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Petersen v. Beekmere

Decided: November 19, 1971.

RALPH C. PETERSEN, DOROTHY C. PETERSEN, LOUISE E. GIBBONS, EDGAR H. GIBBONS, RUSSELL J. PEDERSON, BONNIE M. PEDERSON, HARRY H. CHAPMAN, JR., NANCY A. CHAPMAN, JOSEPH T. GOLDEN, DIANE B. GOLDEN, WILLIAM B. SINCLAIR, MARIE A. SINCLAIR, JOSEPH G. CHAFFEE, BARBARA H. CHAFFEE, VINCENT G. BRZEZINSKI, GEORGINE BRZEZINSKI, SILVIO GALTERIO, MARIE GALTERIO, YOLANDA GIANNELLA, J. EDWIN CAREY AND MARION G. CAREY, PLAINTIFFS,
v.
BEEKMERE, INCORPORATED, A NONPROFIT CORPORATION OF THE STATE OF NEW JERSEY, GLENDALE INVESTMENTS CORP., A CORPORATION OF THE STATE OF NEW JERSEY, CHESTER J. DECKER AND ELIZABETH J. DECKER, DEFENDANTS. BEEKMERE, INC., ETC., ET ALS., PLAINTIFFS, V. RALPH C. PETERSEN ET ALS., DEFENDANTS



Lora, J.s.c.

Lora

This is a class action to construe a covenant compelling purchasers of property in a subdivision, known as Allison Acres, to purchase a share of stock in a community association, Beekmere, Inc. Said action has been consolidated with a county district court suit instituted by Beekmere against each of the plaintiffs herein for $100 for a required stock subscription, and for $75 representing the 1969 annual assessment as against each of them.

The pertinent facts reveal that the original tract surrounding a small lake was owned by Glendale Investments Corp., which subdivided said tract into five sections, the fifth and final subdivision being filed March 18, 1968. The principal stockholders of Glendale, Charles and Elizabeth Decker, formed Beekmere, Inc., a corporation for profit under Title 14 of the Revised Statutes (now N.J.S.A. 14A), said corporation's ostensible purpose, as gleaned from its certificate of incorporation, being the development of land for recreational pursuits, the sale of merchandise incidental thereto, the operation of a private club for the limited membership of lot owners in various real estate developments, and to deal in lands generally.

On January 31, 1961 Glendale conveyed to Beekmere the lake and a certain access lot to the lake in Section Two of the subdivision. A set of covenants, one of which is at issue herein, was not annexed to the deed. On June 29, 1962 Beekmere conveyed back to Glendale; no restrictions were involved. Thereafter, on October 16, 1967 Glendale reconveyed to Beekmere the lake and access lot together with an easement retained by the grantor over two lots with access to the lake in Section Five of the subdivision; no covenants were annexed to the deed.

Individual lots were conveyed by Glendale to purchasers who were predecessors in title of the within plaintiffs, and

a copy of the covenants were annexed to all deeds in these original conveyances. In subsequent conveyances by these individual lot owners to plaintiffs, the covenants were not annexed to some of the deeds. The covenant in dispute, set forth in a document annexed to such deeds and entitled "Covenants for Insertion in Deeds 'Allison Acres,' Sections * * *," recited:

Whereas, the Purchaser (hereinafter designated as the Owner), agrees to apply for membership in Beekmere, Incorporated (hereinafter designated as Beekmere), and member to purchase one share of the common stock of said Beekmere, for a sum not in excess of $100.00 and to comply with and conform to the Constitution and By-Laws of said Beekmere * * *.

The threshold question for the court is whether this covenant, being affirmative in nature, can be enforced at law through the medium of the county district court action, or in equity, by plaintiffs' action to construe the covenant. Plaintiffs argue that under the law of this State affirmative covenants cannot be enforced, relying on Furness v. Sinquett , 60 N.J. Super. 410 (Ch. Div. 1960), which involved an action against subsequent grantees for the enforcement by mandatory injunction of a covenant to construct sidewalks in front of their homes and to remove certain obstructions in street areas.

It appears from the opinion that each original conveyance from the common developer contained the covenant. Testimony was adduced that partically all the lots upon which residences were constructed were made subject to the covenant, the respective parties involved having obtained possession by mesne conveyances, and defendants did not deny that a similar covenant was contained in their chain of title. The court noted that plaintiff had proved a "neighborhood scheme" by showing that the grantor had inserted in each deed, like restrictions concerning the use of the lands from the original owner, but stated that the fact that such a "neighborhood scheme" had been shown did not alter the

fact that the covenant sought to be enforced was affirmative rather than negative in nature.

