Hannula v. Hacienda Homes

• Decision Date: 15 November 1949
• Citation: 34 Cal.2d 442,19 A.L.R.2d 1268,211 P.2d 302
• Court: California Supreme Court
• Parties: , 19 A.L.R.2d 1268 HANNULA v. HACIENDA HOMES, Inc. S. F. 17747.

Page 302

211 P.2d 302

34 Cal.2d 442, 19 A.L.R.2d 1268

HANNULA v. HACIENDA HOMES, Inc.

S. F. 17747.

Supreme Court of California, in Bank.

Nov. 15, 1949.

Nathan G. Gray, Berkeley, for appellant.

Breed, Robinson & Stewart, edgar B Stewart, Oakland, for respondent.

SHENK, Justice.

This is an appeal from a judgment for the defendant in an action for declaratory relief. The plaintiff is the owner of a portion of lot 47 in the residential subdivision of Orinda Park Terrace in Contra Costa County. At one time the entire lot was owned by plaintiff's parents who built a residence on a portion of the lot and then sold that portion to a person not a party to this action. The remaining portion was retained by plaintiff's parents and later transferred to plaintiff. Upon offering her property for sale, plaintiff learned that defendant Hacienda Homes, Inc., would probably assert its authority to deny permission to build a dwelling house upon her fractional part of lot 47. Whatever authority defendant has to restrict building on the plaintiff's land must be derived from a restriction contained in the recorded map of Orinda Park Terrace and in the deeds to lots therein which reads:

'7. No dwelling house or other house or structure shall be erected until the plans and specifications with the proposed site therefor have been submitted to and approved by the first party hereto and by Hacienda Homes, Inc., and a written permit issued therefor.'

Plaintiff brought this action to obtain a declaration that 'plaintiff and her * * * successors in interest have a right to build and erect upon said real property a dwelling house or appurtenance thereto * * *.' Subsequent to the filing of the complaint, in order to make its position clear in the pending action, defendant's directors specifically considered plaintiff's land and determined that her portion of lot 47 does not constitute an adequate and acceptable building site. The answer avers that the use of plaintiff's property as a building site would be detrimental and contrary to the desired and intended residential development of the Orinda area.

At the trial, both parties were prepared to present evidence as to the reasonableness of defendant's action, but in order to narrow the controversy, orally stipulated that the reasonableness of defendant's action was not in issue, and that the only question to be decided by the trial court was whether, in a proper case, defendant has authority under the restriction in question to determine that a site less than a full lot is not suitable for a residence. The evidence on reasonableness was therefore not presented. Nevertheless, the trial court rendered the following judgment:

'c) That said defendant Hacienda Homes, Inc., has not acted arbitrarily or capriciously or in excess of the power and authority conferred upon it under the provisions of said covenants, conditions and restrictions in determining that said real property does not constitute an adequate or proper building site under the provisions of said covenants, conditions and restrictions.'

On appeal, plaintiff claims first, that the judgment wrongly construes the restriction and unduly extends its burdens, and second, that the judgment goes beyond the issue presented to the trial court by determining that defendant has not acted arbitrarily or capriciously.

As to her first claim plaintiff's position appears to be this: For the purpose of this action, the validity and enforceability of the seventh restrictive covenant is not challenged; plaintiff concedes that she or her successor must submit for defendant's approval plans for, and the proposed site of, any residence to be constructed on her land in order that uniform setback and sidelines may be preserved. But her contention is that the restriction does not grant authority to defendant to determine that a portion of a lot is an inadequate building site, irrespective of any plans or specifications which might be submitted. Plaintiff rests her proposed construction of the restriction on the established rule that restrictive covenants are to be strictly construed against limitations upon the free use of property. Wing v. Forest Lawn Cemetery Association, 15 Cal.2d 472, 101 P.2d 1099, 130 A.L.R. 120; Werner v. Graham, 181 Cal. 174, 183 P. 945; Martin v. Ray, 76 Cal.App.2d 471, 173 P.2d 573.

Restrictions on the use of land will not be read into a restrictive covenant by implication, but if the parties have expressed their intention to limit the use, that intention should be carried out, for the primary object in construing restrictive covenants, as in construing all contracts, should be to effectuate the legitimate desires of the covenanting parties. The restriction in question which is stated to be 'for the benefit of all owners of property in the tract' declares that plans and specifications and the proposed site of any construction must receive the approval of defendant. Its clear purpose is to assure that proposed structures will accord with the design and development of the subdivision with regard to space, light and air, and will not detract from its appearance. The power to pass on plans for that purpose necessarily includes the authority to determine that a portion of an original lot is not large enough for dwellings of the type found in the tract, for it might be impossible to construct a residence on a portion of a lot which would comport with setback, sidelines and backlines, maintained as to the other residences. Thus the proper construction of the restriction would uphold the authority of the defendant, in a proper case, to decide prior to the submission of plans that any construction on a portion of a lot could not meet neighborhood standards.

The highest courts of Maryland, Massachusetts and Pennsylvania have held restrictions valid and enforceable which were similar to the one here involved, requiring approval of all construction by an individual or body of persons acting on behalf of other lot owners in a tract. Parsons v. Duryea, 1927, 261 Mass. 314, 158 N.E. 761 construction of driveway disapproved by trustees of tract enjoined; Jones v. Northwest Real Estate Co., 1925, 149 Md. 271, 131 A. 446 erection of disapproved second-story porch enjoined by real estate company; Harmon v. Burow, 1919, 263 Pa. 188, 106 A. 310 construction of dwelling house enjoined where grantor of tract lots refused to approve plans.

On oral argument the plaintiff placed great reliance on a decision of the court of Ohio Appeals, Exchange Realty Co. v. Bird, 16 Ohio Law Abst. 391, decided in 1933. In that case the lots of a subdivision were subject to a number of restrictions including the following: '1. Said real estate ...