Summary
In La Fetra v. Beveridge, 124 N.J. Eq. 24 (E. A. 1938), the court found that a neighborhood scheme existed in spite of a provision that "no livery or public stables shall ever be erected thereon without the written consent of two-thirds of the lot owners * * *."
Summary of this case from Margate Park Protective Ass'n. v. AbateOpinion
Decided May 11th, 1938.
1. Complainant seeks to enjoin the use of certain lands by the defendants for business purposes, on the ground that such use would be violative of an implied covenant of the complainant's grantor to whose title, rights and liabilities incident thereto the defendants have succeeded. Held, the manner in which the entire tract was laid out, the legend written on the map of the development, and the insertion of the slightly varying restrictions in all the deeds of conveyance, with certain exceptions, evidence a plain intent to develop the tract in question as a highly restricted residential community, in which business was to be altogether banned, except for hotels of a certain size, and that the scheme or plan of development was conceived for the benefit of all of the lots on the tract except those specifically preserved in the legend. Aside from these strong evidential facts, there is overwhelming and undisputed evidence that by other acts and express declarations the developers represented to prospective purchasers and to the complainant in particular, that all lots were to be uniformly restricted, and that the conduct of business, except as to hotels, would be entirely banned, and that the plan was for the development of a highly restricted residential community. These circumstances and representations raise an equitable estoppel against complainant's grantor and his successors in title with notice.
2. The interdiction against business is common to all the restrictions contained in the several deeds given by complainant's grantor. Minor variations occur, but they are not important if the general scheme is not affected.
3. Defendants, heirs of one of the original developers of the tract in question, now want to violate it, more than fifty years after it was conceived and twenty-five years after his death, maintaining that certain minor violations indicate an abandonment of the neighborhood scheme. Held, before violations can constitute an abandonment of a neighborhood scheme, they must be so general as to indicate either a change in the neighborhood or a clear intent on the part of the property owners generally to abandon the original plan. None of the violations testified to have in any way affected complainant's enjoyment of his property according to the original plan.
4. Minor violations of a neighborhood plan are no impediment to the enforcement of the restrictive covenants by one like the complainant for whose benefit they were made and who has not violated them himself.
5. Though one of the original developers of the tract in question who conceived of the neighborhood plan may have thought that the restrictive covenants in the several deeds were personal to him, his ideas as to their legal effect and the rights of other grantees thereunder are not controlling. By the release of his own personal right he could not derogate from the vested rights of others.
6. The complainant was among the last to purchase lots on the restricted tract in question, and he purchased upon the direct representation of the owner as to the residential character of the tract and the restrictive covenants imposed. The character of the community has then already been established. The developers reserved the right to dispose of only certain lots unrestricted, and the defendants' lots are not among these. Held, there was, in effect, an implied covenant by the original developers to insert restrictions against business in all subsequent deeds and to refrain from using for business purposes any of the lots not reserved, title to which remained in the grantor. That covenant was binding upon the complainant's grantor and his subsequent grantees with notice.
7. Since the defendants took their lots by inheritance and not by deed, they stand in the original developer-grantor's shoes. The question of notice is not, therefore, important, although notice is freely admitted.
8. The implied covenant of the grantor to subject all retained property to covenants like those contained in a deed to a particular grantee is just as binding as the express covenant of the grantee named in the deed.
On appeal from a decree of the court of chancery advised by Vice-Chancellor Berry, who filed the following opinion:
"The bill seeks to enjoin the use of lands at Loch Arbour, New Jersey, by the defendants for business purposes, on the ground that such use would be violative of an implied covenant of the complainant's grantor to whose title, rights and liabilities incident thereto the defendants have succeeded. The lands in controversy comprise lots 23 to 28, both inclusive, as shown on map of Loch Arbour hereinafter referred to, and bounded on the south by Euclid avenue, on the west by Ocean Place, on the north by Elberon avenue and on the east by the Atlantic ocean. The controversy arises out of the following facts and circumstances:
"In 1883, the tract of land now comprising the community adjoining the city of Asbury Park on the north and known as Loch Arbour was owned by R. Ten Broeck Stout, a member of the bar of this state, and Dr. Samuel Johnson, a resident of Asbury Park, and they laid it out into lots, blocks and streets as shown on a map entitled `Loch Arbour, Ocean Township, Monmouth County, New Jersey, belonging to R. Ten Broeck Stout and Samuel Johnson, surveyed May, 1883, by Herman Lehlbach, Surveyor.' This map was filed in the Monmouth county clerk's office September 4th, 1885, and it bore the following legend: (Italics supplied.)
