Present: All the Justices 

WAYNESBORO VILLAGE, L.L.C. 

OPINION BY JUSTICE LEROY R. HASSELL, SR. 

v. Record No. 970343 January 9, 1998 

BMC PROPERTIES, ET AL. 

 FROM THE CIRCUIT COURT OF THE CITY OF WAYNESBORO 

Rudolph Bumgardner, III, Judge 

 The primary issue we consider in this appeal is whether a 

restrictive covenant is enforceable. 

 The relevant facts are not in dispute. Shenandoah Village 

Associates, L.P., predecessor in title to appellant, Waynesboro 

Village, L.L.C., was the original developer of a retail shopping 

mall in Waynesboro. By recorded deeds of trust, Shenandoah 

Village conveyed certain real estate, in trust, to secure an 

indebtedness to Dollar Dry Dock Bank. 

 Subsequently, BMC Properties executed an agreement with 

Shenandoah Village to purchase a four-acre tract of land, which 

was a part of the land encumbered by the deeds of trust. After 

the deeds of trust were recorded, a certificate of partial 

release for the four-acre tract was recorded among the land 

records in Waynesboro. Shenandoah Village conveyed to BMC the 

four-acre tract of land by a recorded deed dated 1989 which 

contained the following restriction on the remaining property 

owned by Shenandoah Village: 

 "The party of the first part [Shenandoah Village] 

covenants and agrees (i) not to sell any remaining 

portion of the property which it acquired from Royal 

Oaks Investment Corporation for use as a motel, hotel, 

inn or lodging business or similar facility, (ii) not 

to allow any remaining portion of the property which it 

acquired from Royal Oaks Investment Corporation to be 

used, constructed or improved as a motel, hotel, inn or 

lodging business or similar facility, and (iii) that no 
such lodging facility or business shall be allowed to 

operate or exist within the boundaries of its remaining 

property. This restriction shall only apply for so 

long as the property herein conveyed to the party of 

the second part is being used as a motel, hotel, inn or 

lodging business or similar facility. Upon the 

discontinuance of such use, this restriction shall 

expire." 

Also included in the recorded deed to BMC was the following 

restriction on the use of BMC's property: 

 "The party of the second part [BMC] covenants and 

agrees that (i) no factory outlet or discount retail 

stores or gas station, (ii) no drive-in or fast food 

restaurant, including but not limited to a McDonald's, 

Burger King, Wendy's or Roy Rogers, (iii) no freestanding restaurant, except for a free-standing nondrive-in restaurant which is being operated while a 

motel, hotel, inn or lodge is located and operating on 

the property herein conveyed, and (iv) no other use not 

permitted by any master plan adopted (whether now 

existing or hereafter adopted) and any amendments 

thereto by the City of Waynesboro shall be constructed 

or operated upon the property herein conveyed or any 

portion thereof. This restriction shall only apply for 

so long as any portion of the remaining property owned 

by the party of the first part is being used as a 

factory outlet and/or discount retail stores. Upon the 

discontinuance of such use this restriction shall 

expire." 

By a recorded deed of trust, BMC conveyed its four-acre tract to 

Alexander F. Dillard, Jr., and Earl R. Johnson, trustees, to 

secure payment of an indebtedness to the Bank of Essex. 

 After Shenandoah Village conveyed the four-acre tract to 

BMC, the Federal Deposit Insurance Corporation (FDIC) exercised 

its rights to take control of Dollar Dry Dock Bank as receiver. 

Apparently, Dollar Dry Dock Bank acquired title to the property 

that Shenandoah Village Associates had conveyed to the Bank in 

trust and, by a recorded deed, that property was conveyed to the 

FDIC. Subsequently, the FDIC, as receiver for the Bank, conveyed 
135.801 acres of the property to Waynesboro Village, without 

reference to the restrictive covenants in the 1989 recorded deed. 

 BMC is a Virginia partnership which owns, develops, and 

operates lodging facilities and has plans to develop its fouracre parcel as a motel with a restaurant as permitted by the 

restrictive covenants. BMC spent $350,000 to purchase the land 

and has spent at least $93,680 in fees to architects, attorneys, 

engineers, and surveyors for the planning and future construction 

of a motel. Additionally, BMC has incurred interest and debt 

service expense to secure loans to finance the acquisition of the 

property and construction of a motel on its property. 

