Southwest Petroleum Co. v. Logan

• Decision Date: 14 September 1937
• Docket Number: 27726,27727.
• Citation: 71 P.2d 759,180 Okla. 477,1937 OK 473
• Parties: SOUTHWEST PETROLEUM CO. et al. v. LOGAN et al. SOUTHWEST PETROLEUM CO. et al. v. SWINDALL et al.
• Court: Oklahoma Supreme Court

71 P.2d 759

180 Okla. 477, 1937 OK 473

SOUTHWEST PETROLEUM CO. et al. v. LOGAN et al.

SOUTHWEST PETROLEUM CO. et al. v. SWINDALL et al.

Nos. 27726, 27727.

Supreme Court of Oklahoma

September 14, 1937

Syllabus by the Court.

1. A covenant or agreement restricting the use of land in a certain tract imposed thereon by a common grantor under a general improvement plan, intended for the mutual benefit of all grantees therein, may be enforced in equity by any subsequent grantee in such tract, who purchased with reliance on the general plan, against any other subsequent grantee taking with notice of the restrictions. In such case the recording of restrictions with dedication plat is sufficient notice to subsequent purchasers, and the restrictions need not be included in subsequent deeds or be such as would technically run with the land.

2. Restrictions on the use of real property must be strictly construed, and will not be extended on the one hand or limited on the other, but strictly enforced in a proper case.

3. A valid restriction that "All lots in this plat are restricted to residences only" prevents the use of such property for the drilling of oil and gas wells.

4. In determining whether a court of equity should refuse to enforce valid restrictions on the use of real property because of change of conditions of the surrounding property the test is whether the original purpose and intention of the parties creating the restrictions has been so destroyed by the changed conditions, without fault on the part of those who seek to be relieved, that the restrictions are no longer of substantial benefit to the residents, and the original purpose cannot be reasonably effected by granting equitable relief. Each case must be decided on the equities as they are presented.

5. Where the evidence as to change of condition is not sufficient to show that the original purpose of restrictions cannot now be accomplished, and where it is shown that a substantial benefit still inures to the residents of the restricted area by the enforcement of the restrictions, even though the property may be more valuable for other purposes the judgment of the trial court enforcing the restrictive provisions created with the dedication is not against the clear weight of the evidence.

6. Ordinance No. 4778, extending the oil and gas drilling zone to include Lincoln Terrace addition, does not supersede plat restrictions so as to prevent their enforcement in a proper case.

Appeal from District Court, Oklahoma County; Ben Arnold, Judge.

Actions by Margaret Logan and others and by Charles Swindall and others against the Southwest Petroleum Company and others. From judgments in favor of the plaintiffs, the defendants appeal.

Affirmed.

BAYLESS V. C.J., and RILEY, J., dissenting.

Howard B. Hopps, of Oklahoma City (A. Leonard Brougham, of Oklahoma City, of counsel), for plaintiffs in error.

Charles Hill Johns, of Oklahoma City (Harold Thweatt, of Oklahoma City, of counsel), for defendant in error Margaret Logan.

Shirk, Danner & Earnhart, Charles Hill Johns, and Charles Swindall, all of Oklahoma City, for defendants in error Charles Swindall et al.

Wm. L. McCann, of Oklahoma City, for plaintiffs in error Wm. L. McCann, Henrietta Z. McCann, William A. Pettit, and Anngeline Pettit.

HURST Justice.

These are actions seeking permanent injunctions to prevent the drilling of oil and gas wells in Lincoln Terrace addition in Oklahoma City. As both cases involve the same facts and same issues and have been consolidated on appeal, they will be treated together in this opinion. In the Logan case, the action was commenced by the petition of Margaret Logan, owner of lot 20 in block 7 of the addition, for herself and all others similarly situated and who desired to join therein, and by the intervening petition A. D. Sills and his wife, owners of lot 12 in block 15, both seeking to prevent the commencement of drilling operations on lot 11 of block 15. G. A. Nichols and his wife intervened as plaintiffs at the trial. The Swindall case was commenced by the petition of Charles Swindall and his wife, owners of lots 16 and 17 in block 6, to prevent drilling operations on lots 12 and 22 of block 6 in the addition. The Southwest Petroleum Company was a defendant in both cases along with numerous lot owners in the addition who had executed oil and gas leases to that company, and at the trial many other lot owners joined as defendants.

