Court Opinion

ID: 3399390
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:10:29.186656+00
Date Added: 2024-06-11T13:42:26.819422
License: Public Domain

1. A covenant running with the land which binds subsequent purchasers thereof, as distinguished from a personal or collateral covenant which does not run with the land, must relate to the interest or estate for whose benefit the covenant is established, so that its performance or non-performance will affect the quality, value, or mode of enjoyment of such estate. Atlanta, Knoxville  Northern Ry. Co. v. McKinney, 124 Ga. 929, 931 (53 S.E. 701, 6 L.R.A. (N.S.) 436, 110 Am. St. R. 215). A negative covenant running with the land is also distinguished from mere negative  restrictions, in that the former constitutes an obligation between two estates of realty, which continues of force so as to bind whoever may become the owner of either without regard to notice or consideration to the assignees; whereas restrictive agreements may relate to personal property, and may or may not be limited to the original promisor according to the terms of the instrument, and, if *Page 98 
need be, as interpreted in the light of the surrounding facts. When related to mere restrictive agreements notice, actual or constructive, "or the absence of value is the very foundation of the subsequent possessor's liability." Hancock v. Gumm,  151 Ga. 667, 675 (107 S.E. 872, 16 A.L.R. 1003). In an equitable proceeding where realty is involved, the practical distinction more often is concerned with the question of notice, since, if there be a covenant running with the land, then it binds any subsequent owner thereof with or without notice, for the reason that he takes no greater title than his predecessor had to convey, whereas, if it be merely a restrictive agreement, it is essential for its validity that such subsequent owner should have taken it with actual or constructive notice thereof. Rosen v. Wolff, 152 Ga. 578
(110 S.E. 877).
2. Where the owner of realty sells a portion thereof, imposing on his vendee restrictions relating to the use of the estate conveyed, thus creating a covenant running with the land, there is a presumption, in the absence of any facts and circumstances showing a contrary intent, that the restriction is imposed for the benefit of the land retained, with the result that an implied inhibition is created as to the use of the portion of the land conveyed, for the benefit of the owner of the unsold portion. In order to carry out such manifest intention of the parties, it is not necessary that such purpose should be expressly stipulated by the terms of the deed. Any such restrictive clause shall be "construed in the light of the other facts in the record and the intention of the parties to the deed."
(a) The rule would be somewhat different where there was a general scheme as to a subdivision for the purpose of selling lots under restrictive covenants. In such a case, the general scheme binds all the purchasers inter sees, not only as to the restrictions embodied in their respective deeds, but also as to such inhibitions as were embraced within the general scheme of the subdivision, of which they had or were chargeable with notice. This division of the syllabus will be further elaborated in the opinion.
3. Under the facts of this case as disclosed by the petition, and in accordance with the principles of law set forth in the foregoing divisions of the syllabus, the petition stated a cause of action in so far as the defendants W. C. Puryear and Douglas Puryear are concerned, and as to them it was error to sustain the several grounds of the general demurrer thereto. This is true for the reason that a general demurrer will not be sustained if the facts entitle the plaintiff to any of the substantial relief prayed for. Stroup v. Imes, 185 Ga. 422,  423 (195 S.E. 411); Feeney Hay Co. v. Trenton Milling Co., 189 Ga. 109 (5 S.E.2d 235); Carolina Construction Co. v. Branch, 164 Ga. 837 (3 a) (139 S.E. 676). The court by its order having based its judgment upon the proposition that the restriction was not a covenant running with the land, such as the plaintiffs could enforce, and having failed to pass upon the prayer for damages, the latter question will not be adjudicated at this time. However, in so far as the defendant Southern Railway Company is concerned, the petition fails to set forth a cause of action, and the court properly sustained its general demurrer. *Page 99 
This is true for the reason that this defendant had the right to convey to the defendants W. C. Puryear and Douglas Puryear such title as it had to the property in question and, while it did not embody the restrictions in its deeds, since these were covenants running with the land, of which their grantees had at least constructive notice, it was not necessary to do so, and these restrictions would in effect be read into the conveyances as made. While the petition alleges that the property was conveyed to persons who could not possibly use it for any purpose authorized under the grantor's muniment of title, the averments do not show any understanding that the grantees would attempt an illegal use of the property, and it will not be assumed that such a purpose was in the mind of the grantor. So far as the petition goes, the purchasers, having bought at much less than the actual value of the land, might have been content to buy and hold it subject to future eventualities; or they might have purchased it with the purpose of subsequently acquiring rights nullifying the restrictions contained in the original grant, whether or not, if the petition had alleged a joint concert of action between the railway company and its grantees, amounting to a conspiracy to violate the terms of the covenants, in that the railway company conveyed the land to its grantees with notice of the fact that they would, and for the purpose that they should, violate such covenants, such an allegation would operate to change the rule is not a question which we are authorized to determine under the pleadings as they exist; nor are we called upon to determine whether or not the railway company would be accountable to its grantees under its warranty of title.
