Grange v. Korff
79 N.W.2d 743, 248 Iowa 118, 1956 Iowa Sup. LEXIS 412 (1956)
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Rule of Law:
A restrictive covenant limiting land use is enforceable by other landowners within a subdivision against a subsequent purchaser with notice if evidence demonstrates the existence of a general scheme or plan for development, even if the restriction is not present in every deed or in the subsequent purchaser's direct chain of title.
Facts:
- In 1920, Frank B. Lane and H.L. Nehls acquired a tract of land for development, later platted as Lincoln Heights.
- In September 1921, their company advertised the plat as 'suburban homesites' where 'improvements must conform to the standard of desirable, attractive homes.'
- In October 1921, Lane conveyed Lot 31 with a deed containing a covenant that the lot 'shall be used only for private residence purposes,' and that this covenant was for the benefit of all future owners.
- Over the next several years, the developers sold other lots; nineteen of the thirty-one lots were conveyed with deeds containing similar 'private residence' restrictions, while a few others were conveyed without explicit restrictions or with a general reference to 'restrictions of record.'
- The Lincoln Heights area developed into a strictly residential community.
- In July 1950, Carlton J. Korff and his wife purchased Lot 31 by a deed that did not contain the restrictive covenant.
- After their purchase, the Korffs began grading the land and building a road to operate an auto trailer court.
Procedural Posture:
- Plaintiffs, a group of lot owners, filed a suit in equity in the trial court to enjoin the defendants, Carlton J. Korff and wife, from constructing an auto trailer court.
- Other lot owners joined the suit as intervenors.
- Following a trial, the trial court entered a decree in favor of the plaintiffs and intervenors, granting the injunction.
- The defendants appealed the trial court's decree to the Supreme Court of Iowa.
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Issue:
Does a restrictive covenant limiting a lot to 'private residence purposes,' which is part of a general development scheme, prohibit the operation of an auto trailer court and is it enforceable by other lot owners against a subsequent purchaser who has notice of the restriction, even if it is not in their specific deed?
Opinions:
Majority - Garfield, J.
Yes. The restrictive covenant prohibits the operation of an auto trailer court and is enforceable by the other lot owners. The proposed trailer court is a commercial use that violates the 'private residence purposes' restriction found in the chain of title for Lot 31. The other lot owners can enforce this restriction because the evidence establishes a general scheme of development intended to create a residential community. This intent is demonstrated by the original advertisements, oral representations made to early buyers, and the inclusion of similar restrictions in the majority of deeds. The absence of restrictions in a few deeds does not defeat a general plan that has been understood and acted upon. The Korffs had constructive notice of the covenant because it was in their chain of title, their purchase contract mentioned restrictions of record, and the residential character of the neighborhood provided inquiry notice. However, while the commercial use is enjoined, a court of equity may exercise discretion and decline to enforce the implied 'one dwelling per lot' restriction on the large 8.2-acre Lot 31 to avoid undue hardship.
Analysis:
This case solidifies the 'general scheme' doctrine, allowing for the enforcement of restrictive covenants even when they are not uniformly applied across every deed in a subdivision. It establishes that courts will consider extrinsic evidence, such as advertisements and oral representations, to determine the developer's original intent. The decision reinforces the principle that a purchaser is bound by restrictions in their chain of title (constructive notice) and by the observable character of a neighborhood (inquiry notice). Furthermore, it highlights the discretionary power of equity courts to tailor remedies, enforcing the main purpose of a restriction while modifying its application to prevent inequitable hardship on the burdened landowner.
