y A M N A  N A F F , his wife,

Defendants and Appellees.

DEFENDANTS AND APPELLEES’ BRIEF

H A N D , SU L L IV A N , H U LL 6  KIEFER, 
Attorneys for Defendants and Appellees, 

1082 Penobscot Building,
Detroit 26, Michigan.

O f Counsel:
JOSEPH A . SU L L IV A N ,
JOHN B. KIEFER  

and
W IL L IS M . G R A V E S,
JOHN W .  R O X B O R O U G H , II.

Interstate Brief &  Record Co., 642 Beaubien St., Detroit 26, Michigan



APPELLEES’ C O U N T E R -S T A T E M E N T  OF  
Q U E S T IO N S  IN V O L V E D

1. Does a Statg violate the Fourteenth Amendment 
to the Constitution of the United States by permitting an 
action at law for damages against a white person selling 
his property to non Caucasians contrary to racial restric­
tion as to use and occupancy?

The lower Court said “ Yes.”
Appellants say “ No.”
Appellees say “ Yes.”

2. Does a seller breach a covenant restricting use 
and occupancy to members of the Caucasian race, by con­
veying the property to Negroes?

This question was not raised in the lower Court. 
Appellants contend that the answer is “ Yes.”  
Appellees contend that the answer is “ No.”

•3. Do racially restrictive covenants, not providing 
the method of enforcement, become void when they can­
not be enforced in equity?

The lower Court said “ Yes.”
The Appellants say “ No.”
The Appellees say “ Yes.”

4. Is the enforcement of racial restrictive covenants 
in an action for damages for the breach of the covenant, 
contrary to the Public Policy of the State of Michigan ?

The lower Court said “ Yes.”
The Appellants say “ No.”
The Appellees say “ Yes.”





IN D E X  T O  A U TH O R IT IE S CITED

Page
American Jurisprudence:

Vol. 42, p .217............................................................ 8
Vol. 42, p. 223............................................................ 9

Columbia Law Review, Vol. 48, p. 1244.................  4
Cyc., Vol. 32, p. 677..........................................................  8
Grand Rapids Booming Co. v. Jarnis, 30 Mich.

308, 321 .....................................................................  8
Hurd v. Hodge, 334 U. S. 24.....................................  6
McGhee v. Sipes, 334 U. S. 20...................................  3-4
Porter v. Barrett, 233 Mich. 373 (1925).................. 7
Shelley v. Kramer, 334 IT. S. 13....................................  2
University of Detroit Law Journal, January, 1949,

Vol. XII, p. 81..................................................... 10
Weiss v. Leaon, et al., 359 Mo. 1054, 225 S. W.

(2nd) 127 .................................................................. 5

iii



STATE OF MICHIGAN
------♦-----

Iii the

SUPREME COURT
— ♦ —

Appeal from the Circuit Court for the County of W ayne  

Honorable Frank B. Ferguson, Circuit Judge

JESSE PAU L PHILLIPS and 
A D A  BLAN CH E PHILLIPS, his wife, 

Plaintiffs and Appellants, 
v.

FARIS N A F F  and 
Y A M N A  N A FF , his wife,

Defendants and Appellees.

DEFENDANTS AND APPELLEES’ BRIEF

-------- 4---------

S T A T E M E N T  OF FA C TS

Appellees accept the statement of facts as presented 
by appellants in their brief.



0

A R G U M E N T

1. Does a State violate the Fourteenth Amendment 
to the Constitution of the United States by permit' 
ting an action at law for damages against a white 
person selling his property to non-Caucasians con­
trary to racial restrictions as to use and occu­
pancy?

The Fourteenth Amendment of the Constitution of the 
United States forbids state action in denying equal pro­
tection of the laws. It has often been held that judicial 
action by state courts can he state action proscribed by 
the Fourteenth Amendment. This doctrine is pointed 
out by the Court in the case of Shelley v. Kramer, 334 
U. S. 13, when it said:

“ That the action of state courts and of judicial 
officers in their official capacities is to be re­
garded as an action of the State within the mean­
ing of the Fourteenth Amendment, is a proposi­
tion which has long been established by decisions 
of this court.

“ In the Civil rights cases 109 U. S. 3, 11, 17, 
27 L. ed. 835, 839, 841 (1883), this court pointed 
out that the Amendment makes void State action 
of every kind which is inconsistent with the guar­
antees therein contained, and extends to mani­
festation of ‘ State authority in the shape of 
laws, customs, or judicial or executive proceed­
ings.’

