Waterhouse v. Capital Inv. Co.

• Decision Date: 13 April 1960
• Docket Number: No. 4051,4051
• Citation: 44 Haw. 235,353 P.2d 1007
• Parties: , 44 Haw. 289, 44 Haw. 311 John T. WATERHOUSE v. CAPITAL INVESTMENT CO., Ltd., Makaha Valley Farms, Limited, Makaha Beach Company, Limited and Hawaiian Resorts, Ltd.
• Court: Hawaii Supreme Court

Page 1007

353 P.2d 1007

44 Haw. 235, 44 Haw. 289, 44 Haw. 311

John T. WATERHOUSE v. CAPITAL INVESTMENT CO., Ltd., Makaha Valley Farms, Limited Makaha Beach Company, Limited and Hawaiian Resorts, Ltd.

No. 4051.

Supreme Court of Hawai'i.

April 13, 1960.

Rehearing Denied May 31, 1960.

Petition to Reconsider Petition for Rehearing Denied June 16, 1960.

SYLLABUS BY THE COURT

1. Mutual restrictions on use, structures, lot size and the like involve servitudes similar to easements, and the Statute of Frauds applies.

2. Though restrictions are in such form as not to express 'the zone and the incidence of benefit and burden,' the existence of a general scheme or plan to burden land in a definite area by the imposition of restrictions for the mutual benefit of landowners in that area may serve as a foundation for the implication of the intention to make the benefit of each express restriction appurtenant to all of the land in that area. And where there are no restrictions in any of the instruments in the chain of title of the particular lot the use of which is sought to be restricted, the promise to restrict all of the land may be implied from the general scheme or plan if the proof is sufficient to meet the Statute of Frauds.

3. An unregistered right is not a nullity when asserted against a third party, and the question is rather whether the defending third party is entitled to protection against the unregistered right.

4. In passing upon a summary judgment which, in the particular case, is tantamount to a dismissal for failure to state a claim upon which relief can be granted, the court will reverse the judgment when there are involved grave issues which the trial of the case will develop in a manner not possible without findings of fact. Deferral of a determination as to whether the complaint states a claim for relief is appropriate in such case.

John E. Parks, Thomas W. Flynn, Honolulu, for appellant.

Leon L. M. Chun and Ingram M. Stainback, Honolulu (E. C. Peters, Honolulu, on the brief), for appellee Hawaiian Resorts, Ltd.

Heen, Kai & Dodge, Robert G. Dodge, Honolulu, for appellees Capital Inv. Co., Ltd., Makaha Valley Farms, Limited, and Makaha Beach Co., Limited.

Before TSUKIYAMA, C. J., CASSIDY, WIRTZ and LEWIS, JJ., and DYER, Circuit Judge in place of MARUMOTO, J., disqualified.

LEWIS, Justice.

This is an appeal from a summary judgment dismissing the action on a record consisting of the complaint and an affidavit filed by defendants-appellees.

Plaintiff-appellant filed his complaint on July 27, 1956, seeking the protection of equity for three parcels of land for which he holds a deed dated September 29, 1947, and seven parcels of land for which he holds a deed dated October 27, 1950, all ten parcels being beach lots located in a cove at Makaha, District of Waianae, City and County of Honolulu. Relief was sought against a threatened motel development in the same cove.

Defendant-appellee, Hawaiian Resorts, Ltd., it was alleged, entered into an agreement on March 13, 1954, for the sale to it of the motel site and was proceeding with this development. The complaint further alleged that the cove is part of a subdivision which was so sold as to entitle plaintiff to enforce against this defendant, the buyer of the motel site, restrictions whereby only one family dwelling with the usual necessary outbuildings could be erected for each ten thousand square feet of lot area and the premises could not be used for carrying on a hotel or apartment house, among other limitations.

Four corporations were named as defendants. The relationship between Capital Investment Co., Ltd., the first named, and Makaha Valley Farms, Limited, and Makaha Beach Company, Limited, the second and third named, is alleged in the complaint and they are there treated as though the acts of any one of them were the acts of all. This appeal presents no issue as to such treatment and without distinguishing between them we refer to them as 'vendor.' The buyer, the remaining defendant, will be referred to as 'Hawaiian Resorts,' or 'vendee,' or 'defendant.'

Plaintiff's complaint discloses that his land is registered in the land court under chapter 342, R.L.H.1955, presently the chapter number for the Torrens system established by S.L.H.1903, Act 56. Since it is alleged that plaintiff's land and the motel site are parts of Makaha subdivision, a large tract of land which vendor had purchased, we must infer from this that the motel site also is registered in the land court.

