### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE March 20, 2002 Session TENNSCO CORPORATION v. ELIAS H. ATT EA, JR. Appeal from the Chancery Court for Williamson County

No. 27393 R. E. Lee Davies, Judge

No. M2001-01378-COA-R3-CV - Filed June 13, 2002
This is a complaint to remove a cloud on the title to two parcels of property . The Chancery Court of Williamson County

granted summary

judgment to the plaintiff, holding that as a matter of law a restrictive covenant in a prior deed in the plaintiff’s chain of

title did not run with t

he land a nd did not crea te an equ itable se rvitude. We affir

m. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded B EN H. C ANT RELL , P.J., M.S., delivered the opinion of the court, in which W IL LI AM C. K OCH , J R . and P ATRIC IA J. C OTT RELL , JJ., joined. James A. Freeman, II

I, Ric hard H. Sf

orzini, Jr., and Talmage M. Watts, Nashville, Tennessee, for the appellant, Elias H. Attea, Jr. Coburn Dewees Berry

and Kim B. Watson, Nashville, Tennessee, for t he appe ll ee, Tennsco Corporation. OPINION In 1988, Larry

H. Daug herty and wife, Patricia R. Daugherty , owned a large tract of land in Williamson County north of the Co ol Sp rings Shopping Center. T

he Daug herty s lived in a

n historic homeap pr ox im at el y in th e c en te r o f t he pr op er ty. In F ebruar y of 1988, the y c onvey ed the pr operty north and south of their home to Bill Wills, effectively dividing the prope

rty into three parts. The warranty deed to Mr. Wills contained the following restriction: This conveya

nce is made subject to the restriction that any buildings constructed on the land shall be sing le family dwelling s of trad

it ional d esign at least 4,000 square feet in size and on lots of one (1) acre or g reater in size.-2-

In December of 1988, Mr. Wills quit-claimed the property to Mallory

Park, L.P., subject “to all restrictions, easements and encumbrances or ( sic) record.” In February of 1989, Mallory Park gavea deed of trust to Te nnsco Cor poration (Tennsco) to secure a loan. I n 1994, Mallory Park defaulted on the loan and conveyed the property to Tennsco by wa

rranty deed in lieu of foreclosure. Th e w ar ra nt y de ed di d n ot co nt ai n a ny r es tr ic ti on s o n t he us e o f t he pr op er ty. In 19 93, the Da

ugher tysconvey

ed their home and t

he surrounding p

roperty unrestr icted to Gerald and Carolyn B utters. In 1994, the Butters conve yed the prope

rty unrestricte d to the defenda nt, Elias H. Attea, Jr. The complaint in this case, however, alleges that Mr. Attea insists on enforcing the restric tion conta ined in the

Daughe rty s’ deed t

o Wills. Mr. A

ttea’s a nswer a dmits that allegation. The Chanc ery Court of Will

iamson Coun

ty held that the restriction did not run with the land, and removed the restriction as a cloud on Tennsco’ s title. II. Private owners of property in Te

nnessee may

restrict the use of the property , not only for the present but al so when the property pa sses into the hands of subsequent purchasers. The law does notfavor such restrictions because they interfere with the free a

n d unrestricted enjoy

ment of the pr op er ty. Low e v. W

ilson , 250 S.W.2d 3 66 (Tenn . 1952). N everthe less the c ourts will u

phold covena nts running with the land “where the intent of the par ties to bind their remote successors can be determ ined b y the langu age of th e coven ant an d the c ircum stanc es of i ts mak ing. ” Hillis v. Powers , 875 S.W.2d 273 at 275 (Tenn. Ct. App. 1993). Restri ctions that bind remote grantees are sometimes ca lled “real covenants” at law and “equita ble servitudes” or “reciprocal neg ative easements” in equity

. Land Developer s , Inc. v. Maxwell , 537 S.W.2 d 904 (Te nn. 1976) . As stude

nts of the differe nces bet ween la w and equ

ity might expect, the requirements allowing a covenant to “r un with the land” at law were more technical and specific than the requirements imposed by courts of eq ui ty. Some of the differences are discussed at 5 Powell & Rohan, The Law of Re al Propert y § 673 (1991): Different requi rements have developed for the running of r eal covenants and the running of equitable re stri ctions. The elements most often said to be required for covena nts to run at law arethat: (1) the covenant “touch and concern” the land; (2) the original covenanting parties intend the cove nant to run; and (3) there b e s ome form of p rivity of estate. A f ourth requirement, that the covenant be in writing , i s also s ometimes m

entioned . For co venants t o run in eq

uity , courts r

equire t hat; (1 ) the covena

nt “touch and conc ern” the

land; (2) the original cove nanting parties inte nd the covena

nt to run; a

nd (3) the successor

to the burden have “notice” of the covena nt.1 The appellant c orrectl y points out that ot her courts have applied t he rule we have adopted in this state o nly to covenan ts that concern things not in esse. This also appears to be t he co rrect in terpre tation o f the se con d ru le in Spen cer’s Ca se , 5 Coke 16a (Q.B. 1583), but our cour ts have notmade that dis ti ncti on. -3- A . A R EAL C OVENANT As to what covenants “touch and concern” the land there seems to beno universal test, see 2 American L aw of Prope rty § 9.13 (A.J. Casner ed. 1952), but covenants containing building restric tions, entered into between owners in fee, a re almost universally he

