Fritz v. Beem

1. In a suit by property owners in a subdivision, seeking to enjoin the erection of a residence, which it is alleged will cost less than the minimum cost requirements of both general and specific restrictions, where there is evidence introduced at the interlocutory hearing showing that the highest minimum restriction applicable is $7500 and other evidence showing that the proposed residence will cost $7500 or more, the judgment denying an interlocutory injunction is authorized by the evidence.

(a) Where such restriction requires a minimum cost in dollars without specifying the gold content of the dollar required, a building costing the amount required by the restriction, measured in dollars which are legal tender at the time of its erection, notwithstanding that between the time the restriction was imposed and the building erected the gold content of the dollar has been materially reduced, meets the requirement of the restriction and is not a violation thereof.

2. Where the restrictions alleged to have been violated are shown by the petition to be in writing, it is not error for the trial judge to confine the interrogation of a witness to restrictions that are in writing, and to refuse to allow counsel for the petitioners to ask the witness what he had heard or understood, this same witness testifying elsewhere without objection that he had no knowledge of any general restrictions.

No. 15276. OCTOBER 3, 1945. Russell H. Fritz and a large number of other petitioners brought suit against V. S. Beem, Eugene V. Haynes, and Haynes Manor, a corporation, alleging the following: All of the petitioners are owners of lots in a residential subdivision in the County of Fulton called "Haynes Manor," each petitioner residing on his lot located in the subdivision, and the defendant Beem owing lot 11 in block 17, which was deeded to him by the corporation, Haynes Manor, and he is preparing to build a house on said lot and has obtained a building permit for the erection of a residence at a cost of $6250. The subdivision of Haynes Manor was divided into building lots for residential purposes and put upon the market for sale. In order to sell the lots to better advantage and for better prices, the defendants, Eugene V. Haynes and Haynes Manor, developers and owners, placed certain restrictions on all of the property and lots in the subdivision and established with reference to such property and lots in the subdivision a general building scheme and development plan, thereby inducing the petitioners and others to purchase lots. Among the restrictions, included in such general building scheme and development plan, were the following: "Haynes Manor highly restricted out among the hills," being written upon plats of the subdivision recorded in numerous specified plat books; another plat of the subdivision recorded in plat book 11, page 105, containing these words: "A residential subdivision;" circulars of Eugene V. Haynes advertising the lots in the subdivision for sale, including the defendant Beem's lot, the language in the circulars being "Restrictions: . . . Montview Drive $7500, Woodward Way $6000 minimum, Eugene V. Haynes, 430 Citizens and Southern Bank Building." Beem's lot 11 in block 17, on which he is preparing to build, is located at the corner of Montview Drive and Woodward Way, and the defendant Beem is preparing to violate the foregoing restrictions, and the residence he is preparing to build will violate the said restrictions, in that (a) it will not be a high class residence, and (b) it will cost less than $13,500, and is designed by him to cost less than $6000. Since Beem's lot is a corner lot and thus subject to the minimum restrictions on the two lots, the minimum applicable to the lot is either the sum of the minimum restrictions on the two lots or the highest minimum restriction which is applicable on Montview Drive, and which is $7500. The defendant Beem proposes to spend less than $6000 in erecting the said residence. There is a specific restriction in the defendant's deed requiring a minimum cost of $6000, and the proposed residence will violate this restriction also. The cost restrictions should be applied as of the time the said restrictions were adopted by the general building scheme and development plans; and, when the restrictions are thus construed, the proposed residence would cost not more than $3000. The defendant Beem had actual notice of the general restrictions at the time he purchased lot 11 in block 17, and the petitioners are entitled to enforce the defendant Beem's restriction contained in his deed as well as the restrictions arising under the general plan, and they seek herein to enforce both sets of restrictions. All of the defendants committed a wrong against the petitioners in the execution of the deed to the defendant Beem, by placing a minimum restriction of only $6000 therein while knowing that under the general restrictions the minimum would be either $13,500 or $7500, and the cost restrictions by the general plan are to be measured as from the date such plan was adopted, and the deed to Beem, dated many years subsequently thereto, is silent on this point. The defendant Haynes is further violating the general restrictions by selling other lots in violation thereof, and, unless restrained, he will in this manner to irreparable injury to the petitioners; and, if the defendant Beem is permitted to erect the proposed residence on lot 11 in block 17, the petitioners' property will be materially reduced in value, and the subdivision will be destroyed as a highly restricted section, and the petitioners will thus be injured. The prayer was that the defendants be temporarily and permanently enjoined from committing the acts alleged to be a violation of both the specific and the general restrictions stated. The petition was duly verified.

