Mid-State Equipment Co., Inc. v. Bell, MID-STATE

• Decision Date: 11 June 1976
• Docket Number: MID-STATE,No. 750887,750887
• Citation: 217 Va. 133,225 S.E.2d 877
• Parties: EQUIPMENT COMPANY, INC. v. Edward BELL, Jr., et al. Record
• Court: Virginia Supreme Court

Page 877

225 S.E.2d 877

217 Va. 133

MID-STATE EQUIPMENT COMPANY, INC. v. Edward BELL, Jr., et al.

Record No. 750887.

Supreme Court of Virginia.

June 11, 1976.

William M. McClenny, Jr., Amherst, for appellant.

Mosby G. Perrow, III, Lynchburg (Caskie, Frost, Hobbs & Hamblen, Lynchburg, on brief), for appellees.

Before CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

COMPTON, Justice.

We consider in this appeal the equitable doctrine of implied restrictive covenants and its bearing upon the rights of property owners in a residential subdivision. Specifically, the inquiry is whether a restriction for residential use applies to a parcel which appellant Mid-State Equipment Company, Inc., the defendant below, is using for commercial purposes.

The property in controversy, containing about 1.5 acres, is a rectangular parcel of land comprised of two triangular-shaped lots located at the intersection of Waterlick Road and State Route No. 835 (Jefferson Manor Drive) in Campbell County. These lots are designated 'James D. & Mary R. Eubank' and 'R. N. Clemmons' on the attached sketch, which is a composite of portions of three plat exhibits.

See illustration on p. 880.

In September 1973 plaintiffs-appellees, property owners in Jefferson Manor, a residential subdivision in Campbell County, filed a bill of complaint seeking to enjoin Mid-State, a corporation engaged in an equipment rental and sale business, from violating certain restrictions, which plaintiffs contended constituted implied reciprocal negative easements or equitable servitudes applicable to Mid-State's property.* The plaintiffs sought an order restraining Mid-State from utilizing the property in question 'for any other than residential purposes.'

The cause was referred to a commissioner in chancery who filed his report in July 1974 based upon evidentiary hearings which had been held during the preceding March and April, upon certain stipulations of the parties, and upon the commissioner's examination of 'the records in the clerk's office of the Circuit Court of Campbell County.' The commissioner found that: (1) a business or commercial establishment was being operated on the real estate in question; (2) the restrictive covenants in issue were 'not expressly or directly applicable 'to Mid-State's property; and (3) the property was subject to 'implied negative restrictive covenants to the effect that only residential use is to be made of (it)', and operation of Mid-State's business on the property violated these restrictive covenants.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Mid-State excepted to the third finding but the chancellor, after considering the depositions of the commissioners' hearings, the report, and argument of counsel, overruled the exception and confirmed the report. We granted Mid-State an appeal and supersedeas to the April 9, 1975 final decree in which the chancellor enjoined it 'from conducting or operating a business or commercial establishment on said property.' The trial court further found, after an inspection of the premises, that Mid-State had constructed subsequent to the April 1974 evidentiary hearing 'a metal building being utilized as a garage and repair shop for vehicles and equipment.' The final decree ordered that this structure be removed from the property.

The relevant facts are not in dispute; they are gleaned, for the most part, from an examination of the deeds and plats of survey filed as exhibits in the record.

The property in question is part of a tract of 85 acres purchased in 1945 by James D. Eubank and Mary R. Eubank, his wife. On February 27, 1960 Adrian Overstreet, a certified land surveyor, prepared at the Eubank's request a plat (hereinafter Overstreet Plat) for Jefferson Manor Subdivision. A part of the Overstreet Plat is the basis for the foregoing composite sketch. The only portions of the sketch which were not shown on the Overstreet Plat are: lots 13, 14 and 15 in Block B; the shaded part north and west of lots 13 and 14; the shaded triangle marked 'R. N. Clemmons' adjoining Waterlick Road; and the shading on the northern portions of lots 4 through 10 in Block B. Not shown on the sketch but comprising the remainder of the Overstreet Plat are lots 1 through 12 in Block A lying to the southwest of Block B along Route 835, a 'vicinity' map, a metes and bounds 'Description,' and 'Restrictions' as follows:

'1. No dwelling shall be erected on any lot in this Subdivision at a cost of less than Twelve Thousand Dollars ($12,000.00) based on 1960 building cost.

'2. No livestock (or poultry) shall be kept on any lot in this Subdivision.

'3. The building set-back line shall be 50 from the road (or street) on which said building fronts and not less than 30 from any side street.

'4. No building shall be erected within 10 of any property line.

