Trustees of Columbia College v. Lynch — 39 N.Y. Super. Ct. 372

Majority

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THE TRUSTEES OF COLUMBIA COLLEGE IN THE CITY OF NEW YORK, Plaintiffs and Appellants, v. ANNA M. LYNCH, et al., Defendants and Respondents.

Headnote

COVENANTS IN REGARD TO THE USE OF REAL ESTATE RUNNING WITH THE LAND.

Parties thereto—their power to bind subsequent ownebs,

WHO TOOK TITLE SUBJECT TO IT.-RESTRAINT OP TRADE, BY

SUCH COVENANTS, CONSIDERED.

A owning lands contiguous to B, entered into a written and sealed agreement with B, in which each party covenanted that thereafter no buildings but a certain class and kind of dwelling-houses should he erected on their respective lands described in said agreement, and neither they nor their heirs and assigns, nor their tenants, or sub-tenants, should permit, grant, erect, make, establish, or carry on in any manner, on any part of said lands, any stable, schoolhouse, engine-house, tenement-house, or any kind of manufactory, trade or business whatsoever, or erect or build, or commence to erect or build, any building or edifice, with intent to use the same or any part thereof for any of such purposes, and that their covenants should bind their assignees and tenants, and the said lands should be forever subject thereto, and should run with the land, &c., &c.

After the deatli of A, his executor sold and conveyed the premises that belonged to A, and by several conveyances in regular succession, a portion of the same reached 0, as owner, each of said conveyances being made subject to the original agreement between A and B.

0 erected a building of a different style and character from the kind provided for in said agreement, a portion of which had an entrance and offices for business on another street than that contemplated by and covenanted in said agreement, and O’s tcnaht occupied a portion of this building as a dwelling for himself and family, and another portion for an office in the real estate business, and his sub-tenants

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occupied other portions for other business, all of which was a violation and breach of the covenants of said agreement.

It appeared that this portion of the street (Sixth avenue) was wholly occupied, at the time of the commencement of the action, as a business street, while at the time of said agreement these premises were vacant lots. B brings an action to restrain C, and tenants, from carrying on business on their premises, because of the covenants in said agreement.

Held, That these covenants were binding upon C, but it appearing that A had not suffered any damage, and also that since the covenants had been made, there had been a change of the circumstances, condition, and business in this part of the city, and that the enforcement of the covenant against carrying on any business on the premises, would conflict with the public welfare and interests: a court of equity should not interfere. It is a well-established rule, that equity will not interpose between parties when a change of circumstances (in regard to the original status of the parties who made the covenant and the subject-matter thereof) renders it inequitable to do so.

Besides, the plaintiff should have interfered at the time the building was being erected, and not wait until the defendant had expended her money. “Every relaxation which the plaintiff has permitted, in allowing the house to be built in violation of the covenant, amounts pro tanto to a dispensation of the obligation, &c. ” (Roper ». Williams, 1 Turner & Russel, 32).

A court of equity can not disregard, but must take notice of, the changes that have taken place in certain portions of New York during the past fifteen years, in regard to trade • and business; and all contracts which may obstruct the progress of the city, in trade, commerce, and population, should be strictly interpreted, and the equitable rights and interests of the individual must yield to the greater equities or interests of the masses, or the public.

Before Sedgwick and Speir, JJ.

Decided May 3, 1875.

This is an appeal from a judgment of the special

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term dismissing the complaint. The cause was tried without a jury.

The action was brought to restrain the carrying on of business, in the premises on the north-east corner of Fiftieth street and Sixth avenue, in the city oflSTew York, of which the defendant Lynch was owner, and the other defendants tenants, upon the ground that the premises were subject to a covenant reserving the property exclusively for dwelling houses.

The westerly portion of the block in question, prior to 1859, belonged to Joseph D. Beers, from whom defendant Lynch acquired title, and the portion adjoining on the east belonged to the plaintiffs.

On July 25, 1859, an agreement was executed by the parties, whereby the said Beers, in consideration of certain covenants therein contained on the part of the plaintiffs, did for himself, his heirs, and assigns, in respect to tire lands which he then owned, covenant and agree to and with the plaintiffs, their successors and assigns, that his lands above mentioned, and every part thereof, should be subject to the following, covenants among others, namely: that the said Beers, his heirs or assigns, his or their tenants, and others occupying his. lands, above descibed, or any part thereof, should not permit, grant, erect, establish, or carry on in any manner, on any part of said lands, any stables, school-house, engine-house, or manufactory, or business whatsoever :: or erect or build, or commence to erect or build, any building or edifice, with intent to use the same, or any part thereof, for any of the purposes aforesaid.

