
    Common Pleas Court for Montgomery County.
    Francis L. Morgan v. Max Pastor.
    Decided June 17, 1930.
    
      Maurice J. Gilbert, for plaintiff.
    
      I. L. Jacobson, contra.
   Snediker, J.

This is an action for specific performance. The petition recites that the plaintiff on May 14, 1929 was the owner in fee simple of five lots at Crystal Lakes, Bethel township, Clark county, Ohio, and that on that date he entered into an agreement of purchase and sale of these lots with the defendant, Max Pastor; that by that agreement Pastor was to pay $1,000 for the lots; plaintiff claims to have performed all of the conditions of the agreement on his part to be performed; he says that he tendered to the defendant a deed in fee simple of these lots, and was and is ready, able and willing to deliver a good, marketable title thereto. He asks that the court require that the contract be specifically carried out by the defendant. By his answer the defendant claims that his negotiations with the plaintiff were as agent and not as owner; he says that he made a proposition to the plaintiff to purchase these lots through the plaintiff as such agent, and that afterwards his proposition was accepted by the plaintiff as owner; that thereupon he refused to deal further with him. He denies that the plaintiff at the time the offer and acceptance were consummated had title to the realty described in the petition, denies that the plaintiff has carried out his portion of the agreement, and claims that the plaintiff could not have done so and was never able to make a deed consistent with the contract, and he asks the return of the $50 which was his down payment at the time of the signing of the contract here sued upon.

The testimony in the case shows that the plaintiff has been in the real estate business for about eight years, that on May 14, 1929 the following offer and acceptance were signed by the respective parties, plaintiff and defendant:

“Dayton, Ohio, May 14, 1929.
“I hereby agree to purchase the following described property situated in Dayton, Clark County, Ohio, viz: known as Lots No. 1210, 1211, 1212, 1213 and 1214, on map of Crystal Lakes, Township of Bethel, County of Clark for the sum of One Thousand ($1,000) Dollars, payments to be as follows: All Cash when Deed is delivered. Said property to be transferred by Contract or Deed of General Warranty without release of dower. The Title guaranteed to be Clear, Free and Unincumbered, except tax and assessment due and payable after June 1929.
“In consideration of the purchase of same, I have deposited as first payment the sum of $50.00 with Frank L. Morgan, owner, the receipt of which is hereby acknowledged.
(Signed) Max Pastor.
Acceptance.
“I hereby accept the above proposition and will execute and deliver a Contract or Deed of General Warranty and Free of Dower or Incumbrance on or before 10 days. I also agree to pay Frank L. Morgan, Agent, ________________commission for selling property.
Dated May 14-29. (Signed) F. L. Morgan.
Witness: Anna Fay Randall.”

After the signing of this agreement, the defendant declined to go forward with the deal. Plaintiff had a conversation with him over the telephone; in that conversation he told him that he had his deed ready for delivery; the defendant responded that he wanted to go to Springfield to look up the title, that he didn’t know at that time when he would be ready to close. A few days after that, the plaintiff met him on the street here in Dayton, and inquired of him again how soon they could close the transaction. Plaintiff claims that the defendant then said to him that he had found it would cost him more to fix the property up than he had expected, that in the meantime he had another contract at Cincinnati that would take $1,600 of his money, and that he would not perform this contract. The plaintiff testifies that at the time the agreement was made, he was dealing with the defendant as owner of the property, that at the time when the defendant should have responded under his contract, he was able to and did prepare and was ready to deliver a deed for the property. The deed which was drawn and tendered by the plaintiff to the defendant, contains the following clause:

“These lots being conveyed subject to conditions and restrictions as are shown on deed from Arthur J. Wilson dated November 18th, 1927.”

A certified copy of the Wilson deed contains the restrictions referred to and made a part of the plaintiff’s deed to the defendant, which restrictions read as follows:

“Said party of the second part for himself, his heirs and assigns forever, by acceptance of this deed, hereby covenants and agrees to observe the following covenants, which shall run with and bind said premises: There shall not be erected or maintained, without the written consent of the party of the first part, on said premises any slaughter house, smith shop, forge, furnace, steam engine, brass foundry, nail, iron or other foundry, any manufactory of gunpowder, glue, varnish, vitriol or turpentine or for the tanning, dressing or preparing of skins, hides or leather, or for carrying on. any noxious, dangerous or offensive trade; all toilet outhouses shall be suitably screened; and equipped with septic or chemical tanks, no part of said premises shall be used for any insane, inebriate or other asylum, or cemetery, or place of burial, or for any structure other than a dwelling, and suitable private garage for the owner and occupants of said dwelling; said premises shall never be leased or sold to Negroes or to any person of African descent. Plans and specifications, for all buildings shall be submitted to the Dayton Herald or the Dayton Journal, Subscription Department, for approval.”