On September 10, 1956, motions to dismiss were filed by all of the defendants on the ground of failure to state a claim upon which relief can be granted. Hawaiian Resorts, which has carried the burden of the defense throughout, attached a memorandum raising three issues, below noted. On November 20, 1956, defendants filed the motion for summary judgment. This referred, for the grounds thereof, to the memorandum already on file and to an affidavit filed with the motion. Both the motions were argued and the latter granted. However, the only matter considered outside the pleadings was the affidavit, which merely eliminated the defense of res judicata insofar as it might otherwise have been raised by allegations concerning a certain equity suit brought against the defendants other than Hawaiian Resorts in 1952.

Though defendants filed a separate motion for summary judgment, the effect was the same as though only the motion to dismiss had been made, the affidavit being presented and considered under H.R.C.P., Rule 12(b), or only the motion for summary judgment had been made, based on the complaint plus the affidavit. See Moore, Federal Practice, §§ 12.09, 56.02(3), 56.09, 56.11(2) (2d ed.). Both a motion to dismiss and motion for summary judgment having been filed, they might be considered together, as was done here, Moore, Federal Practice, supra, § 56.09, note 11, and the court was 'justified in relying on any or all appropriate grounds disclosed by any or all the papers of record in the case.' Crosby v. Oliver Corp., D.C.S.D.Ohio 1949, 9 F.R.D. 110, 111; Palmer v. Palmer, D.C.D.Conn. 1940, 31 F.Supp. 861; Pofe v. Continental Ins. Co. of New York, 7 Cir., 1947, 161 F.2d 912. From the decision, to which the judgment appealed from refers, it appears that the action was dismissed on the ground that the allegations of the complaint (with the res judicata issue eliminated) were insufficient to state a claim upon which relief might be granted. We so construe the summary judgment.

The complaint alleged that the vendor caused the subdivision to be zoned for residential purposes, publicly declared in writing and advertised that the subdivision was to be sold subject to uniform restrictions for residential purposes, and inserted uniform restrictions in each deed issued covering all parcels in the subdivision except the motel site, which the vendor, after all the other land had been sold with restrictions, agreed to sell to Hawaiian Resorts without restrictions. It further was alleged that at the time of this agreement Hawaiian Resorts had 'full knowledge of the restrictions contained in other deeds,' and 'knowledge of the declarations and promises as aforesaid,' and that the agreement for the sale of the motel site was made 'in order to circumvent and defeat said restrictions.'

Thus the complaint showed there were no restrictions in the chain of title of the motel site, asserted a right to the benefit of the restrictions on the basis of the facts alleged, and relied on the vendee's knowledge to charge it with the burden of the restrictions.

The court below held that the Statute of Frauds was fatal to plaintiff's claim, since:

'The Statute of Frauds prevents the enforcement against the vendor of real property, and any purchasers from him, of a promise not made in writing, signed by the vendor or purchaser, as the case may be, regarding the use of the property. Only where the vendor binds his remaining land in writing, signed by him, can reciprocity of restriction between the vendor and vendee be enforced. Snow et al. v. Van Dam et al. (1935 291 Mass. 477, 197 N.E. 224.)

* * *

* * *

'The court finds the Sprague, et al. v. Kimball, et al, 100 N.E. 622 (1931) Mass. 380 is soundly reasoned and states the law on the matter before the court.' Decision of Circuit Court, July 5, 1957, pp. 2-4.

The three issues raised by the memorandum attached to the motion to dismiss were:

'1. The imposition by a grantor of restrictions on the land of a grantee would not impliedly place the same restrictions on lands retained by the grantor.'

'2. Defendants' land is registered land and the purchaser of registered land holds the same free from all encumbrances except those noted on the certificate of title. Restrictions are encumbrances and are not excepted by law. Defendants therefore hold said land free from restrictions not registered. Sec. 12641, R.L.H.1945 as amended [now R.L.H.1955, § 342-42].'

'3. Plaintiff's action is barred by the Statute of Frauds, sec. 8721, R.L.H.1945 [now R.L.H.1955, § 190-1]. The restrictions alleged are interests in or concerning land and are unenforceable against defendants unless agreed to in a writing signed by defendants. No sufficinet instrument in writing signed by the defendants is alleged in the complaint.'

In this court, Hawaiian Resorts further contends:

'The restrictive covenants are unenunforceable by reason of vagueness and uncertainty.'

'The complaint is too vague and uncertain to permit injunctive relief and the Chancellor was well within his discretionary powers in denying injunctive relief against Hawaiian Resorts, Ltd.'

These further contentions would be considered if they furnished reasons for the judgment though different from the reasons of the court below. Calaca v. Caldeira, 13 Haw. 214; Re Application Kaimuki Land Co., 35 Haw. 254; Akai v. Lewis, 37 Haw. 374, 379. However, such is not the case. The rule applicable here is that an...