“ Similar expressions, giving specific recogni­
tion to the fact that judicial action is to be re­
garded as action of the State for the purposes 
of the Fourteenth Amendment are to be found 
in numerous cases which have been more re­
cently decided.”

“ Twining v. New Jersey, 211 U. S. 78, 90, 91, 
53 L. ed .'97, 102, 103, 29 S. Ct. 14 (1908):



3

B r inkerof-Faris Trust and Sav. Co. v. Hill, 281 
TT. S. 673 (1930): A. F. L. v. Swing, 312 IT. S. 
321 (1941).”

In the case of Shelley v. Kramer and McGhee v. Sipes, 
supra, the I nited States Supreme Court held that the 
judicial enforcement by state courts of restrictive cove­
nants through the equitable remedy of injunction is tant­
amount to state action which violates the Fourteenth 
Amendment. The United States Supreme Court thus 
removed one of the two remedies available for tbe breach 
of a racial restrictive covenant. Whether the other rem­
edy, an action at law for damages, continues to be avail­
able and valid, is the question to be decided by this 
Honorable Court.

While.the McGhee case spoke specifically of injunctive 
relief, the scope of the ruling in that case is not, we re­
spectfully submit, limited to the remedy of injunction 
but can be applied with equal force to any judicial action 
to enforce a discriminatory covenant, The constitutional 
tenor which pervades the entire decisions undeniably ap­
plies to an action at law for damages. The Court in that 
case was not so concerned with the nature of the remedy 
or the procedure used to enforce the restrictive covenant 
as it was with the fact that an agency of the government 
was participating in its enforcement. This participa­
tion, the Court held, constituted state action forbidden by 
the Fourteenth Amendment, In the case at bar the 
plaintiffs are seeking to enforce the restrictive covenant 
through the exertion of state power sought to be applied 
in merely another form; at law instead of in equity. 
The Court apparently had. this development in mind 
when it said in part in the McGhee case:

“ State action as that phrase is understood, 
for the purpose of the Fourteenth Amendment, re­



4

fers to exertions of state power in all forms 
(italics ours). And when the effect of that action 
is to deny rights subject to the protection of the 
Fourteenth Amendment, it is the obligation of 
this Court to enforce the constitutional com­
mands.”  334 U. S. 20.

Thus, if the effect of the state action in the case at 
bar, “ is to deny rights subject to the protection of the 
Fourteenth Amendment,”  then this state action must not 
be permitted. AVe feel that the effect of permitting such 
a law suit is obvious. As was said in 48 Columbia Law 
Review, page 1244:

“ There can be no doubt that the threat of a 
pecuniary liability to the vendor of real prop­
erty for disregarding a restrictive covenant 
would operate as a deterrent to breaching the 
covenant’s terms. And where the state under­
takes to back up that threat by supporting its 
execution with judicial process, it would seem 
no less obvious that the state itself is facilitiat- 
ing the discriminatory purpose of the agree­
ment.”

If a Court of this State were to give legal effect to the 
discriminatory agreement in the case at bar, it would be 
indirectly accomplishing a purpose which the United 
States Supreme Court has not permitted that Court to do 
directly, i.e., by injunctive relief. It cannot be denied 
that if a State Court is permitted to sanction a racial 
restrictive covenant of this nature, it will only serve to 
intensify the pressing social problem which the United 
States Supreme Court sought to relieve in the AIcGhee 
case.

In this law action at bar, the litigants are all members 
of the Caucasian race unlike the usual situation in the 
equitable action for an injunction, and consequently the 
rights and interests of these particular Negro purchasers



are secure and unaffected by any judgment rendered 
here. However, the tendency, object, operation and re­
sult of the enforcement of this class of covenants would 
effectively deny Negro citizens equality in the enjoyment 
of property rights, for the obvious reason that property 
owners in restricted areas would not sell to non-Cau­
casians, lest they be personally liable in an action for 
damages. Clearly, the enforcement of this class of con­
tracts is calculated to promote and foster racial discrimi­
nation by furnishing a powerful motive to prevent aliena­
tion of property to Negroes; that is, the payment of a 
money judgment where the Negro purchaser occupies the 
premises himself. Consequently, the law remedy’s coer­
cive device of retribution in money damages is as effec­
tive as the coercion of the restraining injunction, al­
though not as immediate, in effecting racial separatism 
in housing. Although the two remedies differ, the effect 
of enforcement in the final analysis or ultimate result 
is identical; Negro citizens as such are denied civil 
rights, which the Fourteenth Amendment of the United 
States Constitution was designed to preserve.

