Hall v. American Oil Co.

• Decision Date: 06 November 1973
• Docket Number: 35000,Nos. 34973,s. 34973
• Parties: 1973-2 Trade Cases P 74,768 Leon HALL and Nancy Hall, his wife, Plaintiffs-Appellants, v. The AMERICAN OIL COMPANY, a corporation, et al., Defendants-Respondents, and R. Inn-I 55 and Lindberg, Inc., Intervenor Defendant-Intervenor-Respondent. . Louis District, Division Two
• Court: Missouri Court of Appeals

Page 313

504 S.W.2d 313

1973-2 Trade Cases P 74,768

Leon HALL and Nancy Hall, his wife, Plaintiffs-Appellants, v. The AMERICAN OIL COMPANY, a corporation, et al.,

Defendants-Respondents,

and

R. Inn-I 55 and Lindberg, Inc., Intervenor

Defendant-Intervenor-Respondent.

Nos. 34973, 35000.

Missouri Court of Appeals, St. Louis District, Division Two.

Nov. 6, 1973.

Motion for Modification of Opinion or for Rehearing or for

Transfer to Supreme

Court Denied Dec. 7, 1973.

Application to Transfer Denied Feb. 11, 1974.

Bryan, Cave, McPheeters & McRoberts, St. Louis, for plaintiffs-appellants.

Coburn, Croft, Shepherd & Herzog, Leadlove, Byrne & Daly, St. Louis, Sumner, Hanlon, Sumner, MacDonald & Nouss, Clayton, for defendants-respondents.

GUNN, Judge.

Plaintiffs-appellants appeal from an order of the trial court dismissing both counts of plaintiffs' petition for failure to state a claim upon which relief could be granted. Count I of plaintiffs' petition sought a declaration of plaintiffs' rights in a parcel of land encumbered by a restrictive covenant. Count II of the petition sought money damages by reason of defendants' alleged restraint of trade in violation of Chapter 416 RSMo 1969, V.A.M.S. The issues to be resolved are whether plaintiffs' petition did state a cause of action against defendants and whether the restrictive covenant imposed is valid. We find that we are unable to determine the rights of all the parties to the action until the matter is put at issue by defendants' answers and evidence presented. We reverse and remand.

The facts are not in dispute. In 1972, plaintiffs filed their petition in the Circuit Court of St. Louis County alleging in Court I that they were owners of certain land which had been conveyed to them by general warranty deed in 1969. Defendant-respondent American Oil Company is the owner of a parcel of land adjacent to plaintiffs' property. Defendants Fred and Estelle Schuepfer had at one time owned the two adjoining parcels of property--that which plaintiffs now own and that which American Oil Company now owns. American Oil Company received its parcel from the Schuepfers by general warranty deed dated October 18, 1965. On October 20, 1965, two days after the conveyance to American Oil Company, an instrument purporting to impose a restriction on the adjacent lot now owned by the Halls, but which at the time was owned by the Schuepfers, was recorded in the office of the St. Louis County Recorder of Deeds. ¹ The apparent intent was that when American Oil Company purchased its lot from the Schuepfers, the use of the adjoining lot retained by the Schuepfers and ultimately conveyed to the plaintiffs and the subject of this suit was to be restricted against a gasoline service station. In 1966, the Schuepfers conveyed their property containing the restricted lot to defendants John and Jean Sgonina by general warranty deed. Later the Sgoninas conveyed the restricted lot to the Schuepfer Realty and Investment Company and the latter company in turn conveyed the lot back to the Sgoninas. In 1969, the Sgoninas conveyed the restricted lot to the plaintiffs. None of the deeds of conveyance referred to the declaration of restriction, and plaintiff allege that when they took their property they had no knowledge of any restriction.

Plaintiffs allege that in 1971, as they were preparing to execute a lease on their land to Shell Oil Company for construction of a gasoline service station, they discovered the restriction on their lot. It was further alleged that plaintiffs contacted American Oil Company concerning the restriction and were advised that the restriction had been bargained for as a part of its initial purchase of the adjoining property; that American Oil Company considered the restriction binding on all subsequent grantees of the lot adjacent to its property and refused its release.

American Oil Company has claimed an interest in plaintiffs' lot by reason of the restriction. Plaintiffs allege that American Oil Company's claim is without merit and prayed for the circuit court to try, ascertain and determine the estate, title and interest of the parties in the real estate. The prayer also included a request that plaintiffs be declared fee simple owners and that defendants be enjoined and restrained from asserting any right, title or interest in the property.