And it was mutually covenanted and agreed between, the parties, that the grants, covenants, and agreements, therein contained, should not only be binding upon the parties, their heirs, and successors, but tha,t the same should run with the land, and be binding upon all persons, who might thereby become .interested in the lands, or any part or parts thereof, as owners, tenants,.

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or .occupants, or otherwise claiming under, or through the said Beers, or as lessees of the plaintiffs, or as assignees, undertenants, occupants, or otherwise, under such lessees, and might be enforced by or against any of such persons as occasion might require.

- The agreement was duly recorded, and the defendant Lynch took her lot expressly subject to the conditions and restrictions of the agreement of Beers and the plaintiffs.

Before the action was commenced, the defendant Lynch erected a four-story dwelling-house upon that part of the premises conveyed to her, between Sixth avenue and a line distant twenty-two feet easterly therefrom, and running to the center of the block between Fiftieth and Fifty-first streets, of the full width thereof, fronting on, and entered by a high stoop from Fiftieth street, and in width, on Sixth avenue, sixty-four feet. On the basement story in front, by the side of the stoop, and on the side opening on Sixth avenue, were two French windows, and one on Fiftieth street, which were used as entrance doors to the basement and office.

The defendant Lynch was seized and possessed by herself, or her tenants, of that part of the premises improved by her, and the defendants. Yates and Blaisdell are in the possession as her tenants.

The complaint alleges that the defendant Lynch has not complied with the covenants and restrictions contained in the agreement, but has violated the same, by erecting or building on the premises a certain building, with the intent that certain apartments on the ground floor should be used as shops or offices for the transaction of trade or business, and has permitted, and continues to permit, the violation of the covenants by the defendants Yates and Blaisdell.

That Yates has violated the said agreement, by-carrying on, and continuing to carry on, the trade or

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business of a real estate and insurance agent, or broker, in part of the building erected as aforesaid.

That the said William A. and Harrison A. Blaisdell have also violated the said agreement, by carrying on, and continuing to carry on, the trade or business of house, sign, and fresco painters, in part of the building.

G. D. L. Harrison, attorney for appellants; S. P. Nash, of counsel.

Townsend & Mahan, attorneys for respondents; E. L. Fancher, of counsel.

The claim of the plaintiffs to equitable relief rests on the validity of the agreement entered into between the plaintiffs and Joseph D. Beers, relating to the manner of improving, for future use, the lots of land of which they were the adjoining owners. At the time of making the agreement, each party thereto owned the premises in fee, stated to'be owned by them respectively ; and neither party derived title by or through the other party. All the conveyances which carried the title from Beers to the defendant Lynch, were made subject to this agreement ; and by each of the deeds it was expressly declared that the property was thereby conveyed subject to the covenants, conditions, and restrictions contained in the agreement.

The title to "one of these lots next adjoining the Sixth avenue, and fronting on Fiftieth street, being the corner lot, passed by mesne conveyances to the defendant Lynch, and became vested in her. The plaintiffs at the time the agreement was made, were and still continue to be the owners in fee, of the several lots described therein, as belonging to and held by them.

There can be no doubt that the agreement, between Beers the grantor, and the plaintiffs, was upon a suf

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ficient legal consideration and was valid in law. The intention of the parties in executing it is manifest. It was to prevent such a use of the premises by the owners, and those claiming under them, as might diminish their value or impair their eligibility as sites for private dwellings. Can there be any question that the courts would have enforced this agreement against Beers, had he committed a breach of his covenants by wholly disregarding its conditions and restrictions ? He could not successfully set up that the obligation of the parties, in respect to mutuality, was not exactly equal, and that therefore he was not bound.

The agreement provides that its stipulation “shall not only be binding upon the parties hereto, their heirs and successors, but that the same shall run with the land, and be binding upon all persons who may hereafter become, interested in the lands herein described, or any part or parts thereof, as owners, tenants, occupants, or otherwise, claiming under or through the said party of the second part.”

The defendant Lynch took her title expressly subject to the “ conditions and restrictions” in this agreement of Beers and the plaintiffs. It is quite likely had the contract been improperly obtained, the adequacy of the consideration would become important if either party had asked to have it rescinded. The parties who executed the indenture are bound by it, and I see no reason why such an agreement could not be binding in equity on the parties coming in as devisees or assignees with notice. It is mutual, for each proprietor was manifestly interested in securing the permanent value of his property, and in preserving the general respectability of the street, and the uniformity of the plan. The court can not enter into the question whether the consideration was equal in value to the restraint agreed upon by the parties. There are too many circumstances entering into such a calculation

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which can not lie accurately ascertained, and which the parties are presumed to have fixed and settled (Hitchcock v. Cooke, 6 Ad. & El. 438).

