Case Name: C.W. HYDE, Trustee of the Pauline Klabo Trust, Plaintiff and Appellee, v. Jonathan W.A. LIEBELT and Charlotte A. Liebelt, Defendants and Appellants
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1986-07-09
Citations: 391 N.W.2d 186
Docket Number: No. 15125
Parties: C.W. HYDE, Trustee of the Pauline Klabo Trust, Plaintiff and Appellee, v. Jonathan W.A. LIEBELT and Charlotte A. Liebelt, Defendants and Appellants.
Judges: FOSHEIM, C.J., and SABERS, J., concur specially.
Reporter: North Western Reporter 2d
Volume: 391
Pages: 186–191

Head Matter:
C.W. HYDE, Trustee of the Pauline Klabo Trust, Plaintiff and Appellee, v. Jonathan W.A. LIEBELT and Charlotte A. Liebelt, Defendants and Appellants.
No. 15125.
Supreme Court of South Dakota.
Considered on Briefs April 22, 1986.
Decided July 9, 1986.
Rehearing Granted Aug. 29, 1986.
Kent Hyde, of Hyde Law Office, Aberdeen, for plaintiff and appellee.
Carlyle E. Richards, P.C., Aberdeen, for defendants and appellants.

Opinion:
WUEST, Justice.
This is an appeal from a grant of summary judgment in a declaratory judgment action regarding the nature of a restrictive covenant contained within a contract for deed. We reverse.
Appellee C.W. Hyde (Hyde) brought this declaratory judgment action as trustee of the estate of Pauline Klabo (Klabo). On May 15, 1975, Klabo purchased certain real property in Brown County, South Dakota, from appellants Jonathan and Charlotte Liebelt (Liebelts), under a contract for deed. Paragraph nine of the contract for deed states the following:
Buyer, for herself, her successors in interest and assigns, agrees that no part of the above described premises shall ever be used for any of the following purposes: (a) an area for the display of mobile homes or trailer homes of any kind; or (b) an area for the display, sales or servicing of any sort of recreational vehicles, whether of the two, three or four wheel kind; or (c) for the construction of a motel or motor inn. The parties agree that these restrictions shall constitute covenants running with the land and that any conveyance signed by Sellers shall be subject to the within covenants.
Hyde was negotiating a sale of the property to the owner of an adjacent motel. When the motel owner discovered the restriction in the contract regarding motels, he refused to purchase the property unless the restriction was removed. Consequently, Hyde brought a declaratory judgment action asking the trial court to determine: (1) that the restrictive covenants contained within paragraph nine, supra, do not run with the land; or, alternatively, (2) what uses may be made of the land without violating the restrictions.
Both parties moved for summary judgment. The trial court granted Hyde's motion for summary judgment and declaratory relief therein. The court held that the covenant in question was personal to the vendee and did not run with the land. The expressed rationale of the trial court was that the restrictions of the contract did not benefit the subject premises or any adjacent property and therefore did not qualify as "covenants running with the land," pursuant to SDCL 48-12-2(1). The trial court concluded that
if [Hyde] completes his purchase of the land and sells to a subsequent purchaser, the restrictive covenant does not go with the land and is not effective against the purchaser. If the plaintiff retains the land or assigns his interest in the contract for deed to another, that person takes over subject to the same terms that were effective against [Hyde] and [Liebelts] can enforce the restrictive covenant against either [Hyde] or the sub-purchaser who assumes his contract.
The trial court also dismissed Liebelts' contention that the restrictions might constitute an equitable servitude on the subject premises, citing Trahms v. Starrett, 34 Cal.App.3d 766, 110 Cal.Rptr. 239 (1974), for the proposition that no such equitable servitude may exist without an agreement between the parties that such restrictions are part of a general plan wherein several parcels are subject to, and benefited by, the same restrictions. Liebelts appeal from only this portion of the judgment, contending the correct rule of law is found in Standard Meat Co. v. Feerhusen, 204 Neb. 325, 331, 282 N.W.2d 34, 38 (1979):
Contractual promises with respect to the use of land, which under the rules of equity are specifically enforceable against the promisor, are effective against the successors in title or possession if the successor has actual or constructive notice of the promise. Under such circumstances, the promise subjects the land to an equitable servitude. (Citations omitted.)
Although a promise is unenforceable as a covenant at law, because of failure to meet one of the requirements, the promise may be enforced as an equitable servitude against the promisor or a subsequent taker who acquired the land with notice of restrictions on it. Hudson Oil Co., Inc. v. Shortstop, 111 Cal.App.3d 488, 168 Cal.Rptr. 801 (1980); Sun Oil Company v. Trent Auto Wash, Inc., 379 Mich. 182, 150 N.W.2d 818 (1967); Traficante v. Pope, 115 N.H. 356, 341 A.2d 782 (1975). The equitable servitude, however, is not automatic; it depends upon the equities between the promisee and the subsequent taker with notice. The use of equity to enforce covenants restricting the use of property is not absolute and the right may be lost by laches, waiver, or acquiescence. Equitable enforcement may be denied when there has been a change in conditions so radical in nature as to neutralize the benefits of the restrictions and destroy their purpose. Several factors to be considered, but not as limitations, are: the purpose for which the restrictions were imposed, the location of the restriction violations, the type of violations which have occurred, and the unexpired term of the restrictions. McColm v. Stegman, 3 Kan.App.2d 416, 596 P.2d 167 (1979).
We do not believe a declaratory judgment action was the proper vehicle to determine the rights of subsequent grantees of Hyde. They were not parties to this proceeding, since they did not exist. It may be in some future equitable proceeding a court would hold that Liebelts have an equitable servitude on property acquired by Hyde's subsequent grantee. On the other hand, the equities may have changed and the relief will be denied. As the Kansas Court said in McColm: "No hard and fast rule can be laid down as to when changed conditions have defeated the purpose of restrictions, and each case must be decided on the equities of the situation presented." 596 P.2d at 170.
The trial court in this case was asked to rule on motions for summary judgment in a declaratory judgment action. We have said motions for summary judgment are not ordinarily suitable in equitable actions. Wilson v. Great Northern Railway Co., 83 S.D. 207, 157 N.W.2d 19 (1968).
Although the trial court could determine the rights of Liebelts and Hyde, it could not rule on the rights of subsequent grantees. SDCL 21-24-7 provides:
When declaratory relief is sought all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.
In conclusion, we reverse that part of the judgment which holds the restriction in question did not constitute an equitable servitude. That issue may be decided when it is ripe for judicial determination.
Of course, that part of the judgment not appealed, which holds the covenants do not run with the land but are binding on Hyde or any assignees of the contract, still stands.
FOSHEIM, C.J., and SABERS, J., concur specially.
MORGAN and HENDERSON, JJ., dissent.