"`In filing this map the owners and proprietors reserve the right to control and use all of the streets on this map, subject to the right of public travel only, and do also reserve all lands lying between the easterly line of lots fronting on the ocean, with the privilege to use the same as they desire and to convey same if they so desire, and all land lying south of Edgemont Avenue is also to be used, controlled, sold or disposed of as they shall desire.
R. TEN BROECK STOUT SAMUEL JOHNSON.'
"One hundred and eighty-three (183) lots are delineated on this map, almost all of which have now been sold to persons who have erected thereon attractive and costly dwellings (that on the complainant's two lots representing an investment of over $40,000), so that the entire tract has now been developed into a highly respectable residential community. One hotel of over two hundred rooms was also erected on the tract. In 1909 the complainant negotiated the purchase of lots 43 and 44, and title thereto was conveyed by Dr. Johnson, who had then purchased Stout's interest, to complainant's wife, Bonnie B. La Fetra, and upon her death the complainant succeeded to this title. Prior to the conveyance from Johnson to La Fetra, approximately one hundred and sixty lots had been sold out of the tract. Deeds for all of these lots and those subsequently conveyed referred to the filed map and, with the exception of the original deeds for eight lots, all contained slightly varying restrictions, but uniformly banning the conduct of any business except in a hotel capable of accommodating two hundred or more guests. Of the eight unrestricted lots, five lie at the extreme westerly end of the tract near the railroad and the evidence indicates an intention on the part of the developers that business should be permitted in that section. Title to the remaining three lots was acquired in foreclosure proceedings and subsequent deeds for these lots contained restrictions against business. I think that the manner in which the tract was laid out, the legend written on the map and the insertion of the slightly varying restrictions in all deeds of conveyance, with the exceptions noted, evidence a plain intent to develop the tract of land as a highly restricted residential community, in which business was to be altogether banned, with the hotel exception already noted, and that the scheme or plan of development was conceived for the benefit of all of the lots on the tract except those specifically reserved in the legend; but aside from these strong evidential facts, there is overwhelming, indisputable and undisputed evidence that by other acts and express declarations the developers represented to prospective purchasers and the complainant in particular, that all lots were to be uniformly restricted, and that the conduct of business, except as to hotels, would be entirely banned and that the plan was for the development of a highly restricted residential community. These circumstances and representations raise an equitable estoppel against complainant's grantor and his successors in title with notice.
"The varying restrictions imposed by the common grantor have been classified by counsel for the defendant into classes A, B and C, and as so classified they are as follows:
"`RESTRICTIONS "A""`The said party of the second part for herself, her heirs, executors, administrators and assigns, convenants that she and they shall never use said premises or cause the same to be used for the sale of cider, beer or any intoxicating liquors whatever, or for any business purpose whatever, other than the entertainment of guests, or for any manufacturing purpose whatever, and also that no hog pen shall ever be erected thereon. And also that no livery or public stables shall ever be erected thereon without the written consent of two-thirds of the lot owners of Loch Arbour. And also that no house, cottage, or other building shall ever be erected thereon nearer the line of either or any of the avenues than twenty-five feet. And also that no house or cottage shall ever be erected on either or any of said lots that shall cost less than $3,000. And also that no privy vault, cesspool or water closet shall ever be erected thereon except it be built of brick and cement so as to be perfectly water-tight.'
"`RESTRICTIONS "B""`And the said party of the second part for herself, and her heirs and assigns doth hereby covenant to and with the said party of the first part, their heirs, executors and administrators that neither the said party of the second part, nor her heirs or assigns shall or will at any time hereafter erect any house or cottage or other building on either of said lots within twenty feet of the line of said avenue and will not erect or permit upon any part of either of said lots any outbuilding or stable within eighty feet of the front of either of said lots and will not erect or permit upon either of the said lots any dwelling house or cottage that shall cost less than $2,000 and will not erect or permit upon any part of either of said lots any hog pen; and also that said premises or any part thereof shall never be used for any business purpose whatever other than hotel business where there are actual accommodations for at least two hundred guests and also that no fence shall ever be erected on either of said lots within fifty feet of the line of ____ Ave. higher than four feet.
