Scull v. Eilenberg

121 A. 788, 94 N.J. Eq. 759, 9 Stock. 759, 1923 N.J. LEXIS 705

• Court: Supreme Court of New Jersey
• Decided: June 18, 1923
• Status: Published

Opinions

The opinion of the court was delivered by

Katzenbach, J.

This is an appeal from a decree of the court of chancery. The complainant below, Montice L. Scull, is the owner of a lot of land in the city of Atlantic City, fronting fifty feet on the easterly side of Montpelier avenue and distant two hundred and seventy-five feet from the southerly line of Atlantic avenue. The defendant below and appellant, John F. Eilenberg, is the owner of a lot of land located at the southwesterly eorner of Atlantic and Montpelier avenues, which has a frontage of forty-two feet on Atlantic avenue and extends along the westerly side of Montpelier avenue one hundred and thirteen feet.

Prior to the year 1887, a corporation, known as the Chelsea Beach Company, owned a large tract, of land of which the complainant’s and -defendant’s lots were a part. This company caused the entire tract to be plotted and divided into blocks and lots (both numbered) and a map thereof to be made, which was filed in the Atlantic county clerk’s office. The lot of the complainant, Scull, was conveyed by the company by deed dated May 28th, 1887, and the lot of the defendant, Eilenberg, was conveyed by the company by deed dated March 16th, 1887. The deeds by which the title to these -two lots passed from the Chelsea Beach Company, contained certain restrictions and covenants. Among these are the following, which are the ones pertinent to this case: “Under and subject nevertheless to the following covenants and conditions which are hereby made a part of the consideration of this conveyance: That no building shall, at any time, be erected within twenty feet of the front property line of any street or avenue, except on Atlantic avenue, nor within five feet of the side lines of said lot, except where a party may own two or more contiguous lots, then a building may be erected on any part of the lot or lots the owner thereof may desire, without regard to the intervening line or lines, provided the same is not built within five feet of the outside lines of the “said lots, nor within twenty feet of the front property line thereof, and also, that no building of less value than $500 shall be erected thereon.” * * *

“And also under and subject to the covenants and conditions, that no stores, except drug and confectionery stores, shall be allowed on any part of the Chelsea Beach Company’s property except 'on Atlantic avenue * *

“And it is expressly understood and agreed, that the said several .covenants on the part of the said party of the second part, above specified, shall attach to and run with the land, and it shall be lawful not only for the said Chelsea Beach Company, and their successors and assigns, but also for the owner or owners of any lot or lots adjoining in the neighborhood of the premises hereby granted, deriving title from or through the said Chelsea Beach Company, 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 said party of the second part, his heirs or assigns, unless he or 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 in for an injunction of and for a specific execution thereof against the said party of the second part, his heirs or assigns, and for damages against the .party or parties violating the said covenant, they or their heirs, executors or assigns.

“The object of these covenants being to secure the health, beauty, ornamentation) and value of the premises.”

In the deeds to the complainant and defendant these restrictions and covenants are referred to.

It is apparent from the working of the restrictions and covenants above set forth that the purpose of the Chelsea Beach Company was to create a general neighborhood scheme or plan which would, if carried out, result in the increased enjoyment of the lots by the users, and a greater value to the owners. The restrictions and covenants state the purpose in the words “the object of these covenants being to secure the health, beauty, ornamentation and value of the premises.”

It is also apparent from the restrictions that Atlantic avenue was placed in a different class than the other streets and avenues in the tract. The restrictions provided that no stores, except drug and confectionery stores, were to be permitted on any of the streets or avenues except Atlantic avenue. This permitted stores for business of all kinds to be erected on Atlantic avenue. The restrictions also provided that “no building shall at any time be erected within twenty feet of the properly line of any street or avenue, except on Atlantic avenue.” This restriction also recognized that Atlantic avenue was destined to be in this section a business streel as it then was to' the east of this locality.

