Stein v. Endres Home Builders, Inc.

• Decision Date: 21 June 1938
• Citation: 280 N.W. 316,228 Wis. 620
• Parties: STEIN et al. v. ENDRES HOME BUILDERS, Inc., et al.
• Court: Wisconsin Supreme Court

228 Wis. 620

280 N.W. 316

STEIN et al.

v.ENDRES HOME BUILDERS, Inc., et al.

Supreme Court of Wisconsin.

June 21, 1938.

Appeal from a judgment of the Circuit Court for Dane County; Alvin C. Reis, Judge.

Reversed.

ROSENBERRY, C.J., and WICKHAM, J., dissenting.

Action commenced June 16, 1937, by Bruno and Virginia Stein, Ramon and Nelle Coffman, and Ralph and Katharine Axley, against Endres Home Builders, Inc., a corporation, and J. L. Endres, seeking to enjoin the defendants from building certain houses in the village of Shorewood Hills, in violation of a building restriction. The case was submitted upon a sworn statement of facts, in accordance with sec. 269.01, Stats. The plaintiffs appeal from a judgment, dated June 29, 1937, in favor of J. L. Endres and the Endres Home Builders, Inc.

The parties to this action own property in the village of Shorewood Hills. They derive title from a common grantor, the Eagle Heights Land Co., which promoted two additions to the village. When the Eagle Heights Land Co. platted the lands in question it employed a firm of planning experts. The subdivision was advertised as a carefully planned, restricted, and highly desirable residental property, and a large number of lots were sold to persons who desired to build permanent homes. Nearly all of the deeds from the Eagle Heights Land Co. contained restrictive clauses in the following language:

“Provided, however, that this deed of conveyance shall be subject to the reservations and restrictions hereinafter stated, which said reservations and restrictions are to be construed as covenants, running with the land, to-wit:

“1. None of said lots shall be conveyed to, used, owned, nor occupied by negroes as owner or tenant.

“2. For a period of twenty-five years from October 1, 1921, Eagle Heights Land Company shall have the right to require plans for the exterior design of any building or structure to be erected upon any lot in said plat to be first submitted to and approved by an expert acceptable to the Eagle Heights Land Company.

“3. That for said period of twenty-five years no building on any lot in said plat shall be used for other than residence purposes without written consent of the Eagle Heights Land Company.

“4. That for said period of twenty-five years no building previously erected elsewhere shall be moved upon any lot in said plat.

“5. That for said period of twenty-five years no more than one dwelling house shall be constructed on any lot in said plat without the written consent of the Eagle Heights Land Company.

“6. During said twenty-five year period it is agreed that no windmill be constructed upon said lots or any lot in said plat and that no barn or outhouse or garage shall be constructed upon said plat or any lot in the plat without written consent of the Eagle Heights Land Company as to its necessity and location.

“7. That the dwelling house to be erected upon said lot shall be erected upon substantially the site indicated for the same upon the map of said Fourth Addition to Shorewood prepared by O. C. Simonds and Company.”

Purchasers from Eagle Heights Land Co., including the plaintiffs, relied upon these restrictions to protect the desirability of their properties. Before building, most of the purchasers submitted architect's plans to an officer of that company, who approved them, although in some instances houses were built without submitting plans. Two or more houses were built upon a single lot, in several cases, with consent of the Eagle Heights Land Co.

On February 5, 1931, the Eagle Heights Land Co. conveyed to Sherwood Hills Co. of all of the lots which it then owned in Shorewood. The deed provided that the benefit and right to enforce the restrictive covenants passed to the Shorewood Hills Co. In 1935, this company in turn conveyed to Shorewood Hills Realty Co., but the deed did not contain the restrictions in question, or refer to them. Both the Eagle Heights Land Co. and the Shorewood Hills Co. have been dissolved.

