Goldmann, Freund and Conford. The opinion of the court was delivered by Goldmann, S.j.a.d.
[44 NJSuper Page 383] Plaintiffs sought an injunction restraining defendants from using any part of their premises as a beauty parlor or for any other purpose than a single-family dwelling. The action was based upon a certain restrictive covenant appearing in the chains of title of the respective parties. Defendants challenged the validity and enforceability of the restriction, setting up the defenses of estoppel, laches, absence of neighborhood scheme, abandonment of restriction, immateriality of the alleged violation, and change of neighborhood. They also counterclaimed for compensatory and punitive damages for malicious prosecution. The Chancery Division determined that the single-family
dwelling restriction was in full force and effect, and binding on defendants' property. It entered judgment in favor of plaintiffs granting the restraint sought, and against defendants on the counterclaim. This appeal followed.
The parties are adjoining neighbors on Sunset Avenue, Verona, N.J., plaintiffs Potter owning the premises to the east (No. 44), defendants Jantausch those in the center (No. 48), and plaintiffs Olson the property to the west (No. 50). In 1911 these lands were part of a tract of about 10 1/2 acres owned by Slayback-Ingalls Development Company. We are here concerned only with lots Nos. 1, 2, 3 and 4 of that company's development fronting on Sunset Avenue. On October 11, 1911 the company conveyed lots Nos. 2, 3 and 4, extending 240 feet immediately west of No. 1, to one Meagher. The deed provided:
"The said party of the Second part [Meagher], for himself, his heirs and assigns covenant[s] and agree[s] to and with the party of the first part [the company], its successors and assigns, that he or they will use said premises for no other purposes than the erection of residential buildings with the necessary and appropriate out buildings in connection therewith, each such house to be built on a lot of at least Eighty feet frontage and the front line thereof to be no nearer than thirty feet to Sunset Avenue and each house with its necessary and appropriate out buildings to cost not less than Forty-five Hundred Dollars ($4,500.00), and to be used for single family purposes only."
Lots Nos. 2, 3 and 4 each had a frontage of 80 feet. Plaintiffs Olson now own Nos. 3 and 4, and the westerly 10 feet of No. 2 -- 170 feet in all; defendants own the 70 remaining feet of No. 2. Slayback-Ingalls retained lot No. 1, fronting 100 feet on Sunset Avenue, until August 10, 1916, when the company's surviving directors, as trustees in dissolution, conveyed it to a Harriet B. Soule. Her deed makes no mention of restrictions like those in the Meagher deed, nor do any of the mesne conveyances leading from her unto plaintiffs Potter, the present owners of lot No. 1.
At the beginning of 1928 lots Nos. 1 and 2, then totalling 180 feet frontage, were owned by Adele L. Van Cleve, and
lots Nos. 3 and 4, totalling 160 feet, by Ida S. Harrison. On January 18, 1928 they and the holders of mortgages on their respective properties executed an agreement reciting the restrictions in the 1911 deed to Meagher and their desire to modify the 80-foot minimum frontage requirement, and providing that
"* * * the parties hereto, each in consideration of the covenant of the other, hereby covenant and agree that the said restrictions be and the same are modified accordingly, so that a house may be built on a lot with a minimum frontage of sixty feet, it being understood and agreed that all the other restrictions set forth in the said deed from Slayback Ingalls Development Company will remain in full force and effect."
Defendants took title to 48 Sunset Avenue on May 6, 1954, their deed making no mention of restrictions. However, a title search made at the time fully revealed the restrictions, as did a policy of title insurance covering the property. Jantausch testified that his attorney did not tell him of the restrictions in the search, and that he did not examine the policy when he got it. The trial court said it did not believe him. Nor do we.
On October 11, 1954 defendants obtained a building permit to convert part of their two-car garage into a beauty parlor. Work began some time during the week of October 20. Plaintiffs first learned the purpose of the alterations on October 27. They immediately got in touch with their present counsel who phoned defendants to tell them of plaintiffs' objection to what they were doing and then, on November 3, sent them a registered letter stating that the proposed use was in violation of their property restrictions and that his clients intended to seek injunctive relief. Defendants nevertheless continued with the work. The following week plaintiffs appealed to the Verona Zoning Board from the issuance of the permit. (See ...