Case ID: nc_191/html/0736-01.html
Source: Caselaw Access Project
Author: {"author": "Connor, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MRS. J. P. THOMAS v. PAUL H. ROGERS.
    (Filed 12 May, 1926.)
    
      1. Deeds and Conveyances — Restrictions — Covenants — Development— Corporations.
    Where a corporation has developed suburban property and sold it to various purchasers with covenants and restrictions in some of the deeds as to the class of residences to be built thereon, but under no general scheme in this respect, the right to enforce these restrictions rests only with the corporation, and not with the purchasers of lots who have taken title from the corporation.
    3. Same — Corporation—Dissolution—Trustees— Survivorship — Releases —Consideration.
    Upon the dissolution of a corpmation that has developed and sold land into lots without a general scheme for restrictions upon the class of buildings to be erected, but some of the deeds given by it contain restrictions, upon the dissolution of the company, trustees duly appointed to wind up its affairs, may execute a valid release to a purchaser under a deed containing the covenant, and the trustees holding such right as joint tenants in dissolution, the release thereof by the survivor is valid and enforceable. On this appeal, the question of a valuable • consideration is not presented.
    Clakkson, J., did not sit.
    Appeal by defendant from Harding, J., at March. Term, 1925, of MeckleNbubg.
    Affirmed.
    
      Action to enforce, by decree of specific performance, contract in writing, by wbicb defendant agreed to accept from plaintiff, as lessor, a lease conveying to defendant, as lessee, tbe possession and use of a certain lot of land situate in tbe city .of Charlotte, free and clear of building restrictions, and restrictions affecting tbe use and occupancy thereof for business purposes, for a period of ten years. Tbe lease, in writing, tendered by plaintiff to defendant, was in all respects sufficient, in form, to comply with tbe contract between plaintiff and defendant, with respect thereto. Defendant contended that by reason of certain restrictions, contained in a deed under wbicb plaintiff derived title to tbe said lot of land, plaintiff was unable to comply, and therefore bad not complied with her contract with him; that she was, therefore, not entitled to tbe decree.
    Upon facts agreed, judgment was rendered as prayed for by plaintiff. From this judgment defendant appealed to tbe Supreme Court.
    
      Tillett, Tillett & Kennedy, and Taliaferro & Clarkson for plaintiff.
    
    
      Carrie L. McLean for defendant.
    
   Connor, J.

Tbe lot of land involved in this action consists of lot 10, and part of lot 9, in Block 1, as shown on tbe map of tbe property of Highland Park Company, recorded in Book 127 at page 47, in tbe office of tbe register of deeds of Mecklenburg County. Tbe said lot fronts on tbe north side of East Fourth Street, about 115 feet, and lies on tbe west side of Hawthorne Lane, about 111 feet. This lot was originally owned by tbe Highland Park Company, a corporation. Plaintiff is now tbe owner of tbe lot, having derived her title thereto from a deed executed by tbe Highland Park Company. This deed contains an express covenant that tbe party of tbe second part, bis heirs and assigns shall use tbe lot of land therein conveyed for residence purposes only, and that any residence erected thereon shall cost not less than tbe sum specified therein. There is no provision in said deed providing for a forfeiture, or for a reverter upon breach of tbe conditions or covenants in tbe deed.

Block 1, wbicb includes tbe locus in quo, and was originally owned by tbe Highland Park Company, was laid off into twenty lots by tbe said company. Some of these lots were conveyed by said company, by deeds, containing no restrictions as to tbe purposes for wbicb tbe grantees, their heirs and assigns, might use them, while some of tbe lots, including tbe lots wbicb form tbe locus in quo, were conveyed by deeds wbicb contained restrictions that they should be used only for residential purposes and that residences erected thereon should cost not less than sums specified in tbe deeds. At tbe time Block 1 was laid off and platted into lots, the Highland Park Company owned a large body of land, outside the city limits of Charlotte, but adjacent thereto. This tract of land was laid off into blocks, which were divided into lots. These lots have been sold and conveyed, some by deeds with restrictions and some by deeds without restrictions. All except two of the deeds of the Highland Park Company, in which any condition or restriction relative to the use and occupancy of the lands conveyed therein were inserted, contained the following provision, to wit: “The party of the first part expressly reserves to itself all rights, privileges and easements in and upon its said property not expressly granted to the said party of the second part.”

On 2 April, 1915, the Secretary of State of North Carolina issued a certificate of dissolution of the Highland Park Company, which has been duly recorded. All of the debts of said company have been paid, and the surplus of its assets distributed among its stockholders. Of the three directors of said corporation, who upon the issuance of the certificate of dissolution became trustees in dissolution, two have since died. The surviving trustee, and the executors of the two who have died, have executed releases to the plaintiff of any and all rights which the Highland Park Company had in and to the locus in quo by virtue of the covenants, conditions or restrictions in the deed under which plaintiff owns the same. A similar release has been executed by all the surviving stockholders of said corporation.