4. In addition to the general demurrer as set forth in several grounds. there were certain special demurrers which were not passed upon by the trial court. This court being one for the correction of errors (Code § 2-3005); and the grounds of special demurrer not having been passed upon by the trial court, this court will not deal with the merits there of; but, since the case will be reversed, it seems necessary to determine whether or not the judge was correct in ruling that the special demurrers were filed in time, which ruling was excepted to. Code. § 6-1607.
(a) While the record does not disclose whether or not the special demurrers were filed at the first term, we construe the meaning of the order of the judge to be that such was not the case, but that he allowed them to be filed by virtue of the plaintiffs having amended their petition. The Code. § 81-301, requires that "All demurrers and pleas shall be filed at the first term." Section 81-1312 provides "An amendment to a petition, or plea, or answer, which materially changes the cause of action or defense, opens the petition, plea or answer, as amended, to demurrer or plea. . . An immaterial amendment shall not so open the petition or other pleading." Under this rule, if a petition as originally filed be subject to a special demurrer, an amendment of the petition in other respects will not authorize the filing of such a special demurrer at the trial term. Maryland Casualty Co. v.  Dobson, 57 Ga. App. 594 (196 S.E. 300). See Central of Georgia Ry. Co. v. Keating, 177 Ga. 345 (2) (170 S.E. 493), and Quillian *Page 100 
v. Johnson, 122 Ga. 49 (3) (49 S.E. 801), in which analogous rulings were made to the effect that an amendment to a petition, made after the first term, does not open the petition to a dilatory plea unless the amendment rendered such plea available for the first time. See also generally, Kelly
v. Strouse, 116 Ga. 872 (1 b). (43 S.E. 280); Griffin
v. Augusta  Knoxville Railroad, 72 Ga. 423 (2 b). In accordance with the foregoing ruling, it appears that only one ground of the special demurrer relates to matter not apparent before the amendment was filed, which is ground 11 of the demurrer to prayer number 2 of the petition, praying for a rescission and cancellation of the deed from the Southern Railway Company to the other joint defendants. This prayer was restored to the petition just prior to the entering of the demurrer thereto. All the remaining grounds of the special demurrer were to the allegations as they appeared in the original petition, and as to them were not timely, unless it be true that such special demurrers were in fact filed at the appearance term, which, under the terms of the judge's order, it has been assumed was not the case.
      No. 15058. FEBRUARY 8, 1945. REHEARING DENIED MARCH 7, 1945.