At the interlocutory hearing, the defendants filed no pleadings, but the defendants Beem and Haynes appeared in person and by counsel, their counsel stating their contentions to be as follows: The house under consideration would cost in excess of $7500. Beem was building it under contract for a purchaser who was to pay $10,000 for it, and a loan commitment on the house was pending for a loan of $7000 when completed. Beem's deed contained a restriction for a residence to cost $6000. The house fronts on Woodward Way, and is numbered 389 Woodward Way, and the defendants consider the restriction to be $6000, because it is the restriction contained in Beem's deed. He has obtained a permit to erect a house costing $6259. They denied that the minimum restriction on Montview Drive is $7500, Beem's information obtained from the defendant Haynes being that the minimum restriction there is $6000, and the building restriction as to cost should be determined on the basis of the cost at the time the house is built and not otherwise.

An affidavit of the petitioner Wootton was introduced by the petitioners, in which it was testified, that the material allegations of the petition as to the existence of both general and specific restrictions applicable to the defendant Beem's lot and as to the violation of the said restrictions were true; that Beem was repeatedly notified by the affiant and the other petitioners that he would be enjoined if he attempted to build on the lot; and that the proposed building will not be in keeping with other houses in the subdivision, but will be substantially inferior thereto. Attached to the affidavit was a circular dated July 1, 1938, headed "Haynes Manor," quoting prices on a large number of lots including lot 11 in block 17, the price of which was $3000. The circular concluded as follows: "Restrictions: Peachtree Battle Ave. $10,000 (except lot 1, blk. 10 $12,500); Haven Ridge Drive $7500; Woodward Way $6000 minimum. Will arrange terms to suit customer."

The defendant Beem, called as a witness by the petitioners, testified that he had built a number of houses in Haynes Manor through the years, and was familiar with the restrictions in Haynes Manor at the time he acquired the lot here involved. He had built houses on Montview Drive and knew the restrictions on that street, but each lot in Haynes Manor was restricted differently. He went by the restriction in the deed. Aside from his deed he did not know that there were general restrictions on Montview Drive of $7500. The only restrictions he knew were those recorded in the deed from Haynes Manor to himself. He had no understanding as to Montview Drive at all.

The circular referred to by the witness Wootton, which was in evidence, was exhibited to Beem, and he testified that he did not know that he had ever seen it. He did not remember seeing it, but Haynes had sent him several price lists through the mail. He would not say whether he had seen this circular or not. He just had no recollection about it at all. After detailing various items entering into the cost of the proposed building, he testified that to the best of his knowledge it was going to cost more than $7500 to build it.

Eugene V. Haynes testified that he subdivided Haynes Manor and put it on the market. It was highly restricted, though different restrictions in the different sections were imposed. He sold it to the public under the restrictions, which were of record and were minimum restrictions. There are no restrictions of $7500 on Montview Drive. It is $6000. Regarding the circular, he testified that it was a real-estate list that he put out. It was sent out to everybody. The circular had not altered his records. Despite the minimum costs, he always encouraged the purchaser to allow him to insert in the deed a minimum cost much higher than that required by the general restrictions, and in many cases this was done because the purchaser was intending to build at a much higher cost. He had never sold a lot in the subdivision without placing a minimum-cost restriction in the deed for as much as or more than the minimum required by the general plan of restriction. He had executed deeds to others to lots on Montview Drive with restrictions of less than $7500. He had sold Beem other lots on that street, and he thought that the restrictions on those lots were not over $6500, maybe $6000. The restrictions from Peachtree Battle Avenue south are $6500 on Montview Drive, and there are a number of houses located in that section which are inferior to the one that Beem proposes to build. Below Peachtree Battle Avenue, the minimum restriction on Alton Road and on roads below Peachtree Battle Avenue is $6000. That is the general restriction throughout the subdivision.

