[81 NJSuper Page 567] Plaintiff Mountain Springs Association of New Jersey, Inc., a nonprofit corporation of this State, brings this action for a construction and determination of the rights and liabilities of the parties under certain convenants
and restrictions contained in deeds of property in a 53-acre area known as "Mountain Springs," located in West Milford Township.
The area was acquired by Mountain Springs, Inc., a New Jersey corporation, in July 1924 for the purpose of developing a summer residential lake community. A two-acre lake was located in the tract, and Mountain Springs, Inc. laid out on maps, approved by the township and filed with the Register of Deeds for Passaic County, building lots, private roads and areas around the lake for use by property owners.
In order to assure the proper development of the area as a residential community and to provide utilities, including the development and maintenance of roads, of water supply, the upkeep and maintenance of the lake and other facilities for property owners, Mountain Springs, Inc. did two things. It caused to be formed an unincorporated association of property owners, known as Mountain Springs Association, which was to maintain such facilities and, secondly, all deeds to purchasers of lots in the area contained certain covenants, restrictions and reservations.
The granting clause in each deed to a purchaser recited that the grantor sold and conveyed the property "upon the covenants and with the restrictions and reservations hereinafter set forth." Following a recital of the description of the property conveyed by the deed were these pertinent provisions:
"1. Except the following covenants and restrictions, all of which shall run with the land, namely:
a. Neither said premises nor any building now or hereafter placed upon said premises shall be used for any manufacturing or mercantile purpose, or for any business or trade whatsoever, or for stabling of cows or other cattle, or for the housing of fowl.
b. No building shall be erected on the said premises, except one-family private dwellings, and a suitable stable or garage for private use only for each family.
c. No building of any kind shall be erected on the said premises nearer than 10 feet from any boundary line of the premises, except the rear line, nor nearer than 10 feet from any trail, road or pathway. This restriction, however, shall not cover verandas, porches or steps at either front or rear line.
d. No excavation shall be made on the premises except for the purpose of building thereon, and at the time when building operations are commenced, and no earth or sand shall be removed from the said premises except as part of such excavation.
e. No dwelling or other building shall be erected or occupied on the premises without a cesspool, septic tank and an improved type of chemical toilet, which will meet the requirements of the State Department of Health for the disposal of sewerage from such dwelling. No out-house, toilet or privy shall be erected on the said land, except attached to or as part of the dwelling.
f. The right to run telephone and telegraph lines and poles over, on or under the land hereinbefore described, for the benefit of owners of land at Mountain Springs is reserved by the grantor for itself, its successors and assigns.
g. The right to run water lines or pipes, gas lines or pipes, sewer lines or pipes, in, or under the land hereinbefore described, for the benefit of owners of land at Mountain Springs is reserved by the grantor for itself, its successors and assigns.
h. It is the intent and purpose of this instrument to convey to the grantee, in common with all other purchasers or owners of land at Mountain Springs the use of the lake and stream for boating, bathing, fishing, etc.
i. Whereas, the party of the second part has induced the party of the first part to sell and convey the aforesaid premises, with the promise on the part of the party of the second part to the party of the first part, that the party of the second part will not sell, rent or lease the aforesaid premises or any building thereon, except to a member of the Mountain Springs Association or build or construct or cause to be built or constructed, any building or buildings on the aforesaid premises within a period of three (3) years, without the consent in writing of the party of the first part or its successors and assigns, and the party of the second part has agreed to waive any right or rights which he has or ought to have (a) to sell, rent or lease the said land except as aforesaid, or (b) to build or cause to be constructed thereon any building or buildings, without the consent in writing of the party of the first part or its successors and assigns.
These covenants and restrictions and reservations shall run with the land, but in the event of the Mountain Springs Association disbanding or dissolving or ceasing to be in existence after a period of three (3) years, the party of the second part shall come into his full right or rights without restrictions as to selling, renting or leasing said lands or buildings thereon. Said three-year period to date from July 2nd 1924."
The habendum clause of each deed contained a provision that it was "subject to the covenants, restrictions and reservations hereinbefore set forth."
The Mountain Springs Association assessed dues against each member which were used to repair roads, provide a central well water system, supervision of the lake, to provide recreation facilities and the like. Dues varied from $10 to $30 per year.
On November 15, 1934 the unincorporated association became incorporated as a corporation not for pecuniary profit under the name of Mountain Springs Association of New Jersey, Inc. (the plaintiff in this action, hereinafter referred to as the Association). On January 15, 1937 Mountain ...