Mills v. HTL Enterprises, Inc.

244 S.E.2d 469 (1978)

H. L. MILLS and wife, Catherine C. Mills, Alice W. Frain, L. D. Ussery and wife, Willie Mae Ussery, Stan Olsen and wife, Nancy Olsen, W. A. Rhyne, Steve Sanders and wife, Emily L. Sanders, Ann Pressgraves, Shirley M. McGill, E. L. Grantham and wife, Gertrude D. Grantham, M. L. Smith and wife, Margaret H. Smith, Adrian E. Aman, Ellie G. Funderburke, Roberta Wright, T. R. Todd and wife, Elizabeth Todd, S. M. Villas and wife, Elizabeth Villas, E. R. Holland and wife, Nita G. Holland, Thelma H. Dunn, L. G. McNeil and wife, Lexie E. McNeil, T. W. Riddle and wife, Susan Riddle
v.
HTL ENTERPRISES, INC., a corporation.

No. 7726SC343.

Court of Appeals of North Carolina.

June 6, 1978.

Martin, Howerton, Williams & Richards by Philip F. Howerton, Jr., Charlotte, for plaintiffs-appellants.

Boyle, Alexander & Hord by Robert C. Hord, Jr., Charlotte, for defendant-appellee.

ERWIN, Judge.

The plaintiffs objected and excepted to conclusions of law Numbers 1, 2, 3, 4, 5, and 6, and to the entry of the judgment based thereon, contending that the facts, as found by the Court, do not support the conclusions of law that the restrictions should not be enforced against the defendant. We agree with the plaintiffs, that the restrictive covenants found in plaintiffs' and defendant's chains of title are enforceable inter se by plaintiffs to prohibit the non-residential use proposed by defendant.

Our Supreme Court held in Elrod v. Phillips, 214 N.C. 472, 477, 199 S.E. 722, 724-725 (1938):

". . . We have two lines of decisions in this jurisdiction involving the circumstances under which restrictive covenants in deeds for property originally devoted to residential purposes are rendered unenforceable or are enforced. The leading cases where such restrictions were held unenforceable are Starkey v. Gardner, 194 N.C., 74 138 S.E. 408, and Snyder v. Caldwell, 207 N.C., 626, 178 S.E. 83, and the leading cases wherein such restrictions are held enforceable are Johnston v. Garrett, 190 N.C., 835, 130 S.E. 835, and McLeskey v. Heinlein, 200 N.C., 290, 156 S.E. 489."

Although there are two lines of decisions on the subject before us, we are not at liberty to select one over the other unless the facts of the case before us justify the line we are to follow.

The above finding of fact Number 15 reveals that the lot in question was used for parking by a plumbing company and, subsequently, a candle shop. We do not consider such parking within the restricted area to be significant enough to undo the force and validity of the restrictions before us or to constitute a waiver or an estoppel of plaintiffs' right to enforce the covenants. See Tull v. Doctors Building, Inc., 255 N.C. 23, 120 S.E.2d 817 (1961); Van Poole v. Messer, 25 N.C.App. 203, 212 S.E.2d 548 (1975); Cotton Mills v. Vaughan, 24 N.C. App. 696, 212 S.E.2d 199 (1975).

The evidence for defendant reveals the following:

"Holly Farms outlets normally operate between the hours of Ten a. m. and Nine p. m. We could change the hours as we saw fit. Based on my experience a Holly Farms outlet in this area averages $5,700.00 per week and an average sale of $2.63. This is roughly 2,500 or 2,000 customers per week. The majority of these customers drive on the premises."

To us this would constitute a significant commercial use of the property, in violation of the restrictive covenants.

Long v. Branham, 271 N.C. 264, 156 S.E.2d 235 (1967), involved a situation in which the defendant desired to construct a roadway across his lot in a subdivision subject to restrictive covenants. In concluding that such construction would violate the restrictions, Justice Sharp (now Chief Justice) observed, referring to the intent of the developer and those purchasing lots in the subdivision: "Their objective was a quiet residential area in which the noise and hazards of vehicular traffic would be kept at a minimum . . .." 271 N.C. at 275, 156 S.E.2d at 243. See also Starmount Co. v. Memorial Park, 233 N.C. 613, 65 S.E.2d 134 (1951).

