Lamica v. Gerdes

153 S.E.2d 814 (1967) 270 N.C. 85

George E. LAMICA and wife, Louise W. Lamica, et al.
v.
John Henry GERDES, Jr.

No. 200.

Supreme Court of North Carolina.

April 12, 1967.

Lloyd S. Elkins, Jr., Wilmington, for plaintiffs.

Marshall & Williams, Wilmington, for defendant.

BRANCH, Justice.

We find no merit in appellant's contention that the court erred in striking from his answer allegations as to changed conditions and zoning. This Court has heretofore stated that, "``It is generally held that the encroachment of business and changes due thereto, in order to undo the force and validity of the restrictions, must take place within the covenanted area.'" Also, "``A valid restriction on the use of real property is neither nullified nor superseded by the adoption or enactment of a zoning ordinance, nor is the validity of the covenant thereby affected.'" (Emphasis ours) Tull v. Doctors Building, Inc., 255 N.C. 23, 120 S.E.2d 817.

Appellant's primary contention is that the restrictions are unenforceable by plaintiffs because there is no general plan or scheme of development and because the covenants are personal to the original developer. Without determining whether the instant facts show existence of a general plan or scheme of development within the subdivision, we are at the outset faced with the question whether plaintiffs need prove that such plan existed in order to enforce the restrictions imposed.

This Court has long held that restrictive covenants "are in derogation of the free and unfettered use of land" and are to be strictly construed. Callaham v. Arenson, 239 N.C. 619, 80 S.E.2d 619. However, it has been repeatedly recognized in this jurisdiction that:

"The courts have generally sustained covenants restricting the use of property where reasonable, not contrary to public policy, not in restraint of trade and not for the purpose of creating a monopoly —and building restrictions have never been regarded as impolitic. So long as the beneficial enjoyment of the estate is not materially impaired and the public good and interest are not violated such restrictions are valid. Subject to these limitations the court will enforce its restrictions and prohibitions to the same extent that it would lend judicial sanction to any other valid contractual relationship." Sheets v. Dillon, 221 N.C. 426, 20 S.E.2d 344.

The restrictions imposed in the instant case do not come within the above prohibitions and their validity is not otherwise questioned.

This case exemplifies a large number of situations wherein the grantor has conveyed property within a subdivision subject to restrictions, without imposing similar restrictions on property retained by him. This Court, in Reed v. Elmore, 246 N.C. 221, 98 S.E.2d 360, recognized that in such cases it must be determined whether the grantor intended to create a negative easement benefiting all the property, or whether he imposed the restrictions for his personal benefit, and evidence regarding a uniform plan is admitted as an expression of the grantor's intentions. Considering restrictive covenants in the Reed case, the Court stated.

"* * * Where the grantor has, by uniformity of the conditions imposed with respect to a given area, evidence his intention to create mutual servitudes and benefits, the restrictions are held to be covenants running with the land. Where there is absence of uniform pattern, the intention is not established; hence, the covenants or restrictions or conditions are held to be personal to the grantor. * * * Uniformity of pattern with respect to a development furnishes evidence of the intent of the grantor to impose restrictions on all of the property and when the intent is ascertained it becomes binding on and enforceable by all immediate grantees as well as subsequent owners of any part of the property; but the fact that there is an absence of uniformity in the deeds does not prevent the owner of one lot from enforcing rights expressly conferred upon him by his contract. ``Contractual relations do not disappear as circumstances change.' * * * (Emphasis ours)

* * * * * *

"Plaintiff, when he purchased, heeded the warnings of Justice Connor and caused to be inserted in the deed to him this provision: ``This restriction shall likewise apply to Lot No. 4, retained by the grantor, said Lot No. 4 being adjacent to lands hereby conveyed.' Note the restriction is not on the grantor. It is imposed on the land of grantor. It was a creation of a servitude on the land irrespective of ownership. There is no need to search for grantor's intent. It is clearly and distinctly expressed." (Last emphasis ours)

The application of the principles of law enunciated by this Court regarding restrictive covenants is, of course, governed by the factual situation of the particular case. Ingle v. Stubbins, 240 N.C. 382, 82 S.E.2d 388. Factually, the instant case differs from Humphrey v. Beall, 215 N.C. 15, 200 S.E. 918, and other cases relied on by appellant, in that here it is expressly provided by deeds appearing in defendant's chain of title that the covenants are to run with the land, and the deed specifically gives the developer's grantees, the owners of lots in the subdivision, the right to enforce the covenants inter se.

