Government: A “Neighborhood Association” Analogy

Government: A “Neighborhood Association” Analogy

by John-Henry Hill, M.D.

September 5, 2014

MAXIM OF LAW: “The contract makes the Law.”

In America, the right of the people to determine their own form and jurisdictions of government is the foundational basis of the legitimacy of governments: for their states and the United States of America..

In fact, governments are CORPORATIONS created by the people to conduct certain limited functions – and nothing more. Our own Constitution created a legal TRUST among the various states. The United States government was the corporation as the Trustee (with a president, VP, treasurer, secretary, and board of directors – the Congress) created to manage that trust of which the states were the grantors and the people were the beneficiaries. Just a few years after the United States were created (the term “United States: used to be used as PLEURAL), the U.S. Supreme Court affirmed in numerous cases that the U.S. government was a corporation’ AND that each of the individual states was its own sovereign country; and that each state was a “foreign nation” with respect to the other states and with respect to the federal government.


The Neighborhood Association Analogy

If some of the owners of 50 separate houses (50 different families living in 50 separate homes within a neighborhood) decided to create a neighborhood homeowners association (let’s call it the ABC Neighborhood Association (ABC-NA, for short), under the still-existing American Common Law “unlimited right to contract” (as guaranteed by the Constitution) they lawfully could do so. They could write up a contract creating a trust and/or a corporation detailing its purpose, its governing authority (as the trustees or officers), the powers of the governing authority and the obligations of the homeowners who signed the contract. Assuming the homeowners were not complete idiots, they would insist on clauses limiting their liability for damages caused by other ABC-NA members or the ABC-NA itself, along with strict limits on restrictions, fees and fines that could be enacted or imposed in the future. Most such neighborhood association agreements include clauses which bind any future owner of a house purchased from an ABC-NA member – so be certain to ask about such clauses and insist on a notarized affidavit from the seller stating that no such contract exists. In our example, let us state that 45 homeowners signed the ABC-NA contract, while 5 homeowners declined for whatever reason. The ABC-NA contract could specify such items as lawn care requirements by homeowners, acceptable paint colors on houses, height of fences between neighbors, to name just a few. Let’s presume further that the ABC-NA officers were also allowed to issues fines for violations of these rules. Further, let’s say that one homeowner within the ABC-NA donated some extra land to the ABC-NA and the ABC-NA members decided to build a neighborhood swimming pool, with each member household required to pay its proportional share for the pool’s construction, plus an annual fee for maintenance. The ABC-NA then hires some people to care for the swimming pool. (This example is not as fanciful as it may at first appear; I lived in such a neighborhood in Virginia, just outside Washington, D.C., which created such a neighborhood association.) Later the ABC-NA members might create new rules, such as a 15 mph speed limit within the neighborhood (even though the town-established speed limit was 30 mph); and hire a private security company to watch over their homes and to enforce this new 15 mph speed limit – requiring another annual fee per household.

Obviously, if they do desired the member families of the ABC-NA could restrict the use of the swimming pool to those 45 families – plus maybe a limited number of “guests” perhaps. They could enact a rule stating that none of the 5 non-member families could use the swimming pool or perhaps impose a $25 per day per person fee on these 5 non-member families. The terms of the contract in law would be “private law”; or more familiarly, “rules” or “policies”, applicable only to those homeowners (and their family members) who signed the contract. So far, so good . . . until a controversy arises.

Controversy #1:                               

Many of the neighbors complain to the ABC-NA board of directors that the pool maintenance people are doing a very poor job and/or the private security personnel are getting “too bossy”. Can the ABC-NA board create (i.e., legislate) new “rules” for the pool cleaners and security personnel to follow? As long this new “legislation” does not violate any pre-existing contracts with these employees, the answer is YES. Just as any company such as Wal-Mart or McDonalds may “legislate” rules that its employees must obey, so too can the ABC-NA with its employees.

Controversy #2:

One day a member of the ABC-NA decides to paint his house purple, with bright yellow doors and window trim. His neighbors are aghast and cite to the ABC-NA contract, which does not list these colors as “acceptable”. He could appeal to the ABC-NA officers for a “waiver”, but his neighbors insist that he repaint the house using some “acceptable” color as listed within the contract. Now, this man violated no federal, state or town statute, ordinance or by-law, so can he not paint his house any color he wishes? The answer is NO. Since he had full disclosure of the terms of the contract and voluntarily agreed to those terms by signing it, he is bound by the terms of that contract. He agreed to waive some of his property rights in exchange for certain benefits, such as the use of the swimming pool, private security, a more attractive neighborhood, and supposedly safer streets for his children to walk on. If the ABC-NA decided to fine him, he would be required to pay the ABC-NA that fine AND repaint his house. Could the town police arrest him or issue him a summons (“ticket”) for his violation of the ABC-NA rules? Absolutely not. He violated no public law; he violated the “private law” (the contract) of the ABC-NA. And the ancient maxim of law states, “The contract makes the Law.” If this homeowner refused to repaint his house or pay the fine demanded by the ABC-NA, the ABC-NA could file a “civil action” under Commercial Law. Legislated acts, statutes, ordinances, by-laws, etc would NOT apply in court; the only facts that could be considered would be the terms of the contract he signed and whether he breached that contract. In such a case, he would lose automatically with a “summary judgment” by the judge in a Commercial Court (no trial by jury allowed) that he immediately pay the fine levied by ABC-NA, repaint his house, and probably pay all court costs, plus the legal fees incurred by ABC-NA. If the man still refused to comply, the judge could cite him for “contempt of court” and even put him jail. He might even order a private company to repaint the man’s house (at the homeowner’s expense) and place a “lien” on the homeowner’s assets (“freezing” all his assets) until he paid everyone in full.