Court II of plaintiffs' petition alleged that the Schuepfers and American Oil Company had violated the Missouri Anti-Trust Statutes by their agreement to restrict the lot which plaintiffs now own. ² Plaintiffs allege that the effect of the restriction prohibits them from leasing their property to Shell Oil Company; that by American Oil Company's refusal to release the restriction, the Halls are restrained in the use of their property in violation of the Missouri anti-trust statutes; that the restriction agreed to by the Schuepfers and American Oil Company, since it is in violation of the anti-trust statutes, is invalid and unenforceable.

In May, 1972, American Oil Company filed a motion to dismiss both counts of plaintiffs' petition for failure to state a claim of action. On June 8, 1972, intervenor-defendant R. Inn--I. 55 and Lindbergh, Inc., filed a motion to intervene alleging that they were owners of property abutting plaintiffs' property and that they had relied on the restrictive covenant in the land adjoining their property in the subsequent use and development of their property. Leave to intervene was granted.

On July 31, 1972, the motion to dismiss counts I and II of plaintiffs' petition was sustained, and this appeal followed.

We first decide that the plaintiffs' petition was sufficient to state a claim upon which relief could be granted. The sufficiency of a petition to state a claim must be determined from the facts stated therein, and there must be sufficiently stated facts presenting issues for determination. Klorner v. Nunn, 318 S.W.2d 241 (Mo.1958). In reviewing the plaintiffs' petition for sufficiency, the general rule is that the petition must be viewed most favorably to the plaintiffs with all the facts alleged being deemed admitted and with plaintiff receiving the benefit of all favorable inferences from such facts. Martin v. Shull, 475 S.W.2d 1 (Mo.1972). The prayer of the petition after the allegations made as to the facts is that the court ascertain the title and interest of the parties and define and adjudge the plaintiffs as the fee simple owners with all rights and interest in themselves. The declaration of restriction was attached to the petition as an exhibit and having been so incorporated becomes a part of the petition for all purposes. City of Joplin v. Village of Shoal Creek Drive, 434 S.W.2d 25 (Mo.App.1968). A dispute as to the purpose and effect of the restriction and whether plaintiffs hold their property subject to the restriction has been alleged and exists. Also, plaintiffs seek to establish title in their property without regard to any rights ot defendants. A cause of action is thus stated. Stottle v. Brittian, 459 S.W.2d 310 (Mo.1970); Jones v. Garden Park Homes Corporation, 393 S.W.2d 501 (Mo.1965); Titus v. Tolle, 284 Mo. 175, 223 S.W. 885 (1920).

But the pivotal underlying issue in this case and what has been raised and depends on matters of fact and requires evidentiary enlightenment is whether the covenant purporting to restrict the use of the plaintiffs' property against an automobile gasoline service station is binding upon plaintiffs as subsequent grantees of the property by reason on the covenant being real or personal. ³ We do not have before us sufficient information on which to rest a decision as to the validity of the covenant.

In this case, as to plaintiffs, if the restrictive covenant is ultimately determined to be valid, it is inconsequential whether it is denominated real or personal. If it is a valid real restrictive covenant, it would run with the land and thus bind plaintiffs. If it is to be designated a personal covenant, it would likewise bind plaintiffs, since by its recordation plaintiffs are presumed to have constructive notice of its existance and would be bound thereby; that plaintiffs disavowed knowledge of the existence of the covenant is of no significance. Toothaker v. Pleasant, 315 Mo. 1239, 288 S.W. 38 (1926); Cook v. Tide Water Associated Oil Company, 281 S.W.2d 415 (Mo.App.1955).

The free and untrammeled use of land is favored and restrictive covenants are to be strictly construed and any doubt as to their validity is to be resolved in favor of the free use of the property. Steve Vogli & Co. v. Lane, 405 S.W.2d 885 (Mo.1966); Pellegrini v. Fournie, 501 S.W.2d 564 (Mo.App.1973) (No. 34,859). But that is not to say that a covenant of the type in this case, ostensibly imposing a land restriction upon subsequent grantees of the land so encumbered, would necessarily be invalid, particularly where the covenant has been recorded. Such was the case in Cook v. Tide Water Associated Oil Company, supra. However, in order for such a covenant to be valid in Missouri, it must not transgress certain standards, for restrictions in derogation of the fee are not favored. Kerrick v. Schoenberg, 328 S.W.2d 595 (Mo.1959); Dean v. Monteil, 361 Mo. 1204, 239 S.W.2d 337 (1951). Dean v. Monteil, supra, found that a restrictive covenant protecting business interests was void as against public policy and did not run with the land or apply to subsequent purchasers of the property upon which the restrictive covenant was to have attached. The court, in quoting from Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6 (1899), at pages 14 and 16, stated:

"The general doctrine is that agreements in restriction of trade will be upheld when the restriction does not go beyond some particular locality, is founded on a sufficient consideration, and is limited as to time, place and person." * * * "This class of contracts is always regarded with suspicion by the courts, as their...