H. J. Griffith Realty Co. v. Hobbs Houses, Inc.

• Decision Date: 09 December 1960
• Docket Number: No. 6643,6643
• Citation: 68 N.M. 25,1960 NMSC 128,357 P.2d 677
• Parties: H. J. GRIFFITH REALTY CO., Plaintiff-Appellant, v. HOBBS HOUSES, INC., Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 677

357 P.2d 677

68 N.M. 25

H. J. GRIFFITH REALTY CO., Plaintiff-Appellant, v. HOBBS HOUSES, INC., Defendant-Appellee.

No. 6643.

Supreme Court of New Mexico.

Dec. 9, 1960.

Rose & Johnson, Hobbs, Hoskins, King, Springer & McGannon, Kansas City, Mo., for appellant.

Neal & Neal, Girand & Stout, Hobbs, for appellee.

CARMODY, Justice.

Plaintiff appeals from the refusal of the trial court to set aside a restrictive covenant contained in a deed to property of the plaintiff. Plaintiff also complains of the failure of the trial court to make a declaration as to the meaning and legal effect of the restriction, if found to be valid.

The real controversy in the case has to do with the construction and effect of a provisional condition contained in the deed from the defendant to the plaintiff's predecessor in title.

The property involved, consisting of 14.21 acres within the city of Hobbs, was purchased from the defendant on July 9, 1948. Prior to the purchase, the representatives of the plaintiff were shown a master plan for the development of an entire section of land. At this time, only a portion of the land had been dedicated, but the master plan showed the manner in which the defendant planned to subdivide the section. According to the master plat, the land which plaintiff now owns was included within the area of the property which was to be divided into blocks, and was to be used for residential purposes. The plat also included locations for industrial sites, a shopping center and a school. The property was sold to the plaintiff to be used for exhibiting motion pictures, but it was thoroughly understood at the time that should the property be permanently abandoned as a theatre site, that then and in that event plaintiff would be required to subdivide and use the property only for residential building sites.

Prior to the actual conveyance, the defendant had dedicated a part of the section under the term 'Unit I of Broadmoor Addition,' and this unit was burdened with specific restrictive covenants in order to guarantee that all the property in the unit would be used purely for residential purposes. This particular unit of the section was a considerable distance from the property of the plaintiff and not contiguous thereto. After the deed was issued to the plaintiff, the defendant dedicated additional units, being numbers two through seven of the Broadmoor Addition, which were likewise restricted. However, these additional units still did not bring the dedicated part of the defendant's land to that now owned by the plaintiff, and at the time of trial the defendant still owned a relatively large tract, immediately adjacent to that of the plaintiff's, which had not been dedicated and restricted.

After the sale to the plaintiff, the defendant has continuously followed the master plan for the development of the real estate, with perhaps three exceptions in the proposed residential area. Approximately a year after the plaintiff's purchase, the defendant deeded to the Veterans of Foreign Wars, as a gift, a piece of property immediately adjoining that of plaintiff, and there has been erected upon it a club house. In 1953, by gift the defendant deeded to the Women's Civic Club of Hobbs a piece of property next to that of the Veterans of Foreign Wars, and there was constructed upon it a club building. More recently, the defendant has also sold to the board of education a portion of the property, for the building of a school. These deeds contained similar restrictive provisions to that contained in the deed to the plaintiff that the property shall have residence restrictions placed thereon if it ceases to be utilized for the purpose for which it was originally conveyed.

The actual provision as set forth in the deed from the defendant to the plaintiff, and over which this entire controversy arises, is as follows:

'It is understood and agreed that this property is sold for use as a theatre site, and in the event grantee, its successors or assigns, should permanently cease to use the premises for such purpose or should it use the same, or any part thereof, for any purpose other than a theatre site, then in either of such events, the restrictive covenants identical to those now existing in Broadmoor Addition, Unit I to the City of Hobbs shall immediately be imposed upon and maintained upon the land. A breach of this covenant shall be grounds for the cancellation of this deed by the grantor, its successors and assigns against the grantee, its successors and assigns.'

Summarizing the restrictive covenants of Unit I, Broadmoor Addition: They are to remain effective until January 1, 1967, and thereafter to be automatically extended for successive 10-year periods unless changed by majority vote of the then owners; the remedy for violation is by injunction or for damages by any owner of property in the subdivision. The restrictions themselves relate principally to the size, minimum cost, type, location, and use of the building lots, and there is no contention that they are unenforceable.

In this appeal, plaintiff relies upon six points for reversal, but they are so interrelated that they will be discussed together. Primarily, plaintiff urges that the covenant in the deed should be declared invalid because it is conflicting, vague, susceptible of many different interpretations, and substantially lacking in clarity, and that it is unreasonable, under the circumstances of this case, and invalid as contrary to public policy.

The problems arising from the imposition of restrictive covenants or conditions subsequent are such that the courts are continuously called upon the determine them. The courts and text writers frequently comment on the wide divergence of opinion and attempt to compare and construe conflicting results. However, in this field of law, perhaps more than any other, each case must depend upon its own particular facts, and an attempt to apply specialized rules is singularly unsatisfactory. So it is in the instant case, and we will not attempt, any more than is absolutely necessary, to discuss or distinguish the multitude of cases bearing on the general subject. It is of interest that the peculiar facts of this case are apparently such that counsel could not cite and the court has not found any others that are factually similar. This is because the covenant in the deed requires contingent affirmative action of the grantee as distinguished from mere compliance.

In this state, we do have certain guiding decisions which are helpful in a general way. In Berger v. Santa Fe College, 1923, 28 N.M. 545, 215 P. 825, 826, we said:

'It may be said that conditions which, if enforced, work a forfeiture of the estate are not favored in the law, and are to be construed strictly and most strongly against the grantor * * *.' But, where the language is plain, the condition will ordinarily be enforced * * *.' The intention of the parties, as gleaned from the language used, and the circumstances surrounding the transaction, will ordinarily be the controlling consideration in the interpretation of the condition of the deed * * *.'

In Rowe v. May 1940, 44 N.M. 264, 101 P.2d 391, we approved the above language and refused to set aside restrictions even though a reversion clause was contained therein. In Hoover v. Waggoman, 1948, 52 N.M. 371, 199 P.2d 991, 995, we stated that effect is to be given the intention of the parties as shown by the language of the whole instrument, considered with the circumstances surrounding the transaction and the object of the parties in making the restrictions. Also, in the Hoover case we quoted at some length from Laughlin v. Wagner, 1922, 146 Tenn. 647, 244 S.W. 475, a part of which is as follows:

'In the construction of these restrictive clauses it is, of course, the duty of the court to give them a fair and reasonable interpretation, taking into consideration the position and situation of the parties to ascertain and determine the true meaning of the language used. But where the clause is susceptible of two different constructions, one favorable and the other unfavorable to the free use of the property, that construction should be adopted which assures its free use. A literal interpretation which would amount to a mere evasion of the real intention of the parties is not justified, but, if the clause may be given a reasonable interpretation in favor of the free use of the property, it should be done * * *.' Emphasis added.

With respect to the allied question as to change of conditions, we have held the change must be...