Lincoln Terrace addition covers about 97 1/2 acres and was laid out by the filing of three separate plats by J. J. Culbertson, Jr., and his wife, who were at that time the owners of the whole tract. The first plat, covering the major part of the addition, was filed on June 28, 1926, and included blocks 7 to 23, both inclusive. With it was filed an "Owners' Certificate & Dedication," executed by Culbertson and his wife, which included the following clause: "5. All lots in this plat are restricted to residences only, except lots 10 to 17 inclusive Block 17, on which apartments may be erected, and all of Block 20, on which retail business buildings or apartment houses may be erected."

On November 10, 1926, the plat of blocks 4, 5, and 6 was filed and with it was also filed an "Owners' Certificate & Dedication," which provided: "4. All lots in this plat are restricted to residences only."

The plat for the remaining part of the addition, blocks 1, 2, and 3, was filed on February 26, 1927, together with another similar "Owners' Certificate & Dedication" which contained the clause: "4. All lots in this plat are restricted to dwellings only."

The owners then commenced to sell the platted lots in the addition, and the organization of Mr. G. A. Nichols conducted an advertising campaign by a series of newspaper advertisements. These advertisements called attention to the restrictions stating that they were protective and insured the purchasers that all houses would be equally desirable and of brick, stone, or stucco, and contained other advertising matter to the effect that the district would be the city's finest residential district. They also stated the price range of the lots to be from $850 to $7,500 per lot.

The platters then conveyed to their immediate grantees by warranty deeds containing the statement immediately after the warranty clause: "except subject to the following restrictions, in addition to those recited in the dedication. * * *" (Italics ours.) The subsequent deeds contained no reference to the restrictions. They only referred to the plats by the usual phrase "according to the recorded plat thereof," following the description of the property. Within four or five years after the dedication, practically all of the lots in the addition were thus sold and valuable residences built thereon. The total value of the improvements in the addition was estimated at $3,650,000.

At the time the addition was platted, the original zoning ordinance, passed in 1923, was in force and the city was divided into districts according to their use, i. e., U.1, residence district, U.2, apartment house district, U.3, business and light manufacturing district, U.4, heavy industry. All the property in Lincoln Terrace addition was in U.1, residence district, at the time the plat was filed. On May 10, 1929, U.7, or the oil and gas district, was created by an amendatory ordinance. It was made unlawful to drill for oil and gas within the corporate limits of the city, except within the limits of the oil and gas district. The ordinance provided for the regulation of drilling within this district. On May 22, 1936, by Ordinance No. 4778, the oil and gas district was extended to include Lincoln Terrace addition.

Thereafter, the Southwest Petroleum Company, having acquired leases from various lot owners in the addition, applied to the building superintendent of Oklahoma City for permits to drill in block 15 and block 6, and these actions were commenced.

The several petitions and replies filed by plaintiffs and intervening plaintiffs presented four theories to the trial court in support of their prayers for permanent injunctions. They are in substance, (1) that the addition is restricted to residences only by the "Owners' Certificate & Dedication" filed with the plats; (2) that the leases executed by the other lot owners in the restricted area to the Southwest Petroleum Company are void; (3) that the drilling for oil and gas in the addition would create a nuisance; and (4) that a zoning ordinance which attempts to permit drilling operations in this restricted area is unconstitutional. The defendants raised the general issue as to the equitable relief sought and pleaded defensive matter presenting six grounds for the denial of the injunctions. They are in substance, (1) that there are no specific restrictions against drilling for oil and gas; (2) that the addition is in the drilling zone created by the city ordinance; (3) that there is an oil field surrounding the addition which is draining a common pool under the addition; (4) that the home owners in the addition have no remedy to recover for this drainage except the drilling of wells in the addition themselves; (5) that drilling is only a temporary use and will not prevent the addition from continuing to be used for residential purposes, and that the benefit resulting from drilling will exceed the damage thereby occasioned; and (6) that, because of the drilling operations conducted in the immediate vicinity, the conditions have changed so that it would be inequitable to enforce the restrictions.

At the trial numerous property owners in the addition testified that they had purchased with reliance on the restrictions and had built and maintained residences of considerable value. Also that their residences...