Steinmann v. Silverman

Jun 2, 1964

Versions:14 N.Y.2d 243

200 N.E.2d 192

251 N.Y.S.2d 1

1964 N.Y. LEXIS 1134

Lead Opinion

Burke, J.

In 1957 defendant purchased a plot of land with house and outbuildings from the Garber Lake Realty Corp. at an auction liquidating the Garber holdings near Treasure Lake in Sullivan County. Contained in the deed conveying the property was a covenant restricting the plot to a single residence. Defendant has commenced the conversion of a barn into a second residence in violation of the covenant.

The main question on this appeal is whether the plaintiffs, who own land near that of defendant, also conveyed by Garber some years before the conveyance to defendant, may enforce the covenant in the deed to the defendant. Since they are strangers and not parties to the instrument containing the covenant, or referred to therein as beneficiaries (see Vogeler v. Alwyn Improvement Corp., 247 N. Y. 131), their theory is that of an equitable right based on the existence of a common plan or scheme of building development (Korn v. Campbell, 192 N. Y. 490; Equitable Life Assur. Soc. v. Brennan, 148 N. Y. 661; Chesebro v. Moers, 233 N. Y. 75). We find neither the necessary disclosure nor the clear and definite evidence required to prove the existence of such a common plan.

The tract containing plaintiffs’ and defendant’s parcels was acquired by Garber in 1946 free of restrictions. Between 1947 and 1955 Garber conveyed about 20 parcels adjoining Treasure Lake, of which 11 are owned by plaintiffs. Although the parcels *246were plotted on a map showing a development of numerous parcels, the map was never filed in the County Clerk’s office nor shown to any purchaser. All of the conveyances but one * contained the above-mentioned restriction against more than a single residence. After the commencement of this action, in order to furnish an additional defense to plaintiffs’ claim, defendant conveyed the part of her parcel upon which the barn stands to her son. We do not find this circumstance material. If the covenant is enforcible by plaintiffs at all, it applies to the whole area conveyed subject thereto and binds anyone taking any part thereof with notice, actual or constructive, of the restrictive covenant. Otherwise any restriction against the number of buildings on a given plot could be circumvented by subdivision and sale—-a result clearly inconsistent with the purpose of the covenant and the intention of the parties.

Plaintiffs have the burden of proving that the similar covenants in the several deeds out of Garber Realty were, in the intention of the parties, for the mutual benefit of all of the grantees and not merely for the grantor, Garber (White v. La Due & Fitch, 303 N. Y. 122; Barrow v. Richard, 8 Paige Ch. 351; Snow v. Van Dam, 291 Mass. 477). Absent an explicit provision in the covenant that it is for the benefit of other grantees, in which case third-party beneficiary principles would control (Vogeler v. Alwyn Improvement Corp., 247 N. Y. 131, supra), plaintiffs must show that the parcels sought to be charged with the restriction were embraced in a general plan of development (Korn v. Campbell, 192 N. Y. 490, supra; Equitable Life Assur. Soc. v. Brennan, 148 N. Y. 661, supra; Chesebro v. Moers, 233 N. Y. 75, supra; 5 Powell, Real Property, § 679).

Although we have an affirmed finding of fact that such a common building plan existed here, the undisputed evidence shows that no map was ever filed or shown to prospective purchasers. Nor is there a single word of testimony that any grantee bought with knowledge of, or in reliance on, the existence *247of a uniform scheme of restrictions — or indeed even knew of any other covenant than his own. For aught that appears in the record the prior grantees had not even a vague idea of the extent of the development now alleged to be subject to a common scheme. Only four of the deeds from Garber to the various grantees gave any indication of a plan of development. They read: The real property described herein is part of a tract intended to be used exclusively for a first class residential property ”. Even these four deeds show no uniform, mutually binding, restrictions.

