Nelson v. Jordan

• Decision Date: 14 December 1983
• Docket Number: No. 13837,13837
• Parties: Larry C. NELSON, et al., Appellants, v. Edna JORDAN, Appellee.
• Court: Texas Court of Appeals

Page 82

663 S.W.2d 82

Larry C. NELSON, et al., Appellants, v. Edna JORDAN, Appellee.

No. 13837.

Court of Appeals of Texas Austin.

Dec. 14, 1983.

Rehearing Denied Jan. 4, 1984.

James M. Vogt, Coffee, Goldston & Vogt, Austin, for appellants.

Shelby A. Jordan, Corpus Christi, for appellee.

Before PHILLIPS, C.J., and EARL W. SMITH and GAMMAGE.

EARL W. SMITH, Justice.

In a suit by appellee, Edna Jordan, against appellants, Larry C. Nelson, H.E. Nelson, and Nelson Investment Company, appellee sought to permanently enjoin appellants from using a subdivision lot for any purpose other than a single-family residence. After a bench trial, the court granted the injunction. For convenience, appellants will be referred to as "Nelson" and appellee as "Jordan".

Nelson contends that the trial court erred in granting an injunction in that: (1) the written subdivision restrictions are unenforceable as a matter of law; (2) by the great weight and preponderance of the evidence, Nelson had obtained an express consent to a change in said restrictions; and (3) that the evidence conclusively, or by the great weight and preponderance thereof, shows that Nelson had obtained consent to a change in said restrictions, by estoppel. In the fourth point of error, it is claimed that the court erred in denying Nelson attorney's fees on his counterclaim.

Jordan, in her cross-point of error, contends that the trial court erred in denying her claim, as prevailing party, for mandatory attorney's fees.

We overrule Nelson's points of error, sustain Jordan's cross-point of error, reform the trial court's judgment to award Jordan attorney's fees, and as reformed, affirm the judgment of the trial court.

Jordan purchased four lots in a subdivision known as Lake Bastrop Acres, Section 1, Bastrop County. She was in the process of building a home on one of the lots when Nelson, on March 10, 1981, purchased a lot adjacent to her property, for the purpose of using the lot for a multi-family residence. Nelson moved a pre-fabricated four-plex structure thereon in late December, 1981, or early January, 1982. On learning of such intended use of the Nelson lot, Jordan protested unsuccessfully, and thereafter brought this suit for injunction.

The evidence shows that the subdivision, Lake Bastrop Acres, Section 1, has been subject to restrictions which have been in effect since the date of recordation of such restrictions in 1965. Inter alia, the restrictions provide:

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FIRST

All lots shall be known and described as lots for residential purposes only, with * * *

the exception of those lots specifically marked commercial on the Plat Map. Only one single-family residence may be erected on any lot. [emphasis added].

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FIFTEENTH

The Grantor reserves the right to change or cancel any or all of these restrictions, if in his judgment, the development or lack of development of adjacent property makes that course necessary or advisable.

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SIXTEENTH

These restrictions and covenants are hereby declared to be covenants running with the land and shall be fully binding upon all persons acquiring property in Lake Bastrop Acres ... and any person by the acceptance of title to any lot of this subdivision shall thereby agree and covenant to abide by and fully perform the foregoing restrictions and covenants. These covenants are to run with the land and shall be binding for a period of twenty-five (25) years ... unless said restrictions and covenants are changed or amended by a vote of two-thirds ( 2/3) majority of the then owners of the lots in said subdivision (each lot having one vote), or unless said restrictions are changed by the Grantor, Lake Bastrop Acres, Inc., as provided in restriction number Fifteen above. [emphasis added].

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SEVENTEENTH

If the owner of any lot in said Subdivision, or any person, shall violate any of the covenants herein, it shall be lawful for any other person or persons owning any real property situated in said Subdivision to prosecute any proceedings at law or in equity against the person ... violating or attempting to violate any such covenant and either to prevent him or them from so doing or to recover damages or other dues for such violation.

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We turn to Nelson's contention that the restrictions were unenforceable as a matter of law. The thrust of such contention appears to be that the restrictions are personal to the grantor and are enforceable only by him. Nelson argues further that because the grantor in paragraph "Fifteenth" of the restrictions had retained the power to change or cancel the restrictions, such reservation made the restrictions unenforceable. We do not agree. Nelson ignores paragraph "Seventeenth" of the restrictions, which clearly gives Jordan, as owner of adjacent lots, the right of enforcement. See 51 A.L.R.3d 556, 611 (1973).

