Selected Lands Corp. v. Speich

• Decision Date: 29 August 1985
• Docket Number: No. 01-84-0740-CV,01-84-0740-CV
• Citation: 702 S.W.2d 197
• Parties: SELECTED LANDS CORPORATION, Appellant, v. Ralph J. SPEICH, Robert P. Kellie, and James B. Micros, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 197

702 S.W.2d 197

SELECTED LANDS CORPORATION, Appellant, v. Ralph J. SPEICH, Robert P. Kellie, and James B. Micros, Appellees.

No. 01-84-0740-CV.

Court of Appeals of Texas Houston (1st Dist.).

Aug. 29, 1985.

Rehearing Denied Jan. 16, 1986.

J. Craig Youngblood, Vinson & Elkins, Houston, for appellant.

Robert L. Burns, Sears & Burns, J. Mark Breeding, Houston, for appellees.

Before JACK SMITH, COHEN and DUNN, JJ.

OPINION

DUNN, Justice.

Selected Lands Corporation appeals from a declaratory judgment in which the trial court ruled that certain restrictive covenants were not enforceable by Selected Lands against owners of certain lots in a residential development in Grimes County, known generally as "Bluebonnet Country." Selected Lands is a successor developer of Bluebonnet Country. Appellees are the owners of the lots in question, and the pertinent restrictive covenants require property owners to pay monthly or annual fees for the maintenance of the subdivision's common areas or amenities, such as the roads, the swimming pool, the tennis courts, and the golf course.

After beginning trial to the jury, the parties concluded that there were no fact issues in dispute, agreed to dismiss the jury, and submitted the case to the court. Both sides filed their motions for judgment with supporting briefs, and the court subsequently entered its declaratory judgment holding that:

(1) Certain restrictive covenants recorded in the Deed Records of Grimes County, Texas, have not been imposed as covenants running with the land upon certain lots owned by appellees;

(2) No general plan or scheme has been imposed upon certain sections of Bluebonnet Country;

(3) The maintenance fee provisions of the restrictive covenants burdening certain lots owned by appellees violate the statute of frauds for want of an adequate property description and are therefore unenforceable; and

(4) The previous developer's assignment to Selected Lands of the right to collect maintenance fees violates the statute of frauds and is therefore unenforceable.

In its first two points of error, Selected Lands asserts that the trial court erred in declaring (1) that the restrictive covenants on certain lots owned by appellees have not been imposed as covenants running with the land, and (2) that no general plan or common scheme has been imposed upon certain sections of Bluebonnet Country.

In Texas, restrictive covenants may be created four ways: (1) by grant, as a covenant running with the land, (2) by mutual agreement, (3) by implication, as a reciprocal negative easement, and (4) by a general plan of development, as an equitable servitude. See Billington v. Riffe, 492 S.W.2d 343 (Tex.Civ.App.--Amarillo 1973, no writ); Saccomanno v. Farb, 492 S.W.2d 709 (Tex.Civ.App.--Waco 1973, writ ref'd n.r.e.); Cannon v. Ferguson, 190 S.W.2d 831 (Tex.Civ.App.--Fort Worth 1945, no writ); Hooper v. Lottman, 171 S.W. 270 (Tex.Civ.App.--El Paso 1914, no writ).

In the present case, we are concerned with the first and fourth ways of creating restrictive covenants, i.e., with covenants that run with the land at law and with equitable servitudes. The establishment of a general plan or scheme is relevant only to the equitable servitude theory. Collum v. Neuhoff, 507 S.W.2d 920 (Tex.Civ.App.--Dallas 1974, no writ).

The creation of a covenant running with the land at law requires that:

(1) privity of estate exist between the covenanting parties;

(2) the covenant must relate to something in esse;

(3) the covenant must touch or concern the land; and

(4) it must be the intention of the original covenanting parties that the restrictive covenant run with the land.

Billington v. Riffe, 492 S.W.2d at 346.

We find that the restrictive covenants burdening those lots owned by appellee Speich, specifically referred to by the trial court, were imposed as covenants running with the land. Restrictive covenants evidencing the intent that they run with the land were properly recorded prior to Speich's purchases, and the deeds to those lots were expressly made subject to all subsisting easements and restrictions of record. See Aull v. Kraft, 286 S.W.2d 460, 461 (Tex.Civ.App.--Waco 1956, writ ref'd n.r.e.).

In contrast, deeds to certain lots owned by appellees Micros and Kellie do not state that the land is subject to restrictive covenants, although such covenants had been recorded at the time of their purchases.

It is undisputed that appellees Micros and Kellie had notice of the restrictive covenants. Indeed, it appears that the covenants and the corresponding benefits to the lot owners were used as selling points to induce their purchase of lots in Bluebonnet Country.

A purchaser of a lot who takes with constructive notice of restrictions becomes bound thereby and becomes vested with the rights and benefits flowing therefrom. Cornett v. City of Houston, 404 S.W.2d 602, 605 (Tex.Civ.App.--Houston 1966, no writ). The key to enforceability of such equitable covenants is the fact that the purchasers took with notice of the covenant or servitude. Frey v. DeCordova Bend Estates Owners Ass'n, 632 S.W.2d 877 (Tex.App.--Fort Worth 1982), aff'd, 647 S.W.2d 246 (Tex.1983).

As previously noted, the establishment of a general plan or scheme is also relevant to the equitable servitude theory. Collum, 507 S.W.2d at 923. It is not essential in the execution of a general plan that every lot in the subdivision be imposed with a restriction. Zent v. Murrow, 476 S.W.2d 875, 879 (Tex.Civ.App.--Austin 1972, no writ). It is important to note that most cases which involve restrictive covenants in real estate developments or subdivisions deal with those covenants as equitable servitudes and not as "real" covenants. As stated by the El Paso Court of Civil Appeals in 1914:

"The most familiar cases in which courts of equity have upheld the rights 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."

Hooper, 171 S.W. at 272.

Where a general plan of development has been maintained and has been understood, accepted, relied upon, and acted upon, it is binding and enforceable so long as the grantee of a lot, which is not specifically restricted, either took with notice of the restriction or with knowledge of the general plan. See Burns v. Wood, 492 S.W.2d 940 (Tex.1973); Bein v. McPhaul, 357 S.W.2d 420 (Tex.Civ.App.--Amarillo 1962, no writ).

We hold that the restrictive covenants which purport to burden the properties of appellees Micros and Kellie are valid and enforceable as equitable servitudes and find that the trial court erred in holding that no general plan or scheme has been imposed upon the property of the appellees.

As the court stated in Lehmann v. Wallace, 510 S.W.2d 675, 680 (Tex.Civ.App.--San Antonio 1974, writ ref'd n.r.e.), "[s]uch a plan may be established in various ways, such as by express covenant, by implication from a filed map, or by parol representations ... or the grantor pursuing a course of conduct indicating a neighborhood scheme, leading the several purchasers to assume its adoption and adherence to it by such conduct." In Collum, the court noted the recording of a plat, the restriction of certain areas for residences and others for parks, streets, and common areas, and the levying of an assessment against all lot owners for joint maintenance as circumstances which tended to prove the implementation of a general plan or common scheme for...