Lanski v. Montealegre

361 Mich. 44 (1960)

104 N.W.2d 772

LANSKI v. MONTEALEGRE.

Docket No. 48, Calendar No. 47,924.

Supreme Court of Michigan.

Decided September 15, 1960.

Theron D. Childs, Jr., for plaintiffs.

Small, Zick & Shaffer (Hahn & Zimmerman, of counsel), for defendants.

*46 SOURIS, J.

In 1919 William Eiler, defendants' predecessor in title, acquired title to about 20 acres of land near Lake Michigan in Berrien county. The land was unimproved except for 3 buildings and a residence located on what is now known as lot 1. Until about 1922 Mr. Eiler and another conducted a hotel and restaurant business in those buildings. In 1922 Mr. Eiler and his partner divided the land, his partner taking the business and moving it across the road, Mr. Eiler retaining part of the land, including lot 1, as well as a 30-foot access strip to Lake Michigan. He continued to maintain his residence in a stone house on lot 1. In 1923, 12-1/2 acres of the Eiler land were subdivided, but the plat thereof was not recorded. Beginning in October of 1923, lots were sold or improved and rented by Mr. Eiler, such sale and rental business being conducted from an office in his residence on lot 1. As the number of residents increased in his subdivision, Mr. Eiler sold water through a pipeline he established throughout the subdivision, and he operated a garbage disposal business. The office work and bookkeeping for these enterprises were conducted from the office in his residence on lot 1.

The plaintiffs are owners of lots in the subdivision and trace title to Mr. Eiler. All of their deeds, and almost all of the deeds executed by Mr. Eiler, contain restrictions against using the lots conveyed for commercial purposes. Although the wording varies somewhat, a typical restrictive clause reads as follows:

"Second parties and their successors and assigns shall not use said premises for any commercial enterprise or engage in any commercial undertaking thereon; it being expressly understood and agreed that renting single or duplex cottages is not considered commercializing."

*47 The Eilers retained lot 1, and it has passed by succession to the present defendants. In 1954 the defendants established a convalescent home on lot 1 in the building formerly used as the residence. That same year plaintiffs notified the defendants that such a use of lot 1 was a commercial undertaking; that the language in their deeds attached a reciprocal negative easement to lot 1; and that defendants' use of lot 1 as a convalescent home was in violation thereof. Since defendants continued to operate the home, plaintiffs instituted this action seeking an injunction in November of 1955. The lower court found that a reciprocal negative easement had been created and that the operation of a convalescent home was a violation of the restriction. A decree was entered permanently enjoining defendants' use of the land for such purpose.

Both parties agree upon the definition and effect of a reciprocal negative easement. There must have been a common owner of the related parcels of land, and in his various grants of the lots he must have included some restriction, either affirmative or negative, for the benefit of the land retained, evidencing a scheme or intent that the entire tract should be similarly treated. Once the plan is effectively put into operation, the burden he has placed upon the land conveyed is by operation of law reciprocally placed upon the land retained. In this way those who have purchased in reliance upon this particular restriction will be assured that the plan will be completely achieved. See Sanborn v. McLean, 233 Mich 227 (60 ALR 1212); Denhardt v. De Roo, 295 Mich 223; Cook v. Bandeen, 356 Mich 328.

That there was in this case a common owner of related parcels of land cannot be denied. Further, he was systematic in his inclusion of a covenant against the commercial use of the lots conveyed. The difficulty here lies in the fact that at the time of these *48 conveyances, Mr. Eiler used the office in his residence on lot 1 in connection with his various enterprises, viz., selling lots and renting cottages in the subdivision, selling water, and a garbage disposal service. The defendants assert that since lot 1 was being used for such "commercial" purposes at the time the plaintiffs purchased their lots, they could not have relied upon a future noncommercial use of the retained lot. They contend that the only plan or scheme evidenced by the restrictions is that the grantor was jealously guarding against competition by preventing any of the lots sold to be used for commercial purposes, meanwhile continuing his commercial use of the land retained. If such were true, 2 elements necessary for a reciprocal negative easement would be lacking: (1) reliance, and (2) an intent or general plan that the entire tract retained should be similarly restricted.

The question presented in the first instance, therefore, is whether or not lot 1 at the time of the conveyances was being used commercially within the scope of the deed restrictions. It should be noted that the restriction quoted above, and others used, expressly excludes renting cottages from the ban on "commercializing". This was one type of transaction Mr. Eiler conducted from his residence office on lot 1. Another was the sale of the lots within the subdivision. Such activities cannot be said to negative a reliance by plaintiffs that a general commercial activity would not be conducted on lot 1. Sale of the lots was necessary for the improvement of the subdivision, and the fact that Mr. Eiler conducted the sales from his home does not lend a commercial atmosphere to the site. Nor can his activities be said to negative an intent or general plan that the entire subdivision should be noncommercial in character. Such activities certainly do not lead us to the conclusion that the restrictions were to protect him *49 from competition in his real estate business. No one else owned the subdivision to sell.

The remaining enterprises conducted from lot 1 are 2 "land improvement" type endeavors which would tend to make the lots of his subdivision more desirable and therefore more easily sold. A water system and a pick-up service for garbage are virtual necessities now and were at the time of the conveyances. These "businesses" were no more than incidental to the sale of the subdivided lots, fringe benefits without which the area would be less desirable for a private summer resort. The fact that Mr. Eiler subsequently extended these services to areas adjacent to his subdivision does not make his use of lot 1 into a commercial activity. It only served to further the desirability of the entire area. The facts indicate an intent or general plan that the whole subdivision was to be a summer resort area. There are no elements lacking. The restriction against a commercial use was attached to lot 1 by virtue of the doctrine of reciprocal negative easements.

Even so, defendants contend, a nursing or convalescent home cannot be construed as "commercial activity." Perhaps at its inception the term commerce was particularly applicable to a mercantile activity, the buying and selling of goods. This is, of course, still its meaning in the narrow sense today. But the general plan for a private resort area found from the above facts indicates that a broader definition was intended. In its broad sense commercial activity includes any type of business or activity which is carried on for a profit. Mechanical Farm Equipment Distributors, Inc., v. Porter (CCA 9), 156 F2d 296; City of Sioux Falls v. Cleveland, 75 SD 548 (70 NW2d 62).

Defendants operate a convalescent home. A fee is charged and a profit is made. The services are open to the public if they can afford to pay. The *50 patients, the visitors, the nurses, and the over-all atmosphere detract from the general plan of the private, noncommercial resort area originally intended. Defendants' convalescent home is a commercial use of lot 1, in violation of the reciprocal negative easement imposed thereon by defendants' predecessor in title.

A further claim is made that the plaintiffs are guilty of laches. Since we find that no commercial activity in violation of the reciprocal negative easement took place until the establishment of the convalescent home in 1954, such claim is without foundation.

Decree affirmed. Costs to plaintiffs.

DETHMERS, C.J., and CARR, KELLY, SMITH, BLACK, EDWARDS, and KAVANAGH, JJ., concurred.