Hoffman v. Cohen

• Decision Date: 28 January 1974
• Docket Number: No. 19763,19763
• Citation: 262 S.C. 71,202 S.E.2d 363
• Court: South Carolina Supreme Court
• Parties: Ralph HOFFMAN, as Trustee, Respondent, v. Henry COHEN et al., Appellants.

Page 363

202 S.E.2d 363

262 S.C. 71

Ralph HOFFMAN, as Trustee, Respondent, v. Henry COHEN et al., Appellants.

No. 19763.

Supreme Court of South Carolina.

Jan. 28, 1974.

Grimes, Hinds & Cowan, Georgetown, for appellants.

John C. Thompson, Conway, for respondent.

LITTLE JOHN, Justice:

This class action was instituted by the respondent, Ralph Hoffman, as Trustee, for a declaratory judgment holding that the proposed construction of a high-rise condominium apartment building, containing 62 dwelling units, upon certain lands owned by him in the Forest Dunes Subdivision of Myrtle Beach would not violate the restrictive covenants imposed upon that subdivision by its original developer. The defendants-appellants are lot owners in the subdivision and were made parties individually and as representatives of all other lot owners.

The issues were referred to the Master in Equity for Horry County, who recommended that the court declare that such a condominium is permissible under the applicable restrictions. His recommendation was accepted by the circuit court and incorporated into its order, from which this appeal is prosecuted by the defendants.

The Forest Dunes Subdivision was originally developed by Myrtle Beach Farms Company in 1941. It fronts on the Atlantic Ocean approximately 1900 feet, with a depth, running back to U.S. Highway No. 17, of approximately 1550 feet. A map of the subdivision indicates that there are approximately 185 lots, nearly all of which have a width of 75 feet and a depth of 150 feet. All but three of the 20 lots which front on the Atlantic Ocean have a width of 75 feet and a depth of approximately 260 feet. The property upon which the respondent proposes to build the condominium is composed of two beach-front lots, each 75 feet by 260 feet, plus an adjoining area designated 'reserved', which is slightly larger than one of the platted lots. They lie in the southeastern corner of the subdivision, facing the strand and fronting on the ocean. It is uncontradicted that all deeds executed by the developer to all lots in Forest Dunes, including those owned by the respondent, contain the same restrictive covenants, which provide in pertinent part as follows:

'a. No lot shall be subdivided and no residence or building, including porches and projections of any kind, shall be eracted so as to extend beyond, over or across any of the building lines relating to said lot.

'e. This property shall be used for residential purposes only and any residence erected on the lot herein conveyed is to cost not less than Six Thousand ($6,000.00) Dollars or to be built according to plans and specifications approved by grantor hereof in writing by its proper officers.

'g. No lot shall be subdivided, or its boundary lines changed except with written consent of the grantor endorsed on the deed of conveyance thereof.

'h. The conditions, limitations, and restrictions hereinabove made shall be deemed covenants running with the land binding on both the grantor and grantee, their heirs, successors and assigns.'

Single-family residences are the rule in the subdivision, the principal exception being a two-story building containing five separate dwelling units constructed upon the lot which lies immediately to the north of the respondent's property.

The respondent proposes to construct a building estimated to cost $3,000,000.00. The first floor would be partially underground and used for parking; the main, or ground floor, would have two apartments and a recreation room, manager's quarters and service areas. Above that would be 15 floors composed of four apartment units each. There would be two elevators in the building. Common facilities for the unit owners include a lobby, a recreation room, parking garage, elevators, hallways, foyer, utility rooms, swimming pool, shuffleboard courts and other related recreational facilities.

The appellants submit four questions for our determination. Under the view we take, we need answer only one basic inquiry: Would the proposed condominium violate the restrictions quoted hereinabove? We think that it would and, accordingly, reverse the order of the trial court.

Restrictive covenants are contractual in nature. The cardinal rule of construction in interpreting any contract is to ascertain and give effect to the intention of the parties. Such intent should, as nearly as possible, be gleaned from the instrument itself. Nance v. Waldrop, 258 S.C. 69, 187 S.E.2d 226 (1972).

The respondent asserts that the language in the restrictions in question is unambiguous. Because multi-family dwellings, including condominiums, clearly constitute a permissible use, his argument continues, there is no room for construction and no need to resort to matters outside the restrictions themselves. We disagree. We cannot say that reasonable men could not differ as to the meaning of the language employed.

The respondent argues that conventional apartment-type buildings are permitted under the restrictions and that the only difference between a conventional apartment house and a condominium-type of apartment building lies in the fact that normally an apartment building has one owner, whereas a condominium-type apartment building has many owners. He further urges that some three owners have built two living units on their lots and that one has built five units on his lot. The question of whether a conventional apartment-type building would be permitted in this subdivision is not before the Court at this time, but we cannot agree that there are no basic differences between a conventional apartment building and a condominium apartment building. We think that the building of 62 dwelling units on what amounts to approximately three building lots is entirely inconsistent with the overall scheme of the subdivision. Though a condominium is not strictly speaking a commercial project, it involves congestion and many of the undesirable characteristics incident to a commercial undertaking such as a hotel. It is common knowledge that beach residences, especially apartments (conventional or condominium), are often rented to temporary guests at least a part of the year. When so used in a building of this type, the property would become a commercial-type operation, inconsistent, we think, with the whole tenor of the restrictions.

The respondent correctly relies upon Sprouse v. Winston, 212 S.C. 176, 46 S.E.2d 874 (1948), for the proposition that restrictive covenants are to be construed most strictly against the grantor and persons seeking to enforce them. However, it was also held therein that 'the rule will not be applied to defeat the obvious purpose of the restriction' and, before giving it effect, 'the court will have recourse to every aid, rule, or canon of construction to ascertain the intention of the parties . . ..' See also Edwards v. Surratt, 228 S.C. 512, 90 S.E.2d 906 (1956).

In construing covenants the circumstances surrounding their origin are proper considerations for a court when the language used is susceptible of more than one reasonable interpretation. See, e.g., Nance v. Waldrop, supra; City of Greenville v. Washington American League Baseball Club, 205 S.C. 495, 32 S.E.2d 777 (1945). The concept of condominiums is relatively new to South Carolina; in fact, it was only eleven years ago that the 'Horizontal Property Act' was enacted by our legislature. See 11 S.C.Code § 57--494 et seq. (Cum.Supp.1971). It is a virtual certainty that the question of whether condominiums should be permitted on this property was not even considered by the developer in 1941 when these restrictions were whelped. It is not unexpected that an ambiguity might arise when language employed to cover the situation as it existed over thirty years ago is applied to such a recent innovation.

It has also been stated that 'where there is any ambiguity in a contract, or where...