Hayes v. Gibbs

• Citation: 110 Utah 54,169 P.2d 781
• Decision Date: 04 June 1946
• Docket Number: 6892
• Court: Supreme Court of Utah
• Parties: HAYES et al. v. GIBBS et al

169 P.2d 781

110 Utah 54

HAYES et al. v. GIBBS et al

No. 6892

Supreme Court of Utah

June 4, 1946

Rehearing Denied December 10, 1946.

Appeal from District Court, Third District, Salt Lake County; C. E Henderson, Judge.

Action by Robert S. Hayes and another, against Mary Godbe Gibbs and W. J. Goodwin, building inspector of Salt Lake City, Utah, to enforce building restrictions. From a judgment for plaintiffs, the first named defendant alone appeals. Affirmed.

E. A Walton, of Salt Lake City, for appellant.

Joseph D. Hurd and Wallace D. Hurd, both of Salt Lake City, for respondents.

E. R Christensen, H. Holmgren, and A. P. Kesler, all of Salt Lake City, for defendant.

LARSON, Chief Justice. McDONOUGH and WADE, JJ., concur. WOLFE, Justice, specially concurring. PRATT, J., not participating.

OPINION

LARSON, Chief Justice.

This is an action to enforce building restrictions. The covenant as set forth in the deeds is as follows:

"No residence shall be erected on any of the said lots costing less than $ 2500.00 no less than 20 feet from the front line of said lots, nor shall any building for business purposes be erected on any of said land. (Italics ours.)

Plaintiff alleges that, in accordance with, and pursuant to, a general plan or scheme of development intended for the benefit of the entire tract known and platted as Douglas Park Subdivision, certain building restrictions were imposed upon the land, a subdivision of lots 1, 2, 3, and 4 of Section 9, Township 1 South, Range 1 East, Salt Lake Base and Meridian, by the original owners and predecessors in interest of both plaintiffs and defendant. He contends that the restrictions were reasonable, and were necessary to the successful development of this subdivision into a high-class residential district. It is averred that the defendant Gibbs has applied for building permits for the erection of mercantile buildings for business purposes upon lots 16, 17, 18, 19 and 20, Block 17, Douglas Park Subdivision, and unless restrained will proceed with construction thereof, in violation of the restrictions above set out.

Answering, the defendant contends that there was no general plan or scheme in the imposition of the building restrictions such as to justify their existence and maintenance. As to her property, defendant avers that she obtained title thereto through a tax sale, and therefore took the property free and clear of all restrictions.

The title to the specific property in issue, lots 16, 17, 18, 19, 20, Block 17, and lots 27 and 28, Block 14, Douglas Park Subdivision, comes from the Douglas Heights Land and Improvement Company to the Hubbard Investment Company via a conveyance containing restrictive covenants applying to both Hayes and Gibbs. The Hubbard Company conveyed lots 27 and 28 of Block 14 to plaintiffs' predecessors with restrictive building covenants set forth in the deeds. The Hubbard Company conveyed lots 16, 17, 18, 19 and 20 to defendant's predecessors without restrictive covenants in the deed. The record reveals that of the entire Douglas Park subdivision consisting of 1058 lots, only 55, including those now owned by defendant, were conveyed without mention of building restrictions in the deed.

These facts pose two principal issues which will be answered in their listed order:

1. Was there a general plan or scheme which created and imposed equitable building restrictions?

2. Does a tax title extinguish all equitable covenants and restrictions?

Korn v. Campbell, 192 N.Y. 490, 85 N.E. 687, 689, 37 L. R. A., N. S., 1, 127 Am. St. Rep. 925, is the leading case on restrictive covenants in this country. In that case the court in its discussion of different types of covenants describes the first type as follows:

"* * * In the first class may be placed those which are entered into with the design to carry out a general scheme for the improvement or development of real property. This class embraces all the various plans, generally denominated in the English cases as 'building schemes,' under which an owner of a large plot or tract of land divides it into building lots to be sold to different purchasers for separate occupancy, by deeds which contain uniform covenants restricting the use which the several grantees may make of their premises. In such case the covenant is enforceable by any grantee as against any other, upon the theory that there is a mutuality of covenant and consideration, which binds each, and gives to each the appropriate remedy. Such covenants are entered into by the grantees for their mutual protection and benefit, and the consideration therefor lies in the fact that the diminution in the value of a lot burdened with restrictions is partly or wholly offset, by the enhancement in its value due to similar restrictions upon all the other lots in the same tract."

