Court Opinion

ID: 6905602
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:59:52.494685+00
Date Added: 2024-06-11T16:06:20.090030
License: Public Domain

Mr. Justice McCamant
delivered the following dissenting opinion:
In this case we are not embarrassed by any controverted questions of fact. The demurrer admits the allegations of the complaint to be true and challenges their sufficiency in point of law. Many of the legal questions arising on this record are determined by recent and well considered decisions of this court. The validity of the restrictions on which appellants rely is established by Seeck v. Jakel, 71 Or. 35 (141 Pac. 211, L. R. A. 1915A, 679). The right of appellants to claim equitable relief based on these restrictions is supported by Duester v. Alvin, 74 Or. 544 (145 Pac. 660). This latter case grew out of the marketing of Overlook Addition to the City of Portland under a general scheme whereby purchasers of lots were required to keep their buildings at least twenty feet from the street line. Restrictions to this effect were inserted in the deeds under penalty, as in this case, of forfeiture of the estate of the grantee to the grantor. In construing this provision in the deeds this court said through Mr. Chief Justice Moore :
“This covenant grants a conditional estate, in the nature of a negative easement, whereby each grantee who secured a title to any land in Overlook Addition with knowledge of the limitations prescribed became seised of a servient estate as to his own premises, and also the owner of a dominant estate in all other lots the deeds to which contained such conditions. * * These restrictions, in the case at bar, prohibit each owner of real property so conveyed from violating the limitations put upon his premises, because a breach *111thereof would or might affect the dominant estate therein of some or all other owners of lots. Since his land is subjected to the burdens incident to a servient estate in the premises, he has the corresponding advantage of enforcing in equity his rights in and to the dominant estate as to all other real property the owners of which obtained their title with knowledge of the covenant, and he may prevent any infringement that would or might affect his land.”
The conclusion reached in Duester v. Alvin sustained the injunction passed by the lower court at the instance of purchasers of lots in Overlook Addition restraining other purchasers from constructing houses in closer proximity to the street line than that permitted by the restrictions contained in the deeds.
The case at bar is distinguishable from Duester v. Alvin in that while the restrictions in that case were absolute, in this case Laurelhurst Company reserved to itself a dispensing power by inserting in the deeds the following language:
“Nor shall said premises or any building thereon be used or occupied otherwise than strictly for residence purposes (or for church or school purposes, and then only with the prior consent of the party of the first part, or its successors or assigns).”
Respondent bases its contentions wholly on the reservation above quoted and admits in effect that in the absence of this reservation and appropriate action by Laurelhurst Company pursuant thereto, appellants would be entitled to the relief prayed for. Respondent contends that this dispensing power extends to the modification of the restrictions in so far as they control the erection of buildings on the property in question. Appellants controvert this construction of the language and contend that Laurelhurst Company has reserved to itself only the power to permit build*112ings erected in accordance with the restrictions to he used for church and school purposes. It is the duty of the court to ascertain the intention of the parties from the language they have used and from the surrounding circumstances.
The restrictions first forbid the erection on the premises, for a period of twenty-five years, of any building other than a detached dwelling-house to each lot, and forbid the erection of such dwelling-house within twenty feet of the street line on which the house fronts. These restrictions have to do with the construction of buildings on the property. The next two provisions have to do with the use and occupation of the property. They are as follows:
“Nor shall said premises or any building thereon be used or occupied otherwise than strictly for residence purposes (or for church or school purposes, and then only with the prior consent of the party of the first part, or its successors or assigns); nor shall the same or any part thereof be in any manner used or occupied by Chinese, Japanese or negroes, except that persons of said races may be employed as servants by residents.”
The next provision forbids the placing of any old buildings on the premises. Then follows a prohibition against the erection, maintenance or use of any building on the premises “for flats, apartments, stables, stores or business or manufacturing purposes.” The final restriction forbids the manufacture and sale of intoxicating liquors. The restrictions close with penal and- explanatory clauses not necessary to be noticed in this connection.
It will be remembered that these restrictions are found in the deeds by which respondent acquired title to all its property except Lot 5 in Block 1, and that title to this lot was taken with full knowledge of the *113restrictions and with knowledge that they were a part of a general plan under which the property was being marketed and on the faith of which appellants had purchased and improved their property. "Whatever right respondent has to escape the effect of these restrictions must be predicated on the parenthetical clause above quoted. A parenthetical clause ordinarily qualifies the language to which it is attached. This clause is attached to a provision limiting the use and occupation of the premises. The clause to be interpreted consists of a preposition and its objects and a second preposition and its objects. The grammatical construction of the sentence plainly imports that the phrases modify the preceding verbs, “used” and “occupied.” The parties permit the premises to “be used or occupied” “for church or school purposes,” but “only with the prior consent of the party of the first part.” The natural interpretation of the language makes it equivalent to this:
“Said premises or any building thereon may be used or occupied for church or school purposes, but only with the prior consent of the party of the first part, or its successors or assigns.”
We cannot apply the language used as a modification of the restriction on the erection of buildings without taking the words out of the connection in which the parties have placed them and putting a forced construction on the language used. As it seems to me, the parties have provided that the premises and buildings situate thereon are to be used for strictly residence purposes and then have qualified this restriction by permitting them to be used for church or school purposes, provided the prior consent of the Laurelhurst Company is secured, and this is the extent to which the restrictions have been modified.
