Mid-State Equipment Co. v. Bell
217 Va. 133, 225 S.E.2d 877, 1976 Va. LEXIS 252 (1976)
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Rule of Law:
Where a common grantor develops land for sale in lots and pursues a course of conduct indicating a general scheme for residential development, an implied reciprocal negative easement may be enforced against a lot retained by the grantor, even if not expressly restricted, provided a subsequent purchaser has actual or constructive notice of the scheme.
Facts:
- In 1945, James and Mary Eubank purchased an 85-acre tract of land.
- In 1960, the Eubanks had a surveyor, Adrian Overstreet, create a plat for a residential subdivision called Jefferson Manor, which included numbered lots and a list of restrictions limiting all lots to residential use.
- At the time the plat was created, the Eubanks' home was located on an unnumbered parcel adjacent to the numbered lots, which Mr. Eubank instructed the surveyor to 'leave out' as an area sufficient for two residential lots.
- The Eubanks began selling the numbered lots subject to the residential restrictions, and a uniform residential community was developed.
- The Eubanks later moved from their original home on the unnumbered parcel to a home on a numbered lot within the subdivision, and their original home was subsequently rented to others for residential use.
- In 1966, the Eubanks conveyed the unnumbered parcel to James R. Hicks and his wife. The deed to Hicks referenced the Overstreet plat but did not contain the explicit residential restriction.
- The Hickses used the property as their residence until 1973, when they contracted to sell it to Mid-State Equipment Company, Inc.
- After purchasing the property, Mid-State began operating its commercial equipment business on the parcel, converting the house into an office and storing heavy equipment on the lot.
Procedural Posture:
- Property owners in the Jefferson Manor subdivision filed a bill of complaint in the Circuit Court of Campbell County (trial court) to enjoin Mid-State Equipment Company, Inc. from operating a commercial business on its property.
- The cause was referred to a commissioner in chancery.
- The commissioner's report found that the property was subject to an implied restrictive covenant for residential use only.
- Mid-State filed an exception to the commissioner's report.
- The chancellor overruled the exception, confirmed the report, and entered a final decree enjoining Mid-State's commercial use of the property and ordering the removal of a structure.
- Mid-State was granted an appeal to the Supreme Court of Virginia.
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Issue:
Does an implied reciprocal negative easement restricting a parcel to residential use apply when the parcel was part of a larger tract developed under a general residential scheme but was not explicitly included in the metes and bounds description of the subdivision plat or subjected to the express restrictions?
Opinions:
Majority - Compton, J.
Yes, an implied reciprocal negative easement restricting the parcel to residential use applies. The court determines the existence of such a right by examining the intent of the common grantor, the Eubanks. The evidence establishes a clear course of conduct indicating the Eubanks intended to execute a general scheme of residential development that included the subject parcel. This intent is demonstrated by: 1) the parcel was used for residential purposes by the Eubanks when the subdivision was created; 2) the surveyor testified that Mr. Eubank directed him to leave out an area for two residential lots; and 3) the deed to the subsequent purchaser, Hicks, referenced the subdivision plat containing the restrictions. Mid-State had constructive notice of the scheme because a physical inspection of the property would have revealed a uniform residential development surrounding the parcel, which was sufficient to put a purchaser on inquiry as to whether a general plan of restriction applied.
Dissenting - Cochran, J.
No, an implied reciprocal negative easement has not been established. The subject property was deliberately not included in the legal description on the subdivision plat, which implies an intent to exclude it from the restrictions, not include it. Enforcing an unrecorded, implied easement against the property imposes an intolerable burden on title examiners, who cannot be expected to determine the existence of such rights beyond the official land records. This decision is an unjustified extension of the doctrine of implied easements.
Analysis:
This decision reinforces the power of the implied reciprocal negative easement doctrine, showing that a grantor's intent and course of conduct can override the absence of an express restriction in a deed. It establishes that courts will look beyond the four corners of the plat and deed to the surrounding circumstances, including surveyor testimony and the physical development of the land, to determine intent. The ruling places a significant burden on purchasers to investigate for unrecorded restrictions, establishing that the uniform residential character of a neighborhood can constitute constructive notice of a general restrictive scheme, triggering a duty to inquire further.