Counsel for appellants cite the opinion of the Supreme 
Court of Missouri, a former slave-holding state, in the 
case of Weiss v. Leaon, et al., 359 Mo. 1054; 225 S. W. 
(2nd) 127 (pages 10 and 11 of Appellants’ Brief) as 
authority for their position that the decision in Shelley 
v. Kramer and McGhee v. Sipes did not rule out an 
action for damages for breach of the agreement.

Counsel quotes the Missouri Court as follows (Appel­
lants’ Brief, page 11):

“ Since Shelley v. Kramer also found the re­
strictive agreement itself made by private parties 
was valid against the charge of unconstitu­
tionality, it may follow that an action for its 
breach rather than its enforcement might lie.”



6

But the learned Missouri Court overlooked an import­
ant clause in the Shelley decision on page 13. It is true 
that the United States Supreme Court said that “ The 
restrictive agreement standing alone cannot be regarded 
as violative of any rights guaranteed to petitioners by 
the Fourteenth Amendment’ ’ but that Court hastened to 
add the qualifying clause: “ so long as the purposes of 
its agreements are effectuated by voluntary adherence 
to their terms”  (italics ours).

Here, there has been no voluntary adherence to the 
terms of the covenant. Defendants have willingly sold 
their premises to colored people who were willing buyers.
Had defendants felt compelled to refrain from the sale 
because of the terms of the restrictive covenant, their 
adherence would have been involuntary rather than 
voluntary as required by the Supreme Court. That Court 
apparently reasoned that since the Fourteenth Amend­
ment did not apply to discrimination by private indi­
viduals, racial restrictions formulated by such individuals 
were not affected by this amendment. However, once the 
terms of the restrictions were breached and one or more 
of those individuals who continued to adhere to the terms 
of the restrictions, sought the aid of a State Court to 
enforce them, then the full impact of the Fourteenth 
Amendment would be brought to bear, because the re- • 
strictive agreement was no longer private and voluntary, 
but rather, a new element, state action, had intervened..

In the case of Hurd v. Hodge, 334 F. S. 24, a com­
panion case to Shelley v. Kramer and McGhee v. Sipes, 
S'upra, the restrictive agreement in question contained 
a specific penalty clause, “ * * * that said lot shall never 
be rented, leased, sold, transferred or conveyed unto 
any Negro or colored person, under a penalty of Two 
Thousand Dollars, which shall be a lien against said



7

property.”  Here the Court held that “ the action of the 
District Court directed, against the Negro purchasers 
and the white sellers (italics ours) denies rights intended 
by Congress to be protected by the Civil Rights Act and 
that, consequently, the action cannot stand.”

Although injunctive relief was sought, it would seem 
that if the alternate remedy in law were available to 
plaintiffs, the Supreme Court should have remanded the 
cause for further determination of rights and damages. 
This the Court did. not do.

2. Docs a seller breach a covenant restricting use and 
occupancy to members of the Caucasian race, by 
conveying the property to Negroes?

These questions of “ sale”  and “ use and occupancy”  
are here discussed further to support the lower Court’s 
opinion in dismissing plaintiffs’ Declaration because it 
failed to state a cause of action. The portion of the re­
striction agreement which the plaintiffs’ Declaration 
states was violated to the plaintiffs’ damage reads (R. 
12 and 13, Exhibit 3 ):

“ The use and occupancy of all lands subject 
hereto is hereby restricted to white persons of 
pure Caucasian race and no such lands or prem­
ises shall be occupied or used, in whole or in part, 
by any other than a white person of the Cauca-

* * * * 9 7sian race

It is important here to note that the agreement above 
does not restrain the sale of the restricted premises to 
any other than a white person. The reason that such a 
prohibition was omitted from the agreement in question 
stemmed, no doubt, from the decision of the Court in 
Porter v. Barrett, 233 Mich. 373 (1925) which had be­
fore it a restriction against the sale of premises to a

\



8

colored person. There the Court held the restriction in­
valid because it violated the common law rule forbidding 
restraints on alienation. Defendants, therefore, have 
breached no agreement by the sale of the premises to 
Negroes.

Here the restriction agreement merely restrained the 
“ use and occupancy”  of the premises. Is there any rule 
of law which would make the defendants liable for use 
and occupancy by Negroes after the defendants have 
vested a fee simple estate in the grantees? The appellees 
contend that there is no such rule of law because “ own­
ership of property implies the right of possession and 
control thereof”  42 Am. Jur. p. 217. Accordingly, loss of 
ownership by a grantor deprives him of all control over 
the property so conveyed.

