Ridley v. Haiman

• Decision Date: 26 March 1932
• Parties: RIDLEY v. HAIMAN.
• Court: Tennessee Supreme Court

47 S.W.2d 750

164 Tenn. 239

RIDLEY v. HAIMAN.

Supreme Court of Tennessee.

March 26, 1932

Certiorari to Court of Appeals, Middle Division, on Appeal from Chancery Court, Davidson County; R. B. C. Howell, Chancellor.

Suit by Mrs. Adele Morton Ridley against B. Haiman. To review a decree of Court of Appeals reversing decree for complainant and dismissing bill, both parties bring certiorari.

Decree of Court of Appeals reversed, and decree of chancellor affirmed.

Roy A Miles, John A. Pitts, Louis Leftwich, and Paul Williams, all of Nashville, for complainant.

Higgins & Moore, of Nashville, for defendant.

GREEN C.J.

This suit was brought by the owner of a lot, adjacent to a lot owned by defendant, to enjoin the latter from erecting a filling station. Both lots are on West End avenue, or Harding road, in a high-class residential section of Nashville. Complainant charges that defendant holds title under a restrictive covenant as to the use of his property, and complainant seeks to enforce that covenant. The chancellor decreed for complainant. The Court of Appeals reversed the decree of the chancellor, and dismissed the bill. Both parties filed petitions for the writ of certiorari, and both petitions have been granted.

In 1916, and prior thereto, the Kenner Manor Land Company owned two contiguous tracts of land, fronting on West End avenue or the Harding road. This company subdivided these tracts into 163 lots, numbering the lots, laying out streets, etc. A plan of the subdivision was recorded, but no restrictions were set out in the registered plan.

On May 16, 1916, following considerable advertising, a public sale of this land was undertaken at auction. In the advertisement of sale, by newspapers, posters, and circulars, it was stated that there would be "moderate restrictions to protect it as a desirable home section." Before the sale restrictions were publicly read by one of the real estate agents, and it was announced that the lots would be sold subject to said restrictions.

Five such restrictions were proclaimed, only one of which it is necessary to notice, as follows:

"That no shop, store, factory, saloon or business house of any kind, no hospital, asylum, or institution of like or kindred nature, and no charitable institution shall be erected and maintained on the premises hereby agreed to be conveyed, but the said premises shall be occupied and used for residential purposes only, and not otherwise."

Forty-nine lots were sold on this occasion, including all the lots fronting on the Harding road or West End avenue. Printed deeds were prepared, containing the five restrictions noted, and the deeds executed to all purchasers were practically identical. These deeds, moreover, contained this clause:

"The foregoing five stipulations, covenants and conditions are and shall be binding and obligatory upon, and shall be observed by, the said grantee and heirs, devisees, successors, and assigns, until the first day of January, A. D. 1938; and it is expressly agreed that all and every of said stipulations, covenants, and conditions shall attach to and run with the land, and shall be binding and obligatory upon all and every person or persons who may now or hereafter own, possess, occupy or use said premises or any part thereof, or any building or structure thereon, under any tenure whatsoever."

The proof shows that it was the intention of the land company to sell all the lots in the subdivision upon the same terms, with the exception of some fourteen or more. The portion of the property, including these lots, had been previously mortgaged to secure advances obtained by the land company for development. This part of the land was later conveyed without restrictions. None of it, however, was located on Harding road or West End avenue, and, so far as the record shows, none of it has been used for business purposes, and, from the map sent up, none of it appears to be suitable for business purposes. Other lots in the subdivision were thereafter sold by the land company, all of them subject to restrictions similar to the restrictions contained in the deeds executed for the lots sold at auction.

Lot No. 1 on the Harding road was purchased by John T. Landis. A cash payment was made by him and notes executed for the balance. These notes appear to have come into the possession of Duncan F. Kenner, who originally owned the land, and to whom the land company owed a balance of purchase money secured by lien. Kenner signed all deeds for lots sold at the auction sale by way of releasing his lien.

Landis failed to record his deed to lot No. 1, but the proof as to its contents is clear, and his deed was similar to the others and embodied the same restrictions. Shortly after Landis bought lot No. 1, and before he paid the purchase-money notes, he was forced into involuntary bankruptcy. Lot No. 1 was sold by the trustee in bankruptcy of Landis to Duncan F. Kenner and a deed executed to Kenner containing no restrictions.