 Waynesboro Village filed its bill of complaint against BMC, 

the Bank of Essex, and Alexander F. Dillard, Jr., trustee, and 

Earl R. Johnson, trustee, seeking a decree that the 

aforementioned restrictive covenants do not prohibit Waynesboro 

Village from using its property "for a motel, hotel, inn or 

lodging business or similar facility." The defendants filed 

numerous responsive pleadings and a cross-bill. Additionally, 

the defendants filed a motion for summary judgment, asserting 

that the restrictive covenants contained in the deed from 

Shenandoah Village Associates, predecessors in title to 

Waynesboro Village, L.L.C., and BMC Properties, are expressly 

intended to create a servitude and burden upon their respective 

properties so long as the proposed uses of the property are 

maintained and, thus, the covenants run with the title of the 

respective land as a matter of law and are enforceable. Because 

there were no material facts in dispute, the trial court 
considered argument of counsel and certain exhibits, and entered 

a final decree which granted the defendants' motion for summary 

judgment and decreed that the covenants are enforceable. 

Waynesboro Village appeals. 

 Waynesboro Village argues that the trial court erred "either 

in its determination that the [restrictive covenants are] not 

ambiguous or in its determination that the correct interpretation 

of the [r]estriction is that it currently restricts [Waynesboro 

Village from] using its land for the development of a hotel, 

motel, or other lodging facility." Continuing, Waynesboro 

Village says that the restriction which prohibits it from 

constructing a motel on its property is ambiguous because it may 

"be construed to take life at such time (if ever) as BMC actually 

develops its property for use as a lodging facility. When or if 

that will occur is not clear from the record. Hence, the 

[r]estriction, which does not now apply and may never apply by 

its own terms, yields an anomalous result." Waynesboro Village 

says that this purported ambiguity renders the restriction 

unenforceable.1

 

 We disagree with Waynesboro Village's contentions. We 

follow the "plain meaning" rule when construing written 

instruments: 

 "[W]here an agreement is complete on its face, is plain 

and unambiguous in its terms, the court is not at 

 

 1 Waynesboro Village withdrew its assignment of error that 

the trial court erred "in its determination that the 

[restriction] is not invalid because [Shenandoah Village 

Associates] did not possess the necessary capacity to convey 

an interest in what would become the [Waynesboro Village 

property]." 
liberty to search for its meaning beyond the instrument 

itself. . . . This is so because the writing is the 

repository of the final agreement of the parties." 

Berry v. Klinger, 225 Va. 201, 208, 300 S.E.2d 792, 796 

(1983) (quoting Globe Co. v. Bank of Boston, 205 Va. 

841, 848, 140 S.E.2d 629, 633 (1965)). 

Capital Commercial Prop. v. Vina Enterprises, 250 Va. 290, 294-

95, 462 S.E.2d 74, 77 (1995); Management Enterprises v. The 

Thorncroft Co., 243 Va. 469, 472, 416 S.E.2d 229, 231 (1992). We 

have stated that the word "ambiguity" is defined as "the 

condition of admitting of two or more meanings, of being 

understood in more than one way, or of referring to two or more 

things at the same time." Berry, 225 Va. at 207, 300 S.E.2d at 

796 (quoting Webster's Third New International Dictionary 66 (3d 

ed. 1976)). 

 Additionally, and just as important, we stated in Friedberg

v. Riverpoint Bldg. Comm., 218 Va. 659, 665, 239 S.E.2d 106, 110 

(1977): 

 "Valid covenants restricting the free use of land, 

although widely used, are not favored and must be 

strictly construed and the burden is on the party 

seeking to enforce them to demonstrate that they are 

applicable to the acts of which he complains. Riordan

v. Hale, 215 Va. 638, 641, 212 S.E.2d 65, 67 (1975); 

Traylor v. Halloway, 206 Va. 257, 259, 142 S.E.2d 521, 

522-23 (1965). Substantial doubt or ambiguity is to be 

resolved against the restrictions and in favor of the 

free use of property. Schwarzschild v. Welborne, 186 

Va. 1052, 1058, 45 S.E.2d 152, 155 (1947). 

