Title: Mershon v. Neff
Citation: 355 P.2d 128, 67 N.M. 311
Docket Number: 6617
State: new-mexico
Issuer: new-mexico Supreme Court
Date: September 8, 1960

355 P.2d 128 (1960) 67 N.M. 311 John Mershon and Bernie Bounds, Plaintiffs-Appellants, v. John B. NEFF, Thomas C. Patterson, J.C. Pender, Jane Perrenot and Vivian Hamilton, Individually and as Members of the Official Board of Directors of the Cloudcroft Directory, Defendants-Appellees, J.O. Frilick, Sr., and Ruby v. Frilick, his wife, J.O. Frilick, Jr., a single man, J.C. Read and Josephine Read, his wife, A.D. Mclean, a/k/a Allen D. Mclean, and Barbara A. Mclean, his wife, David L.C. Hover and Helen Hover, his wife, Abe Zicafoose and Flossie Zicafoose, his wife, T.B. Longwell, a single man, and R.F. Anderson, Intervenors-Appellees. No. 6617. Supreme Court of New Mexico. September 8, 1960. Brenton, Boyce &amp; Wilkinson, John P. Otto, Alamogordo, Grantham, Spann &amp; Sanchez, Albuquerque, for appellants. Garland &amp; Martin, Las Cruces, for defendants-appellees. John H. Lawless, Jr., Alamogordo, for intervenors-appellees. MOISE, Justice. The appellants filed an action seeking a declaratory judgment to the effect that the restrictive covenants imposed in the deeds to Block 1 of the Place of Cloudcroft are *129 no longer applicable thereto and accordingly should be cancelled. Appellants are successors in interest to P.B. Hendricks, having acquired Block 1 (except certain described pieces) by purchase in 1957. P.B. Hendricks was defendant in a previous action tried in 1951 wherein he was enjoined from violating the restrictive covenants prohibiting use of the property for purposes of trade or commerce. In that action, the Board of Directors of the Cloudcroft Directory (the governing organization of Cloudcroft provided for in the plan devised by the company which platted Cloudcroft) brought suit to enjoin violation of the restrictions against commercial use by operating a gasoline filling station and were granted an injunction. This action was affirmed by this court in Neff v. Hendricks, 57 N.M. 440, 259 P.2d 1025, decided August 6, 1953. Appellants purchased with full knowledge of the restrictions and of the earlier case. Appellees are the defendants and intervenors below. The named defendants were the duly elected Board of Directors of the Cloudcroft Directory and were named as representatives of the owners of lots and property in Cloudcroft. Certain owners of lots in Cloudcroft and in North Cloudcroft, a separate subdivision lying immediately north of Block 1 of Cloudcroft, were permitted to intervene, and are likewise appellees herein. The case was tried to the court, which made findings of fact and conclusions of law deciding the issues in favor of defendants and intervenors (appellees) and dismissing the complaint. From the judgment entered pursuant thereto, this appeal is prosecuted. Among others, the court made the following findings of fact and conclusions of law: Appellants' first point relied upon for reversal is to the effect that the court erred in holding the decision in Neff v. Hendricks, supra, to be res judicata as to changed conditions in Block 1 as of 1951, and in not considering the same in this action. There is some dispute between the parties as to what the trial court's ruling was in this regard. Appellees assert that the court *131 did admit and consider evidence of changes in the area prior to 1951 and cite the following statement by the court: On the other hand, appellants call attention to the following statements by the court during the trial: Probably more to the point are findings 18 and 19 and conclusions 3 and 4, hereinbefore quoted. Although admittedly there is some question as to exactly how the trial court appraised the previous decision, from the remarks and findings and conclusions set forth above, it seems reasonably certain that he did not consider the situation prior to 1951 in deciding the instant case. He found there had been no material change in the neighborhood since 1951 as to warrant removal of the covenants, and has a conclusion to the same effect. To our minds, this was not the question. The determination which he was called upon to make was whether there had been such a change in conditions since 1900 when the townsite was platted as to make it inequitable to enforce the restrictions. To answer this question, it was necessary for the court to consider all changes since 1951, and if they, together with changes existing in 1951, would justify lifting of the restrictions, it should be done. The pertinent law is found in the case of Hurd v. Albert, 214 Cal. 15, 3 P.2d 545, 546, 76 A.L.R. 1348, where the following language is found: The similarity between the cases