Brief Fact Summary. The Plaintiffs sued the Defendant to attempt to enforce restrictions of a deed, for the second, third, fourth, and part of the fifth lot of land, which Defendant subdivided. The enforcement sought by the Plaintiffs would be against the sale of the remainder of the fifth lot to Grossman without restrictions.
Synopsis of Rule of Law. In order to be enforceable, a restrictive covenant must be in writing, signed by the party against whom enforcement is sought, and executed contemporaneously to the sale of the land upon which the restriction is sought to be enforced.
It is settled by our decisions, that under the statute of frauds an equitable as well as a legal interest in land must be evidenced by some sufficient instrument in writing or it is unenforceable.View Full Point of Law
Issue. Could the Plaintiffs, themselves, being restrained in the use of their land, enforce the same agreement as against Grossman, who took title from Defendant without the restrictions?
Held. No. The suit must be dismissed.
The Plaintiffs, even though restrained in the use of their land, did not gain a corresponding right as against their common grantor (Defendant) in the remaining land unless the restrictions were annexed to the purchase of Grossman by a document in writing, which was contemporaneous to the sale of the remainder of the fifth lot.
The right invoked by the Plaintiffs attached to each lot, as it was granted for the mutual benefit of the grantees. The grantor while he owned the remainder and observed the conditions of the contract for sale, could have compelled in equity a compliance with the restrictions by the lot owners or their successors in title.
The covenant then, is not a covenant running with the land at law, but is, rather, an equitable easement or servitude. An equitable interest in land as well as a legal interest in land must be evidenced by some sufficient writing within an instrument in order to be enforceable. Thus, the claim of enforcement of the covenant as to the sale of the remainder of lot five to Grossman must be dismissed for lack of conformity with the statutory requirements.
The Plaintiffs argue that the Defendant should be required to pass the remainder of the fifth lot to Grossman with the restrictions, because to do otherwise would be to allow a fraud. The court found, however, that mere non-performance of an oral contract was not fraudulent.
Discussion. The oral contract in question here is that, as an inducement to purchase, the Defendant told the lot buyers of the restrictions, which would limit the subdivision to residential use. The court’s decision allowed the Defendant to avoid its oral promise based on a strict adherence to the statutory rule requiring a writing for a promise such as this to be enforceable.