The court in Furness stated that beginning with the English case of Spencer's Case , 1 Smith's Lead. Cas. 145, 5 Coke 16a, and followed in New Jersey by Brewer v. Marshall and Cheeseman , 19 N.J. Eq. 537, 546 (E. & A. 1868), our courts have refused enforcement of affirmative covenants, quoting dictum from De Gray v. Monmouth Beach Club House Co. , 50 N.J. Eq. 329, 332-333 (Ch. 1892), aff'd p.c., 67 N.J. Eq. 731 (E. & A. 1894):

It is settled that a court of equity will restrain the violation of a covenant, entered into by a grantee, restrictive of the use of lands conveyed, not only against the covenantor, but against all subsequent purchasers of the lands with notice of the covenant, irrespective of the questions whether the covenant is of a nature to run with the land, or whether it creates an easement; provided, however, that its enforcement is not against public policy. [Citations omitted] * * *

This rule of equity being an encroachment on the general doctrine of the common law, that the burden of a covenant does not run with the land [citations omitted], its application is not to be extended beyond the class of cases in which it has been heretofore enforced [citation omitted], and is to be confined to negative covenants.

However, whether affirmative covenants are enforceable at law or in equity does not appear to be settled in this State. The De Gray case, upon which the court relied in Furness v. Sinquett, supra , involved a negative rather than an affirmative covenant, and thus the Court of Errors and Appeals did not pass on the question. Javna v. D.J. Fredericks, Inc. , 41 N.J. Super. 353, 360 (App. Div. 1956), noted but likewise did not rule thereon. In addition to De Gray v. Monmouth Beach Club House Co., supra , the cases of Brewer v. Marshall and Cheeseman , 18 N.J. Eq. 337 (Ch. 1867), aff'd 19 N.J. Eq. 537 (E. & A. 1868), and Costigan v. Pennsylvania R.R. Co. , 54 N.J.L. 233, 242 (Sup. Ct. 1892), contained some very early statements that the burdens of covenants, affirmative or otherwise, do not run at law except as between landlord and tenant.

The court in Conover v. Smith , 17 N.J. Eq. 51, 55 (Ch. 1864), while it did not have the question of affirmative covenants directly before it, stated by way of dictum that if a lessee covenanted for himself and his assigns to make a new wall upon the demised premises, the assignee was bound; and Child v. C.H. Winans Co. , 119 N.J. Eq. 556 (E. & A. 1936), which involved a covenant by the grantee to pay taxes and assessments on land retained by the grantor, although held not to be a covenant running with the land, allowed enforcement against a subsequent purchaser under a theory of an equitable lien.

A view of other jurisdictions indicates that the weight of authority permits the enforcement of affirmative covenants, although courts have not distinguished between the rubrics under which such enforcement is effected, whether it be by covenant running with the land at law, or as an equitable servitude enforceable against a subsequent purchaser with notice. Adaman Mutual Water Co. v. United States , 278 F.2d 842 (9 Cir. 1960); Note, "Affirmative Duties Running with the Land," 35 N.Y.U.L. Rev. 1344 (1960), and appendix at 1365-1369; 7 Thompson, Real Property § 3153 at 78 (1962); 2 American Law of Property (Casner ed. 1952), § 9.36, at 438-439; 20 Am. Jur. 2d Covenants, Conditions and Restrictions , § 37 at 607, where it was stated that courts make no distinction between affirmative and negative covenants regarding their running with the land, the chief consideration in running being whether the covenant relates to the land so as to enhance its value and confer benefit, rather than whether it is affirmative or negative in nature. See also, Annotation, "Affirmative Covenants as Running with the Land," 68 A.L.R. 2d 1022, § 4 at 1026 (1959), and cases in earlier annotations at 41 A.L.R. 1363 (1926), 51 A.L.R. 1326 (1927), 102 A.L.R. 781 (1936) and 118 A.L.R. 982 (1939).

In New York the courts adhered to the old English rule that affirmative covenants did not run with the land so as to charge the burden of performance upon a subsequent

grantee. Miller v. Clary , 210 N.Y. 127, 103 N.E. 1114 (Ct. App. 1913). However, such position has been eroded in that state due to recognized exceptions, and in subsequent cases that in all but letter appear to overrule Miller v. Clary. In accord with the view that New York has thus changed its position, see 7 Thompson, Real Property , § 3153 at 78, note 7 (1962); 2 American Law of Property (Casner ed. 1952), § 9.36 at 438; 20 Am. Jur. 2d Covenants, Conditions and Restrictions , § 37, p. 607, 5 Powell, Real Property , § 677 at 195 (1970). Cf. Tarantelli v. Tripp Lake Estates, Inc. , 63 Misc. 2d 913, 314 N.Y.S. 2d 21 (Sup. Ct. 1970), for an apparent statement that an affirmative covenant will not run. In Nicholson v. 300 Broadway Realty Corp. , 7 N.Y. 2d 240, 196 N.Y.S. 2d 945, 949-950, 164 N.E. 2d 832, 835 (1959), which involved a covenant to furnish heat, the Appellate Division stated:

The burden of affirmative covenants may be enforced against subsequent holders of the originally burdened land whenever it appears that (1) the original covenantor and covenantee intended such a result; (2) there has been a continuous succession of conveyances between the original covenantor and the party now sought to be ...


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