Crowley v. Knapp
| Citation | 288 N.W.2d 815,94 Wis.2d 421 |
| Decision Date | 04 March 1980 |
| Docket Number | No. 76-398,76-398 |
| Parties | John F. CROWLEY, Eileen M. Crowley, Gerald E. Wright and Linda L. Wright, Plaintiffs-Respondents, v. Donald F. KNAPP, Bette M. Knapp, and Lori Knapp, Inc., a Wisconsin Corporation, Defendants-Appellants. |
| Court | United States State Supreme Court of Wisconsin |
Robert C. Kelly, Madison, argued, for appellants; William Haus and Kelly & Haus, Madison, on brief.
Robert R. Scheffer, Prairie du Chien, argued, for respondents; Scheffer & Queram, Prairie du Chien, on brief.
This case arises out of the attempted enforcement of restrictive covenants in a deed to two lots in an area known as "Meadowlane" in the outskirts of Prairie du Chien, Wisconsin. The property was purchased in 1973 by Donald F. Knapp and his wife, Bette M. Knapp (hereafter the Knapps), for the purpose of establishing a non-institutional home for retarded adults. Neighbors, who took title to their property from a common grantor, brought an action to enjoin the defendants from using the property for this purpose on the grounds that it violated the restrictive covenants. The court, after a trial, enjoined the defendants from the use of the property as a residence for retarded adults upon finding that the Knapps had violated the following deed covenants:
Although no specific finding was made in respect to the covenant violated, the court also enjoined the defendants from carrying on any commercial activity on the premises. The appeal by the Knapps is from the entire judgment.
The basic question is whether, based on the undisputed facts, the defendants' use of the property as a state-licensed, run-for-profit group residence housing eight unrelated retarded adults violated the covenant requirement that the property's use "shall be restricted to . . . one single family dwelling . . . for residential purposes only." Before that question can be addressed, however, it must be determined whether the plaintiffs, neighboring landowners, who derive their titles from a common grantor, can enforce restrictive covenants incorporated in a deed to which they are not parties.
The record demonstrates that the original landowners of the parcel known as Meadowlane were Clarence and Mildred Ahrens (hereafter Ahrens). On March 28, 1968, Ahrens conveyed a lot to Gerald E. and Linda L. Wright (hereafter the Wrights), who are plaintiffs in this action. On May 10, 1968, Ahrens conveyed a lot to the other plaintiffs, John F. and Eileen M. Crowley (hereafter the Crowleys). On the same day, Ahrens conveyed two lots to Franklin A. and Mary A. Weeks (hereafter the Weeks). It is the use of this property, conveyed to the Knapps on November 2, 1973, which is in question in this action. At the time of the initial conveyance to the Wrights, each lot of the Ahrens' property was marked by stakes. Each of the Meadowlane lots subsequently conveyed by Ahrens was subject to restrictive covenants which were substantially identical to those applicable to the Knapps' property.
The plaintiffs in this case were not privy to the restrictive covenants in the deed from Ahrens to the Weeks or the deed from the Weeks to the Knapps. The Knapps take the position that, although an owner of land may impose restrictions upon the portion conveyed, those restrictions create only a personal right in the grantor unless it is apparent from the face of the instrument or it is clear by fair implication that the right will inure to the benefit of other grantees acquiring title in the same tract. Stated differently, the fact that the owner of one lot would be benefited by the enforcement of a restrictive covenant in a deed conveying a nearby lot to another party does not entitle the former to enforce the covenant where there is no privity of contract, unless it is shown that the parties derived title from a common grantor, that the restrictions were imposed for the benefit of the other lot, and that the party seeking to enforce the covenant purchased his lot with the knowledge of, or in consideration of, the restrictions.
State courts have adopted different theories to justify the enforcement of restrictive covenants by one who is not privy to the instrument containing the covenant sought to be enforced. See generally, Annot., Who May Enforce Restrictive Covenant, 51 A.L.R.3d 556 Et seq. (1973); 20 Am.Jur.2d, Covenants, sec. 292 Et seq.