When the liquidation sale was held the advertisement made no mention of uniformity of restriction. The previous deeds to plaintiffs did not operate to put defendant on inquiry notice (Buffalo Academy of Sacred Heart v. Boehm Bros., 267 N. Y. 242); nor would an inquiry have revealed more than the bare existence of similar restrictions — insufficient without more to establish a uniform plan (Bristol v. Woodward, 251 N. Y. 275). The physical surrounding circumstances clearly did not have the effect of giving notice of schematic restriction. The parcels were of varying shapes and sizes, some as little as one half the area of defendant’s parcel. Although some lots were laid out in a straight line, others, including defendant’s, were spread out in no perceptible pattern. No notice of a common restriction can be found in the advertisement issued with the notice of the auction sale at which defendant purchased her property. To the contrary, it boasted of the recreational potential of the area and stated that ‘ ‘ Privacy and accessibility make it attractive for subdivision for private homes—summer camp — dude ranch or institutional use.”

Lastly, it is significant that the other two parcels sold at the liquidation sale contained the following language in the deed: ‘‘ All of said premises will be and are sold subject to such conditions, reservations and restrictive covenants as are contained in various deeds from Garber Lake Realty Corporation to various grantees and restrictions contained in collateral agreements between Garber Lake Realty Corporation and grantees, which said deeds and collateral agreements are recorded in the office of the Clerk of the County of Sullivan.” The deed to defendant’s parcel contains no such notice of subjection to other restrictions. In sum, there is simply a complete failure of proof *248that a uniform scheme of restrictions was ever made manifest to all parties, and most certainly a failure of proof that this defendant, a purchaser for value, had notice, actual or constructive, of any such common scheme. (4 Warren’s Weed, New York Real Property [4th ed.], p. 813.)

The order appealed from should be reversed, with costs in this court and in the Appellate Division, and the complaint dismissed.

Notes

The single parcel conveyed free of restrictions was a part of the tract severed from the rest because of the appropriation of a part of the tract for New York State Route 17. Lack of access amply justified the courts below in treating this conveyance as a special circumstance not bearing on the existence of a uniform plan for the rest of the Garber land.

Concurrence Opinion

Christ, J.

(concurring). I concur for reversal. The covenant in the defendant’s deed to erect only a single residence on one plot is between the grantor and grantee named in the deed. But this ease turns on whether other grantees of the common grantor may enforce the covenant against the defendant. We must determine, in order to answer this question, whether there is a common scheme and plan for the development of the land in respect to this covenant. There is not sufficient definiteness in my opinion to sustain its enforcement. In Bristol v. Woodward (251 N. Y. 275, 283) Chief Judge Cardozo said: “ The scope of the community scheme * * * was as much undisclosed as if the project were still locked in the brain of the projector. * * * Servitudes do not result by implication from a subjective state of mind.” There never was any plan or layout of this tract filed or exhibited which gave to the plaintiffs a right to command the nature of the development as to streets and lots. The common grantor, Garber Lake Realty Corp., at all times retained full control to make the lot lines and the sizes of the plots and it had the right to alter them at will. The plaintiffs never had the right to compel Garber to lay out the development in any specific manner as to size or shape of plots. Garber could have sold plots in acreage, with great irregularity, or it could have set up lots 20 by 100 feet. The requirement of one residence on one plot did not give plaintiffs any control over the character of the development, but this was left fully and wholly to Garber. The very parcel which is under consideration in this case could have been divided by Garber into two parcels, one with the house and one with the barn, and the restriction as to one house on one plot in such circumstances would have brought the very development which the defendant here contemplates. The plaintiffs’ rights against the defendant can be no higher than they would have been against *249G-arber. The covenants as to residential nse and the exclusion of business uses do not depend on the size and shape of the plots and, although that question is not before us for decision, I do not determine that the restrictions as to residential use and the exclusion of business use are not enforcible by plaintiffs. These covenants are of a different nature. The reasoning of this opinion is not necessarily applicable to them.

Dissenting Opinion

Fuld, J.

