finding that the burden of proving the existence of a restrictive covenant lies on the party that is asking the Court to enforce itSummary of this case from In re Ames Dept. Stores, Inc.
Argued December 1, 1953.
Decided January 29, 1954.
Where the original owner of a large tract of land subdivided it into lots under a general plan and imposed upon certain lots sold therefrom restrictions against use for commercial purposes without express agreement that such restrictions should be for the reciprocal benefit of the purchasers or apply to the land retained by the grantor, the grantees of such lots acquired no reciprocal rights to such restrictions against a lot later proposed to be conveyed out of the remaining land without restriction. Although upon the evidence a reciprocal restriction in favor of a lot on one side of the highway might be implied as against other lots on the same side, such a restriction would not be implied as a matter of law against a lot on the opposite side of the highway at a distance from the first lot, there being no evidence of existing restrictions upon any of the land upon the opposite side. The burden of establishing the existence of a restriction against use of certain land for certain purposes and its application to a particular lot in the same general area is upon those asserting it and will not be implied upon doubtful evidence.
CASE, to recover the unpaid balance of the purchase price of a certain lot of land on the westerly side of the state highway known as Ocean Boulevard in Seabrook, in accordance with a written agreement by which the plaintiff undertook to sell and the defendants to buy the lot for use as a business site. The defendants moved to dismiss upon the ground that the plaintiff is unable to give a quitclaim deed to the premises "free and clear of all encumbrances" as provided by the agreement of the parties.
The lot in question is part of a larger tract known as Seabrook Beach, various plans for the subdivision of which have been recorded over a period of some forty years. The lot in question is described in the agreement by reference to a 1948 plan of a limited section of Seabrook Beach, lying wholly westerly of the state highway. The lot is designated as Lot 12 on this plan.
The plaintiff acquired its title by acquisition of a larger tract extending from the Massachusetts line to Hampton River, conveyed to it in 1944 by Tavern Investment Corporation, Inc. Prior thereto, the land on both sides of the state highway, including the lot in question, but excluding individual lots sold from time to time, had been conveyed by a series of conveyances beginning in 1901. None of the conveyances in Tavern Investment Corporation's chain of title referred to any restrictions, but they described the properties in whole or in part by reference to a plan or plans, at least nine of which were made a matter of record between 1902 and 1925. So far as appears, the individual lots sold out of the larger tract during this period were all located on the easterly side of the highway and were conveyed subject to varying restrictions, which consistently included a restriction against use for commercial purposes. There is no suggestion that any recorded plan disclosed any proposed restrictions.
The land easterly of the highway lies between the highway and the ocean. The land westerly of the highway lies between it and a marsh.
In September 1943, Ethel E. Rogers and twenty-one owners of individual lots agreed with Seabrook Beach Community, Inc., a predecessor in title of the plaintiff from which these owners had purchased their lots, that if restrictions in their deeds, including a restriction that no business should be conducted on the lots conveyed, should "have any force and effect on the unsold and undeveloped sections of the property of Seabrook Beach Community, Inc. located on the Westerly side of [the] State Highway," such restriction should be null and void and without effect as to such sections.
By deed dated June 5, 1944, Tavern Investment Corporation, Inc., successor to the interests of Seabrook Beach Community, Inc., conveyed to the plaintiff land on both sides of the highway including the land which the defendants later agreed to buy. The description referred to a 1925 plan of lots, which was evidently later embodied in a 1944 plan received in evidence. The conveyance was made subject to certain restrictions which the deed recited "run with the land and shall be binding upon the Grantee, its successors and assigns, and all persons claiming thereunder." Included was a restriction that "no business of any kind shall be conducted on the premises," with a single exception not material here.
By a second deed, dated April 13, 1945, Tavern Investment Corporation, Inc. conveyed to the plaintiff certain additional land lying easterly of the state highway, subject to the same restriction against business use contained in the deed of 1944. Lots excepted from this conveyance were described by reference to the 1944 plan received in evidence. Lots lying westerly of the highway as shown on this plan, differ from the lots shown by the 1948 plan referred to in the agreement of the parties to this action.
By separate instrument also dated April 13, 1945, Tavern Investment Corporation, Inc. released to the plaintiff "all restrictions, reservations and conditions" in its 1944 deed "insofar as [they] shall apply to that portion of the premises [then] conveyed . . . which lie Westerly of the . . . State Highway, except such restrictions of record, if any, as may have applied" at the time of two specified conveyances in September 1943, by one of which Tavern Investment Corporation acquired its title.
The parties agree that when former owners of the large tract upon both sides of the highway conveyed subdivision lots on the easterly side of the highway, building restrictions of the sort previously described were imposed upon each lot so conveyed.
The defendants rely upon three deeds of record in support of their position. In 1937, a single lot on the easterly side of the highway was conveyed to Wells by the owner of the large tract by description referring to a 1920 layout, subject to a restriction that only a one-family dwelling should be erected on the lot. In 1941, four lots and part of a fifth, all on the easterly side of the highway, were conveyed to McCarthy by description referring to a 1925 plan of lots, subject to comparable restrictions, which were to "run with the land." Wells was a party to the subsequent release given by Rogers and others to Seabrook Beach Community, Inc. but McCarthy was not. In July, 1944, the plaintiff conveyed to Ernst two lots on the easterly side of the highway by description referring to a 1944 plan. This conveyance was subject to certain restrictions including the restriction that "no business of any kind shall be conducted on the said premises."
