Craven County v. First-Citizens Bank & Trust Co.

• Decision Date: 15 April 1953
• Docket Number: FIRST-CITIZENS,No. 314,314
• Citation: 237 N.C. 502,75 S.E.2d 620
• Court: North Carolina Supreme Court
• Parties: CRAVEN COUNTY, v.BANK & TRUST CO., Inc.

Page 620

75 S.E.2d 620

237 N.C. 502

CRAVEN COUNTY, v. FIRST-CITIZENS BANK & TRUST CO., Inc.

No. 314

Supreme Court of North Carolina.

April 15, 1953

W. B. R. Guion and R. A. Nunn, New Bern, for plaintiff, appellee.

Ward & Tucker, New Bern, for defendant, appellant.

JOHNSON, Justice.

Is the land sought to be conveyed to the defendant, First-Citizens Bank & Trust Company, subject to a restrictive burden under which the Bank may be prevented from using the property for business purposes? This is the question presented by this appeal.

In the outset it is to be noted that the principle upon which these restrictive burdens on the use of lands within a real estate subdivision are enforceable is that they are servitudes imposed on the various lots or parcels for the benefit of the area affected. Such servitudes ordinarily are treated as easements appendent or appurtenant to the various lots or parcels within the restricted area. The existence of two estates in land is required to support an easement of this sort. On the one hand is the estate which bears the burden--the servient tenement; on the other is the estate which derives the benefit--the dominant tenement. The one owes, whereas the other is owed the obligation. Tiffany, Law of Real Property, Third Edition, Sec. 758; Clark, Covenants and Interests Running with Land, Second Edition, p. 1134; Mordecai's Law Lectures, Second Edition, pp. 469-470.

These servitudes, commonly referred to as negative easements, are usually imposed by restrictive covenants between the developer and the initial purchasers and become seated in the chain of title so that subsequent purchasers are chargeable with notice thereof, Turner v. Glenn, 220 N.C. 620, 18 S.E.2d 197, thus fixing it so each lot in a legal sense owes to all the rest of the lots in the subdivision the burden of observing the covenant, and each of the rest of the lots is invested with the benefits imposed by the burdens. Accordingly, in legal contemplation the servitude imposed on each lot runs to and attaches itself to each of the rest of the lots in the restricted area, thus forming a network of cross-easements or cross-servitudes, the aggregate effect of which is to impose and confer on each lot reciprocal and mutual burdens and benefits appurtenant to the lots, so as to run with the land and follow each lot upon its devolution and transfer. Thompson on Real Property, Permanent Edition (1940), Vol. 7, Sec. 3631; 14 Am.Jur., Covenants, etc., Sections 193 and 194.

Therefore, where land within a given area is developed in accordance with a general plan or uniform scheme of restriction, ordinarily any one purchasing in reliance on such restriction may sue and enforce the restriction against any other lot owner taking with record notice, and this is so regardless of when each purchased; and similarly, a prior taker may sue a latter taker. Johnston v. Garrett, 190 N.C. 835, 130 S.E. 835; Myers Park Homes Co. v. Falls, 184 N.C. 426, 115 S.E. 184; 26 C.J.S., Deeds, § 167; Tiffany, Law of Real Property, Third Edition, Chapters 17 and 18, p. 441 et seq.; Clark, Covenants and Interests Running with Land, Chapter 6, p. 170 et seq.

The right of action rests upon the principle that a negative easement of this sort is a property right amounting to an interest in land. City of Raleigh v. Edwards, 235 N.C. 671, 71 S.E.2d 396; Turner v. Glenn, supra; Davis v. Robinson, 189 N.C. 589, 127 S.E. 697.

Decision here does not require a detailed discussion of the procedural requirements necessary to be followed in order to impose restrictive servitudes on a given area of land. The minimum procedural requirements necessary to impose such burdens have been delineated and fully explained in numerous decisions of this Court, among which are these: East Side Builders v. Brown, 234 N.C. 517, 67 S.E.2d 489; Sedberry v. Parsons, 232 N.C. 707, 62 S.E.2d 88; Higdon v. Jaffa, 231 N.C. 242, 56 S.E.2d 661; Turner v. Glenn, supra; Humphrey v. Beall, 215 N.C. 15, 200 S.E. 918; Davis v. Robinson, supra; Snyder v. Heath, 185 N.C. 362, 117 S.E. 294; Myers Park Homes Co. v. Falls, supra; Stephens Co. v. Myers Park Homes Co., 181 N.C. 335, 107 S.E. 233.