A neighborhood scheme of restrictions to be effective and enforceable must have certain charactertistics. It must be universal, that is, the restrictions must apply to all lots of like character brought within the scheme. Unless it be universal it cannot be reciprocal. If it be not reciprocal, then it must as a neighborhood scheme fall, for the theory which sustains a scheme or plan of this character is that the restrictions are a benefit to all. The consideration to each lot owner for the imposition of the restriction upon his lot' is that the same restrictions are imposed upon the lots of others similarly situated. If the restrictions upon all lots similarly located are not alike, or some lots are not subject to the restrictions while others axe, then a burden would be carried by some owners without a corresponding benefit. “The burden follows the benefit,” as was said by Judge White in the case of Sanford v. Keer, 80 N. J. Eq. 240. When there is no benefit there should be no burden. If the benefit be destroyed the burden should end. The requisite universality of the neighborhood plan was referred to by the late Vice-Chancellor Green in the case of DeGray v. Monmouth Beach Club House Co., 50 N. J. Eq. 329, in the following language: “The law, deduci'ble from these principles and the authorities, applicable to this case, is that where there is a general scheme or plan, adopted and made public by the owner of a tract, for the development and improvement of the property, by which it is divided into streets, avenues and lots, and contemplating a restriction as to the uses to which buildings or lots may be put, to be secured by a covenant embodying the restriction, to be inserted in each deed to a purchaser, and it appears, by writings or by the circumstances, that such covenants are intended for the benefit of all the lands, and that each purchaser is to be subject to and to have the benefit thereof, and the covenants are actually inserted in all deeds for lots sold in pursuance of the plan; one purchaser and his assigns may enforce the covenant against any other purchaser and his assigns, if he has bought ■with knowledge of the scheme, and the covenant has been part of the subject-matter of his purchase.

“The right of action from this would seem to be dependent as much on the fact of the general scheme as on the covenant—a very important consideration in a case in which the' question arises whether certain threatened acts are in violation of the covenant, if any ambiguity exists as to its scope and meaning.”

Where the restrictions are not universal or after frequent violations of the restrictions have been permitted, then the neighborhood scheme will be considered abandoned.

About two years after the deeds were made by the Chelsea Beach Company to the complainant’s and defendant’s predecessors in title, some question evidently arose as to whether or not the restriction “that no building shall at any time be erected within twenty feet of the front property line of any street or avenue, except on Atlantic avenue," applied to lots located at the corners of Atlantic avenue and intersecting streets so as to require buildings erected on these lots to be located twenty feet from the property line of the side streets. On April 30th, 1889, the Chelsea Beach Company made a deed to Charles R. Myers, which contained the usual restrictions, and at the end of the restrictions a copy of a resolution purporting to have been passed by the company reading as follows: “By resolution of the board of directors of the said Chelsea Beach Company, the above restriction on the Atlantic avenue lots is rendered null and void and the following restriction is hereby made a part of this conveyance,; that no building shall at any time be erected on a corner lot on Atlantic avenue within five feet from the side street property line, but may be erected to full party line of adjoining lot; and all other Atlantic avenue lots may be erected to full party line of adjoining lots."

Thereafter, in its conveyances the Chelsea Beach Company after the restrictions recited this resolution, so that after 1889 the restrictions did not require buildings erected on the corner lots on Atlantic avenue to stand back twenty feet from the property line, of side streets. In the tract of land of the Chelsea Beach Company there are on Atlantic avenue sixteen corner lots. On ten of these corners buildings are now erected within less than twenty feet of the property line of the side streets.

On July 27th, 1922, Scull, having learned that Eilenberg proposed to erect on his lot at the southwest comer of Atlantic and Montpelier avenues a building which would come within less than twenty feet of th,e property line of Montpelier avenue, served a notice on Eilenberg, warning him that such contemplated building construction would be in violation of the restrictions contained in his deed from the Chelsea Beach Company. On July 29th, 1922, Scull filed a bill in the court of chancery to enjoin the construction of the proposed building within less than twenty feet of the property line of Montpelier avenue.