The question, to what extent and in what cases are such stipulations binding on those who take the estate directly or by derivative title, is discussed in Whitney v. Union Railway Company ( 11 Gray, 359 ). The learned judge says. “ the better opinion seems to be that such agreements are valid, and capable of being enforced in equity, against all those who take the estate with notice of them, though they may not be, strictly speaking, real covenants, so as to run with the land, or of a nature to create a technical qualification of the title conveyed by deed.” It is not material that such stipulations should be binding at law, or that any privity of estate should exist between the parties, in order to render them obligating, and to warrant equitable relief in case of their infraction (Western v. McDermot, 1 Vol. Law. Rep. Eq. cases 499; Whitman v. Gibson, 9 Sim. 196; Parker v. Nightengale, 6 Allen 341 ).

Where the purchaser of the fee simple entered into restrictive covenants as to the user of lands, and after-wards granted a lease which did not contain any similar prohibitions, the lessee, though he had no actual notice of the covenants, was restrained, at the suit of the original vendor, from committing a breach (Fielder v. Slater, L. R. 7 Eq. 523).

The point is (the covenant before us being clearly of the nature that it might run with the land), whether the fact that it was made by Beers with, a third person, the plaintiffs, prevents its attaching upon his own land against his grantees. The common law permits, the transfer of covenants not by direct operation of an assignment, provided they are in their nature capable of running with the land. “ The capacity of running with the land only exists when the covenant is about

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or affecting the land, although not directly to be performed upon it, if it tends to increase or diminish its value in the hands of the owner” (1 Smith’s leading cases, 225).

The courts in these cases clearly recognize the distinction between actions at law and in equity. In Hurd v. Curtis (19 Pickering) the covenant seems to have been treated as a purely personal one; and though it holds that an action at law will not lie as between subsequent owners of the land, the same court in Massachusetts has enforced similar covenants in equity ( 11 Gray, 359 and 6 Allen, 341 , supra). In the late case of Cole v. Hughes ( 54 N. Y. 444 ) the action was to recover the value of a party wall built by one Dean, one half upon his lot and the other on that of one Voorhis. The latter had agreed that when he used the wall he would pay one half its costs ; his successor used the wall, and the question was, whether he was liable, and it was held that he was not; that the covenant was a personal one, and did not run with the laud. The learned judge says even if the defendant had purchased with constructive notice of the covenant, he did not become liable in an action at law upon the covenant. He cites the case of Keppell v. Bailey (2 Myh. & K. 517). Lord Collenham observes in Tulk v. Moxhay ( 2 Phil. Rep. 774 , 11 Beav. 571): “If Keppell 0. Bailey meant to lay down that the court would not enforce an equity attached to land by the owner, unless under such circumstances as would maintain an action at law, he (the chancellor) could only say he could not coincide with it.” And in Dart on Vendors and Purchasers, 705, it is said, “ nor will equity refuse to interfere, even though the covenant may be invalid at law as creating a perpetuity, or as being in unreasonable restraint of trade.”

It would seem, therefore, upon authority, that in equity the question whether covenants run with land,

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or whether there be privity of estate, is of no importance. Nor can I see any reason why there should be. The doctrine rests upon the principle, that as in equity that which is agreed to be done shall be considered as-performed, a purchaser of land, with notice of a right of interest in it subsisting in another, is liable, to the same extent and in the same manner, as the person from whom he made the purchase, and is bound to do-that which his vendor had agreed to perform.

The important question is, therefore, did the defendant Lynch buy her lot subject to the covenants and restrictions in the agreement, in such a sense that. her performance of them constituted an element of the consideration between her and her vendor. In the case of De Mattos v. Gibson (4 De G. & J. 276), the principle is clearly stated: “ Reason and justice seem to prescribe that, at least as a general rule, where a man by gift or purchase acquires property from another, with knowledge of a previous contract, lawfully, and for valuable consideration made by him with a third person, to use and employ the property for a particular purpose, in a special manner, the acquirer shall not, to the material damage of the third person, in opposition to the contract, and inconsistently with it, use and employ the property in a manner not allowable to the giver or seller (Tulk v. Moxhay, Wilson v. Hunt, supra).

Whether the mode of use is impressed upon the property by the plan of one owner, from whom all later grantees derive title, or by mutual covenants of two or more adjacent owners, the equitable obligation to perform the covenants must be the same in principle. The plaintiffs and Beers being adjoining owners of the several lots, entered into a mutual agreement, among other restrictions, to build dwelling-houses fronting on a certain street creating an easement, or open court yard by setting their houses back from the street line, being for their mutual benefit to secure them permanent

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value, their subsequent purchasers should be bound in equity to maintain the plan, whether at law one could be sued by another for damages or not.