"`RESTRICTIONS "C""`And the said party of the second part, for himself, his heirs and assigns does hereby covenant to and with the said parties of the first part, their heirs, executors and administrators that neither the said party of the second part nor his heirs or assigns shall or will at any time hereafter erect any house or cottage or other building on said lots within twenty-five feet of the line of said Edgemont avenue and will not erect or permit upon any part of said lots any outbuilding or stable within eighty feet of the front of said lots and will not erect or permit upon said lots any dwelling house or cottage that shall cost less than $3,500 and will not erect or permit upon any part of said lots any hog pen; and also that said premises or any part thereof shall never be used for any business purpose whatever other than hotel business where there are actual accommodations for at least two hundred guests.'
"It was probably the original intention of the developers that no buildings for business purposes, and no business of any kind, should be permitted on the tract; but after thirteen lots had been sold, and in 1885, or not later than 1887, the plan was modified to permit the erection of hotels with accommodations for two hundred guests and forms of deeds with restrictions printed thereon were prepared accordingly and thereafter used in making conveyances out of the tract. The defendants claim fifteen and not thirteen lots were sold and conveyed subject to the restrictions banning all business, hereinafter referred to as Restriction `A,' but only six deeds, five for two lots each, and one for three lots, were shown on the title abstract offered in evidence. The last of these deeds was dated September 17th, 1885. The first of the deeds containing the modified Restriction `B' was dated August 23d 1887. The inference to be drawn from these circumstances is that in the first few years of the development the neighborhood plan was in a state of flux and was not definitely fixed until 1885, at about the time the map was filed which was just a few days after the first deed containing the modified restrictions was made. It was not until 1908 (in the conveyances to Hulick and Wallace for the lots on which the Loch Arbour Hotel now stands) that the form of restriction appearing in the 1887 deed (Restriction B) was further modified and then only slightly (Restriction C) to provide for a different setback line and cost of building. But this Restriction C was inserted in but four deeds conveying in all seven lots, four of which are the hotel lots. And a comparison of these three classes of restrictions will show that there is no appreciable difference in them except as between `A' and `B,' the latter permitting hotel businesses and the former not. Restrictions B and C are almost identical except for variance in phraseology. Their general purport is the same, but there are variances as to the cost of dwellings, setback lines and other matters not affecting the restrictions against business. The interdiction against business is common to all restrictions. But minor variations in restrictive covenants are not important if the general scheme is not affected. Sanford v. Keer, 80 N.J. Eq. 240; Morrow v. Hasselman, 69 N.J. Eq. 612; Schreiber v. Drosness, 100 N.J. Eq. 591.
"At the time this tract was laid out there was a high bluff of sand dunes along the ocean front, beyond which was the beach, washed by the Atlantic ocean, and immediately to the westward of which was a street delineated on the map but unnamed. The lots involved in this controversy as delineated on the map were bounded on the east by the unnamed street, but as the result of erosion by the sea they now abut on the ocean and are partly washed by it at ordinary high tide. The bluff and beach formerly lying to the eastward of these lots have `gone with the wind' and sea. It was the land comprising the unnamed street, the bluffs and the beach that is referred to in the italicized portion of the legend endorsed on the map and above quoted.
"Practically all the deeds out of the original grantors granted an easement to the grantees `to pass and repass on foot, on over and across' this bluff and beach which was particularly described by boundaries. The lots here involved are not a part of the reserved area and no question touching that easement is involved in this controversy.
"The defendants are the children of Dr. Johnson, one of the original developers, who died in 1912, and their wives or husbands, and two corporations owned and controlled by the individual defendants and which, for the purposes of this suit, may be considered as standing in the children's shoes. They have succeeded to the title of all unsold portions of the tract known as Loch Arbour which includes the six lots in controversy.
"The complainant contends that Loch Arbour was developed according to a neighborhood scheme to the benefit of which he is entitled and that although the lots here involved were not the subject of an express covenant against business, they are subject to an implied covenant of the common grantor that he would neither convey them without restrictions against business nor himself devote them to such purpose. I think the contention is well founded.
"The defense is that no covenant restricts the defendants' land; that there is no neighborhood or community scheme, or if there ever was, such scheme has been abandoned, and that the proposed use of defendants' lands would not invalidate the neighborhood scheme if one existed.