A grantor, for a nominal consideration of five dollars, conveyed eight acres of land in the heart of the city of Dalton to a railroad company, predecessor in title of the present plaintiffs and of the present defendants. The following stipulation was embraced in the deed: "It is further ratified and agreed  confirmed between the above-mentioned parties that the above-described parcels or lots of land are not to be used for any other purpose than the railroad depot, that no private dwelling or business houses are to be erected thereon, or said grounds to be used for any other than the legitimate purpose of the East Tennessee and Georgia Railroad depot." The deed, while not expressly stipulating that the restriction was imposed for the benefit of the remaining unsold adjoining lands of the grantors, does indicate in two of its provisions that the grantors were the owners of other adjacent property not conveyed. The petitioners allege that they are the owners of land adjoining that conveyed to the railroad company; that, at the time the conveyance to the railroad company was made, the grantors in that conveyance held the land now owned by them; and that their title was derived from such common grantor. They aver that a recent sale by the railroad company, under deeds containing no reference to such restrictions, and conveying a portion of the land originally deeded to the railroad company to persons not engaged *Page 101 
in the railway business, but in an ordinary commercial business, who are erecting commercial houses on a portion of the railroad property conveyed to them, will cut the petitioners' land off from the railroad property and deprive their property of railroad frontage; and they ask that the railroad company and their grantees be enjoined from using the property for any purpose at variance with the stipulations set forth in the deed to that company, and ask a judgment for the expenses of the litigation. In addition to the general demurrers, there were certain special demurrers, the character of which has been sufficiently indicated in the fourth division of the syllabus, dealing with such special demurrers. The court held that the Southern Railway Company was not precluded from filing written demurrers after an oral motion to dismiss, because a material amendment to the petition had been filed, thus reopening the case for demurrer; held the restriction not to be a covenant running with the land; and sustained the general demurrers of all the defendants, to which ruling the petitioners excepted.
Only the second division of the syllabus seems to require any further elaboration. Where the owner of realty sells a portion thereof, imposing on his vendee restrictions relating to the use of the estate conveyed, thus creating a covenant running with the land, there is a presumption, in the absence of any facts and circumstances showing a contrary intent, that the restriction is imposed for the benefit of the land retained, with the result that an implied inhibition is created as to the use of the portion of the land conveyed, for the benefit of the unsold portion. Godfrey v.Huson, 180 Ga. 483 (2) (179 S.E. 114). In Gulf OilCorporation v. Suburban Realty Co., 183 Ga. 847
(190 S.E. 179), there was a conveyance of lots, subject to a restriction that they were to be used for residence purposes only, by a grantor owning other contiguous and nearby properties, the deed containing no provision that the restriction was for the benefit of any person or property, and there being no uniform scheme of restrictions relating to use for residence purposes only. The court said (p. 854) that the record authorizes the inference that "a violation of the covenant relating thereto would tend to reduce the value of the plaintiff's other property, both within and without *Page 102 
the subdivision;" and stated further that such restrictions may even have contemplated the purchase by the grantor in the deed containing the covenant of additional property in the same vicinity, and of having such additional property protected by such restriction.
Turning to other jurisdictions, in the leading Massachusetts case of Peck v. Conway, 119 Mass. 546, under similar facts to the case under consideration, the court said, that the "owner of the fee had the right to sell his land subject to such reservations or restrictions as to its future use and enjoyment as he saw fit to impose, provided they were not contrary to public policy." After stating that the only question in the case is whether a grantee from the former owner who imposed the restriction is entitled to the same remedy as his grantor, the court continued: "The reservation creates an easement, or servitude in the nature of an easement, upon the land conveyed. If this easement was created for the benefit of the adjoining lot, of which the grantor in the deed remained the owner, and not for the personal convenience of the grantor, and was intended to be annexed to such lot, it would be appurtenant thereto, and would pass to a grantee thereof. The question whether such an easement is a personal right, or is to be construed to be appurtenant to some other estate, must be determined by the fair interpretation of the grant or reservation creating the easement, aided, if necessary, by the situation of the property and the surrounding circumstances. . . There is