Franklin v. Elizabeth Realty Co.

• Decision Date: 27 January 1932
• Docket Number: 468.
• Citation: 162 S.E. 199,202 N.C. 212
• Parties: FRANKLIN et al. v. ELIZABETH REALTY CO. et al.
• Court: North Carolina Supreme Court

162 S.E. 199

202 N.C. 212

FRANKLIN et al. v. ELIZABETH REALTY CO. et al.

No. 468.

Supreme Court of North Carolina

January 27, 1932

Appeal from Superior Court, Mecklenburg County; Harding, Judge.

Action by Alton W. Franklin and others against the Elizabeth Realty Company and others. From a judgment dismissing the action as of nonsuit, plaintiffs appeal.

Affirmed.

In action to remove restrictive covenants limiting use of property to residential purposes, evidence that property had changed from residential to industrial held to require granting of judgment of nonsuit (C.S. § 567).

Evidence in action to remove restrictive covenant limiting property to residential use held to disclose that development in question was general scheme for residential development.

This is a civil action brought by plaintiffs against defendants to remove cloud upon plaintiffs' title by virtue of certain restrictive covenants in the deeds under which plaintiffs held title. Plaintiffs pray: "That it be decreed that the restrictions set forth in the deed from Elizabeth Realty Company to H. C. Sherrill Company be declared to be null and void and of no force and effect, and that the plaintiffs be declared to be the owners of said property in fee simple freed and discharged from said restrictions."

The Elizabeth Realty Company established a subdivision of thirty-two lots on East Morehead street in the city of Charlotte, N.C. On March 8, 1924, by deed duly registered in Book of Deeds 534, p. 170, registry for Mecklenburg county N. C., the defendant Elizabeth Realty Company conveyed to the defendant H. C. Sherrill Company said thirty-two lots with certain restrictive covenants and conditions, one of which is: "The property shall be used for residential purposes only," etc. A map of the thirty-two lots, showing the size of the lots, etc., is recorded in Book 332, p. 80 register of deeds office of Mecklenburg county, N.C. All of the lots were sold with restrictions that "the property shall be used for residential purposes only," except one. The one not restricted by deed has a residence built on it in accordance with the restrictions. A further restriction: "No residence or dwelling house shall be erected or occupied on said lot costing less than $7,500.00 (servants' house excepted)." The plaintiff Dorothy G. Franklin purchased from H. C. Sherrill Company. The other plaintiff, Dr. R. P. Lyon, is successor in title from H. C Sherrill Company. In the deed above mentioned, from the Elizabeth Realty Company to H. C. Sherrill Company, is the following: "It is hereby understood and agreed by the parties hereto that all the foregoing covenants, conditions and restrictions shall run with the land and shall be held to bind the land and all subsequent owners or occupants thereof and the acceptance of this deed shall have the same force and binding effect upon the party of the second part, its successors and assigns, as if said deed were signed by the party of the second part." All the deeds from the defendant H. C. Sherrill Company conveying various lots contain a clause substantially as follows: "This conveyance is made subject to the restrictions, conditions and reservations set forth in the aforesaid deed from Elizabeth Realty Company." Such is in plaintiffs' deeds.

The plaintiff Dorothy G. Franklin owns lot 4, in block 6, conveyed to her by H. C. Sherrill Company by deed dated July 14, 1928, and registered in Book of Deeds 713, page 69, registry for Mecklenburg county, N.C. The other plaintiff, Dr. R. P. Lyon, owns lot 10 in block 5, conveyed to him by Coy E. Langford and wife, deed dated January, 1925, and registered in Book of Deeds 735, p. 77, registry aforesaid.

The plaintiffs contend: That since the date of the conveyance from the defendant Elizabeth Realty Company to the defendant H. C. Sherrill Company above referred to, and since the dates of the conveyances from the H. C. Sherrill Company to the plaintiffs in this action above referred to, the character of the community in which the said lands are located has been materially changed by the expansion of the city of Charlotte and the spread of industry, causing a fundamental change in the essential character of the property herein referred to.

On the other hand, the defendants contend: That at the time the plaintiffs bought their lots every building on Morehead street now used for business, about which they complain, except the filling station, was either in existence or in the process of construction, and some were occupied and in use. None that they complain of, or the filling station, is in the Elizabeth Realty Company development. That the Elizabeth Realty Company formerly owned the tract of land in which the plaintiffs' property is located; that, pursuant to a general plan to develop and sell that particular tract as high-class restricted residential property, it made and recorded the map thereof recorded in Book 332 at page 90 in the office of the register of deeds for Mecklenburg county, N. C., on which map is shown the property of the plaintiffs and defendants; that 32 lots were shown on said map; and that, as appears from said map, the said restricted area extends from the intersection of Morehead avenue and the street now known as Harding place to the intersection of Morehead avenue and Coddington avenue. That the said Elizabeth Realty Company thereafter, pursuant to said general plan, proceeded to sell said lots as shown on said map; that it has sold all or practically all of said lots; that in every deed except one it has inserted the identical restrictions set forth in the complaint; that in said one deed, which was to Chase Brenizer, an officer of the Elizabeth Realty Company, the said restrictions, through inadvertence, were omitted, but that shortly after the execution of said deed he erected upon said property a residence, conforming in all respects to said restrictions, which residence is now owned and occupied by P. C. Whitlock, and that all owners of said lots have fully observed the said restrictions; that all persons buying property in said restricted area, including the defendant H. C. Sherrill Company, bought in reliance upon said restrictions and general plans; that only a very small percentage of said lots remain unimproved at this time; and that all of said lots, which have been improved, are used solely for residential purposes, except the lot owned by this defendant H. C. Sherrill Company, on which a residence has been constructed, but is being temporarily used by Miss Burbank. That there has been no change in the character of the restricted area in which is located the property of the plaintiffs. That to eliminate said restrictions from the plaintiffs' said property, which is located in said restricted area, and to permit the plaintiffs to use their said property for business purposes, as they are attempting to do, would violate said general plan and seriously and irreparably damage the property of the other owners in said restricted area.

Plaintiff Dr. R. P. Lyon testified, in part: "The other stores facing Morehead Street were then occupied. They were the same ones that are there today, but not the same occupants. It is a fact that every store which faces Morehead Street today was in existence at the time I bought my lot except the filling station. That was built after I bought my lot."

Plaintiff Alton W. Franklin testified, in part: "I selected this place because it was a high-class residential place and desirable for my business (photography). I knew that Morehead Street was a restricted area. I understood that everything east of Harding Place was unrestricted. I saw the store on the south side. Saw the cars going back and forth on Morehead Street, but nothing like they are now. All the business places except the Burbank place and the golf course are located east of Harding Place, (not in the Elizabeth Realty Co. development). *** I knew the restrictions were there because Mr. Sherrill told me so and I took his...