Kenner thereafter undertook to sell lot No. 1 to Bissinger. Upon examination of the abstract, it was discovered by Bissinger's attorney that there was nothing of record taking the title to the lot out of the Kenner Manor Land Company, and Bissinger declined the title. Kenner thereupon filed a bill in the chancery court to clear up his title, and in that suit Kenner proved the execution of the deed by the Kenner Manor Land Company to Landis, and also proved the contents of that deed, including the restrictions. The chancellor thereupon declared Kenner to have a good fee-simple title to the land.

Kenner's negotiations with Bissinger, notwithstanding the chancery proceedings mentioned, appear to have come to nothing, and thereafter Kenner advertised lot No. 1 for sale, as the only unrestricted lot "on the Harding Road between Ensworth Avenue and Kenner Avenue." The defendant, Haiman, became interested in the property, and Kenner made him a written proposition of sale, which was accepted. Notwithstanding the tenor of his advertisement, Kenner set out in the written offer accepted by Haiman the following: "I will make a deed to said property, unrestricted, but do not guarantee against any complaints or suits which may be filed in case the property is to be used for any purpose other than a residence."

Under such circumstances, Haiman bought lot No. 1, obtaining from Kenner a warranty deed without restrictions, and shortly thereafter Haiman proceeded with the erection of a filling station. He was injoined by the complainant after the concrete floor and approaches were laid and pumps put in, before any building was erected.

The complainant is the owner of the east one-half of lot No. 2 in the aforesaid subdivision. Her lot is immediately adjacent to that of the defendant, both fronting on the Harding road or West End avenue. Mrs. Ridley bought from the Bransford Realty Company. The Bransford Realty Company bought lot No. 2 at the auction sale, and took a deed with the aforesaid restrictions, and that company conveyed the east half of lot No. 2 to Mrs. Ridley upon the same restrictions. Mrs. Ridley has erected a nice residence on her lot, her property, as we gather from the record, being estimated to be of the value of about $10,000.

The complainant, Mrs. Ridley, was out of the city when defendant, Haiman, began work on his filling station. She returned when the work had advanced to the stage above mentioned, and immediately advised with counsel and brought this suit. We think, therefore, no laches can be imputed to her, notwithstanding the contention of defendant's counsel.

The Court of Appeals found that Haiman was affected with notice of the restrictions contained in the deed from the Kenner Manor Land Company to Landis, as did the chancellor, and this is the first matter complained of in the defendant's petition for certiorari.

We think the two courts were clearly right. Haiman claims under Landis through Kenner. In order to clear up the title to this lot, it was necessary for Kenner, Haiman's immediate predecessor in title, to prove the deed from the Kenner Manor Land Company to Landis. This Kenner did in the case of Kenner against Bissinger, as above stated, and the contents of the deed to Landis were proven in that case. All this is a part of Haiman's direct chain of title, and with respect to all of this he is charged with notice.

Moreover, a reading of Haiman's deposition herein does not satisfy us that he was without actual notice of the restrictions upon all these lots. In addition, there is the significant passage from Kenner's offer of sale heretofore quoted. The Supreme Court of Michigan has suggested that, when one buys into a high-class residence neighborhood where there are no business houses, such a situation, open to him, puts upon the purchaser a duty of inquiry. Sanborn v. McLean, 233 Mich. 227, 206 N.W. 496, 60 A. L. R. 1212. Certainly the purchaser cannot willfully close his ears and shut his eyes.

If, as we hereafter undertake to show, the restrictions contained in the deeds made to purchasers at the auction sale of the Kenner Manor Land Company were for the benefit of all those purchasers and available to all of them, such restrictions cannot be released without the assent of these purchasers or grantees for whose benefit they were imposed. Hopkins v. Smith, 162 Mass. 444, 38 N.E. 1122; Hills v. Miller, 3 Paige (N. Y.) 254, 24 Am. Dec. 218; Weston v. Macdermot, L. R. 1 Eq. 499, L. R. 2 Ch. 72. Kenner's effort, therefore, to sell the property to Haiman free of restrictions was without effect.

Defendant relies on Yates v. Chandler, 162 Tenn. 388, 38 S.W.2d 70, for the proposition that he was not affected with notice of the contents of the deed of the Kenner Manor Land Company...