In Wisconsin, this court has enforced private deed covenants on the theory that the common grantor imposed restrictions on each parcel of property sold, with a general scheme in mind of making the individual lots more attractive to all purchasers. According to this theory, even in the absence of privity of contract, another purchaser of land in the same tract may enforce the covenant when there is evidence to show that the original grantor inserted the covenant to carry out a general plan or scheme of development. The question, then, is whether the common grantor, Ahrens, placed the restrictive covenants in the deed for the purpose of carrying out a general plan of development, which was to inure to the benefit of other grantees.
This court has repeatedly accepted the "general plan or scheme doctrine" in determining whether a person purchasing property in a particular tract may invoke the equitable powers of the court to enforce a covenant to which he was not privy. Representative cases approving relief on this theory are Ward v. Prospect Manor Corp., 188 Wis. 534, 206 N.W. 856 (1926); Boyden v. Roberts, 131 Wis. 659, 111 N.W. 701 (1907). The court most recently stated the doctrine in Hall v. Church of the Open Bible, 4 Wis.2d 246, 248, 89 N.W.2d 798, 799 (1958). The court said:
"It is a well-established rule that a covenant restricting land to residential use, inserted by the proprietor in a conveyance of his lands, inures to the benefit of all the purchasers where it is inserted for the purpose of carrying out a general plan or scheme of development, and that it constitutes at least an equitable servitude upon the land, and constitutes a valuable property right which a court of equity will enforce in the absence of facts and circumstances making such enforcement unjust or inequitable."
The trial court specifically held that the Crowleys and the Wrights, the common grantees, were proper parties to enforce the restrictions, because it found:
"That it was the intent and purpose of Ahrens to create and adopt a general plan or scheme for a subdivision to be known as Meadowlane Addition which would contain only single family dwellings used exclusively for residential purposes . . .."
A trial court's finding of fact in respect to a grantor's intention to create a restrictive covenant running with the land is entitled to the same weight on appeal as are other findings of fact by a court. Clark v. Guy Drews Post, 247 Wis. 48, 18 N.W.2d 322 (1945). Accordingly, the court's finding must be accepted unless contrary to the great weight and clear preponderance of the evidence.
Our examination of the record shows that Ahrens consistently inserted substantially identical covenants into the Meadowlane deeds. When he made his original conveyances, Ahrens stated that he intended to put the same restrictions on all the Meadowlane property, and he instructed his real estate representative to put the same deed restrictions on any remaining Meadowlane property when it was sold. Additionally, when Ahrens sold the first parcel, the entire Meadowlane tract had been staked out, showing that a common plan for the disposition of all the Meadowlane property existed from at least 1968.
The defendants assert, however, that a general plan of development can be proved only if there was evidence that the plan existed when the initial conveyances were made to the Weeks and the Crowleys on May 10, 1968. The defendants argue that there was no legally cognizable subdivision on that date and that it is only from the pattern of the subsequent conveyances that any evidence can be gleaned of a common plan. The Knapps argue that no general plan existed at the time of the original conveyance of the property eventually acquired by the Knapps, and that, therefore, the covenants in the chain of title by which the Knapps acquired the property were enforceable only by the privies to those deeds.
The record shows that the trial court considered not only the conduct and representations of the common grantor at and prior to the original conveyance, but also considered his subsequent conduct in selling other Meadowlane parcels.
Boyden v. Roberts, supra, and Ward v. Prospect Manor Corp., supra, conclude that the general plan or scheme for the subdivision could be ascertained from the common grantor's manifestation of intent prior to conveying any part of a defined area. Although such prior manifestations of intent are sufficient to show a general plan, a Wisconsin court is not restricted to the examination of conduct occurring at or prior to the original conveyance. In Schneider v. Eckhoff, 188 Wis. 550, 206 N.W. 838 (1926), the court stated that the grantor's intent to create a general development plan could best be determined by examining the pattern manifested by all of his conveyances. In Schneider, the court considered whether a grantee could build a combination residence-retail building in a platted subdivision containing individual deed restrictions. The court stated:
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