Ottawa Shores Home Owners Ass'n v. Lechlak

• Decision Date: 28 December 1955
• Docket Number: No. 52,52
• Parties: OTTAWA SHORES HOME OWNERS ASSOCIATION, Inc., a Michigan corporation, Plaintiff and Appellant, v. Anthony LECHLAK, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 840

73 N.W.2d 840

344 Mich. 366

OTTAWA SHORES HOME OWNERS ASSOCIATION, Inc., a Michigan

corporation, Plaintiff and Appellant, v. Anthony LECHLAK, Defendant and Appellee.

No. 52.

Supreme Court of Michigan.

Dec. 28, 1955.

Edgar G. Gordon, Jr., Detroit, for plaintiff and appellant, Frank E. Mensing, Toledo, Ohio, of counsel.

Thomas E. Griffin, Monroe, for defendant and appellee, Leo P. Frankowski, Toledo, Ohio, of counsel.

Before the Entire Bench.

SHARPE, Justice.

This is a suit equity to restrain defendant from selling bait, renting space for docking boats, and maintaining a parking lot for his customers on his premises. Defendant is the owner of two waterfront lots, lots 81 and 82 of Ottawa Shores, a subdivision in Erie township, Monroe county, Michigan. Plaintiff is an association organized by reason of the provisions contained in the deeds to lot owners, and is incorporated under the non-profit laws of the State of Michigan.

The issues arising out of this case were created by virtue of defendant constructing two docks which extend from his shore line approximately 115 feet into the Ottawa River. The docks are used in connection with defendant's business. Ottawa Shores was platted by the Pheatt heirs and recorded in July, 1947. The streets in the platted property were dedicated to the use of the property owners. In 1939 the Pheatt heirs, through Richard Pheatt, their agent, rented a site to defendant who built a cottage upon or in the area as was later subdivided as lots 81 and 82 Ottawa Shores. At the time defendant built his cottage he was working for a brewery. In 1944 Defendant made his cottage his permanent place of residence. At that time defendant had built a dock extending into the river. He started the sale of minnows in 1945, and kept the minnows out in the river in a tank at the end of his dock. About 90% of defendant's customers come by water. A few cars parked on his property from 1945 to 1948, and he now maintains a parking lot for his customers. He has had a sign erected advertising the sale of bait since 1945. He has a license for the sale of minnows. In 1948 defendant built another dock extending out into the river. On November 5, 1947, defendant purchased the lots in question and continued his business of renting boats and selling bait until the present time. The deed received by defendant contained the following provisions:

'The grantor herein by accepting this deed shall ipso facto become a member of Ottawa Shores Home Owners Association, an unincorporated association composed of the owners of lots in Ottawa Shores.

'In said Association each member thereof shall be entitled to one vote for each lot owned by him or her, and said Association shall act through a Board of Trustees to be elected by the Association of such number and for such term as it may determine.

'Said Board of Trustees shall have authority, except as limited by the Association, to:

'(a) Adopt general rules and regulations (not inconsistent with items 1 to 6 above) which said Board deems to the best interests of the lot owners as a whole and reasonably so designed which shall be binding upon the lot owners and each of them.'

Subsequently deeds were issued to other owners in the subdivision which contained the following provisions:

'The grantee herein by accepting this deed shall ipso facto become a member of Ottawa Shores Home Owners Association, a corporation to be formed under the laws of Michigan for and composed of the owners of lots in Ottawa Shores.

'In said Association each member thereof shall be entitled to one vote for each lot owned by him or her, and said Association shall act through a Board of Trustees to be elected by the Association of such number and for such terms as it may determine.

'Said Board of Trustees shall have authority, except as limited by the Association:----

'(a) To adopt general rules and regulations (not inconsistent with items 1 to 6 above) which said Board deems to the best interests of the lot owners as a whole and reasonably so designed which shall be binding upon the lot owners and each of them.'

On June 16, 1951, Ottawa Shores Home Owners Association was organized, and on July 2, 1951, it was incorporated. Defendant is a member of the association and paid the initial fee of $12.50 per lot. At the time the instant suit was commenced, about 35 lots were deeded to individual home owners. The approximate value of the combined cottages erected is between $150,000 and $200,000. None of the homes are built as commercial structures. All of such cottages are residences.

The cause came on for trial, and at its conclusion the court entered a decree dismissing plaintiff's bill of complaint, holding that defendant's real estate should not be limited to residential use, and that his carrying on of commercial uses is a proper use of the premises. In an opinion the trial court stated:

'The Court understands it is the theory of the plaintiff in this case that this deed read in its entirety should, by implication, be held by the Court to include the restriction against the use of this property for commercial purposes. The Court has examined the deed and the various restrictions contained therein, and applying the rules of construction as they exist in this State the Court is of the opinion that the deed does not restrict the use of this property solely to residential purposes.

'There is another matter that in the opinion of the Court is not too important, but it has apparently entered into the theory of the plaintiff herein: that is, that the deed required the defendant when he received this deed to become a member of the Ottawa Shores Home Owners Association to be formed; that such association to subsequently formed, and that association in its articles of association reserved the right to restrict the entire plat area to residential purposes. I do not think that that is tenable, for two reasons: First, under the evidence in this case, if it is a sustainable theory, all the corporation acquired was the power to do, that, which power has not be exercised prior to the institution of this suit by act of the corporation; Secondly, if the interpretation of the deed, as the Court construes the plaintiff's position, means that he received the deed, that his occupancy and use of the premises conveyed under the provisions of the deed could be limited by the corporation without consent of this defendant, and that the extent of the occupancy and the consequent ability to alienate the property and the number of prospective purchasers might be limited by changing the character of usage of this property * * * The Court is of the opinion that that is such a provision that is entirely contrary to the conveyance by warranty deed and the title in fee simple, and that it has no place in the deed and must be considered as void, as repugnant to the title in fee simple.'

Plaintiff appeals and urges that the trial court was in error in holding...