"The defendants propose to construct, on lots 23 to 28, directly in front of complainant's residence, a cement block bathing establishment, two hundred and thirty feet long, with a maximum height of thirty-seven feet and with provisions therein for all bathing facilities, including the serving of refreshments, and liberal parking space for automobiles to be provided for patrons of the establishment. Assuming that there was an implied covenant on the part of complainant's grantor as contended, I think it is clear that the erection of the proposed building and the conduct of the proposed business therein would be a violation of that covenant.
"I have already said that the neighborhood scheme or plan has been established and I do not consider the variations in the three classes of covenants mentioned to militate in any way against said plan. In fact, no one challenges the existence of such scheme except the heirs of one of the original developers who now, more than fifty years after he conceived it, and twenty-five years after his death, want to violate it.
"As to abandonment of the neighborhood scheme, minor violations do not necessarily indicate an abandonment, nor impair complainant's right to enforce it. Before violations can constitute an abandonment they must be so general as to indicate either a change in the neighborhood or a clear intent on the part of the property owners generally to abandon the original plan. None of the violations testified to have in any way affected complainant's enjoyment of his property according to the original plan. Morrow v. Hasselman, supra; Newberry v. Barkalow, 75 N.J. Eq. 128; Polhemus v. De Lisle, 98 N.J. Eq. 256. On the entire tract, there have been only fifteen violations of set-back lines and none of them in any way affect the complainant. East of Main (now Norwood) avenue, there have been no violations of restrictions against business except for the operation of a tennis court and miniature golf course on lots 1-6 a few years ago. Such use was protested by numerous property owners and injunctive litigation instituted or threatened and the use was discontinued and likewise the litigation. Nor are such minor violations any impediment to the enforcement of restrictive covenants by one for whose benefit they were made and who has not himself violated them.
"In a few instances, after a conveyance had been made subject to the restrictive covenants, Dr. Johnson executed releases modifying the restrictions imposed, in one case permitting the erection of a garage on lots 124-125 on the westerly portion of the tract and in another case modifying the restriction so as to permit the operation of a drug store in connection with a hotel business already established. While the garage was built, no drug store was ever established. However, although this may indicate a thought in Dr. Johnson's mind that the restrictive covenants were personal to him, his ideas as to their legal effect and the rights of his other grantees thereunder is not controlling. By the release of his own personal right he could not derogate from the vested rights of others.
"The complainant was among the last to purchase lots on this tract and he purchased upon the direct representation of the owner as to the residential character of the tract and the restrictive covenants imposed. The character of the community had then already been established. By the map filed in 1885 the developers held out to the world that all lots except those specifically reserved would be restricted and by express declaration to prospective purchasers of lots in this tract, the character of the development was represented to be residential only, and there was reserved the right to dispose of only certain lots unrestricted. This was, in effect, an implied covenant to insert restrictions against business in all subsequent deeds and to refrain from using for business purposes any of the lots not reserved, title to which remained in the grantor. That covenant was binding upon complainant's grantor and his subsequent grantees with notice. DeGray v. Monmouth Beach Club House Co., 50 N.J. Eq. 329; Sanford v. Keer, supra; Shoyer v. Mermelstein, 93 N.J. Eq. 57; Beattie v. Howell, 98 N.J. Eq. 163. The defendants stand in the grantor's shoes — they took the land by inheritance and not by deed. The question of notice is not, therefore, important although notice is freely admitted. Counsel for defendants argues that the complainant seeks to enforce restrictions imposed not upon the six lots involved in this controversy, but upon the two lots owned by complainant. But that is not so. It is not the express covenant contained in complainant's deed, but the implied covenant of the grantor, which is here sought to be enforced. The implied covenant of the grantor to subject all retained property to covenants like those contained in a deed to a particular grantee is just as binding as the express covenant of the grantee named in the deed. In the one case the grantor is the covenantor and in the other the covenantee. He gives in the one and exacts in the other. He cannot retain what he exacts and recall what he gives. There is no doubt in my mind but that complainant is entitled to the relief sought and I will advise a decree accordingly."
Mr. Walter Fox ( Mr. Merritt Lane, of counsel), for the appellants.
Mr. Edward W. Wise and Mr. Theodore J. Labrecque ( Mr. Theodore D. Parsons, of counsel), for the respondent.
The decree appealed from will be affirmed, for the reasons stated in the opinion delivered by Vice-Chancellor Berry in the court of chancery.
For affirmance — THE CHIEF-JUSTICE, PARKER, CASE, BODINE, DONGES, HEHER, PERSKIE, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, WALKER, JJ. 13.
For reversal — None.