Suttle v. Bailey
361 P.2d 325, 68 N.M. 283 (1961)
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Rule of Law:
When a subdivision developer reserves the absolute right to alter or annul restrictive covenants for any specific lot without the consent of other lot owners, those covenants are personal to the grantor and do not create mutually enforceable rights among the lot owners.
Facts:
- In 1937, Mr. Dickason platted and subdivided the Mesa Verde Addition in Albuquerque, placing restrictive covenants on the lots limiting their use to residential purposes.
- The deeds for these lots contained a clause allowing the covenants to be 'altered, or annulled at any time' through a written agreement between the grantor (Dickason) and the current owner of a specific lot.
- This clause explicitly stated that such a change did not require the consent of any adjacent property owners.
- The plaintiffs own two lots in the Mesa Verde Addition.
- The defendants are purchasing two adjoining lots under a contract that acknowledges the property is subject to the restrictions of record.
- On their lots, the defendants constructed an office building and made improvements for an insulation business, which violated the residential-use restriction.
- The defendants also placed the building closer to the property line than the restrictions allowed.
Procedural Posture:
- The plaintiffs filed a lawsuit in the district court against the defendants.
- The plaintiffs sought an injunction to restrain the defendants from using their property for business purposes in violation of restrictive covenants.
- The district court granted the injunction in favor of the plaintiffs.
- The defendants appealed the district court's judgment to the Supreme Court of New Mexico.
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Issue:
Does a restrictive covenant in a subdivision plan create mutually enforceable rights among lot owners when the original grantor reserves the absolute power to alter or annul the restrictions on any specific lot without the consent of other property owners?
Opinions:
Majority - Carmody, Justice
No. A restrictive covenant does not create mutually enforceable rights among lot owners when the grantor reserves the power to annul or alter it for individual lots. Such a reservation destroys the mutuality and uniformity of the plan, which is necessary for covenants to 'run with the land' and be enforceable between grantees. The court reasoned that the essence of a mutually enforceable covenant is the guarantee of a uniform development plan that benefits all lot owners. When a grantor retains the power to change the restrictions for any lot at any time, no grantee has any assurance that the restrictions on neighboring lots will remain in effect. This lack of reciprocity and assurance means the covenant is personal to the grantor, existing for their benefit alone, and does not create a right for one lot owner to sue another for a violation.
Analysis:
This decision solidifies a key principle in New Mexico property law: for restrictive covenants to be enforceable neighbor-to-neighbor, they must be part of a uniform, stable plan that applies to everyone. A developer's reservation of a unilateral right to waive restrictions for individual lots defeats the 'general scheme' and renders the covenants personal to the developer. This holding serves as a crucial guide for developers in drafting covenants and for buyers in understanding the enforceability of neighborhood restrictions. It emphasizes that the mere existence of such a reservation clause, regardless of whether it is ever used, is sufficient to destroy the mutuality required for inter-grantee enforcement.