 But if it is apparent from a reading of the whole 

instrument that the restrictions carry a certain 

meaning by definite and necessary implication, then the 

thing denied may be said to be clearly forbidden, as if 

the language used had been in positive terms of express 

inhibition. Whitehurst v. Burgess, 130 Va. 572, 576-

77, 107 S.E. 630, 631-32 (1921)." 

 We hold that the restrictive covenants here are unambiguous. 

 It is apparent from a review of the restrictive covenants that 
they have definite and necessary meanings. The aforementioned 

reciprocal restrictive covenants were created to establish a 

general plan of development in which a lodging facility would be 

developed on the four-acre parcel purchased by BMC and factory 

outlets, discount retail stores, gas stations and fast food 

facilities would be developed only on the remaining parcel. 

 These recorded restrictions are covenants, at common law, 

which run with the land and are, therefore, enforceable. As we 

recently stated: 

 "At common law, a landowner may enforce a covenant 

running with the land provided he establishes: (1) 

privity between original parties; (2) privity between 

original parties and their successors; (3) an intent 

that the restriction will run with the land; and (4) 

that the covenant 'touches and concerns' the land. 

Additionally, the conveyance must be in writing." 

Sloan v. Johnson, 254 Va. 271, 276, 491 S.E.2d. 725, 

728 (1997) (citations omitted). 

The record indicates that the defendants established each of 

these requirements. 

 Waynesboro Village contends that the trial court, "acting as 

a court of equity, erred in applying the [r]estriction to 

restrict [Waynesboro Village] from using its land for the 

development of a hotel, motel, or other lodging facility." 

Essentially, Waynesboro Village argues that more than seven years 

have elapsed since the restrictions were placed in the 1989 deed, 

that BMC has taken no apparent action "to cause the [r]estriction 

to ripen into an enforceable provision" and that "the lapse of 

time, coupled with BMC's inaction, has resulted in a change in 

position by [Waynesboro Village], an innocent party acting in 

good faith without notice of the applicability of any current 
restriction." 

 We find no merit in Waynesboro Village's contentions. When 

Waynesboro Village purchased the property from the FDIC, 

Waynesboro Village was charged with constructive knowledge of the 

restrictive covenants contained in the 1989 deed because the deed 

was in Waynesboro Village's chain of title and "once a deed is 

recorded, the admission to record is in law notice to the entire 

world." Porter v. Wilson, 244 Va. 366, 369, 421 S.E.2d 440, 442 

(1992); Jones v. Folks, 149 Va. 140, 144, 140 S.E. 126, 127 

(1927). 

 We also disagree with Waynesboro Village's contention that 

BMC is estopped "to ask a court of equity to interpret the 

[r]estriction so as to apply in the future to the detriment of 

[Waynesboro Village]." The doctrine of equitable estoppel simply 

has no application here. 

 "To establish equitable estoppel, it is not necessary 

to show actual fraud, but only that the person to be 

estopped has misled another to his prejudice, Security 

Co. v. Juliano, Inc., 203 Va. 827, 834, 127 S.E.2d 348, 

352 (1962), or that the innocent party acted in 

reliance upon the conduct or misstatement by the person 

to be estopped. Khoury v. Memorial Hospital, 203 Va. 

236, 243, 123 S.E.2d 533, 538 (1962). Elements 

necessary to establish equitable estoppel, absent a 

showing of fraud and deception, are a representation, 

reliance, a change of position, and detriment." T...

v. T..., 216 Va. 867, 872-73, 224 S.E.2d 148, 152 

(1976). 

Waynesboro Village does not contend that the defendants engaged 

in any fraudulent conduct or deception, and the record does not 

show that the defendants made any representations to Waynesboro 

Village. 

 Next, Waynesboro Village argues that the restrictive 
covenant is unenforceable because of the D'Oench, Duhme doctrine. 

