Plaintiff herein filed a complaint seeking the construction of a restrictive covenant contained in a conveyance in his chain of title, by way of a declaratory judgment under N.J.S. 2 A:16-50 et seq.
The matter was submitted to the Court upon a stipulated statement of facts. The pertinent facts in connection herewith are as follows:
Plaintiff is the owner of a vacant tract of land situate on the northeast corner of Raleigh and Atlantic Avenues, in the City of Atlantic City. He obtained title by deed dated July 10, 1951. In his chain of title there appears a restrictive
covenant imposed by a predecessor in title, Samuel Bell, Jr., et ux., et als. , in a deed to one William McLaughlin, dated July 19, 1899 and recorded in Book 234, page 11 in the Atlantic County Clerk's office. Inter alia , this restrictive covenant provides as follows:
"That no building, except for cottage resident purposes, or hotels and drugstores, shall be erected on any part of said land."
It is admitted that the restrictive covenant was a part of a neighborhood scheme. There are included in the area encompassed within this neighborhood scheme at least 80 other owners of parcels of land, hereafter referred to as covenantees.
On September 10, 1952 plaintiff obtained a building permit from the Superintendent of Buildings of the City of Atlantic City to erect two two-family apartment buildings on the premises here involved, and actually undertook the construction of said buildings. Being then met by an objection from defendant Sara Newhoff that the construction as so undertaken violated the terms of the restrictive covenant, he discontinued said construction.
Some time during the year 1955 plaintiff, through his attorney, mailed registered letters to be delivered to addressees only, return receipt requested, to those persons named as owners of property in the Atlantic City Tax Office in the area encompassed within the neighborhood scheme, and advised those owners that he intended "to construct on said premises a building containing 12 efficiency apartments, together with an open area to be used by the apartment residents for parking facilities." Needless to say that the plaintiff construed the aforementioned restrictive covenant as giving him the right to build. The letter further read as follows:
"It is our view that the proposed construction will not be in violation of a restrictive covenant imposed in 1899 for the benefit of those plots in the neighborhood plan.
If you, as the owner of a plot in the neighborhood plan, take a contrary view and if you wish to object to the proposed construction and/or use, please notify us forthwith by registered mail.
Your silence will be deemed a consent to our entry into contracts to construct and our said construction at said premises and our use of same for said purposes."
Plaintiff's attorney received 73 return receipts from the addressees and seven of the letters were returned as undelivered. The present complaint was thereupon filed, joining as defendants only those persons who had expressed any objection to the plaintiff's interpretation of the restrictive covenant. The owners of 14 premises have filed answers. The owners of 17 premises who expressed a contrary view to that of the plaintiff in answer to his letter, and who were joined as defendants, filed no answers.
Although it does not appear how many of the premises are encumbered by mortgages, at least two of the premises owned by answering defendants are so encumbered. Neither these two mortgagees nor any other mortgagees (hereafter also referred to as covenantees) were joined as defendants to this action.
Some time prior to the institution of this suit plaintiff had placed upon said premises a sign of the Albert M. Greenfield Company, realtors, advertising the premises for sale, which said sign continued on said premises until several days after the pretrial conference here held. Shortly before the filing of the complaint herein, plaintiff as well had erected on the premises a sign advising of his intention to erect a building containing 12 efficiency apartments. The plans for the construction of the intended building, as introduced as an exhibit, consisted of a first floor plan of a two-story building which plaintiff allegedly intended to erect. It demonstrates that each apartment will contain a living room, dining area, a bedroom, kitchen and bath. Plaintiff states that the plan of the second floor will be the same as the plan of the first floor, as above described. Except for this floor plan, there have been no other plans or specifications prepared for the proposed construction. The absence of such further plans and specifications is explained by the plaintiff by his statement that further preparation is withheld pending the determination of the present suit. No bids have been solicited
or received for the construction of the apartments nor has any application been made for a building permit ...