A number of affidavits were introduced, in which each affiant swore that he was engaged in the building business in Atlanta and was familiar with the cost of building materials and labor. He had examined the plans and specifications of the house to be erected by Beem on lot 11 in block 17, and in his opinion the house will cost not less than $7000.

While counsel for the petitioners was interrogating the defendant Beem, counsel said: "I am not asking or confining you to what you have read, Mr. Beem. I am asking you what you have heard, learned, and understood in your building operations and building in Haynes Manor." Opposing counsel objected on the ground of irrelevancy. The court stated that it did not think what the witness heard or understood would be binding, whereupon counsel for the petitioners stated to the court that the petitioners were traveling on implied restrictions, and that restrictions placed in the general plan may become binding as implied covenants chargeable to everybody who purchases with notice, whether in writing or not. Thereupon the court said: "Well, I would not enjoin him on some general plan that he understood or heard about. There might be something for the jury on that. . . I think it must be in writing somewhere to put folks on notice. . . Now, I am going to restrict it to what is in writing." Then, to counsel's inquiry as to whether the court would permit him to prove anything except what was in writing, the court said, "No." Judgment was entered, dissolving the restraining order and denying an interlocutory injunction. Error is assigned on this judgment and on the statement of the court that it would not allow proof of anything except what was in writing. 1. Unless there is an abuse of discretion, the judgment denying the interlocutory injunction must be affirmed. Code, § 55-108. If the testimony of Eugene V. Haynes, the developer, is accepted as the truth, as the trial judge was authorized to so accept it, then the minimum restriction imposed upon the lot here involved is $6000 on both Montview Drive and Woodward Way, and the erection of the residence thereon at a cost of $6000 would satisfy this general restriction as well as the specific restriction in the deed, which is $6000. If the testimony of the defendant Beem is accepted as stating the truth of the cost, as the trial judge was authorized to so treat it, then the proposed building will cost more than $7500. Thus, in determining the question of whether the cost of the building violates the restriction applicable to the lot, it is unnecessary to determine whether the restriction on Montview Drive is $7500, as indicated by the circular in evidence, or $6000, as stated in Beem's deed and as contained in the general restrictions recorded as testified by Haynes, for there is evidence which would have authorized the trial judge to find that the cost was sufficient to satisfy the highest minimum required cost of $7500. This record leaves no room for serious doubt that there was evidence produced upon the hearing sufficient to show that the proposed building will cost $7500, and will thus satisfy the restriction contended for by the petitioners, except the contention that, since this was a corner lot, the minimum applicable to the two streets added together would constitute the minimum applicable to this lot. This contention is unsound and is rejected, the true rule being that, if different minimums apply to two streets, then the building erected must satisfy the higher minimum, and it would thereby satisfy both.

But counsel for the petitioners, after laying down the unquestioned rule that requires a construction giving effect to the intention as of the date of the contract, or here the restrictions, makes a strong and impressive argument that, since at that time the gold content of a dollar was 25.8 grains .9 fine, and subsequently by proclamation of the President, No. 70272, on January 31, 1934, the gold content of a dollar was reduced to 15 5/21 grains .9 fine, the cost of the defendant's residence in dollars in 1945 does not satisfy the cost stipulated by the general restrictions in 1931; but that the cost now should be based upon the value of the gold content of a dollar when the restriction was imposed, and hence a restriction of $6000 then would require a cost, measured by the present dollar, in excess of $10,000. Counsel for the plaintiff in error contend that the majority opinion in Holyoke Power Co. v. Writing Paper Co.,300 U.S. 324 (57 Sup. Ct. 485, 81 L. ed. 678), in upholding an act of Congress (31 U.S.C.A. § 463) pointed out that the law does not apply to contracts for the delivery of commodities, chattels, and substances, but applies exclusively to contracts requiring the payment of money. Admittedly, at the time the general restrictions were imposed, reference to a dollar was a reference to a dollar containing 25.8 grains of .9 fine gold, but all the parties concerned then and thereafter knew that this gold content was subject to change by law. Therefore, in the absence of a specific stipulation that the minimum dollar cost required by the restrictions should be in dollars of the gold content then provided by law or its equivalent in gold, the employment of the general term "dollars" requires a construction that it was intended to refer to any dollar made legal tender by law, irrespective of the gold content. Under this construction, when the cost of the residence, measured by dollars of legal tender by law, equals the minimum dollars required by the restriction, there is no violation, and an inquiry into the subject of gold content is neither required nor authorized.