By a deed dated January 20, 1936, the Shorewood Hills Realty Co. conveyed lot 32 in the Fourth Addition of Shorewood to the defendant Endres Home Builders, Inc., this deed containing a warranty against incumbrances, but excepting from that warranty the restrictions set forth above. Endres Home Builders, Inc., proposes to build two houses upon that lot, and has secured written permission to do so from the Shorewood Hills Realty Co. The plaintiffs own nearby lots. Alleging that the building of two houses on lot 32 will cause them irreparable damage, they demand an injunction.

Schubring, Ryan, Peterson & Sutherland and Ralph E. Axley, all of Madison, for appellants.

James E. Karn, of Madison, for respondents.

FAIRCHILD, Justice.

When the Eagle Heights Land Co. platted a subdivision in the wooded hills bordering Lake Mendota, it advertised and sold lots in the plat as carefully planned, restricted, and highly desirable residential property. Promoter and purchasers alike were interested in developing a residential section of peculiar quality, the promoter because adherence to a general plan would increase the value of property yet unsold, the purchasers because they wished to build homes with the assurance that for a period of years, at least, no one would disturb the attractiveness which was expected to result from careful planning.

To insure compliance with this scheme of development, the Eagle Heights Land Co. included in the deeds of conveyance certain restrictive covenants, which were to be construed as covenants running with the land. There were seven restrictive clauses, all except one of which were so expressed as to apply to all of the lots in the plat, rather than to the particular lot conveyed.

The language of these restrictions was not such as to indicate clearly that the covenants were mutual. The deeds might have provided expressly that both grantor and grantee were to be bound, and their heirs and assigns. On the other hand, they might have been so drawn as to place the restrictions only upon the particular lot conveyed, without reference to other lots in the subdivision.

[1][2] The question is one of intent. If the intent was to express a mutual promise, both grantor and grantee agreeing to conform to the general scheme, the covenants attached to all of the land included in the plan, and were binding upon all purchasers with notice. It has been held by this court in a number of cases that such restrictions are enforceable where intended to benefit the grantee of a conveyance as well as the grantor.

The leading case is Boyden v. Roberts, 1907, 131 Wis. 659, 666, 111 N.W. 701, 703. John Johnston owned a considerable tract of land on the shore of Lake Geneva. He sold a part to George A. Weiss, at the same time entering into an agreement “by and between” Weiss and Johnston, which recited that Johnston owned certain land, and then provided that it was “covenanted and agreed between said parties” that no part of the property would be used for hotel, club or camping purposes. This agreement was recorded. A number of years later Edward Uihlein purchased from Johnston a part of the land which Johnston had retained at the time of his conveyance to Weiss. Other purchasers from Johnston objected to the plan of Uihlein to erect a clubhouse, and Uihlein brought an action to quiet title. It was held that the agreement between Weiss and Johnston had created a restrictive covenant, binding upon all purchasers with notice. The court said:

“It seems manifest from the express terms of the agreement, to the effect that it should be binding on all purchasers of any portion of the property, and upon the heirs, executors, administrators, and assigns of each party, and that the covenant should run with the land, that the parties intended to impress the property with an equitable servitude in the nature of a restriction. *** It is apparent from the established facts that the agreement was executed in pursuance of a general scheme for the benefit and improvement of the property, and not for the benefit of the grantor alone; and that each purchaser with notice took the portion conveyed with the right to enforce the restriction against other grantees of portions of the property charged with the restriction. *** The very object of the restriction was to enhance the value of the property by making it desirable for residence property, and such enhanced value was obviously intended to be secured by imposing upon all the property a servitude in the nature of a restriction which could be enforced by the grantees inter sese.”

Another case involving the same property and reaching the same result was decided by this court more recently, Roberts v. Gerber, 1925, 187 Wis. 282, 202 N.W. 701. See, also, Ward v. Prospect Manor Corporation, 1926, 188 Wis. 534, 206 N.W. 856, 46 A.L.R. 364.

The language of the Johnston-Weiss agreement was more apt to create a mutual covenant than the language now under consideration. But the law has progressed beyond the point where valuable rights in land may depend upon the choice of apt words. Language very similar to that in the Eagle Heights deeds was used in certain conveyances in Mueller...