 We disagree. 

 The United States Supreme Court, in D'Oench, Duhme & Co. v. 

FDIC, 315 U.S. 447, 457 (1942), created a rule designed to 

implement a "federal policy to protect [the FDIC], and the public 

funds which it administers, against misrepresentations as to the 

securities or other assets in the portfolios of the banks which 

[the FDIC] insures or to which it makes loans." There, a 

securities firm sold certain bonds to a bank, and payment upon 

the bonds was later defaulted. The firm executed a demand note, 

payable to the bank, to cover the loss of the amount due on the 

bonds. The bank identified the note, instead of the past due 

bonds, as an asset on the bank's financial books. The firm and 

the bank made a secret agreement that the proceeds of the bonds 

would be credited to the note and that the note would never be 

called for payment. Subsequently, the bank failed, and the FDIC 

acquired the note as part of the collateral securing a loan to 

the bank. The FDIC filed a suit to collect on the note, and the 

firm claimed that the agreement with the bank relieved it of 

liability. 

 The Supreme Court held that the defendant "was responsible 

for the creation of the false status of the note in the hands of 

the bank. It therefore cannot be heard to assert that the 

federal policy to protect [the FDIC] against such fraudulent 

practices should not bar its defense to the note." Id. at 461. 

The Court also stated: 

 "Plainly one who gives such a note to a bank with a 

secret agreement that it will not be enforced must be 
presumed to know that it will conceal the truth from 

the vigilant eyes of the bank examiners. . . . The 

test is whether the note was designed to deceive the 

creditors or the public authority, or would tend to 

have that effect. It would be sufficient in this type 

of case that the maker lent himself to a scheme or 

arrangement whereby the banking authority on which [the 

FDIC] relied in insuring the bank was or was likely to 

be misled." Id. at 460. 

Subsequently, Congress enacted 12 U.S.C. § 1823(e)(1) which, to 

some extent, codified the D'Oench, Duhme doctrine.2 

 Assuming, but not deciding, that Waynesboro Village, as a 

purchaser of real property from the FDIC, has standing to assert 

a defense that the restriction violates the D'Oench, Duhme

doctrine and § 1823(e), we hold that neither the doctrine nor the 

federal statute is implicated here. As the United States Court 

of Appeals for the Fifth Circuit stated, "[t]he modern D'Oench

rule protects the FDIC, as receiver of a failed bank or as 

purchaser of its assets, from a borrower who has "'lent himself 

 

 2 The Federal Deposit Insurance Act of 1950, 12 U.S.C. 

§ 1823(e)(1) provides: 

 "No agreement which tends to diminish or defeat the 

interest of the Corporation [FDIC] in any asset acquired 

by it under this section or section 1821 of this title, 

either as security for a loan or by purchase or as 

receiver of any insured depository institution, shall be 

valid against the Corporation unless such agreement -- 

 (A) is in writing, 

 (B) was executed by the depository institution 

and any person claiming an adverse interest 

thereunder, including the obligor, 

contemporaneously with the acquisition of the asset 

by the depository institution, 

 (C) was approved by the board of directors of 

the depository institution or its loan committee, 

which approval shall be reflected in the minutes of 

said board or committee, and 

 (D) has been, continuously, from the time of 

its execution, an official record of the depository 

institution." 
to a scheme or arrangement' whereby banking authorities are 

likely to be misled." Beighley v. Federal Deposit Ins. Corp., 

868 F.2d 776, 784 (5th Cir. 1989) (quoting D'Oench). In 

particular, D'Oench bars the use of unrecorded agreements between 

the borrower and the bank as the basis for defenses or claims 

against the FDIC." Bowen v. Federal Deposit Ins. Corp., 915 F.2d 

1013, 1015-16 (1990). 

The undisputed facts in the record reveal that the restrictive 

covenants contained in the 1989 deed of trust, which were 

recorded among the land records in Waynesboro County, simply did 

not mislead the FDIC, the failed bank (Dollar Dry Dock Bank), or 

Waynesboro Village. 

 Accordingly, we will affirm the judgment of the trial court. 

Affirmed.