Eilenberg, in his answer, admitted his intention of building within less than twenty feet of the property line of Montpelier avenue, and claimed the right to do so upon the ground of passage in 1889 of the resolutions by the board of directors of the Chelsea Beach Company above set forth and the subsequent conveyances of the remaining corner lots on Atlantic avenue with the changed restrictions, the abandonment and waiver of the restrictions by numerous violations thereof, and the violation of the restrictions by the complainant. The case came on for hearing before a vice-chancellor, who decided the questions raised in the answer adversely to the defendant and advised a decree enjoining the erection of the proposed building on the defendant’s land nearer than twenty feet to the “front property line of Montpelier avenue,” and directing the removal of so much of the building already constructed as is nearer than twenty feet to the “front property line of Montpelier avenue.” The learned vice-chancellor based his decision upon a case involving the same restriction and decided by the court of chancery on December 5th, 1895, and later affirmed by this •court without an opinion or per curiam. This ease is entitled Waters v. Collins, and is only reported in 70 Atl. Rep. 984. Waters owned a lot on Montpelier avenue. Collins owned the lot on the northeast corner of Atlantic and Montpelier avenues. Collins started to erect a building about seven feet from the line of Montpelier avenue. Waters filed a bill in the court of chancery to enjoin Collins from erecting the building. The deeds of Waters and Collins had in them the restrictions and covenants above set forth. Collins set up in his answer that the restriction did not apply to the side line of his lot on Montpelier avenue; that this restriction upon his lot was nullified by the 1889 resolutions and later conveyances of the Atlantic avenue corner lots with modified restrictions, and that there had been a practical construction of the restrictive clause limiting the restriction on the side lines of the Atlantic avenue corner lots to a five-foot space. In the case of Waters v. Collins, the learned vice-chancellor, in disposing of the defences set np in the answer, held that the lot of Collins fronted on two streets, namely, Atlantic avenue and Montpelier avenue, and was within the restriction, providing that a building on streets other than Atlantic avenue must stand back twenty feet from the front property line. He also held that the 1889 resolution and subsequent conveyances could not affect the contractural rights to the parties to the deeds. His language on this subject was: “The company could not sell lots, holding out to the grantees a restrictive scheme intended to advance the value of the property sold, at the expense of property to be yet sold, and afterwards receive an enhanced price for subsequent lots, by a removal in whole or in part of the restriction bargained for. To the point that a party cannot be absolved from such a restriction by a subsequent agreement or resolution is the ease of Coudert v. Sayre, 46 N. J. Eq. 386; 19 Atl. Rep. 190.”

The ease of Waters v. Collins presented the same facts and the same question as the ease under consideration. Notwithstanding the decision in Waters v. Collins, which was affirmed, in 'the manner mentioned, by this court, we are of the opinion that this case was wrongly decided and that-the acts of the Chelsea Beach Company in altering in its deeds executed subsequent to the passage of the 1889 resolutions the restrictions with, reference to the Atlantic avenue comer lots brought about a situation which makes it inequitable to enforce the restriction contained in the deed for the Eilenberg lot forbidding the erection of a building upon this lot within twenty feet of the property line of Montpelier avenue.