The court being of opinion and finding as a matter of law that upon the facts agreed, the plaintiff has and can convey to defendant the unrestricted use and occupancy of said lots 9 and 10 of Block 1, as shown on map recorded in Book 127, page 47, in the office of the register of deeds of Mecklenburg County, free and clear of any conditions and restrictions affecting or limiting the use and occupancy thereof, ordered, adjudged and decreed that defendant specifically perform his contract with plaintiff for the lease of said premises.

The right of plaintiff to maintain an action for the specific performance by defendant, of a contract for the lease of land is not questioned by defendant in this action. The contract, upon which this action is founded, is clear, and the lease tendered is in all respects, as regards form, in full compliance with the provisions of the contract. 25 R. C. L., 284; Bennett v. Moore (Neb.), 194 N. W., 802, 31 A. L. R., 495; Hotel Corp. v. Real Estate Co. (Fla.), 103 So., 403; F. & W. Grand Stores v. Eiseman (Ga.), 127 S. E., 872. If the covenant or restriction in the deed is valid and enforceable by the grantor or his assigns, a lease for ten years must be held to be a breach thereof. Blue v. Wilmington, 186 N. C., 324.

All tbe questions presented by tbis appeal have been considered and decided by tbis Court in Snyder v. Heath, 185 N. C., 362, except tbat involving tbe effect of tbe releases executed in tbe instant case by tbe surviving trustee in dissolution, by tbe executors of those wbo are dead, and by tbe surviving owners of stock in said corporation at time of its dissolution. It is there held upon practically tbe identical facts appearing on tbis record tbat no uniform scheme of development of its property, either as to tbe blocks or as to tbe entire tract, bad been adopted by tbe Highland Park Company, and tbat tbe grantees of said company in deeds for other lots sold and conveyed by tbe company, either before or subsequent to tbe deed to plaintiff, whether such lots were in tbe same block or not, bad no right to insist upon tbe performance' of tbe conditions in said deed, or to enforce tbe restrictions contained therein. Tbe trustees in dissolution of tbe Highland Park Company, tbe only party wbo would bave bad tbe right to insist upon tbe performance of said conditions or to enforce said restrictions, bad, by proper deed, 'released plaintiff and tbe lot from said conditions and restrictions. It was held tbat plaintiffs in tbat case bad and could convey their lots free and clear of any and all conditions and restrictions affecting or limiting tbe use and occupancy of tbe said lots. Tbe decision of tbis Court in Snyder v. Heath is determinative of tbe questions presented by tbis appeal unless it shall be held tbat releases of tbe rights of tbe Highland Park Company were necessary, and tbat tbe releases set out in tbe record are not effective for tbat purpose.

Upon tbe dissolution of tbe Highland Park Company, tbe directors, three in number, became trustees of said company, with full power to settle its affairs, collect tbe outstanding debts, sell and convey tbe property, and after paying its debts, divide any surplus money and other property among tbe stockholders. C. S., 1194. It is clear tbat a release executed by tbe three trustees to plaintiff would bave been effectual to bar any right which they or tbe corporation bad to enforce tbe restrictions' in tbe deed under which plaintiff held tbe locus in quo. It is so held in Snyder v. Heath, supra. These trustees held as joint tenants, with tbe right of survivorship incident to their tenancy. C. S., 1736. Webb v. Borden, 145 N. C., 188; Cameron v. Hicks, 141 N. C., 21; see C. S., 2582. Tbe release of tbe surviving trustee was effectual to bar tbe right of tbe Highland Park Company, or any one claiming under said company, in or to any interest in tbe locus in quo by reason of tbe covenants, conditions or restrictions in plaintiff’s deed.

It is not necessary for us to decide upon tbis record whether tbe Highland Park Company, tbe only party wbo could bave enforced tbe restrictions, or wbo could bave bad any relief for a breach of tbe covenants by tbe plaintiff, having been dissolved and having ceased to exist, any release was required in order to relieve plaintiff or tbe lot of tbe burden imposed by tbe restrictions and conditions in tbe deed. In order to determine tbis appeal, it is sufficient to bold, as we do, tbat tbe Highland Park Company alone bad tbe right to recover for breach of tbe covenants in tbe deed, or to enforce tbe restrictions; upon its dissolution, all •rights in tbat respect passed to and vested in tbe trustees in dissolution as joint' tenants, with tbe right of survivorship incident to their title and estate. Tbe releases executed by tbe executors of trustees who are dead, have no force or effect.

Tbe releases by tbe surviving owners of stock in tbe corporation, at tbe time of its dissolution, while probably not essential, preclude any question as to tbe validity of tbe release'by tbe surviving trustee upon tbe ground tbat there was no consideration for such release. We do not think tbe instant case can be distinguished upon tbe facts from Snyder v. Meath. Upon tbe authority of tbat case, tbe judgment is

Affirmed.

Clarkson, J., did not sit.