The foregoing facts having been established by agreement of the parties, the Superior Court (Wheeler, C. J.) transferred without ruling the following questions of law: "1. Whether the plans and deeds submitted in evidence by the parties show the existence of a general scheme for the development of the property located on both sides of said Ocean Boulevard. 2. Whether the restrictive covenants shown in said deeds apply to all lots on both sides of said Ocean Boulevard, as shown on said plans. 3. Whether the lots on the westerly side of said Ocean Boulevard are subject to restrictions against commercial use. 4. Whether the Plaintiff can give a good and sufficient quitclaim deed to the Defendants, free and clear of all encumbrances to said Lot 12 above referred to."
Richard E. Shute (by brief and orally), for the plaintiff.
Frank A. Batchelder and Thomas B. Murphy (of Massachusetts), for the defendants.
If there are restrictions against commercial use in force against the lot which the plaintiff has undertaken to sell to the defendants, they constitute an encumbrance upon the title so that the plaintiff could not convey free from all encumbrances as it has agreed to do. Nashua Hospital v. Gage, 85 N.H. 335, 336. It was settled by the Gage case that: "Whenever it appears that the original owner has adopted a general scheme of development, and has inserted in his deeds of lots restrictions intended by him and agreed by the purchasers to be for their reciprocal benefit, an equitable right is shown." Id., 339. The vital question in this case is whether the plaintiff or its predecessors, as successors to the original owner, and the purchasers from them of the various lots subject to restriction did in fact intend and agree that the restrictions should be for their reciprocal benefit.
It is established that various deeds given by the original owner or its successors conveying lots on the easterly side of the state highway imposed restrictions which were not uniform, but which consistently precluded commercial use. In no instance so far as appears did any grantor expressly agree that like restrictions should apply to other land retained by him. It does appear, however, that prior to these various conveyances the vendors had laid out the estate or portions of it for sale in lots. If the defendants' position is unsound, it is because it does not appear that the vendors intended the restrictions to be for the benefit of all lots intended to be sold, or even for some of those lots.
What was said in the Gage case, supra, 340, applies to the situation as it existed prior to the conveyances to the plaintiff in 1944 and 1945. Although it could be found that one or more general schemes theretofore existed for some sort of development of land on both sides of the highway, evidence that uniform restrictions were intended to apply to all such land is lacking. "The case for the defendants stands upon the conveyances, unaided by extrinsic evidence. These contain no reference to any reciprocal rights conferred upon the several grantees. There is a condition in favor of the grantor, but no mention of any other limitation upon the title conveyed. If the existence of reciprocal rights is to be implied here, the inference must be drawn from the fact that all the deeds contain similar conditions reserved to the grantor. The cases wherein this question has received consideration hold that the inference cannot be drawn from that fact alone." Nashua Hospital v. Gage, supra, 340. See also, Bristol v. Woodward, 251 N.Y. 275; 3 Tiffany, Real Property (3d ed.) s. 868.
While the court was concerned in the Gage case with transactions which occurred a hundred years ago and the law relating to reciprocal servitudes has since undergone substantial development (Id., 341; see 2 American Law of Property, s. 9.30, et seq), no reason appears to depart from the general principles laid down in that case as "sound law." Id., 339. We conclude that the evidence fails to establish that grantees of common owners prior to Tavern Investment Corporation, Inc., acquired rights against the lot which the plaintiff has agreed to convey to the defendants.
The effect of the conveyances to the plaintiff and of its conveyance to Ernst must also be considered in determining the defendants' rights. The plaintiff took the premises in question subject to a restriction, "binding upon the [plaintiff] its successors or assigns and all persons claiming thereunder," that "no business . . . [should] be conducted on the said premises." Pursuant thereto, in conveying two lots to Ernst in July, 1944, the plaintiff imposed restrictions against business use. Thereafter, in April, 1945, the land west of the highway was released from any servitude imposed by the deed to the plaintiff of June, 1944.
The restriction contained in the deed to Ernst was sufficiently accounted for by the then existing restrictions created by the deed of Tavern Investment Corporation, Inc. to the plaintiff. They would have been binding upon Ernst in any event. Burbank v. Pillsbury, 48 N.H. 475. But the land west of the highway, including the lot to be conveyed to the defendants has been freed of any servitude in favor of the plaintiff's grantor. Hence Lot 12 is no longer under servitude unless one persists because of a reciprocal restriction implied from the plaintiff's deed to Ernst. As has already been determined, no such restriction resulted from other deeds of individual lots, given by the plaintiff's predecessors.
The deed to Ernst contained no express provision for reciprocal restrictions upon remaining land of the grantor. The grantor did reserve, however, the right to conduct a real estate business upon the land retained. This might be thought to indicate an understanding that but for the reservation such a right would be precluded, and therefore that any other business use, not similarly reserved, was intended to be forbidden. But if it be assumed that such an implied restriction was intended, there still remains the question of how much of the land retained was intended to be affected.
The 1944 plan of "Part of Seabrook Beach" referred to in the Ernst deed is not before us. If the lots conveyed are those shown by the same lot numbers upon the 1944 plan which is before us, they are situated some five hundred feet distant from the lot which the defendants have contracted to buy, and on the opposite side of the highway. It is impossible to say with any certainty that any implied restriction in favor of Ernst was intended to attach to land thus separated from the land conveyed. Cf. Clemence v. Mazika, 73 R. I. 254, 262. The burden of establishing the restriction and its application to Lot 12 is upon the defendants, and it will not be implied upon doubtful evidence. Loomis v. Collins, 272 Ill. 221, 232; Lovell v. Columbian Nat'l Life Ins. Co., 294 Mass. 473, 477, 478. See Wickwire v. Church, 142 N. J. Eq. 174, 179; Baederwood, Inc. v. Moyer, 370 Pa. 35. The only express restrictions shown presently to exist are upon lots lying between the highway and the ocean. We cannot say as a matter of law that like restrictions must be implied as to the section of land westerly of the highway, between it and the marsh, where Lot 12 is situate.
The first three questions transferred are answered in the negative, and the fourth in the affirmative.