Summary of Caullett v. Stanley Stilwell & Sons, Inc., Superior Ct. of NJ, Appellate Div. (1961)
Parties: DF is the developer who conveyed deed of title to land to PL for consideration of $4K.
Cause of action/remedy sought: The following is a bill in equity to quiet title.
Procedural History: Summary judgment for PL’s. This court affirms.
Facts: Following collapse of negotiations directed towards agreement on the construction by DF of a dwelling on the transferred premises, the parent suit was instituted. There was a covenant which said DF’s could build the structure on the land, which binds the purchasers, their heirs, executors, administrators and assigns.
Trial court held the covenant to be stricken from the deed as it was unenforceable, and based on that the DF’s had no claim, right, or interest in and to the lands by the clause in question, or by the covenant, and the clause was stricken (as above) so as to be declared null, void and of no further force and effect.
DF urges that the recital comprises an ordinary property restriction, entered into for the benefit of the grantor and his retained lands. PL maintains the clause is too vague to be capable of enforcement and amounts to no more than a personal covenant which in no way affects or burdens the realty and has no place in an instrument establishing and delimiting the title to same.
Issue(s): Under NJ law, does the recital constitute an enforceable covenant restricting the use of plaintiff’s land?
Holding: No. Approaching from a direction which is compatible with the constructional principles set forth in the rule, it is clear that the deed item in question is incapable of enforcement and and is therefore not restrictive of PL’s title. This clause is too personal in nature to restrict the use of the land by PL’s. An intention to dispense broader land use benefits, in the form of a neighborhood scheme, cannot here be found, as in effect conceded by DF and as expressly stated in the parties’ deed.
Court’s Rationale/Reasoning: Nothing mentions what kind of building, how much it costs, or how long the restriction runs. Even if the clause is sufficiently definite to DF, it still cannot be said to be an equitable servitude or a covenant running with the land.
The provision does not touch and concern the subject property. To constitute a real rather than a personal covenant, the promise must exercise direct influence on the occupation, use, or enjoyment of the premises. It cannot be a use incidental to the performance of a promise. There must be a reasonable limitation or proscription to the land (like limiting land to residential purposes), but this provision is not similar.
This provision seems more like a scheme for DF to make a profit twice on the land he is attempting to sell, and in such an event there is no clean hands, and without clean hands, one cannot come into the court of equity and claim relief as innocent and injured. PL, on the other hand, is innocent and stands to be considerably injured if it should not be permitted to build what it wants by who it wants on property it now owns by bargain and sale.
Rule: While restrictive covenants are to be considered realistically in the light of the circumstances under which they were created…counter considerations, favoring the free transferability of land, have produced the rule that incursions on the use of property will not be enforced unless their meaning is clear and free from doubt. Thus, if the covenants or restrictions are vague or ambiguous, they should not be construed to impair the alienability of the subject property.
When the burden is placed upon the land, and the benefit is personal to one of the parties and does not extend to his or other lands, the burden is generally held not to run with the law at law. Nor can the covenant be enforced as an equitable servitude where the benefit is in gross and neither affects retained land of the grantor nor is part of a neighborhood scheme of similar restrictions (Tulk v. Moxhay).
Did court avoid issues?: No.