“ The chief incidents of the ownership of prop­
erty are the rights to its possession, use, and 
enjoyment, and to sell or otherwise dispose of it 
according to the will of the owner, usually to the 
exclusion of all others, and without any diminu­
tion or control save only the laws of the land.”
32 Cyc. 677, Grand Rapids Booming Co. v. Jar- 
nis, 30 Mich. 308, 321.

At the time the defendants in the instant case lost con­
trol over the premises, they also became exempt from 
liability to others for the use put to the premises by the 
new owners. This principle has long been recognized 
and needs no amplification other than the following cita­
tion from American Jurisprudence:

“ The principle of law expressed in the maxim 
(six utere tuo et aliemim non laedas) is negative 
in its application, forbidding the use so as to in­
jure another; it relates to the use and enjoyment, v 
and not to the ownership, of property. The duty 
imposed by it rests only (italics ours) on the



9

owner of the property or one who is vested with 
its management and control * *• *”  42 Am. Jur. 
P. 223.

If, for example, the premises were subject to a restric­
tion against their use as a tavern, the defendants could 
not be held liable in damages for selling their property 
to a tavern-keeper who subsequently sought to use and 
occupy the property as a tavern. Defendants would 
have no control over such use and could not be held liable 
for breaching the restriction. Anyone objecting’ to such 
use would have his remedy against the one using the 
premises and not against the defendants, who merely 
gave him title.

Consequently, defendants could be held liable for the 
use and occupancy only while they had title to the prop­
erty in question and, had the right to control over it.

3. Do racially restrictive covenants, not providing 
the method of enforcement, become void when 
they cannot be enforced in equity?

The lower court, R, 29, says:

“ In view of the holding in this case, (Stone v. 
Stone, 319 Mich. 194), it is my opinion that the 
defendant could come into equity and ask that 
the contract be set aside, or if he has been sued 
at law for damages, may defend on the ground 
that the contract is void because he has mistaken 
his antecedent and existing private legal rights, 
interests and estates when he entered into the 
agreement, the legal scope and operation of 
which he correctly understood for the purpose of 
affecting such assumed rights, interest and es­
tate.”

A



10

The parties became covenantors to this racial re­
strictive covenant, or to any racial restrictive covenant 
prior to Sipes v. McGhee, supra, for one purpose, and 
one purpose only—to prevent the occupancy of property 
in their neighborhood by persons not of the Caucasian 
race. No answer of the defendant or testimony to ad­
duce this most obvious fact is necessary. Without ques­
tion it was not the desire or within the contemplation 
of the parties merely to obtain money judgment after a 
non-Caucasian moved into their neighborhood. Clearly, 
the lower Court is correct in holding that damages for 
the breach was not in contemplation of the parties.

4. Is the enforcement of racial restrictive covenants 
in an action for damages for the breach of the 
covenant, contrary to the Public Policy of the 
State of Michigan?

Notwithstanding the fact that the Supreme Court of 
the State of Michigan has held, prior to the McGhee v. 
Sipes decision, that the enforcement of racial restrictive 
covenants in equity is not contrary to the public policy 
of this state, public policy is a changing concept, and 
must again be reviewed on this important issue in light 
of the rulings in Sipes v. McGhee, supra, and Hurd v. 
Hodge, supra.

As recited in University of Detroit Law Journal, Jan­
uary, 1949, Volume XII, page 81, entitled, “ RACIAL 
RESTRICTIVE COVENANTS” —Enforcement in Law 
in an action for damages for the Breach of the Covenant 
is Contrary to the Public Policy of the State of Michi­
gan:

“ * * * the case of Hurd v. Hodge, supra, a 
companion case o f Shelley v. Kramer, constitutes 
ample legal precedence for the denial by the



11

Michigan courts of the enforcement of racial re­
strictive covenants in law on the ground that they 
are contrary to public policy.”

RELIEF

The appellees contend that for the reasons given 
above, the appellants have no right of action at law for 
damages.

The lower Court granted the motion of the defendants 
and appellees to dismiss plaintiffs’ and appellants’ Dec­
laration. The appellees, therefore, ask that the decision 
of the lower Court be affirmed, and the cause dismissed 
with costs to apellees.

Respectfully submitted,

HAND, SULLIVAN, HULL & 
KIEFER,

JOSEPH A. SULLIVAN,
JOHN B. KIEFER and 
WILLIS M. GRAVES,
JOHN W. ROXBOROUGH, II,

Of Counsel.

Dated: December 7, 1951.