
    Benjamin Altman, Plaintiff, v. James A. McMillin, Defendant.
    First Department,
    November 5, 1906.
    Vendor and purchaser — covenant prohibiting the building of an apartment house r when title not marketable — when cloud on title, although party to covenant had no title.
    A vendor of lands who contracts to convey an unincumbered title cannot compel the vendee to accept lands subject to a restrictive covenant prohibiting the building of apartment houses.
    Although such restrictive covenant, which provided that it shall not be' binding upon any party until all parties have executed the same, was executed fifteen - years before by one of the parties, at a time when he had conveyed to his wife, who did riot join in the covenant, the title of the other parties to the covenant is not free of incumbrance beyond a reasonable doubt so as to warrant a decree of specific performance by the vendee;
    
      Moreover, the covenant being under seál, the-parties thereto cannot question its validity in the absence of a reformation of the instrument on the ground of mistake.
    So, too, the vender having had the benefit of the observance of the covenant by the other parties for fifteen years, is estopped from denying its validity.
    Submission of a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure.
    
      William B. Coles of counsel [Choate, Hanford & Larocque, attorneys], for the plaintiff.
    
      Philip S. Dean, attorney, for the defendant.
   Clarke, J.:

The plaintiff is the owner of a piece of property at the northeast corner of West End avenue and Ninety-ninth street in the city of New York, extending 100 feet 11 inches toward the middle of the block and 102 feet deep. On July 14, 1905, he entered into a written contract with the defendant for the sale of said property, the defendant to pay $1,000 on the signing of the contract and the date for closing was therein fixed for August 1, 1905. The said contract contained the following clause : “ The deed shall be a full covenant warranty deed in proper form and shall be duly executed and acknowledged by the seller at the seller’s expense to convey to the purchaser or the purchaser’s assigns the absolute fee of the above premises free of all incumbrances.” The defendant purchaser declined to take upon the ground that the said real property was subject to. the covenants and restrictions contained in an agreement bearing date the 21st day of November, 1890, recorded in the register’s office in the county of New York on the 2d day of June, 1891; that the covenants and restrictions contained in said agreement created a cloud upon the title of said real property, preventing and prohibiting the erection thereon of flat and apartment houses, the class of improvement intended to be erected thereon by the defendant, and that plaintiff could not convey said real property free and clear of all incumbrances as provided in the contract of sale. The agreement alluded to, dated November 21, 1890, was under seal, was signed by the plaintiff by his attorney, and was recorded. The material parts thereof are as follows: “ This indenture made this twenty-first day of November, one thousand eight hundred and ninety, between‘Edward Kilpatrick, Alfred E. Beach, Eliza Jacobs, as executrix of Aaron Jacobs, deceased, Jean F. Chaveau, Charles Rauhofer, Samuel W. Bowne and Benjamin Altman, all of the City of New York, Witnesseth: Whereas,, the said parties of are the owners respectively of lands fronting on West End Avenue and running back one hundred feet therefrom between Ninety-seventh and One hundredth Streets in the City of New York and described as follows : * * *, as the said land and the ownership of the respective parties is shown upon the diagram. thereof set forth herein and forming part hereof, and whereas the said parties have agreed in order to promote and secure the better improvements.of the said lands and their permanent value to malee the restrictions upon buildings herein contained. Now .Therefore this Indenture Witnesseth : That the said parties and .each of them in consideration of the premises and of the covenants herein contained and of One Dollar to each of the said parties, duly paid by each of the said parties do hereby covenant and agree each of them for himself, his heirs, executors and assigns with each of the ' other of said parties, his .heirs, executors and assigns, severally and respectively as follows : First, that the first building erected on said land within twenty years after the date hereof shall be private' dwellings of brick or stone not less than three stories in height planned and adapted for the residence of private families or buildings for churches. Secondly, that in the meaning and for the purposes of this agreement the buildings commonly known as tenements, flat or apartment houses are not such private dwellings.” Fowthly, that this covenant shall run with the land and be binding upon the heirs, executors,, administrators' and assigns of the said ■parties and all the persons deriving title from them respectively. This contract shall not be binding upon said parties or any of them until all said parties have éxecuted the same.” Attached to the said agreement was a diagram which showed the names of each of the parties, set forth in the agreement as owners and who signed the same, attached to specific pareéis of land, Benjamin Altman’s name, the plaiuti'ff herein, being attached to the parcel on the northeast corner of Ninety-ninth street and West End avenue.

Said agreement so executed and recorded has been in existence some fifteen years, and by its terms has five years yet to run. Its-restrictive provisions have been observed. No buildings have been put upon the property included therein except private dwelling houses, and such dwelling houses have been put on-all of the property except the premises owned by the plaintiff and a portion of the premises owned by the estate of Jacobs on the west side of West End avenue between Ninety-seventh and Ninety-eighth streets, which are still vacant and unimproved. No releases have been executed of the said covenant, and said agreement appears upon the record to be a valid and binding agreement restricting said premises as therein provided.

If such be the fact, if it be a valid and binding agreement, undoubtedly it is a restrictive covenant and hence an incumbrance, and the defendant was warranted in declining to complete a contract which provided that the plaintiff should convey the land to him with fiill warranty deed free from all incumbrances. In fact, the precise structure he intended to erect when he engaged to purchase the property is specifically prohibited by the provisions of the covenant.

The plaintiff contends that said agreement is not a cloud upon his title because it is void and ineffectual, and in this proceeding he asks for a judgment that said agreement be declared null and void and of no effect.

