Suttle v. Bailey

Brief Fact Summary. Defendant breached a purported real covenant containing restrictions in deed, but which are freely waived or subject to alteration by the grantor, his heirs or assigns.

Synopsis of Rule of Law. When the grantor reserves the power to alter the restrictions as to one lot owner without the consent of any other lot owner, the requirement for mutuality or reciprocity is not met and the covenant created is personal and does not run with the land.

Facts. In 1937 Dickason and wife owned a tract of land which was then added to Albuquerque and subdivided with restrictive covenants placed thereon. The restrictions were intended to restrict the use of land to residential housing only. The last sentence of the restriction stated that the covenants were to end in January 1970, except that it was mutually understood that the restrictions could be altered or amended at any time prior to January 1970 by the grantor, his successors and assigns, and any owner of any lot at the time of the proposed amendment to the restrictions. The amendment or alteration with one owner of one lot by the grantor would be permitted to occur without requiring the consent of the adjacent property owners. The Plaintiffs are two owners of lots in the addition and the Defendants are purchasing two of the adjoining lots from Mr. and Mrs. Thomas, who now own the lots to be purchased. The contract for purchase provides that the property is being sold subject to th
e restrictions. The Defendants have placed an office building nearer to the property line than allowed and have begun construction of an insulation business. The Plaintiffs sued to enjoin the use of the land by the Defendants as being disallowed by the restrictive covenants. The lower court granted the injunction. Defendants appealed.

Issue. Is a reservation by the grantor of a general power to dispense with restrictions a personal covenant, or one which runs with the land?

Held. Personal covenant. Reversed and remanded with instructions to dismiss complaint.
The right to change the nature of the restrictions was reserved by the grantor, and the fact that it was not exercised except in the one instance does not destroy the substance of the right. No subsequent grantee had any assurance, other than the personal integrity of the original grantor, that the restrictions on any adjacent lot owner would remain in force.
The circumstances herein evidence a lack of mutuality as to the restrictions. Reciprocity of restriction is required in order for the covenant to run with the land.
The reservation in this covenant made the covenant a personal covenant between the grantor and the individual grantees. The individual grantees had no right to enforce the restrictive covenants, and the right to enforce lay only with the original grantor and does not, therefore, run with the land.

Discussion. What possible motive could the original grantor had in reserving the right to change the restrictions as to one lot while not affecting the rights of the other lots? One motivation could be that the grantor reserved a valuable right under which the grantor could sell amendments to the lot restrictions one at a time. There was no evidence of a scheme of enforceable restrictions on this case.