Shields v. Welshire Development Co.

144 A.2d 759, 37 Del. Ch. 439, 1958 Del. Ch. LEXIS 132
CourtCourt of Chancery of Delaware
DecidedSeptember 10, 1958
StatusPublished
Cited by8 cases

This text of 144 A.2d 759 (Shields v. Welshire Development Co.) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shields v. Welshire Development Co., 144 A.2d 759, 37 Del. Ch. 439, 1958 Del. Ch. LEXIS 132 (Del. Ct. App. 1958).

Opinion

Seitz, Chancellor:

Plaintiffs, in reliance upon deed restrictions, seek to restrain defendants from maintaining sample houses and from erecting structures of a type which they contend are inharmonious with the surrounding structures.

In July of 1937, Welshire Incorporated, through a transfer of deeds to and from William W. Gilbert and wife, divided the so-called “Welshire” tract into building lots and placed general building restrictions on all of the lots therein. From 1937 until 1958, Welshire Incorporated sold property for only four houses and, pursuant to a restriction provision, approved the structures to be erected thereon. A high grade development was contemplated. See Welshire v. Harbi-son, 32 Del.Ch. 362, 88 A.2d 121, affirmed 33 Del.Ch. 199, 91 A.2d 404.

When, in 1950, Welshire Incorporated sold plaintiffs the property on which they erected their home, it was made subject to a a special agreement by which the Gilbert restrictions were extinguished and another set of restrictions substituted (“Shields restrictions”).

[441]*441Defendants assert that in view of the agreement executed by plaintiffs when they purchased their property, they are governed by its provisions (Shields restrictions) and are not entitled to assert rights under the earlier Gilbert restrictions. Since it was a matter of contract as between the corporation and plaintiffs, there is no reason why it should not bind them. I conclude that plaintiffs’ rights must be found in the Shields restrictions.

About March 12, 1958, a corporation known as Welshire Development Company (“Development”), a defendant, purchased the 72 remaining lots in Welshire from Welshire Incorporated and took an assignment of all rights of the assignor. Parenthetically, Welshire Incorporated has since dissolved. Under the practice adopted Development conveyed certain lots to the other defendant, W. Percival Johnson & Son, Inc. (“Johnson”) which thereupon erected houses thereon. To date about six houses have been built or are under construction. It may be noted that Development and Johnson are owned by the same parties.

Plaintiffs, who erected a home on their property about 1951, make certain claims against both defendants, but I think that technically they must be viewed as being asserted against Johnson rather than Development since they deal only with action on the lots conveyed to Johnson. Reference herein to “defendant” will therefore refer only to Johnson unless otherwise indicated.

Plaintiffs claim the following violations of restrictions:

1. The use of “sample houses” violates the restrictions which limit the use of the premises to “private residence purposes only (Par. 1) or “strictly limited to private residential purposes only”. (Par. 6);
2. The use of sample houses will constitute a nuisance contrary to the provisions of the restrictions;
3. Johnson has failed to obtain approval of its building plans from Welshire, Inc., contrary to the provisions of the restrictions;
[442]*4424. The structures erected by the defendant are “inharmonious” and thus violate the restrictions providing certain standards for “harmonious” structures.

Plaintiffs also contend that the sample house use of the land will create a common law nuisance.

Defendant contends that plaintiffs’ claims are without merit. Further, it asserts that plaintiffs are themselves violating a restriction and are therefore barred from bringing this action. Defendant also says that plaintiffs are estopped from enforcing the restrictions because they agreed to a provision that Welshire Incorporated could amend or revoke the restrictions at any time, which right, it says, was duly assigned to Development. Finally, both defendants counterclaim for an injunction preventing the plaintiffs from using their home for business purposes.

This is the decision after final hearing.

I first consider plaintiffs’ contention that the use of sample houses on certain lots in Welshire violates the restriction limiting the use of the land “for private residence purposes only”, or the restriction that such use should be “strictly limited to- private residential purposes”. Defendant admits that it is using certain houses as sample houses but says that it is only “for a temporary period and will not extend past the time the defendants are actually constructing houses in the development”. Johnson says the use of sample houses is an incidental part of the business of building houses and not a business use within the meaning of the restrictions.

The restriction provides that the use of such land shall be strictly limited to private residential purposes only. Certainly, the use of the land for sample houses is not using it for private residential purposes only. Whether the use is a business use is therefore not strictly before the court but obviously it partakes of a business use and defendant necessarily so concedes.

[443]*443Defendant relies upon the case of City of New York v. Jack Porter Associates, 5 Misc.2d 633, 161 N.Y.S.2d 731. The language of the court relied upon by defendant was a dictum to the effect that the use of a sample house in a housing development would not violate a “business use” provision in the zoning law, although the court agreed the use was for business purposes. The court, in fact, held that a sample house located outside the development, but within the land area zoned against business use, violated the zoning provision prohibiting business use. Passing over the logic of the court’s distinction, it appears that the court agreed that the use of a sample house was a business use but felt that a zoning provision which would outlaw a sample house within a development would be unreasonable. In contrast, we are dealing with a voluntarily imposed and accepted deed restriction. There is no attack upon the validity of the restriction relied upon by plaintiffs. I re-emphasize that plaintiffs are relying upon the “residential-use only” restriction and not the business use restriction which defendant emphasizes.

The question then is whether the use of sample houses is fairly within the provisions of the restriction limiting the use of the property to residential purposes only. While defendant adduced testimony to the effect that the sample houses now erected would be sold if anyone wanted to buy them, the fact remains that there is no reasonable assurance that they will not continue to be used as sample houses for an indefinite time. Defendant so concedes. Thus a protracted nonresidential use is fairly contemplated.

Defendant asks the court to take judicial note of the fact that sample houses are used quite generally to sell homes in a development. I fully agree, but this does not answer our problem. It is undisputed that the original developer here visualized and to a modest extent approved a custom-home type of development. Plaintiffs purchased their property and erected their home on that basis.

In the ordinary development, where sample houses are used from the outset, it may well be that purchasers would be estopped, i. e., not permitted in law, to complain about them. Or, they might be subject [444]*444to other defenses. Moreover, a developer is perfectly free, in imposing restrictions, to reserve the right to erect sample homes.

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Shields v. WELSHIRE DEVELOPMENT COMPANY
144 A.2d 759 (Court of Chancery of Delaware, 1958)

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Bluebook (online)
144 A.2d 759, 37 Del. Ch. 439, 1958 Del. Ch. LEXIS 132, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shields-v-welshire-development-co-delch-1958.