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dedication of the Lee Ranch mine coal reserves to fulfilling that
contract and to establish a servitude upon Santa Fe and its
successors running with the Lee Ranch mine property. Although
the TEPCO supply contract contains no specific provision, it
provides that the agreement is to inure to the benefit of and be
binding upon respective successors to and assigns of the original
parties to the TEPCO contract. Where the original instrument
creating a covenant involving land provided that successors
should be bound by the covenant and where only successive owners
of the land were capable of performing the obligation pertaining
to that covenant, that covenant has been held to run with the
land. Murphy v. Kerr, 5 F.2d 908, 910 (8th Cir. 1925); Bolles v.
Pecos Irr. Co., 167 P. 280, 282-283 (N.M. 1917).7
As to the requirement that the successor against whom
enforcement of that covenant is sought have actual, constructive,
or inquiry notice, Peabody had actual notice of the TEPCO and WEF
coal supply contract obligations, as it assumed those contracts.
In addition, a memorandum of dedication concerning the WEF
contract was recorded in 1985 with the County Clerk for McKinley
County, New Mexico, the county in which the Lee Ranch mine is
7See also 1 Restatement, supra sec. 2.2, cmt. i (“If the
contract calls for a performance that can only be rendered by
someone who owns or occupies a particular parcel of land, and if
it would have little value to the other party if it could be
terminated by a conveyance of that land, the burden was probably
intended to run with the land of the promisor.”).
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