Controversy #3:

A few months later a non-member of the ABC-NA decides to paint his house bright yellow, with bright orange doors and window trim. He never signed the ABC-NA contract, nor did he purchase his house from a previous ABC-NA member. The neighbors once again are aghast and cite to the ABC-NA contract, which does not list these colors as “acceptable”. He also has erected a tall fence on his property line, has torn up his lawn and replaced it with a rock garden and drives the legal 30 mph in his neighborhood. He is soon confronted by the ABC-NA officers who issue him multiple fines for his infraction of their rules, and is stopped on several occasions by the neighborhood security personnel who issue him “speeding tickets” and even threaten to arrest him.

Now, this man violated no federal, state or town statute, ordinance or by-law, so can he not paint his house any color he wishes? The answer is YES. The same is true for his fence, rock garden and driving 30 mph through the neighborhood. He NEVER agreed to waive some of his property rights in exchange for certain benefits, such as the use of the swimming pool, private security, a more attractive neighborhood, and supposedly safer streets for his children to walk on. If the ABC-NA decided to fine him, he would NOT be required to pay the ABC-NA that fine, repaint his house or follow any of their demands. Could the town police arrest him or issue him a summons (“ticket”) for his violation of the ABC-NA rules. Absolutely not. He violated no public law; and he did not violate the “private law” (the contract) of the ABC-NA, since he never signed the contract. And the ancient maxim of law states, “The contract makes the Law.” Since he did NOT sign the contract, that private law (rules, policies, regulations) does NOT apply to him,

Now, judges usually prefer negotiated compromises to litigation, but let us presume that the ABC-NA insisted on taking the issue to court. The sole argument (often used by government agencies) the ABC-NA could possibly make would be that, because this homeowner accepted some of the “benefits” offered by the ABC-NA (such as neighborhood security patrols, a “more attractive neighborhood”, a “safer neighborhood” for his children due to its 15 mph “speed limit” and the availability of use of the swimming pool), then the homeowner was bound by ABC-NA contract and its obligations. Such an assertion is a one-sided contract or “adhesion contract”, where agreement to the contract is PRESUMED. And in law there is a maxim: “An unrebutted presumption becomes a fact in Law.” However, once the man challenges this presumption by ABC-NA, the “burden of proof” shifts to ABC-NA wherein it must provide evidence that the man, by word or action, had agreed to the contract.

Now, had this man by his ACTIONS appeared to abide by any of the ABD-NA rules (by repainting his house another color, lowering the height of his fence, replanting some grass, accepting and/or paying the “speeding tickets” issued by the neighborhood security officer, by using the swimming pool, etc.), such actions could be considered as creating a contract with ABC—NA. In fact, merely accepting a “speeding tickets” from the neighborhood security officer might be interpreted as an “implied contract”. And if he SIGNED and/or PAID the “fine” for such a ticket, he would have affirmed by his signature and/or payment that such a contract existed AND that he was under the private jurisdiction of the ABC-NA.

The best defense for this homeowner would be a written, notarized affidavit of truth (sent to each ABC-NA officer in their private capacity; and NOT as an officer of ABC-NA), the county clerk; plus one copy for his own records) delivered soon after the formation of the ABC-NA – but still valid at any time later on – that he was NOT part of the ABC-NA; did NOT wish to receive any “benefits” of that organization; was NOT bound by any of its rules or policies; and assumed NO financial liability for any of its expenses, fees, etc. Included in that affidavit he should also have included a sentence stating that he expected a written response with 14 days. Had he written and mailed such an affidavit, he most likely would not have received any responses from the officers of ABC-NA in their private capacities. At any later date had the ABC-NA issued him any fines, warnings, threats, etc., he could then have written a formal claim of violation of his rights (injuries) and a demand for damages (financial restitution) to “make him whole”. He could then follow that up with a affidavit of default on those ABC-NA officers as private individuals. He could then publicize their default in several local newspapers, keeping copies for his records. By doing this small amount of paperwork, he would have created a “commercial lien” without the need for an attorney or the courts. Next, by simply registering that “commercial lien” with the U.S. Securities and Exchange Commission, (SEC), he would have converted those commercial liens into “negotiable instruments” (like any stock or bond) which he could have sold to any investor (“lien creditor”)– such as an investment bank, insurance company, etc. The effects of the ABC-NA officers, in their private capacities, would be to “freeze” all their assets, so that nothing they owned could be sold, given away or used as collateral for a loan. Such a commercial lien is valid for 99 years and is almost impossible to remove without the permission of the “lien creditor”. It can NOT be challenged in any equity or admiralty court. It can be challenged only in a true “court of record” (a Common Law court) with a 12-person trial by jury, BUT demand for a trial by jury MUST be made in the accused’s first point-by-point response as his own notarized affidavit of rebuttal to the homeowner’s first written, notarized affidavit of truth. If the accused does NOT respond by notarized affidavit with point-by-point rebuttals, then it is presumed that the accused has agreed that all statements within the homeowner’s initial affidavit are the truth; and thus these statements become facts in law. At that point, NO court may intervene. The case is over. The accused, by his non-response, has agreed to all of the homeowner’s claims. And this agreement means that there is NO controversy – and NO court can intervene in a case unless there exists a controversy in law.

John-Henry Hill, M.D.

retired physician



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