no suggestion that (the creator of the reservation) had other land in the vicinity, which could be benefited by the restriction. It is difficult to see how he would have any interest in restricting the use of the land sold, except as owner of the house lot which he retained. The nature of the restriction also implies that it was intended for the benefit of this lot. A prohibition against building on the land sold would be obviously useful and beneficial to this lot, giving it the benefit of better light and air and prospect; this is its apparent purpose, while it would be of no appreciable advantage for any other purpose. The fair inference is that the parties intended to create this easement or servitude for the benefit of the adjoining estate." In Clark v. Martin, 49 Pa. St. 289, the court held that, where the owner of two adjoining lots sold one which was on a corner, subject to a restriction that no building would be *Page 103 
erected on the back part of such lot over a prescribed height, and subsequently the remaining lot was sold without mention of the restriction imposed on the corner lot, the deed containing the restriction not reciting that the reservation was for the benefit of the grantor or his remaining property, such a reservation was for the benefit of the adjoining property of the common grantor, and created an obligation to the owner of that property, whoever he might be. In Watrous v. Allen, 57 Mich. 362
(24 N.W. 104, 58 Am. R. 363), the owner of a large amount of land in a village conveyed a lot subject to a restriction as to its use, but without any recital that the benefit was intended for any person or property. The Petition alleged that the restriction was for the benefit of the grantor as owner of the lots and land in the vicinity and contiguous thereto, and that his rights were held by the plaintiff, who was a subsequent grantee of the original owner. In a suit by a grantee of the adjoining property, the court, upon the pleadings and proof, enjoined a violation of the restriction by a grantee of the restricted lot. In Coughlin v. Barker, 46 Mo. App. 54, while, under the special and peculiar facts and circumstances of the case, the restrictions were not upheld, the court said: "In every case there is a very strong argument in favor of the view that, such restrictions ought to be construed as imposing what is termed a negative easement upon the land conveyed, for the benefit of the land retained, or what is sometimes termed an equity in the land retained as against the land conveyed. To the argument that the grantor intended the restriction for his own personal benefit, and that it was a mere personal covenant, and not a covenant running with the land, it may generally be answered that the grantor could not intend it for his own personal benefit, except for his benefit as owner of the land retained, and that he should be benefited by it from no other circumstance than from the circumstance that it benefited the land which he retained."
The editor of the note, embodied in 21 A.L.R. 1292, makes this observation: "The rule adopted in this class of cases has been well stated to be that, where the common grantor of two adjoining lots sells one and retains the other, and puts in the deed of the one which he sells a covenant against building in a certain way, which covenant is manifestly intended for the benefit of the lot which is retained, and he afterward sells this lot to another, the *Page 104 
covenant passes to the assign of such lot as an appurtenance to it, or as an easement for the benefit of it, and such assign may enforce it against the owner of the other lot, whether he acquired the other lot immediately from the original vendor, or through mesne conveyances, or by devise, descent, or otherwise, from him, provided he took with notice of it, actual or constructive." In order to carry out such manifest intention of the parties, it is not necessary that such purpose should be expressly stipulated by the terms of the deed. Coughlin v.
Barker, supra.
In quoting from these above-mentioned outside authorities, we do not mean to say that we adopt all the language employed in the course of the reasoning, but we regard the conclusions arrived at as sound. Any such restrictive clause shall be "construed in the light of the other facts in the record and the intention of the parties to the deed." Smith v. Gulf Refining Co., 162 Ga. 191
(134 S.E. 446, 51 A.L.R. 1323); Meaney v. Stork, 80 N.J. Eq. 60,65 (83 A. 492); Meigs v. Lewis, 164 Pa. St. 597 (30 A. 505); Electric City Land  Improvement Co. v. West Ridge Coal Co., 187 Pa. St. 500 (41 A. 458); Deeves v.
Constable, 87 App. Div. 352 (84 N.Y. Supp. 592); Godfrey v.
Hampton, 148 Mo. App. 157 (2) (127 S.W. 626).
(a) The rule would be somewhat different where there was a general building scheme in a subdivision for the purpose of selling lots under restrictive covenants. In such a case, the general scheme binds all the purchasers inter sese, not only as to the restrictions embodied in their respective deeds, but also as to such inhibitions as were embraced within the general scheme of the subdivision, of which they had, or were chargeable with, notice. Atkinson v. England, 194 Ga. 854, 857
(22 S.E.2d 798).
Judgment reversed in part, and affirmed in part. All theJustices concur, except Wyatt, J., absent because of illness.