Runyon v. Mr./Mrs. Paley & Midgett Realty Case Brief

Summary of Runyon v. Mr./Mrs. Paley & Midgett Realty , S. Ct N. Carolina [1992]

Enforcement and Running Covenants

Relevant Facts: Original owner Gaskins acquired a 4 acre tract. By various deeds she conveyed out several lots, later developed for residential use. One of which was conveyed to Pl Runyons. 6 yrs later Pls reconveyed w/ a second tract to Gaskins. Two days later she conveyed to Pl a lot and a 15ft strip. The next day she conveyed the remainder to Brugh, but subjected it to restrict “running with said land." Prior to that conveyance she had built a home across the street from that parcel. When she died Pl Williams, her daughter, acquired the property. Df Paley acquired the property conveyed to the Brughs and thereafter entered into a partnership w/ Midgett to construct condos on the property.

Legal Issue(s): Whether the Dfs property is subject to restrictive covenants that prohibit the construction of condominiums, and whether Pl Runyon may enforce the covenants against Dfs on theory of equitable servitude?

Court’s Holding: Yes, and No.

Procedure: Pls sought injunction; Df sought dismissal; Tr Ct granted dismissal, Ct of App affirmed; S. Ct. Reversed in part (dismissal).

Law or Rule(s): A restrictive covenant is a real covenant that runs w/ the land of the Dominant and Servient Estates ONLY if 1) the subject of the covenant touches and concerns the land; 2) there is Privity of Estate btwn party enforcing and party against enforcement; AND 3) the original parties intended the benefits and the burdens of the covenant to run with the land.

Court Rationale: The right to restrict the use of Df’s property would affect the Pl’s ownership interests in the property owned by them, and therefore the covenants touch and concern their lands. Although Pl Williams is in Privity with Dfs, Pl Runyon was not a party to the covenant and is not in privity with the original parties. Pl Runyon may not enforce the covenant as a real covenant running with the land at law. Although none of the original deeds of conveyance contained restrictions limiting the use of the property to residential purposes, Gaskins intended to preserve the residential character and value of the secluded area. The language of the deed creating the restrictive covenant supports the parties intent that the benefit of the covenant attach to the real property retained by Gaskins. Pl Williams established that the parties intended that the restrictive covenant be enforceable.

Pl Runyon although unable to enforce the covenant as running with the land, may enforce against Dfs by way of equitable servitude. A covenant that T & C the land at law will also T & C in equity. Pl Runyon was not a party to the covenant, and neither they nor their property are mentioned as intended beneficiaries in the deed. They cannot be said to be successors in interest to any property retained by covenantee that was intended to be benefitted by the covenants. Pl Runyon did not acquire their property as part of a plan or scheme to develop the area as residential property. The promise may not be enforced as an equitable servitude against the promisor or subsequent taker who acquired the land.

Plaintiff’s Argument: The restrictive covenants were placed on the property for the benefit of Mrs Gaskins property and neighboring property owners, specifically including and intending to benefit the Runyons. The restrictive covenants have not been removed and are enforceable.

Defendant’s Argument: A restrictive covenant is not enforceable against a subsequent purchaser UNLESS the instruments in the chain of title expressly state, “both an intention to bind succeeding grantees and an intention to permit enforcement by successors of the grantor or named beneficiaries.

CONCLUSION: The restrictive covenants contained in the deed from Mrs. Gaskins to Dfs predecessors are not personal covenants that became unenforceable at her death, but are real covenents appurtenant to the property retained by her at the time of conveyance to Df’s predecessors.



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