ld to satisfy the

“touch and concern” requirement – both as to the burden and the benefit. Id. Therefore, we are satisfied that this restriction touches and concerns the land. As to the inten t requirement , the courts in Tennessee have given c onclusive effect to the langua ge in the deed. If the cove nant does not specifically

bind the heirs andassignsof the g rantee s, the co v enant cannot be held to run with the land. Lowe v. Wilson , 250 S.W.2d 366 (Tenn. 1952). While this result has been criticized, see Case Comment, 22 Tenn. L. Rev. 971 (1953), this court has consiste ntly followed the rule, and theSupreme C ourt so fa r has refused to

review it. See Essary v. Cox , 844 S.W.2d 169 (Tenn. Ct. App. 1992). In Hillis v. P owers , 875 S.W.2d 273 (Tenn. Ct. App. 1993), we hel d that the co venan t coul d be en forced agains t remo te gr antees where it purpor ted to bind the gra

ntees’ “ assigns ” only , but we th ink that the

rulerequiring specific langua ge in the deed remains intact. 1 Therefore, the restriction in the deed fr om Daugherty

to Wills did not run with the land.

B . E QUITABLE S ERVIT UDE As we have indicated, courts of equity have

enforced restrictions on the use of property that would not h ave bee

n conside red rea l covena nts at law . As one le ading tr eatise h as put it: [w]here an owner of

land ente rs into a contract that he will use or abstain from using his land in

a particular way

or manner, equity

will enforce the agreeme

nt against any purchaser or possessor with notice who attempts to use t he land in violation o f its terms, irrespective of whether the ag reement creates a valid covenant running with the land a t law or not. 2 America

n Law of Prope rty § 9.24 (A.J. Casner ed. 1952). See Tulk v. Moxhay , 2 Phillips 774, 41 Eng. Rep. 1143 (ch. 1848). It results that grantees seeking to enforce reciprocal

negati ve ease

ments are not nece ssarily limited to the recitals in their deeds. They may, of course, rely on their deeds and other deeds from a common grantee, Land Deve lopers, I nc. v. Ma xwell , 537 S.W.2d 904 (Ten n. 1976), they

may also rely on recorded plats, Stracener v. Bailey , 737 S.W.2d 536 (Tenn. Ct. App. 1986), or even on parol evidence of th e circ umstances surrounding the purchase of the pr operty. Ridley v. Haiman , 47-4-

S.W.2d 750 (Ten

n. 1932); Owenby v. Boring , 276 S .W.2d 75 7 (Tenn. Ct. App. 1954). The one essentia l, that the one charged with the burden of the restr iction ha ve notice of it, may be alsoshown by circumstantial evide

nce. Ridley v. Haiman , 47 S.W.2d 750 (Tenn. 1932). Equitable servitud es are n ot favor

ed, howe ver, for the same reason t hat oth e r restrictive covena nts are not favored. Land Developers, Inc. v. Maxwell , 537 S.W.2d 904 (Tenn. 1976). They should be enforced with extreme caution. Id. It is in accor d with this r

eluctance to re strict the

use of property – for

an indefinite period of time – that the Supreme Court said in Land Deve lopers that the common grantor must have imposed the restric tions on the

use of the

propert y in furtherance of a scheme or plan of

development so that each grantee ma y enforc e the restrictions against any other gra ntee. 537 S.W.2d at 912-913. Therefore, in order to enforce a n equitable serv itude or a reciprocalnegative easement it must appear that the g rantor had in minda generalplan of development

and intended

for the r estricti ve cove

nant to be nefit all the property involved. Ridley v. Haiman , 47 S.W.2d 750 at 755 (Tenn. 1932). In Essary v. Cox , 844 S.W.2d 169 (Tenn. Ct. App. 1992), we said: “[o]utside the context of restrictions which evidence a common development plan, however, plaintiffs have cited no authority in this jurisdiction for the proposition that restrictive covena

nts may be impose d on remot e g rantee s based up on their knowledge of the existence of a prior re striction.” 844 S.W.2d at 172. The Court thus distinguished Stracener v. Bailey , 737 S.W.2d 536 (Tenn. Ct

. App. 1986) andOwenby v. Boring , 276 S.W.2d 7 57 (Tenn . Ct. App. 1954), both of which held that the r eciprocal negative ease ments were enforceable. B oth cases involved a common plan of development. We think the undisputed facts show that there was no general plan or scheme of development adoptedto cover the property he ld by the Daug

hertys. As the trial judg e observed there was no map or sales br ochuresshowing

the restr ictio ns. And there is no restriction on the property the Da ug he rt ys retaine d. When the y c onvey ed the pr operty to the Bu

tte rs they did not include any restric tions. Since, the

re was n o reciprocal easement, the conclusion is inescapable that the restric tion plac ed in the Wills deed w as perso nal to the Daughe rty s. The judgment of the trial court is affirmed and the cause is remanded to the Chancery Court of Williamson County for a ny further

proceedings necessary . Tax the costs on appeal to Elias H. Attea, Jr.

_________________________________________ BEN H. CA

NTREL L, PRESI DIN G JUDGE, M. S.