The decision in Waters v. Collins is rested, as stated in the opinion, upon the case of Coudert v. Sayre. In this case the covenant under consideration was a restrictive covenant reserved by a grantor of lands in favor of the lands retained by him upon lands which he conveyed to the covenantor. The respective obligations of the parties were fixed by one instrument, the single deed of conveyance. The grantor and the grantees to whom he later might convey all or any part of the retained lands in favor of which the covenant was reserved could enforce the restriction although such retained lands were never subjected to any restriction. Any subsequent grantee, upon delivery of his deed, obtained the right to enforce the restriction or covenant against the lands of the covenantor, that no subsequent action of the common grantor could in anywise affect. Such a covenant as considered in Coudert v. Sayre does not partake of any of the essential characteristics of the neighborhood scheme of restrictions and covenants which have been referred, to., In the restrictions and covenants inserted in the deeds of the Chelsea Beach Company there was no reciprocal covenant made by the company that it would insert like covenants in all deeds for the remaining lots similarly located for the common benefit of all of the grantees and their assigns. There was no offer by the Chelsea Beach Company of its lots for sale, subject to restrictions and covenants alike for all lots in the same locality, so that purchasers with notice would be bound thereby. In view of the fact that the company did not obligate itself to insert the same restrictions and covenants in all its deeds for lots similarly located, or did not sell its lots on the representation that all' lots similarly located would be conveyed subject to the same restrictions and covenants, or did not embody in all its deeds for the corner lots on Atlantic avenue the same restrictions so that each lot which carried a burden would receive a corresponding benefit, we feel that in so far as the comer lots on Atlantic avenue are concerned, that an owner should not be required to erect a building farther back from the property line of the side street than five feet. The inequity in enforcing in the present case the restriction against the Eilenberg lot is apparent. The lot on the northwest corner of Atlantic and Montpelier avenues, which is directly opposite to the Eilenberg lot, was conveyed by the Chelsea Beach Company without the same building restriction as contained in the Eilenberg lot. On this lot is erected a building within twenty feet of the property line of Montpelier avenue. To enforce' the building restriction against the Eilenberg lot is to subject his lot to a burden when it is not correspondingly benefited, as Eilenberg’s lot is deprived by the failure of the neighborhood scheme from the benefit of having the building on the opposite corner stand back from Montpelier avenue the same distance as the building which would be erected upon the Eilenberg lot if the building restriction referred to were enforced.

The lot of Eilenberg is only forty-two feet in width. The enforcement of the twenty-foot building restriction would deprive Eilenberg of the use of fifteen feet of his lot on a street devoted to business where the land must be valuable; while others, owning similar lots, would have the use of the amount of land of which Eilenberg would be deprived. It is not a sufficient answer to say that this is what the predecessor in title of Eilenberg covenanted to do, and that therefore Eilenberg must take the consequences, because the complainant below was bound to know that in the absence of a covenant on the part of the Chelsea Beach Company to insert the same restrictions and covenants in the deeds for all lots, or in the absence of a sale of the lots upon the representation that lots similarly located would be subject to the same restrictions, the neighborhood scheme might fall, and a situation be created as in the present case in which it would be inequitable to enforce a restriction against an owner of a lot, although embodied in the deed of his predecessor in title of which he had full notice when he acquired the property.

The injury to the complainant in the present case is slight, if any. Iiis lot is nearer to the ocean than the lot of Eilenberg. The complainant by the erection of the proposed building by the appellant would be deprived of no ocean view or ocean breeze which he now has. The complainant’s lot is also on the opposite side of Montpelier avenue. The lot on the southeast comer of Atlantic and Montpelier avenues, which is on the same side of Montpelier avenue as the complainant’s lot, has erected upon it a building coming within twenty feet of the property line of Montpelier avenue. These facts seem to make the complainant’s damage negligible. Some thirty-five years have passed since these restrictions were inserted in the deeds mentioned. The character of the neighborhood has changed. Atlantic avenue has become in this section the business street which it was thought it would become. It does not seem reasonable that in a locality devoted to business, buildings used for business purposes, should be, in some instances, required to stand back twenty feet from the side lines of corner lots. Where restrictions have ceased to be reasonable, courts of equity’ are loathe to enforce them. Courts lay hold of circumstances evidencing a failure or abandonment of the restrictive scheme. The present case furnishes such abundant proof of the failure of the neighborhood scheme, so far as the corner lots on Atlantic avenue are concerned, to justify in our opinion the refusal of an injunction to the complainant. These views make it unnecessary to consider the testimony offered by the defendant to show an abandonment of the restrictions by numerous violations thereof. It also makes it unnecessary to consider the question as to whether the construction given in the case of Waters v. Collins of the twenty-foot restriction as set forth in the original deeds for the Scull and Eilenberg lots is correct. Eor the foregoing reasons, the decree of the court of chancery is reversed, to the end that the injunction decree ■may be limited to the portion of defendant’s lot lying within five feet of Montpelier avenue.