Considering the effect of covenants in a purchaser's chain of title, the Court in Higdon v. Jaffa, 231 N.C. 242, 56 S.E.2d 661, said:

"Furthermore, covenants limiting the use of land may be enforced against a subsequent purchaser who takes title to the land with notice of the restrictions. Davis v. Robinson, 189 N.C. 589, 127 S.E. 697. The law contemplates that a purchaser of land will examine each recorded deed or other instrument in his chain of title, and charges him with notice of every fact affecting his title which such an examination would disclose. In consequence, a purchaser of land is chargeable with notice of a restrictive covenant by the record itself if such covenant is contained in any recorded deed or other instrument in his line of title, even though it does not appear in his immediate deed. Sheets v. Dillon, 221 N.C. 426, 20 S.E.2d 344; Turner v. Glenn, 220 N.C. 620, 18 S.E.2d 197; Bailey v. Jackson-Campbell Co., supra."

Whether covenants imposed on land by a grantor are a servitude on the land, enforceable by plaintiffs, or merely a personal obligation to developer, is answered by ascertaining the intention of the grantor and the grantee when the sale and purchase was consummated. Ordinarily this is done by interpreting the language which the parties chose to express that intention. If doubt exists as to the meaning of the language used, it is proper to consider the situation of the parties and the situation dealt with. Reed v. Elmore, supra. In the case of Cejka v. Korn, Mo.App., 127 S.W.2d 786, the Court held:

"* * * We have in mind that restrictive covenants in a deed to be enforceable by a third party must be shown to have been put on defendant's property for the benefit of the land owned by plaintiff, and in determining this question we must endeavor to arrive at the party's intention who originally created the restrictions. Toothaker v. Pleasant, 315 Mo. 1239, 288 S.W. 388; Coughlin v. Barker, 46 Mo.App. 54."

Here, there is no need to search for the grantor's intent. The developer clearly and distinctly expressed an intention to impose the restrictions on the land, and to allow any person or persons owning any real property situate in said development or subdivision to enforce the restrictions inter se. If there were any ambiguity in the language of the grantor as to whether the developer intended to impose restrictions for his personal benefit, it is dispelled by his outright grant to his grantees of the right to enforce the restrictions.

"Sometimes restrictive covenants expressly provide that they may be enforceable by any owner of property in the tract. Where such is the case, the right of an owner to enforce the same is, of course, clear. Similarly, where the agreement declares that the covenant runs with the land for the benefit of other lots or other owners, it may be so enforced." 20 Am.Jur., 2d, § 292, p. 857. (Emphasis ours)

The grantor expressly made the plaintiff and other owners of property in the subdivision third party beneficiaries of the contractual provisions contained in conveyances in defendant's chain of title. "A third party may sue to enforce a valid contract made for his benefit even though he is a stranger to the contract and to the consideration, and it is not necessary that he be the sole beneficiary, provided the contract was entered into for his direct benefit and the benefit to him is not merely incidental to the agreement." Strong: N. C. Index, Vol. 1, Contracts, § 14, p. 586. See also Pickelsimer v. Pickelsimer, 255 N.C. 408, 121 S.E.2d 586, and American Trust Co. v. Catawba Sales & Processing Co., 242 N.C. 370, 88 S.E.2d 233.

It makes no difference in the instant case that the property was repurchased by the grantor before being sold to the defendant. In Higdon v. Jaffa, supra, all the original deeds contained the following provision: "Nothing herein contained shall be held to impose any restrictions on or easements in any land of the Stephens Company not hereby conveyed." Considering this, the Court, inter alia, said:

"* * * It (the developer) sold every lot in the subdivision subject to restrictive covenants limiting its use to residential purposes. In so doing, the Stephens Company rendered the stipulation in question wholly nugatory. It did not revive this clause by repurchasing Lots Nos. 1, 2, and 3 of Block 11-D. This is necessarily so because its re-acquirement of those lots was under chains of title subjecting them to the restrictive covenants. * * *"

Plaintiffs' action is not dependent on a general plan for the development of the property, but is based upon express covenants appearing in defendant's recorded chain of title which specifically grant to the plaintiffs the right to enforce the restrictions.

No error.

BOBBITT, J., dissents.