'5. All lots in this Subdivision are restricted to residential use only, house trailers excluded.' (emphasis supplied)

The evidence shows that when Overstreet prepared his plat the Eubanks resided in a frame dwelling on the lot marked 'James D. & Mary R. Eubank'. Overstreet testified:

'I was directed by Mr. Eubank to lay out a subdivision of lots for residential use as in accordance with the requirements of the Subdivision Ordinance of Campbell County. And I proceeded to follow his instructions and laid out the lots that are shown here. But, on a parcel of land adjacent to the road on which Mr. Eubank resided, he directed me to leave out a block of land there of a sufficient area to accommodate two building lots, two residential lots, and this, I did. And then the residue of his frontage was cut into lots as shown on this plat.'

Overstreet further testified that the 'Restrictions' were 'dictated' to him by Eubank 'and they were put on (the plat) as instructed.'

The metes and bounds 'Description' found on the lower left-hand corner of the Overstreet Plat includes only the numbered lots in Blocks A and B. The sum of the square feet of (1) lots 1 through 12, Block A; (2) lots 1 through 10, Block B; and (3) the platted street between Blocks A and B, equals approximately 13.03 acres.

Subsequently by deed dated and recorded April 24, 1961, to which was attached the Overstreet Plat, the Eubanks dedicated Jefferson Manor as a subdivision under the county subdivision ordinance. Thereafter the sale of lots in Jefferson Manor commenced, upon which lots residences of brick construction were built.

In May 1962, the Eubanks exchanged land with R. N. Clemmons, who owned property north of and adjacent to Block B of Jefferson Manor. In the exchange, the Eubanks deeded to Clemmons small portions of lots 4 to 10 inclusive in Block B of Jefferson Manor and a small amount of land outside the subdivision. That conveyance was expressly made subject to 'all valid existing and recorded easements, restrictions and conditions heretofore imposed on said property.' Attached to that deed was a 'Plat Showing Land to be Exchanged between James D. Eubank and R. N. Clemmons' dated May 9, 1962 made by Erskine W. Proffitt, surveyor. In return Clemmons conveyed to the Eubanks the unimproved triangular parcel marked 'R. N. Clemmons' and shown on the foregoing sketch. The property exchanged is illustrated on the sketch by shading.

In the spring of 1962, the Eubanks continued to subdivide their property and increased the size of Jefferson Manor by adding 12 lots to Block A, by adding Block C north of Block A, and by adding lots 13, 14 and 15 to Block B as shown on the foregoing sketch. This addition, called Section 2, was shown on a plat of survey made by Charles Kirkland, another surveyor, and was dedicated as a subdivision by deed dated June 14, 1962 recorded the next day. This deed contained the same restrictions as shown on the Overstreet Plat.

The next significant event of record occurred in 1966 when by deed dated October 6, 1966 and recorded eight days later, the Eubanks conveyed the property in question, that is, the almost rectangular parcel as the that is, the almost rectangular parcel at the Route 835, to James R. Hicks and wife. The description in that deed follows, in part:

'Those certain lots or parcels of ground, together with the buildings and improvements thereon, and the privileges and appurtenances thereunto belonging, situate, lying and being in Brookville Magisterial District, Campbell County, Virginia, and reference is made to two plats of record in the Campbell County Clerk's Office, one of which is designated 'Plat Showing Land To Be Exchanged Between James D. Eubank and Robert N. Clemmons', dated May 9, 1962, made by Erskine W. Proffitt, C.L.S., and of record in the aforesaid Clerk's Office along with a deed dated May 15, 1962 from the parties of the first part to Robert N. Clemmons, Jr. and wife, and the other being 'Plat of Jefferson Manor', made by Adrian Overstreet, S.C.S., February 27, 1960, and of record in said Clerk's Office in Plat Book 16, at page 80, and which property is more particularly described according to said plats as follows: (Then follows a full metes and bounds description).'

Prior to their purchase, the Hickses leased the property from the Eubanks using the frame dwelling as a residence. The testimony shows that sometime after February 1960 and before February 1962 the Eubanks had moved from that dwelling to a dwelling on lot 5, Block B, Jefferson Manor, which dwelling was also in existence when Overstreet drew his plat. The record further shows that during the interim between the Eubanks' occupancy and that of the Hickses the dwelling on the parcel in question was rented by the Eubanks to one Crouch, who used it for a residence.

The Hickses continued to reside on the disputed property until 1973. In February of that year Hicks authorized Joseph E. Champe, a real estate salesman with Ted Sims Realty of Lynchburg, to seek a buyer for the parcel. During April and June of 1973 the property was advertised for...