De Gray v. Monmouth Beach Club House Co., 50 N.J. Eq. 329, 24 A. 388, 390, further clarifies covenants as follows:

"* * * action is held not to be maintainable between purchasers not parties to the original covenant, in cases in which: (1) It does not appear that the covenant was entered into to carry out some general scheme or plan for the improvement or development of the property which the act of defendant disregards in some particular. * * * (2) It does not appear that the covenant was entered into for the benefit of the land of which complainant has become the owner. * * * (3) It appears that the covenant was not entered into for the benefit of subsequent purchasers, but only for the benefit of the original covantee and his next of kin. * * * (4) It appears that the covenant has not entered into the consideration of the complainant's purchase. * * * (5) It appears that the original plan has been abandoned without dissent, or the character of the neighborhood has so changed as to defeat the purpose of the covenant, and to thus render its enforcement unreasonable."

In Biltmore Development Co. v. Kohn, 239 Ky. 460, 39 S.W.2d 687, 689, the court dealt with facts similar to ours in the following manner:

"Where an owner of a tract of land subdivides it into building lots and sells parcels thereof to separate grantees, imposing restrictions in accordance with the general plan or scheme for uniform development, such restrictions inure to the benefit of the several grantees and may be enforced by one of the grantees against any other grantee."

The cases appear to be unanimous in supporting the proposition that if a general scheme for building or development is intended by the original grantor, subsequent grantees may bring action against each other to enforce the restrictive covenant. This intent may be gathered from the grantor's acts and attendant circumstances. Constructive or actual notice of the general plan on the part of the grantee is an essential requirement in enforcing the restrictive covenant. See Vogeler v. Alwyn Improvement Corp., 247 N.Y. 131, 159 N.E. 886, 887, which held:

"Before, a stranger to a conveyance may assert rights based upon a covenant or restriction, 'there must be found somewhere the clear intent to establish the restriction for the benefit of the party suing or his grantor, of which right the defendant must have either actual or constructive notice.'"

After careful consideration of the cases, our conclusion is that if the general, plan has been maintained from its inception, if it has been understood, accepted, relied on, and acted upon by all in interest, it is binding and enforceable on all. It goes with the land, and is equally binding on all purchasers with notice.

This being the rule laid down by, the cases it poses two questions for our solution: Was a general scheme intended in the present case? If so, did the defendant have actual or constructive notice thereof?

The question of notice can quickly be disposed of for on page 68 of the defendant's abstract of title the restrictive covenant covering 674 lots, including the defendant's, is clearly set out.

In 66 C. J. p. 1128, § 962, we read:

"A purchaser of land is chargeable with notice of all conditions, restrictions, exceptions, or reservations appearing in his chain of title, or concerning which he is put on inquiry. * * *

"Where a purchaser has notice of existence of restrictions because they appear in the direct chain of title, he is chargeable with knowledge of the purpose for which the restrictions were made."

When the title record shows a restriction against erection of houses for a contract price less than a stated sum, it is sufficient to charge a prospective purchaser with notice of restriction. Dellaughter v. Hargrove, Tex. Civ. App., 40 S.W.2d 253.

"A purchaser is not only charged with notice of the contents of deeds of his chain of title but, if the same contain anything that would put a prudent man upon inquiry, he is chargeable with notice of whatever an inquiry would reveal. Wilkerson v. Ward, Tex. Civ. App., 137 S.W. 158." Spencer v. Maverick, Tex. Civ. App., 146 S.W.2d 819, 823.

The restrictions appear in defendant's chain of title--therefore he is chargeable with knowledge of the purpose for which the restrictions were made.

Was a general scheme intended? It is clear that by written restrictions in 95% of the Douglas Company's conveyances specific contracts, fully understood, accepted, and acted upon by all who purchased, these lots were subjected to a general plan of restriction. There is strong evidence that all of the grantees, including the Hubbard Company, purchased and accepted these lots subject to restrictive convenants which gave rise to conditions that were of a nature to operate as an inducement to purchasers by giving each purchaser the benefit of a general plan. This conclusion is substantiated by the fact that up to the present time...