Nelson relies heavily on Green v. Gerner, 289 S.W. 999 (Tex.Comm.App.1927, holding approved) and Curlee v. Walker, 112 Tex. 40, 244 S.W. 497 (1922) in support of the argument that restrictive covenants are personal to the grantor and are only enforceable by him unless a common scheme of development and mutuality of covenants are shown. It should be noted that neither Curlee nor Green dealt with restrictions giving lot owners a specific right to enforce restrictions, as is true in the instant case. Even so, in Curlee, our Supreme Court held that owners of lots in the subdivision could enforce, against other purchasers, the restrictions contained in each deed in the subdivision. The Court said, at 498:

The correct rules that govern covenants of the character set out in the deeds to this restricted district are well stated by Judge Higgins in the case of Hooper v. Lottman (Tex.Civ.App.) 171 S.W. 270, as follows:

"The most familiar cases in which courts of equity have upheld the right of owners of land to enforce covenants to which they were not parties are those in which it has appeared that a general building scheme or plan for the development of a tract of land has been adopted, designed to make it more attractive for residential purposes by reason of certain restrictions to be imposed on each of the separate lots sold. This forms an inducement to each purchaser to buy, and it may be assumed that he pays an enhanced price for the property purchased. The agreement therefore enters into and becomes a part of the consideration. The buyer submits to a burden upon his own land because of the fact that a like burden imposed on his neighbor's lot will be beneficial to both lots. The covenant or agreement between the original owner and each purchaser is therefore mutual. The equity in this particular class of action is dependent as much on the existence of the general scheme of improvement or development as on the covenant, and restrictions which contemplate a general building plan for the common benefit of purchasers of lots are recognized and enforced by courts of equity at the instance of the original grantor or subsequent purchasers. So the general rule may be safely stated to be that where there is a general plan or scheme adopted by the owner of a tract, for the development and improvement of the property by which it is divided into streets and lots, and which contemplates a restriction as to the uses to which lots may be put, or the character and location of improvements thereon, to be secured by a covenant embodying the restriction to be inserted in the deeds to purchasers, and it appears from the language of the deed itself, construed in the light of the surrounding circumstances, that such covenants are intended for the benefit of all the lands, and that each purchaser is to be subject thereto, and to have the benefit thereof, and such covenants are inserted in all the deeds for lots sold in pursuance of the plan, a purchaser and his assigns may enforce the covenant against any other purchaser, and his assigns, if he has bought with actual or constructive knowledge of the scheme, and the covenant was part of the subject-matter of his purchase."

Here, the conveyance to Nelson contained recitations that the grantee took the property subject to restrictions of record. Nelson ignored the First and Sixteenth restrictions. In the latter, every purchaser of a lot in Lake Bastrop Acres specifically agrees and covenants "to abide by and fully perform the ... restrictions and covenants." The restrictions clearly show a general scheme of development for residential purposes and mutuality of covenants running with the land as to each lot in the subdivision. Nelson conceded, in argument, that prior to the Nelson purchase no lot in the subdivision had been sold for other than residential purposes and that there was a general scheme of development for residential purposes.

Texas courts have never held that mere reservation by a grantor of a power to change or cancel a restrictive covenant, in and of itself, renders the covenants unenforceable. In Norwood v. Davis, 345 S.W.2d 944, 948-49 (Tex.Civ.App.1961, no writ), this Court held that the power to modify restrictions could only be exercised in the exact manner provided in the dedication and that lot owners in the addition could maintain suit to enforce restrictions since the original dedication provided a right of enforcement.

A more correct statement of the law is that the reservation of power to change restrictions along with the absence of a common scheme or plan or its implementation is enough to destroy an equitable right of enforcement in assignees of the original grantor, when such assignees have not expressly been granted this right.

Other cases cited by Nelson are inapposite. In Gray v. Lewis, 241 S.W.2d 313 (Tex.Civ.App.1951, writ ref'd n.r.e.), there was a reservation to change clause, but no fixed plan or scheme and restrictions were in but a few deeds. In Stewart v. Valenta, 361 S.W.2d 910 (Tex.Civ.App.1962, writ ref'd n.r.e.), there was a reservation clause, but no...