It suffices here to say that our decisions emphasize these factors: (1) that to be effective the restrictive covenant sought to be enforced must be part of a general plan or scheme of development which bears uniformly upon the area affected, Sedberry v. Parsons, supra; Humphrey v. Beall, supra; and (2) that where an entire tract is developed over an extended period of time, and the intent clearly appears, as disclosed by the record chain of title, that the restrictions were imposed by the developer in accordance with a plan of development by separate, distinct divisional units within the larger area, rather than as a single development project, effect will be given to restrictive covenants only as they relate to each such separate unit. Stephens Co. v. Myers Park Homes Co., supra; Myers Park Homes Co. v. Falls, supra; Snyder v. Heath, supra; Higdon v. Jaffa, supra; East Side Builders v. Brown, supra; See also Besch v. Hyman, 221 App.Div. 455, 223 N.Y.S. 231; Russell Realty Co. v. Hall, Tex.Civ.App., 233 S.W. 996.

Further, it is to be noted that we adhere to the rule that these restrictive servitudes being in derogation of the free and unfettered use of land, the covenants imposing them are to be strictly construed in favor of the unrestricted use of property. Davis v. Robinson, supra. See also 14 Am. Jur., Covenants, etc Sec. 212.

It seems to have been assumed below that the main body of the land lying west of Fort Totten Drive and north of Neuse Boulevard is subject to negative easements, imposed pursuant to a general plan or uniform scheme of development, which confer upon the owners of these lots reciprocal rights to prevent the use of any of them for business purposes. Humphrey v. Beall, supra; Sedberry v. Parsons, supra.

Conceding, without deciding, that such is the status of the title to the lots within this area, nevertheless decision here requires that we determine the question whether or not these easements or restrictive servitudes reach across Fort Totten Drive and attach to any part of the 7.3 acre tract. The determination of this question is dependent largely upon whether the developers of this property treated and dealt with the two areas as a single unit and intended the restrictive easements to cover both tracts, or whether the two areas were treated and dealt with as separate, independent units, with intent of the developers and purchasers that the restrictions imposed be limited to the area west of Fort Totten Drive and north of Neuse Boulevard. This intent is to be gathered from the terms of the covenants and related facts appearing in the chain of title. It may not be established by parol. Turner v. Glenn, supra; Davis v. Robinson, supra.

The record here discloses these crucial facts bearing on the question at hand: (1) The original map of the subdivision shows the 7.3 acre Fort Totten tract left as open acreage designated as 'Jones and Meadows Land,' whereas the large area west of Fort Totten Drive and north of Neuse Boulevard is divided into streets, Lots, and so forth. (2) The trust agreement executed 6 November, 1926, by the Bank as trustee stipulates in effect that building restrictions to be directed by Fort Totten Inc., shall be imposed on the subdivided area west of Fort Totten Drive and north of Neuse Boulevard, whereas the 7.3 acre tract designated 'Jones and Meadows Land' is to be conveyed as a whole or in parcels as directed by Fort Totten, Inc., with no reference being made to restrictions on this area. (3) The printed form contract approved by Fort Totten, Inc., and used in selling the lots expressly recites that the designated restrictions apply 'to lots west of Fort Totten Drive.' (4) the instrument dated 15 january 1931, substituting John A. Guion as trustee in place of the defunct bank, reiterates that the lots 'west of Fort Totten drive * * *' shall contain building restrictions. and leaves the arca east of the Drive to be sold as acreage, with no mention being made of restrictions (5) On 27 November, 1937, Judge Frizzelle entered an order approving the proposed contract made by the Receiver of Fort Totten, Inc., with J. W. Ferrell Company for the sale of the remaining lots. This contract, embracing lots in both areas, stipulates that 'all lots sold to be subject to building restrictions heretofore provided for the development as contained in the conveyances heretofore made.' At the sale conducted pursuant to the contract, 'B. O. Jones, Trustee for Craven County,' became the purchaser of the entire 7.3 acre area for the price of $2,000, and the report of sale 'was approved and confirmed' by Judge Harris, and the record here discloses no reference to restrictions in the order of confirmation.

These and other related facts disclosed by the record impel the conclusion that for restrictive use purposes the large suburban development west of Fort Totten Drive and north of Neuse Boulevard was treated and dealt with by the developers and purchasers of this property as being entirely separate from the 7.3 acre Fort Totten area east of the Drive. The record effectively negatives the suggestion that the parties intended the restrictions imposed on the lots in the larger area to extend to the neighboring 7.3 acre parcel.

We have not overlooked the consent judgment entered 1 December, 1934. This judgment reduced the sale price of the unsold property and authorized the Receiver of Fort Totten, Inc., to sell the remaining lots on both sides of Fort Totten Drive at any time within three years. The judgment provides that the Receiver may not sell the lots in the 7.3 acre area 'until protective building restrictions * * * applying to this area are agreed upon by Craven County, Virginia Trust Company and Mrs. Julia B. Jones.' As to this, it is suggested by the...