(dissenting). The deed to the defendant and to the other grantees from the common grantor expressly recited in two separate clauses that each plot was to contain no more than “ a single dwelling house * * * for the use of one family only ’ ’ and that ‘ ‘ only one residence shall be erected on said premises ’ ’. It matters not that the several plots, owing perhaps to terrain, varied in size or shape. Quite obviously, the intention of the parties, the design envisaged, was for a development of one home to one plot. Had any grantee desired to be exempted from that requirement, so as to be free to have more than one dwelling on his plot, language was at hand to so provide and the words could easily have been found to reflect such an intention. In view of the circumstance that the defendant has reconstructed the barn into a residence, it may seem a hardship to hold that that building may not be used as a dwelling but the simple fact is that what was done was done deliberately by the defendant herself in the very face of the covenant.

The suggestion that the covenants speak only of and to the future seems to me to flout both the intention of the parties and the language of the deed. When the two provisions are read together, as of course they must be, it is clear that the design was to have a single dwelling house, for the use of only one family, grace each plot. The resemblance between this case and Barrand v. Quinn (302 N. Y. 744) is purely superficial. The parties there involved, who owned large summer houses, were primarily concerned with the right to subdivide in the future. They were not concerned with the possible future uses of the large homes then existing, one of which the defendant sought to use for a nursing home; they were intent on dealing with the future and had devised the covenant under review in that ease to deal only with new buildings which new owners might erect. This was plainly not the situation in the case before us; here, a development of practically *250all new homes was contemplated and grantor and grantees were interested and concerned in limiting each plot to one dwelling, and necessarily for the present as well as for the future.

Nor do I see any warrant for concluding, as the court has, that there was no evidence to support the affirmed finding of fact (found by the trial court and affirmed by the unanimous Appellate Division) that a common building plan existed. Where the owner of a large tract of land divides it into building lots to be sold to separate purchasers by deeds which contain uniform covenants restricting the use to which the grantees may put their land and premises, a presumption arises that the restrictions are intended for the common benefit of the purchasers, and each will be permitted to enforce them against the others. (Cf., e.g., Bristol v. Woodward, 251 N. Y. 275, 284; see, also, 4 Warren’s Weed, New York Real Property [4th ed.], pp. 723, 738.) Moreover, the purchaser of a lot under such circumstances is bound to know of the restrictions in the deeds of other lots because each deed made prior to his own created easements in his lot in favor of the other lots. (See, e.g., Equitable Life Assur. Soc. v. Brennan, 148 N. Y. 661, 672; see, also, 4 Warren’s Weed, New York Real Property [4th ed.], p. 812.)

Here, Garber Lake Realty Corp., the common grantor, had purchased, with intent to market, an entire tract of land and prepared maps of the property in which it was subdivided into building lots. Each of the deeds from this common grantor to the plaintiff grantees herein, as well as to the defendant grantee, contained the restrictive covenants noted above. The restriction imposed, that each plot contain a single one-family dwelling, was uniform. And that the grantor contemplated, and partly carried out, the actual development of the plan subject to the restriction is apparent not only from the deeds to the plaintiffs and the defendant which contained the restriction in question but from the deeds of the tracts sold at auction at about the time defendant purchased her plot. Thus, the deeds of these two tracts — Parcel A, which was about the size of the defendant’s lot, and Parcel O, a large tract which comprised the remainder of the lots unsold—recite that “ All of said premises will be and are sold subject to such conditions, reservations and restrictive covenants as are contained in various deeds *251from Garber Lake Realty Corporation to various grantees and restrictions contained in collateral agreements between Garber Lake Realty Corporation and grantees”. In my view, this combination of circumstances was sufficient to make out a common scheme or plan. Since the defendant took directly from the grantor subject to a deed containing the restriction sought to be enforced, the other grantees, the plaintiffs herein, for whose mutual benefit, pursuant to such plan, the restriction was imposed, were entitled to enforce it against her.

I would affirm the order appealed from.

Opinion by Judge Burke in which Judges Van Voorhis, Scileppi and Christ * concur; Judge Christ * concurs in a separate opinion in which Judges Van Voorhis, Burke and Scileppi concur; Judge Fuld dissents in an opinion in which Chief Judge Desmond and Judge Dye concur.

Upon reargument: Order reversed, etc.

Designated pursuant to section 2 of article VI of the State Constitution in place of Bergan, J., disqualified.