Circle Square Co. v. Atlantis Development Co.
| Decision Date | 18 August 1976 |
| Docket Number | No. 20273,20273 |
| Citation | 230 S.E.2d 704,267 S.C. 618 |
| Court | South Carolina Supreme Court |
| Parties | CIRCLE SQUARE COMPANY and Lois H. Richardson, Appellants, v. ATLANTIS DEVELOPMENT COMPANY and Alton E. Jones, Individually and as partnerscomprising Atlantis Ventures, and Atlantis Ventures, Respondents. |
J. Fred Buzhardt, Jr., and William W. Jones, Jr., of Dowling, Dowling, Sanders & Dukes, Hilton Head Island, for appellants.
Eugene F. Rogers, of Rogers, McDonald, McKenzie & Fuller, Columbia, and Randolph Murdaugh, III, of Murdaugh, Peters & Murdaugh, Hampton, for respondents.
This is an action in equity commenced on or about August 5, 1975, in the Court of Common Pleas for Beaufort County, seeking permanently to enjoin the construction of a shopping area by respondents on property subject to restrictive covenants running with the land. The lower court denied relief. We reverse.
In 1956, The Hilton Head Company was the owner of what is now generally known as the Forest Beach Subdivision of Hilton Head Island, South Carolina, and at that time, executed and recorded a Declaration of Covenants (hereinafter 'Declaration') with respect to the land in the said Forest Beach Subdivision. By its Declaration, The Hilton Head Company established a plan or scheme of development for the property, dividing the property into five (5) categories according to usage, to wit: residential, semi-residential and commercial categories for private use, and roadside areas and parks for public use. In addition to defining the several types of areas and designating the property placed in each use category, various restrictions were placed upon each of the use categories. The restrictive covenants were specifically declared to run with the land and to be enforceable by persons who subsequently acquired property within the subdivision.
The subdivision plan set forth in the Declaration is so designed that the 'semi-residential' areas lie and form a buffer between the residential areas and the commercial areas. The residential areas are restricted to single family dwellings. 'Semi-residential' is defined in the Declaration as 'buildings in the nature of motels, multiple-unit apartment houses and any accompanying facilities, such as restaurants and swimming pools.'
The Declaration provides that the restrictions imposed by the Declaration may be changed by written consent of the owners of the two-thirds (2/3) of the acreage in the subdivision.
Respondent Atlantis Development Company acquired title to land on the west side of Forest Drive subject to the semi-residential restrictions on which they have constructed a 72-unit condominium complex. Respondents contemplate selling these units as condominiums but under present circumstances are renting a portion by the day, week, or month.
Respondents also own The Adventure Inn, a motel, located across the street from the condominiums, on the east and ocean side of Forest Drive. They propose to construct a shopping center called 'Saltaire Village' composed of sixteen (16) buildings across the street from The Adventure Inn, in front of their condominiums. Under proposed plans, the following businesses will operate in the shopping center: a men's wear shop, a ladies' wear shop, a gift shop, an antique shop, a beauty shop, a candy and ice cream store, a children's clothing shop, a gift and towel shop, a shoe shop, a sports shop, a needlepoint shop, a gourmet food, wine and spirits shop, a restaurant and supper club, a country kitchen restaurant, the business office of respondents and a real estate agency.
The area designated 'semi-residential' has been substantially developed since 1956, and on such areas there now exist more than two thousand motel, hotel or multi-unit apartment house units. There are restaurants and swimming pools associated with the hotels and motels.
In addition, various 'business' type enterprises have operated or are operating within the semi-residential area, ranging from a par three golf course to a lawyer's office. The most significant, by far, of such enterprises is a shopping area operated for an undetermined number of years in connection with The Hilton Head Inn by The Sea Pines Company. No court action has been previously brought to enforce the restrictions established by the Declaration of The Hilton Head Company. In 1968, however, The Sea Pines Company commenced construction of a dry cleaning service establishment in the semi-residential area, and under threat of litigation, the construction was discontinued and a portion of the improvements were removed from the site.
In the Declaration, The Hilton Head Company reserved the right to prior approval of all architectural plans, specifications, construction materials and location before construction of any building or structure on the restricted areas. Subsequent to the commencement of the action, respondents obtained this approval for its proposed shopping center.
By agreement of the parties, the matter was submitted to the court upon an agreed stipulation of fact and issues. The issues submitted were whether the proposed use by respondents constituted an allowed usage of the property under the semi-residential restrictions imposed by the Declaration of The Hilton Head Company, and if not, were the appellants barred by laches, waiver or estoppel from asserting objections to such use.
The court below found that the use proposed by respondents was an allowable one in the area designated semi-residential, and denied injunctive relief. In so concluding, the court below relied on the approval of the architectural standards of respondents' plan by The Hilton Head Company, and the operation of the shops on the premises of The Hilton Head Inn as demonstrating the interpretation placed on the covenants and restrictions by the parties to the contract.
Appellants contend that the proposed shopping center is not an allowable usage of that portion of Forest Beach designated as semi-residential. We agree. In construing the allowable usages under this restriction the Court must consider the entirety of the Declaration. Sprouse v. Winston, 212 S.C. 176, 46 S.E.2d 874 (1948), especially where, as here, there are several categories of restriction. An examination of all is necessary to ascertain the total scheme.
From an examination of the Declaration and exhibits showing the relative locations of the various categories of restrictions, it is inescapable that the plan established three categories for private use, to wit: residential, semi-residential, and commercial. Reference to the plats shows clearly that the semi-residential areas lie between the residential areas and the commercial areas, forming a buffer between them.
The residential areas are restricted by the Declaration to one detached single family dwelling, not to exceed two and one-half stories and a private garage which can include servant's quarters.
As noted above, 'semi-residential' is defined in the Declaration as 'buildings of the nature of motels, hotels, multiple-unit apartment houses and any accompanying facilities, such as restaurants or swimming pools.'
No specific definition is included in the Declaration for 'commercial' in the part of the Declaration dealing with commercial areas, but some of the restrictions contained therein shed light on the intention. For example, in prescribing restrictions applicable in the commercial area, the Declaration repeatedly uses the terms 'shops or other business establishments.' Every reference to the enterprises to be contained in the commercial areas commences with 'shops.' Also, the Declaration provides that no more than fifty (50%) percent of the total area in any tract restricted commercial may be utilized for enclosed and/or covered commercial buildings or facilities of any kind, and that the remainder shall be available for landscaped grounds and gardens, swimming pools, walkways, vehicular parking, outdoor recreational facilities and similar facilities. No such space limitations are imposed by the Declaration on semi-residential areas.
If the Declaration were construed to permit a shopping center to be constructed and operated in semi-residential areas, there would be no applicable prohibition in the Declaration to preclude up to one hundred (100%) percent of a given tract from being utilized for a building, except for minimum setback-from-streets requirements. Considering the very elaborate development scheme, obviously devised to insure a major retention of open spaces and to avoid high density development, even in commercial areas, such a construction of the Declaration would not only be strained, but clearly contrary to the expressed scheme of the declarants.
Consideration of the entire Declaration, and the scheme of development, demonstrates an intention for the 'shops' to be in the commercial areas, and for businesses to be confined to the most remote areas in relation to the residential areas. Thus, the only allowable method for locating a shop in the semi-residential area is for that shop to qualify as an 'accompanying facility' to an...
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