Counsel relies upon Virginia v. West Virginia, 238 U.S. 202 (35 Sup. Ct. 795, 59 L. ed. 1272), where it is stated, that "The contract is still to be interpreted according to its true intent, although altered conditions may have varied the form of fulfillment." The decision sustains our ruling, for, as above stated, the manifest intent in the present case was that the general term "dollar" not be restricted to a fixed gold content; and, notwithstanding a lawful change in its gold content, which would to that extent alter its intrinsic value, yet the intent of the parties, under the employment of the term "dollar," is fulfilled by the payment of dollars which are legal tender.Whitaker v. Dye, 56 Ga. 380, is cited and relied upon, but that decision has no application here, the facts being materially different. There was done in that case what might have been done, but was not done, in the present case, to wit, a stipulation was placed in the contract to the effect that the payment of $3530 would be made on December 25, 1869, in the currency then in circulation, "an amount equivalent to the aforesaid amount of the currency now in circulation, as it is valued at the date hereof. This October 12th, 1868." In construing that contract, this court properly held that the stipulation just referred to must have been complied with in order to satisfy the contract. Had the restriction in the present case contained a provision that the dollar referred to therein meant a dollar with a gold content of 25.8 grains .9 fine, then the contention made here would be sustained. Nor does Thomas v. Wolfe, 47 Ga. 295, cited by counsel, sustain the contention. It was there merely held that a contract requiring by its terms solvent notes was not satisfied by giving insolvent notes.

There was no abuse of discretion in denying the interlocutory injunction.

2. Error is assigned upon the action of the trial judge in refusing to allow counsel for the petitioners to ask the defendant Beem what he had heard, learned, or understood in his building operations and building in Haynes Manor. Counsel stated to the court that the petitioners were relying upon restrictions which need not be in writing; and the court stated that it would not enjoin him on a general plan which he had understood or heard about, that the court thought it must be in writing somewhere to put folks on notice, and that the court was restricting counsel to what was in writing. This action of the court is assigned as error, upon the ground that, where a subdivision is laid out and established under a general building and development plan, the restrictions imposed by such plan are binding upon all persons having notice thereof; and that such restrictions do not have to be in writing or contained in the deed to the person alleged to be violating them. Reference to the petition shows that the petitioners sought relief here upon the ground that specific restrictions in a general scheme or building plan were being violated; and it is alleged that all such restrictions were in writing, "Haynes Manor highly restricted out among the hills" and "A residential subdivision" being written upon plats which were recorded. Restrictions fixing a minimum cost of $7500 on Montview Drive and $6000 on Woodward Way were written upon a circular, which was introduced in evidence. Therefore, in confining the evidence to restrictions that were in writing, the court was simply confining counsel to the restrictions upon which the suit was based. There was no error in this. Nor did the petitioners suffer injury because the witness Beem was not permitted to state what he had heard or understood, since elsewhere in his testimony, as appears in the brief of evidence, this same witness testified that he had no knowledge of any general scheme or development plan of restrictions in the Haynes Manor subdivision, but that he knew that lots were being sold under restrictions, different restrictions applying to each lot, and the restrictions being contained in the deed. The court did not err in the ruling complained of.

Judgment affirmed. All the Justices concur.