and the pertinency of the language quoted should be obvious. The rule as to the effect of the previous judgment as announced in the quotation is also supported in the Restatement of the Law of Judgments, §§ 54(d) and 68(q). Appellees would limit the holding in Hurd v. Albert, supra, to a recognition of the right of the court to consider the changed conditions that had occurred between the two lawsuits, and express agreement that this is the law. However, concerning the holding that this should include consideration of changes prior to the decision in the earlier case, they say the cases in the annotation in 76 A.L.R. 1348 do not support the rule, and they then call attention to the case of St. Lo Construction Co. v. Koenigsberger, 84 U.S.App.D.C. 319, 174 F.2d 25, 10 A.L.R.2d 349, which they assert supports their position that occurrences prior to 1951 could not be considered in deciding this case. At first blush, it does appear that this was the holding in that case. However, a closer reading will disclose, we believe, that what the court held was that the previous judgment was res judicata of the issues as of the date of the judgment. It does not necessarily follow from this that upon showing of change since the previous judgment it would not be proper to consider changes both before and since in passing upon the present day situation. Whether or not Hurd v. Albert, supra, can be reconciled with St. Lo Construction Co. v. Koenigsberger, supra, is not important. It is sufficient that we consider the rule in the Hurd case to be a correct one to apply under the circumstances here present, and since the trial court apparently did not do so, it fell into error. The court in a memorandum opinion which it filed stated that appellants asserted four changed conditions as follows: (1) the new highway and increased activity along it catering to tourists, (2) an increase in permanent residents, (3) abandonment of the railroad which formerly served the town, and (4) the location of the highway so as to make Block 1 geographically a part of North Cloudcroft, and then concluded that these conditions all were in existence in 1951 when the previous case was heard, and that there had been "no material increase in their impact on the community since that time." This was incorporated in Finding 16, quoted above. The court did not note at least he did not mention the following additional facts proven to have occurred since 1953, which appellants assert must be considered along *133 with the other changes which occurred before that date: (1) The highway has been paved with greatly increased traffic thereon, (2) conversion of the building on the southeast corner of Block 1 into a cafe, (3) construction of the City Hall on the property, (4) use of the property as a parking lot for the benefit of the businesses in North Cloudcroft and for trucks of all kinds, and (5) occasional use of the property for other commercial activities as for example a place from which milk was distributed by Price's Creameries for some two years. To say the least, these additional items should have been considered by the court together with changes present in 1951, and a determination made as to whether the restrictions should continue to be maintained on Block 1. In view of our disposition of this point we do not believe it necessary to consider or discuss appellants' second point. We rule that appellants' Point III is without merit. As to Point IV, whether or not the court erred in permitting intervention of owners of property in North Cloudcroft, it does not appear that appellants were prejudiced or injured thereby. Several of the intervenors owned property in Cloudcroft as well, and their right of intervention is clear. That others concerning whom there may have been a question as to their interest were also permitted to intervene would seem to be immaterial under the circumstances. In the light of what we have said concerning Point I, the cause is remanded to the district court with instructions to reinstate the same on the docket and to proceed in a manner not inconsistent herewith. It is so ordered. CARMODY and CHAVEZ, JJ., concur. COMPTON, C.J., dissenting. NOBLE, J., not participating. COMPTON, Chief Justice (dissenting). The judgment reaches us presumptively correct and I would affirm. If I understand correctly, the judgment is being reversed principally because the court did not consider changed conditions since 1900, the date the townsite was platted, in determining whether the restrictions should be removed. As I construe the findings, this is just what the court did. In any event, the record does not show that he did not do so. The majority having reached a different conclusion, I dissent.