We find a factual distinction between the case at bar and Muilenburg v. Blevins, 242 N.C. 271, 87 S.E.2d 493 (1955), where our Supreme Court approved the nullification of certain restrictions. Muilenburg, supra, at 275-276, 87 S.E.2d at 496, reveals:

". . . An apartment house is located on the lot adjacent to the plaintiffs' property to the east on Circle Avenue. In this same block at the corner of Circle Avenue and Willoughby Street, according to the record, is a plumbing and heating establishment. Adjacent to the property of the plaintiffs on the south is an apartment house, while on the west side of Providence Road opposite plaintiffs' property the entire block is occupied by an apartment house, an office building and a filling station."

Defendant urges, in its brief, that we consider seriously the following:

"At the outset, the Defendant desires to again enforce the idea before this Court that the lot which it proposes to use for a parking area fronts on a different street entirely from all of the other residentially restricted lots and is a part of an area which is zoned for business and generally used for business and office purposes."

We do not make a distinction between Lot 1, Block 5, and the other lots in the subdivision. Lot 1 appears to be one side of the gate which protects the subdivision. If Lot 1 is released, the gate is opened to release all the remaining lots in the subdivision.

As our Supreme Court pointed out in Tull v. Doctors Building, Inc., supra, 255 N.C. at 40, 120 S.E.2d at 829:

"Business uses not permissible in this residential subdivision have gradually approached it on land outside this subdivision and not a part of it. . . . If equity should permit these border lots to deviate from the residential restriction, the problem arises anew with respect to the lots next inside those relieved from conforming. Thus, in time, the restrictions throughout the tract will become nugatory through a gradual infiltration of the spreading change."

The defendant contends that the factual situation in the case at bar is more closely akin to that presented in Elrod v. Phillips, supra, and that we should follow its holding and affirm the case before us. However, our Supreme Court has distinguished Elrod, supra, in Sheets v. Dillon, 221 N.C. 426, 20 S.E.2d 344 (1942), and Brenizer v. Stephens, 220 N.C. 395, 17 S.E.2d 471 (1941). We conclude that Elrod, supra, is not controlling here, and we instead believe that the line of cases represented by Brenizer, supra, is controlling.

It appears from the record that the changes which have taken place in the area in question have occurred outside the restricted area. Citing considerable authority, our Supreme Court stated in Brenizer v. Stephens, supra, 220 N.C. at 399, 17 S.E.2d at 473: "It is generally held that the encroachment of business and changes due thereto, in order to undo the force and vitality of the restrictions, must take place within the covenanted area." (Emphasis added.) See also Lamica v. Gerdes, 270 N.C. 85, 153 S.E.2d 814 (1967); Tull v. Doctors Building, Inc., supra. Clearly one important rationale for the imposition of restrictive covenants is to protect the character of the area subject thereto from encroachment by changing conditions occurring in surrounding areas. We conclude that the trial court should not have considered the changes occurring outside the restricted area.

Our Supreme Court, in Lamica v. Gerdes, supra, dealt with restrictive covenants containing very similar language to those we find here. In Lamica, supra, 270 N.C. at 90, 153 S.E.2d at 818, Justice Branch wrote for the Court as follows:

"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 record reveals that the property in question is now zoned for business. A zoning ordinance will neither nullify nor supersede a valid restriction on the use of real property. Tull v. Doctors Building, Inc., supra.

The record clearly shows that defendant was aware of the restrictions when it purchased the lot in question. In any event, the restrictions were duly recorded, and lots were conveyed by deeds specifically referencing the same.

Based on the foregoing, we conclude that the trial court erred in finding that the restrictions were no longer enforceable as to the lot in question. Accordingly, the judgment of the trial court is

Reversed.

VAUGHN and MITCHELL, JJ., concur.