On this state of the case, it is a principal contention of the defendant that the plaintiff was unable within the period mentioned in his acceptance to comply with that term thereof which reads as follows: “Will execute and deliver a contract or deed of general warranty and free of dower or incumbrance.” The offer is:

“Said property to be transferred by Contract or Deed -of General Warranty without release of dower. The Title guaranteed to be Clear, Free and Unincumbered, except tax & assessment due & payable after June, 1929.”

The question of whether or not such a conveyance as is required by the contract entered into between the parties, can be made of property subject to the kind of restrictions which were upon these lots, has been passed upon by a number of the courts of last resort, many of which were cited in the brief of counsel for the defendant. We will refer to a few of these. In the case of Shea et al v. Marie M. Evans, 109 Md., p. 229, a memorandum of restrictions upon the property handed by the seller to the purchaser read as follows:

“That no part of any building shall be erected nearer to the avenue or street front than fifteen (15) feet; that no barn, stable, coop, or other outbuilding shall likewise be erected nearer to the avenue or street front than fifty (50) feet.”

The restrictions in fact were:

“That the parties of the second part, the vendee, will not at any time within fifteen years from the day of the date of the deed for said premises, erect or build, or cause or permit to be erected or built, upon said premises, or any part thereof, any hotel, tavern, drinking saloon, blacksmith, carpenter or wheelwright shop, steam mill, tannery, slaughter house, skin drying establishment, livery stable, glue, soap, candy or starch manufactory, or use for any offensive purpose or occupation; that no part of any building shall be erected nearer to the avenue or street front from fifteen feet; that no barn, stable, coop or other outbuilding shall likewise be erected nearer to the avenue or street front than fifty feet; and that no dwelling house costing less than two thousand dollars shall be erected or built upon said premises within fifteen years from the date of the deed that may convey the aforesaid premises to the vendee.”

The court held:

“When a vendor of land does not inform the purchaser that there are restrictions relating to the character of buildings that may be erected upon it, and their location, which may affect its market value, and the purchaser is not aware of the existence of such restrictions, specific performance of a contract to purchase the land will be refused.”

In the opinion, Chief Justice Boyd refers to another Maryland case, in which the court said:

“It is a principle, obviously just, in the law relating to the specific performance of contracts, that the vendee is entitled to have that for which he contracts before he can be compelled to part with the consideration he agreed to pay. He is not bound to take an estate fettered with incumbrances by which he may be subjected to litigation to procure his title; and in a contract such as is sought to be enforced in this case, the vendee is not bound to accept anything short of an unincumbered legal estate in fee, the title to which is free from reasonable doubt.”

Continuing, the court says:

“Or, as said in Dobbs v. Norcross, 24 N. J. Eq. 327, and quoted with approval in Gill v. Wells: ‘He shall have a title which shall enable him not only to hold his land, but to hold it in peace; and if he wishes to sell it, to be reasonably sure that no flaw or doubt will come up to disturb its marketable value.’ ”

In the case of Goodman v. Kortsch, 219 N. W., p. 354, the court regarded restrictive covenants as equitable easements, not only in favor of the grantor, but in favor of other owners of lots in a subdivision, and said:

“Under such circumstances, how can it be said that the restrictive covenant as to dwelling houses has been abandoned, and that under the stipulation the defendants complied with their obligations under the agreement of sale; and how can the defendants execute a warranty deed of the property involved, free and clear of restrictive covenants as was required by the agreement, when many others who are owners of lots in the subdivision, or who are interested in such lots, have not been made parties so as to bar their rights with respect to these equitable easements?”

And the court concluded that a purchaser contracting to purchase a lot to be conveyed by warranty deed free and clear of restrictive covenants is entitled, not only to refuse to complete his contract, but even may recover the deposit which he made at the time he entered into such contract.

In the case of Wheeler, Appellant, v. Sullivan et al., Appellees, 90 Fla., pp. 711-716, the court uses this language:

“The principal question presented here is whether the covenants above mentioned constitute an incumbrance of such nature as to justify the vendee in declining to accept the title, there being no provision in the contract of sale whereby it was agreed that the conveyance should be made subject to such covenants.
“The agreement sued upon says nothing with reference to the character of title to be conveyed, but this court has held that in every valid contract for the sale of lands, whatever may be the language in which it is couched, there is an implied undertaking to convey a good title, unless such an obligation is expressly excluded by the terms of the agreement.
“It is well settled that, in the absence of a provision to the contrary in the contract of sale, a purchaser under an executory contract cannot be compelled to complete his purchase or accept the title, if there is an incumbrance on the property which the veridor cannot or will not remove and which the purchaser cannot himself remove by an application of the purchase money.
“When a vendor of real property expressly or by implication agrees to convey a good title or marketable title, that undertaking is discharged only by the conveyance of a title unincumbered and free from reasonable doubt as to any question of law or fact necessary to sustain its' validity.”
“The contract here sued upon is executory. That being the case, the settled rule is that, unless excepted by such contract of sale, or the restrictive covenants be properly released, or the objection duly waived by the vendee, covenants imposed by the vendor, or a predecessor in title, restricting the use which may be made of the premises, are such incumbrances as entitle the purchaser to refuse to perform, unless such covenants require no more than the law would compel the vendee to do, or refrain from doing, as the case may be, independently of contract.”

In support of the principles here enunciated, the court referred to numerous authorities, some of which were text books on Vendor and Purchaser, on Marketable Title, and others, the decisions of courts of last resort of many states.

In the 46 California Appellate Reports, at p. 593, we find the case of Bertola, Respondent, v. Allred, Appellant, in which the court held:

“Restrictions imposed upon the use of premises for other than residential purposes constitute such encumbrances upon the title to real property as will justify a purchaser in seeking a recovery of his partial payment in the event of the refusal or failure of the seller to bring about their removal.”

In Ogooshevitz v. Warizas et al., decided by the Supreme Court of Michigan, and found in 169 N. W., the holding was: “Building restrictions constitute a cloud on the title to real estate.”

In the case of Dethloff 1. Voit, 158 N. Y. Supp., p. 522, the court held:

“Specific performance of a private contract to purchase land will not be enforced unless the title is marketable. A title subject to restrictive covenants which impose greater restrictions on the use of the land than those imposed by law is unmarketable, and the court will not inquire whether the restrictions are beneficial or otherwise.”

In the Gebbie case, found in the 95th Ohio State, at p. 215, Judge Newman was considering restrictions placed upon the use of premises which had been contracted to be conveyed, and in the course of his opinion, uses this language:

“If plaintiff in error was unable, for the reasons set forth in the petition, to convey an unincumbered title to the real estate in question, she could not, as a matter of course, deposit a warranty deed, the instrument by which such a title was to be conveyed, and her inability to do this was in effect a refusal to do so. It would have been an idle ceremony on the part of the plaintiff in error to pay or offer to pay the balance of the purchase price under such circumstances. The law does not require a useless act. It appearing that plaintiff in error was unable to give to defendant in error an unincumbered title to the property embraced in the contract, defendant in error was not required to pay or tender payment of the balance of the purchase money before he could maintain an action for damages.”

The decision from which we have just quoted, indicates a point of view of the Supreme Court, which ought to be followed in this opinion. The facts in the instant case, on the application of authorities from which we have read, warrant us in saying that the plaintiff is unable to convey the title agreed to be conveyed by the contract, that it is unmarketable in the legal sense, and so incumbered that as it is the plaintiff'is unable to deliver to the defendant the title which.he guaranteed by his acceptance of defendant’s proposal. In fact, some of the authorities go so far as to hold that a restrictive clause such as we have been discussing is so much of the fee which when a conveyance is made subject thereto, remains in a grantor.

In the case of Fuller v. Arms, decided by the Supreme Court of Vermont, found in the 45th Vt., at p. 400, a warranty deed conveyed certain lands, and immediately following a description, there was this clause:

“Conditioned that no building or erection is ever to be made on said land, except a dwelling house and outbuildings for the same, or such other buildings and erections as would not affect the rights, privileges, and interests of said Arms (grantor) or his heirs or assigns to a greater degree than a dwelling house and outbuildings as aforesaid would affect his and their rights, interests and privileges; the said Arms being now the owner of a house and land westerly of, and near, said premises; and conditioned, also, that no building is to be erected on said land, which shall extend more than twenty feet southerly of the main body of the dwelling house now owned and occupied by the said John Arms.” In all other respects, said deed was in the usual form of a warranty deed without condition.

The court' held:

“That said clause did not constitute a condition precedent or subsequent; nor a covenant that the grantee would abide by the terms thereof; but was a part, of the description of the estate, or interest, which passed by the deed to the grantee, and showed, with the rest of the description, what rights in the land passed to the grantee, and what were left remaining in the grantor; and that, the land passing to the grantee with the use thereof thus restricted, those claiming under the grantee could not make erections thereon in violation of those restrictions.”

By all of the foregoing, we are constrained to deny the prayer of plaintiff’s petition, and to find that defendant is entitled to the recovery of the amount of his deposit. Let an entry be drawn accordingly.  