It appears that at the time of the execution of the agreement Samuel W Bowne, one of the signers thereof, was not the owner of record of the piece of land to which his name was attached on the diagram annexed to the agreement; that although he had bought and paid for the property, he had conveyed it to his wife, who, at the time of execution of the agreement in question, was the owner of record, and that she had not signed the agreement nor authorized her husband to sign it for her and knew nothing about it. It is claimed that these facts are established by the judgment of this court in the case of Kurtz v. Potter (44 App. Div. 262 ; affd., 167 N. Y. 586). In. that case the plaintiff brought an action to enjoin the defendants from continuing the use of-the premises No. 804 West End avenue for any purposes other than those of private families or buildings for churches, according to the terms and condi-. tions of the agreement hereinbefore set forth. The property in possession of the defendants in that case was a portion of' the plot stated in the diagram to be the property. of Samuel W. Bowne, who executed the agreement sought to be enforced, and the decision of the court was that the property belonged to Nettie It. Bowne, his wife, and tliát she was not bound by the agreement. Therefore, the decision in that case only went so far as to say that the agreement not having been made by the owner of the particular piece of property there in question, the person taking title to that property was not bound to assume that the agreement was intended to or did bind the property of those who were not parties to it. Said the court: The recording of the agreement gave no notice to the purchasers of the property that the interest or title of one not a party to the agreement was bound by its provisions.”

It should be noted, perhaps, that there was another ground upon which the decision óf the court was put, and that was that there was no evidence to show that the covenants contained in the agreement had been violated; that the sole effect thereof was that the first building erected on said land within twenty years should be a private dwelling, and that that covenant had not been violated ; that the use of the building after its erection was not covered by the agreement.

The plaintiff’s contention is that inasmuch as the agreement provided that it should not be binding upon said parties or any of them' until all said parties had executed the same, and inasmuch as it has been judicially determined that Samuel W. Bowne, although mentioned as one of the parties who did execute it, was not the owner of the property, therefore, the agreement, although of record for difteen years, and observed by all the parties thereto and by himself, yet never took effect.

It may be assumed that all the parties- to the agreement supposed at the time of the execution thereof that Samuel W. Bowne was the owner of the property, and it is, of course, evident that the intention of the agreement was to secure mutual protection and the preservation of this neighborhood for twenty years for strictly residential purposes. That purpose has been accomplished up to the present time, and so far as each of the signers of the agreement is concerned, it is an executed contract.

The decision in Kurtz v. Potter (supra) was not based upon the proposition that the contract as between the parties who were owners and did sign was invalid, no such question having been raised apparently at any stage of the litigation, and I fail to see how any such decision, if made, would have been binding and conclusive upon any of the signers not made parties to the case. So it is quité clear in this case that so much of the relief asked for by the plaintiff as demands that the restrictive agreement be declared null and void and of no effect cannot be granted, as all the parties thereto are not made parties to this controversy.

This agreement, which is under seal, is made between certain enumerated parties, and in its recital states that they are the owners of certain specified property. In further sections of the agreement the parties' thereto are referred to as parties, and it concludes with the clause : This contract shall not be binding upon said parties or any of them until all said parties have executed the same.” All the said parties did execute the same and all said parties have observed the same, and I think when we come to interpret an executed contract under seal, that it is a very serious question whether any party thereto can question the recital of facts as inducement therefor. I understand the purpose of a recital is to estop the parties to a deed from questioning its truth, and that the rule of law applicable is that where the instrument under seal contains a recital of a fact upon the truth of which the validity of a contract is dependent, in the absence of the reformation of the contract on the ground of mistake, such recital is conclusive upon the parties.

Further, it seems to me that the doctrine of equitable estoppel may be invoked as between the parties to this agreement. The plaintiff who signed it lias reaped the benefit of the signatures of the other parties thereto who have kept their agreement and retained this neighborhood for residential purposes as contemplated and provided for.

, Again, the contract expressly states that each of the parties thereto covenants and agrees each for himself with each of the other of said parties, severally and respectively, and it is not at all clear that one of the parties who signed can be relieved of the obligations thereunder to others.who signed and who have performed, by reason of the fact that years afterwards it was discovered that there was a mistake as to the actual ownership of one of the parties thereto.

Whatever the decision upon the facts might' be in an .action brought upon the covenant to obtain an injunction, or in a direct proceeding, where all the signers were "parties, for a reformation, or for the purpose of setting it aside-—and to such an action the Statute pf Limitations appears to be a bar — it seems to me that under the familiar rule that where by the contract of sale the vendor has covenanted to give a full warranty deed, conveying the property free and clear from all incumbrances, the vendee will not be forced to take and may recover back the earnest money paid when it appears that the title is not reasonably free from any doubt which would interfere with its market value.

Here is a sealed instrument of record which, if valid, creates an incumbrance upon the property, which recites that • its signers are all owners of the property covered by it, which is as between the parties thereto.and each of them a several agreement respectively, which has been observed for fifteen years and which the plaintiff ■himself signed and from the restrictions- in which lie presumably has received advantages. There is nothing upon the! record which suggests the defect in the original agreement here claimed. In my opinion it cannot be said, in the absence of the other parties to.- said agreement, that this title is so free from reasonable doubt that specific performance, of this contract should be required by the court..

Under the stipulation, therefore, judgment should be rendered for the .defendant, relieving him from any obligation to complete •the purchase under the contract of sale, and that the plaintiff be directed to repay him the moneys paid on said contract, with costs.

O’Brien, P. J., Patterson, Ingraham and Laughlin, JJ., concurred.

Judgment directed for defendant relieving him from obligation to complete -purchase under contract of sale, and that plaintiff be directed to repay him the moneys paid on- said contract, with costs. 
      
      
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