*114The language we are called upon to interpret is found in the deeds executed by Laurelhurst Company to appellants and other purchasers of lots. In the absence of the parenthetical clause appellants would clearly be entitled to the complete relief for which they pray: Duester v. Alvin, 74 Or., 544 (145 Pac. 660). "Whatever the rights of respondent may be to erect or use buildings on the premises for school and church purposes, they are derived through Laurelhurst Company, and these rights are only such as have been reserved by Laurelhurst Company in the parenthetical clause above quoted. It is elementary that a reservation is to be construed most strongly against the grantor: 2 Devlin on Deeds, § 979; Klaer v. Ridgway, 86 Pa. St. 529, 634. Such reservation cannot be extended beyond the import of its terms: Fort Wayne v. Lake Shore Co., 132 Ind. 558 (32 N. E. 215, 32 Am. St. Rep. 277, 282, 18 L. R. A. 367). The language used is that chosen by the Laurelhurst Company and is therefore to be construed most strongly against it: McFadden v. Friendly, 9 Or. 222, 225; Loomis v. McFarlane, 50 Or. 129, 134, 135 (91 Pac. 466); Spande v. Western Life Co., 68 Or. 171, 188 (136 Pac. 1189) ; 8 R. C. L. 1051; 9 Cyc. 590.
None of the cases cited by the Chief Justice on the subject of construction involved the interpretation of a clause in a deed reserving to the grantor a dispensing power. The sole question involved in this case is the interpretation of such a clause. The restrictions themselves are clear and the parties are in substantial accord as to their meaning.
If it had been the intention of Laurelhurst Company to reserve to itself the power to dispense with all restrictions, it would have been easy to insert in the deeds a proviso to that effect. I apprehend that such *115a proviso would have impaired the usefulness of the restrictions in marketing the property. The relative rights of appellants and Laurelhurst Company under the facts alleged in the complaint are clearly set out in De Gray v. Monmouth Beach Co., 50 N. J. Eq. 329, 339 (24 Atl. 388, 391):
“The equity would seem to spring from the presumption that each purchaser has paid an enhanced price for his property, relying on the general plan, by which all the property is to be subjected to the restricted use, being carried out, and that while he is bound by and observes the covenant, it would be inequitable to allow any other owner of lands subject to the same restrictions to violate it.
“Lord Macnaghton, in Spicer v. Martin, 14 App. Cas. 12 (at p. 25), says: ‘It seems to me that when Mr. Spicer put his houses in Cromwell G-ardens on the market, he invited the public to come in and take a portion of an estate which was bound by one general law, a law perfectly well understood, and one calculated and intended to add to the security of the lessees, and consequently to increase the price of the houses. The benefit of that increase, whatever it was, Mr. Spicer got. Can he or his representative be permitted to destroy the value of the thing he sold, by authorizing the use of part of the estate, for a purpose inconsistent with the law by which he professed to bind the whole.’ ”
It is true that the construction adopted by me restricts within narrow limits the dispensing power reserved to itself by Laurelhurst Company; but I am led to this construction both by the import of the language used in the connection in which it is placed and also by the intention of the parties, to be gathered from the surrounding circumstances. The clause inserted in deeds executed by Laurelhurst Company was framed in 1909, when the tract was first put on the market. Its manifest purpose was to promote the *116sale of lots by assuring to purchasers that the tract would be used only for high-class homes. Each purchaser accepted the restrictions when applied to his property, in the belief that he was abundantly recompensed by the assurance that the surrounding property would be devoted to the erection of homes whose cost should not be less than a stated sum, and whose number should not exceed one to a lot. If the dispensing power reserved had been a broad one, purchasers would not have found in the scheme the assurance with reference to neighboring property which was the incentive to purchase. The circumstances,, suggest that the Laurelhurst Company must have intended that its purchasers should regard the restrictions as applying throughout the tract and the dispensing power as not materially interfering with the scheme. It is true, as contended by respondent, that the most fundamental canon of construction requires that effect be given to a contract in accordance with the intention of the parties, but Section 721 of Lord’s Oregon Laws provides as follows:
“When the terms of an agreement have been intended in a different sense by the different parties to it, that sense is to prevail, against either party, in which he supposed the other understood it ’ ’
The material question is, therefore, what Laurelhurst Company intended its purchasers to understand by the language used: Barr v. American Copying Co., 142 Ill. App. 92, 101, 102; Maney Co. v. Baker Co., 186 Ill. App. 390, 394; Stevens v. Amsinck, 133 N. Y. Supp. 815, 821 (149 App. Div. 220); People’s Building Assn. v. Klauber, 1 Neb. (Unof.) 676, 678, 679 (95 N. W. 1072); Campbell v. Hobbs, 97 Neb. 833, 836 (151 N. W. 929). I cannot think that it was intended by Laurelhurst Company that each purchaser was to *117understand that the vendor of the tract had reserved to itself the right to permit the erection of a school or church building on the lot adjoining his purchase. It is alleged that appellants have improved their property and that the carrying out of respondent’s plans will result in great and irreparable loss to appellants and will render their property undesirable and unsalable as homes.
In the event of the reversal of the decree, issue might be joined on these allegations and the proofs might not sustain them, but in the present condition of the record we are bound to accept these allegations as true. Where these results would follow we should be the more careful not to enlarge by construction the rights reserved by Laurelhurst Company to waive the restrictions under which its property has been marketed.
On the facts alleged in the complaint, in my opinion, appellants are entitled to an injunction restraining respondent from erecting on the property described in the complaint any building which does not conform to the restrictions above quoted. Respondent should be free to use the premises for church and' school purposes in so far as such use is consistent with the building restrictions. A dwelling-house erected on the property could be used as a convent within the dispensing power reserved and exercised.
I think that the decree should be reversed.