Opinion
Argued May 26th, 1931.
Decided February 1st, 1932.
1. The form in which a restriction is imposed, whether by condition, covenant or reservation, is not so important, the real question being whether it was intended for the benefit of the retained land of the grantor.
2. While there is no presumption that the building restrictions in this case were originally imposed for the benefit of lands retained by the grantor, the evidence discloses circumstances from which it might be concluded that that was the grantor's purpose in imposing the condition.
3. Defendant's predecessors in title entered into an agreement with the executor of the common grantor under which the land was taken subject to several covenants exactly like those imposed by the common grantor, and which agreement gave the executor and the owner or owners of any adjoining land deriving title from the common grantor, the right to institute proceedings at law or in equity against any person violating or threatening to violate the restrictions. Held, the complainant, the owner of an adjoining piece of land whose title derived from the common grantor, has the right to maintain this action to restrain the defendants from violating the building restrictions.
4. The general rule of law is that a third person may enforce a promise made for his benefit even though he is a stranger both to the contract and to the consideration.
On appeal from a decree of the court of chancery advised by Vice-Chancellor Berry, who filed the following conclusions:
"By this bill the complainant seeks an injunction restraining the defendants from violating a building restriction. Complainant is the owner of a lot of land having a street frontage of fifty feet and a depth of one hundred fifty feet and comprising parts of three lots shown on map of Asbury Park made by F.H. Kennedy Son, A.D. 1874, and which property was formerly owned by James A. Bradley. The defendants are the owners of an adjoining lot with a street frontage of ninety feet on Third avenue and a depth of one hundred fifty feet, abutting on Main street its full depth, and being parts of three lots shown on the same map, also formerly owned by James A. Bradley. Bradley conveyed to the defendant's predecessor in title by deed dated March 17th, 1882, containing the following restriction:
"`The said premises are hereby conveyed upon the following conditions to wit: That no house, garage or other building shall ever be erected thereon nearer to the line of the said Third Avenue than twenty-five (25) feet, therefrom, nor nearer to the line of said Main Street than ten (10) feet therefrom.'
"The deed to the complainant's predecessor in title, dated October 16th, 1882, contained the following restriction:
"`The said premises are hereby conveyed upon the following conditions, to-wit: That no house, cottage or other building shall ever be erected thereon nearer to the line of said Third Avenue than twenty-five (25) feet therefrom.'
"Both deeds contained the following provision, together with other restrictions not pertinent to this controversy:
"`And that in case the said party of the second part or his heirs, executors, administrators or assigns or any of them shall violate any or all of the conditions herein contained, then this deed shall be null and void and thereupon the fee of the said land shall revert to the party of the first part.'
"Prior to, and at the date of these deeds, Bradley also owned a large number of lots shown on said map, among which was a lot immediately adjoining on the east that of complainant. On February 6th, 1882, Bradley conveyed that lot to one Howell, by deed containing the same restriction for a twenty-five-foot setback and under a like condition of forfeiture. At the time of the purchase of her lot defendant's predecessor in title gave back a purchase-money mortgage. This was subsequently foreclosed and the property conveyed to Bradley by the sheriff by deed dated June 13th, 1884, and on the same date Bradley conveyed that lot to Buchanan and others by deed containing the same provision with respect to the twenty-five-foot setback on Third avenue and the ten-foot setback on Main street. This deed contained practically the same restrictions as the original deed from Bradley to Sarah Jane Hurley and the same condition respecting forfeiture.
"It is undisputed that the defendants have built over the entire restricted area on their lot notwithstanding timely protest by the complainant and prompt application to this court for relief, and notwithstanding that the order denying preliminary restraint contained the following provision:
"`If the defendants erect a building which in any way violates the restrictions in the deed to the property at the southeast corner of Third Avenue and Main Street, in the City of Asbury Park, the complainant's rights shall not thereby be prejudiced, but the defendants shall be deemed to have erected such building at their peril.'
"If, therefore, it becomes necessary to issue a mandatory injunction in this cause, the defendants have no case for complaint on the ground of hardship.
"It is admitted that there was no neighborhood scheme, and it is objected on the part of the defendants that as the restrictions were imposed by way of condition instead of covenant, the benefits thereof were personal to the grantor and the restrictions are not enforceable at complainant's suit; also, that the complainant does not stand in the position of a subsequent grantee of the common grantor because the title to the defendant's lot revested in Bradley by virtue of the foreclosure sale prior to the conveyance to complainant's predecessor in title by Bradley. But the form in which the restriction is imposed, whether by condition, covenant or reservation, is not so important, the real question being whether it was intended for the benefit of the retained land of the grantor. Coudert v. Sayre, 46 N.J. Eq. 386; Hayes v. Waverly and Passaic Railroad Co., 51 N.J. Eq. 345. And while there is no presumption that the restrictions here were imposed for the benefit of lands retained by the grantor ( McNichol v. Townsend, 73 N.J. Eq. 276; Hemsley v. Marlborough Hotel Co., 62 N.J. Eq. 164 ), the evidence discloses circumstances from which it might be concluded that that was the grantor's purpose in imposing the condition. In Leaver v. Gorman, 73 N.J. Eq. 129, and in Genung v. Harvey, 79 N.J. Eq. 57, Vice-Chancellor Stevens, in construing a similar restriction imposed by way of condition, seems to have assumed that the restriction was made for the benefit of retained lands, but Vice-Chancellor Leaming, in Sailer v. Podolski, 82 N.J. Eq. 459, questioned the force of surrounding circumstances to indicate such purpose. Except for the foreclosure and reconveyance to Bradley by the sheriff, above mentioned, the complainant stands in the position of a subsequent grantee from the common grantor, and the conveyance by Bradley to Buchanan and others on the date of the sheriff's deed is a circumstance from which the existence of a continuous restriction might be assumed, or a republication or revivor thereof found. Genung v. Harvey, supra. However, it is not necessary to here decide these vexing questions, as there are other grounds upon which a decision in favor of the complainant may be based.