There are covenants sometimes entered into by owners of land with the purchasers of other adjoining land, that the former shall not be built upon or planted, so as to impose other restrictions upon the mode of enjoyment of land in favor of persons taking no property in such land. Such a contract binds the land in view of a court of equity, where the court can properly interfere, as in case a person buys with notice of the covenant, although it may not run with the land, a specific performance of it will be enforced ; or, what amounts to the same thing, the owner of the land will be enjoined from committing a breach of the covenant,; and it is not open to the objection of creating a perpetuity (Waterman v. Gibson, 9 Sim. 196; Man v. Stephens, 15 Sim. 377; Sugden on Vendors, 266, ed. 1873).

The more important question, and one on which the plaintiffs’ right to the relief asked for depends, 3’elates to the extent of the covenant against carrying on any trade or business whatever, and whether the defendants are guilty of such a breach as would entitle the plaintiffs to damages.

By the record it appears that the tenant Yates lived in the basement of the dwelling-house with his family, having in one room thereof a real-estate office, and using it for that business, with a business sign ; and that the other tenants occupied a room in said office' for receiving orders for painting to be done by them, also with a business sign ; and that no other trade or business was carried on in the building. That the entrance to this office was on Sixth avenue. Fifteen years ago, when the parties entered into the arrangement for providing for the future use and enjoyment of their several parcels of land, the improvements of the city by the erection of buildings had not extended as

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far in a northerly direction as Fiftieth street. This property and the surrounding neighborhood were known as, and called vacant lots. As the improvements in the city advanced on the cross-streets, they consisted chiefly, if not almost entirely, of dwelling-houses, and were held to be more valuable than buildings adapted to business purposes. The different trades and business of all kinds were confined to the more settled and populous parts of the city. The result was that real estate in the upper part of the city, improved by buildings adapted to business purposes, was less valuable than when improved by the erection of dwelling houses.

The rapid growth of the city, the improvement of its wide avenues by the comparatively easy mode of travel by the city railway, has wrought a great change not only in business locations, but in values. The Sixth avenue, among other great thoroughfares, has rapidly extended its trade and business quite beyond Fiftieth street, and is now well known as a business street. Not one of the plaintiffs’ lots lie upon this avenue. The defendant Lynch has built her dwelling-house in full compliance with the restrictions imposed,by fronting on the cross-street, with the open court, thereby admitting more light and air, and adding to the attractive character of the street. It seems to me the aim and intent of the parties was to preserve these two cross-streets exclusively for residences. The whole force of the agreement is significant of that purpose. These streets were to be built upon with dwellings, at least three stories high, the material to be of brick, brown stone, or marble. After the house is finished and occupied, the complaint is made that it has been done with the intent to use apartments on the ground floor as shops or offices for business purposes. It must be assumed, in other respects at least, the covenants have betn kept.

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If the building had not been put up as required, it was the duty of the plaintiff to interfere at the time, and not wait until the defendant had expended her money. Lord Eldon says: “Every relaxation which the plaintiffs have permitted, in allowing the house to be built in violation of the covenant, amounts, pro tanto, to a dispensation of the obligation intended to-be contracted by it” (Roper v. Williams, 1 Turner & Russel R. 22).

Even if it be maintained that the covenants apply to an exclusion of business on the avenue, or in any way regulate the style of the building on the avenue, otherwise than it should be a dwelling-house and fronting on the street, it is not plain that they have been broken. Offices occupied in the same way, in the basements of the street dwellings, as these are on the avenue, could not, I think, be said to be injurious or offensive to the neighborhood. They certainly are not, on a business street.

Whether this particular covenant be too broad to be upheld in a court of equity, it is enough to say that, such as it is, the breach is not sufficient, as appears from the case, to entitle the plaintiff to recover in an action at law, if one could be maintained.

It seems impossible to disregard the very different state of affairs which has taken place in the business relations in certain portions of the city of New York during fifteen years. Contracts which may obstruct its progress in trade, commerce, and population, should be strictly interpreted. It is the duty of the court to take notice of these changes. I am of the opinion that the plaintiffs should not prevail, for two reasons: First. Equity will not interfere if the plaintiffs have suffered no damage ; and, secondly, it will not interpose when change of circumstances would render it inequitable to do so.

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The judgment must be affirmed, with costs.

Sedgwick, J., concurred.

Cases cited

Cole v. Hughes 54 N. Y. 444 N.Y. Comm'n App. p. 379