"On May 14th, 1923, an agreement was entered into between Samuel H. Gillespie, executor of James A. Bradley, the common grantor, and Alfred A. Jones and wife, who were then the owners of the defendant's lots, by virtue of which the right of forfeiture and re-entry reserved in the Buchanan deed was released and quit-claimed and instead thereof the following agreement was substituted:
"`And the said parties of the second part * * * do hereby covenant and agree to and with the said Samuel H. Gillespie, sole acting executor and surviving trustee, as aforesaid, his heirs, legal representatives, successors in office and assigns, that they the said parties of the second part, their heirs and assigns, shall not, nor will, at any time or times hereafter, build or erect, or cause or procure, permit or suffer to be built or erected upon the lot or parcel of land hereinabove described, any dwelling house, or other kind of building (exclusive of ordinary open piazzas) nor any fence which shall exceed four (4) feet in height, nearer to the southerly line of the said Third Avenue than twenty-five (25) feet therefrom, nor nearer to the easterly line of the said Main Street than ten (10) feet therefrom; * * *
"`And it is expressly understood and agreed, that the said several covenants on the part of the said parties of the second part, above specified, shall attach to and run with the said land, and that it shall be lawful, not only for the said Samuel H. Gillespie, acting executor and trustee as aforesaid, his heirs, legal representatives, successors in office and assigns, but also for the owner or owners of any lot of land adjoining or in the neighborhood of the premises hereby released, deriving or having derived title from or through the said Samuel H. Gillespie, acting executor and trustee as aforesaid, or from or through the said testator, to institute and prosecute any proceedings at law or in equity against the person or persons violating or threatening to violate the same; it being understood, however, that this covenant is not to be enforced personally for damages against the parties of the second part, their heirs or assigns, unless they be the owner or owners of the said premises, or of some part thereof, at the time of a violation of the said covenant, or of a threatened or attempted violation thereof; but the said covenant may be proceeded on for an injunction of, and for a specific performance and execution thereof against the said parties of the second part, their heirs or assigns, * * *.'
"There is no doubt but that under the provisions of that agreement, which was duly executed, acknowledged and recorded prior to the acquisition of title by the defendants, the complainant's right to restrain the violation of the covenants herein contained is complete. The conveyance was made expressly for the benefit of the grantees of Bradley and his executor, irrespective of whether or not they were classed as prior or subsequent grantees. The general rule of law is that a third person may enforce a promise made for his benefit even though he is a stranger both to the contract and to the consideration. 6 R.C.L. 884 § 371. The rule is in force in this state by statute. P.L. 1898 p. 481; P.L. 1902 p. 709; P.L. 1903 p. 541; 3 Comp. Stat. p, 4059 § 28; Holt v. United Security Life Insurance and Trust Co., 76 N.J. Law 585; Styles v. F.R. Long Co., 70 N.J. Law 301.
"`That this court has jurisdiction to enforce a contract between the owner of land and his neighbor purchasing a part of it, that the latter shall either use, or abstain from using, the land in a particular way, is what I never knew disputed. * * * It is said that, the covenant being one which does not run with the land, this court cannot enforce it. But the question is not whether the covenant runs with the land, but whether a party shall be permitted to use the land in a manner inconsistent with the contract entered into by this vendor and with notice of which he purchased.' (Per Lord Cottenham in Tulk v. Moxhay, 2 Phil. 774, cited in Coudert v. Sayre, supra.) The pertinency of that language to the instant case is not difficult to see. And on general principles equity will prevent a party having knowledge of the just rights of another from defeating such rights. Brewer v. Marshall, 19 N.J. Eq. 537. To permit the defendants to build upon the restricted area with immunity would be to violate this cardinal principle of equitable jurisprudence. In the agreement of May 14th, 1923, it was provided, however, that it was not to become effective until the agreement was signed and acknowledged by the parties of the second part, and recorded in the county clerk's office; until all mortgages, judgments, liens and other encumbrances affecting the lots were paid, canceled, released and discharged of record; nor unless Jones, the party of the second part, was the sole and actual owner in fee of the premises described, at the time of the execution and recording of the agreement. The agreement was duly executed on May 14th, 1923, and recorded on July 23d 1924. Jones was then the sole and actual owner in fee of the premises and there were no outstanding mortgages, judgments, liens or other encumbrances affecting the lot, so far as the records disclose, at the time the agreement was executed. On May 9th, 1924, and before the agreement was recorded, however, Jones executed a mortgage in favor of the Asbury Park Building and Loan Association which was recorded on May 13th, 1924, and remained open on the record until canceled on August 15th, 1928, at which time Jones was not the owner. The defendants claim that consequently the agreement never became effective. But this, in my judgment, places a strained construction on the instrument. I think the mortgages and other liens referred to were those existing at the time of the execution of the agreement and not those which might become liens thereafter. This defense, therefore, fails.
"I will advise a decree in accordance with these conclusions."
Messrs. Cook Stout and Mr. Merritt Lane, for the appellants.
Messrs. Gerand, Matlack Lautman, for the respondent.
The decree appealed from will be affirmed, for the reasons expressed in the conclusions of Vice-Chancellor Berry.
For affirmance — THE CHIEF-JUSTICE, TRENCHARD, PARKER, CAMPBELL, LLOYD, CASE, BODINE, DALY, DONGES, VAN BUSKIRK, KAYS, HETFIELD, DEAR, JJ. 13.
For reversal — None.