On Plaintiff's Motion for New Trial July 15, 1954.
On Reargument Sept. 23, 1954.
Action by purchaser for judgment declaring that certain land in tract which was being developed for housing purposes was not subject to restrictions contained in certain deeds issued by seller to lot owners. The Court of Chancery, New Castle County, Seitz, Chancellor, held that construed from their four corners, deeds, some of which contained reference to unrecorded plan showing part of real estate development project in which they were located and all of which contained restriction limiting use of ‘ land in above described tract’ to single family dwellings and conferred upon the owner of any other lot in said ‘ tract’ the right to enforce the restriction, evidenced an intention that restriction apply to all lots on unrecorded plan of project and not to just the ‘ tract’ conveyed by each particular deed.
[34 Del.Ch. 571] John VanBrunt, Jr., and Charles F. Daley of Killoran & VanBrunt, Wilmington, for plaintiff.
Robert C. Barab, Wilmington, for defendants, Joseph J. Heintz, Jr., Pauline Heintz and Charles G. May.
By this declaratory judgment action and the counterclaims of certain individual defendants the court is required to [34 Del.Ch. 572] determine whether certain land is subject to restrictions of a type which would prevent plaintiff from using the land for the erection of so-called garden type apartments.
On September 4, 1953, plaintiff Hyman Cashvan entered into a contract with one of the defendants J. Frank Darling whereby plaintiff agreed to purchase from Darling all of the issued and outstanding capital stock of defendant Castle Construction Co. (called ‘ Castle’ ), of Glen Homes Co. (called ‘ Glen’ ), as well as certain land held by Darling. The agreement also provided that ‘ The seller shall also at said time [settlement] cause to be extinguished of record any restrictive covenants binding any of the real property of said two corporations and the Seller.’
Darling owned all of the stock of Castle and Glen. The assets of the two companies consisted solely of the ownership of certain land which, together with that held by Darling directly, constituted the tract which plaintiff agreed to purchase. Plaintiff intends to use the tract to erect garden type apartments, financed with F.H.A. insured mortgage loans.
Plaintiff expended a substantial amount of money in preliminary work before being formally advised of the possibility that some or all of the land which he was to obtain by virtue of the contract was subject to a possible claim that it was restricted to single family dwelling use-a restriction which admittedly would prevent the erection of garden type apartments. Plaintiff claims all the substantial expenditures were made before such advice was received. It appears that plaintiff expended this money without getting any opinion as to possible restrictions from any Delaware counsel then employed by him and despite the quoted provision as to removal of restrictions.
A default judgment has been entered against all the defendants who have standing to object except those now represented. There can be no doubt that a controversy exists within the meaning of the Declaratory Judgment Act, 10 Del.C. § 6501 et seq.
The land sought to be acquired directly and by the purchase of stock was part of a much larger tract which the defendant Darling commenced to develop as far back as 1936. On December 10, 1940, [34 Del.Ch. 573] Castle caused a plot covering a small portion of the larger tract to be recorded. It recites that it is a ‘ Plan showing part of a real estate development known a Swanwyck, formerly known as Castle Heights. It shows a road running roughly east and west known as Landers Lane. It also shows certain lots south of Landers Lane, some of which abut thereon, as well as a row of some 19 lots abutting Landers Lane on the north side, being, inter alia, lots Nos. 1-19 in Block 1 on the Plan. These lots were subject to the so-called Rodgers or Landers Lane restrictions which admittedly do not cover the land in dispute. These restrictions were recorded in December 1937 and applied specifically to lots 1 to 19 in Block 1 on the then recorded plan of Swanwyck.
After World War II, Castle caused plans to be drawn but not recorded which completed the outline of Block 1 by creating lots 20 to 38 in Block 1. These lots were made to face on Ridge Avenue which was the next street north of Landers Lane and roughly parallel thereto. The rears of lots
1 to 19 abut the rears of lots 20 to 38 in Block 1.
Castle then undertook to sell all the remaining unsold lots in block 1, including those which fronted on the south side of Ridge Ave. (later renamed Linstone Road). The land owned by Castle, and which is part of the tract in suit, commences on the north side of Ridge Ave., and runs both north and west for a substantial distance.
At this stage we are basically concerned with the effect of restrictions contained in deeds given by Castle to the purchasers of certain of the lots in Block 1 facing on Ridge Ave.
On August 23, 1945, Castle conveyed lot 34 in Block 1 to Peter Loch and wife. The restrictions limited its use to single family dwellings but specifically provided that the restrictions did not bind any lands of Castle not recorded. Thus these restrictions did not apply to any of the land in dispute.
Defendants rely on some five deeds from Castle to various individuals concerning nine lots in Block 1 facing on Ridge Ave. They are:
| Date || Grantee || Lots of Block 1 |
| September 6, 1946 || Wells || 35, 36, 37, 38 |
| November 13, 1946 || Simmons || 33 |
| May 23, 1947 || Grow (now owned || 32 |
| September 18, 1947 || Heintz || 25, 26 |
[34 Del.Ch. 574] The deeds to all of these lots contain the so-called Wells restrictions. The specific restrictions in these deeds, insofar as they relate to residential use and single family dwellings, are as follows:
‘ 1. The land included in the above described tract shall be used for private residential purposes only except as otherwise provided, and no dwellings shall be erected on any portion thereof other than detached, single family dwellings.’
‘ 11. The above covenants, conditions, restrictions, easements and reservations shall not be construed to prevent or prohibit Castle Construction Co. from designating and reserving certain lots to be shown on additional plots of Swanwyck, intended hereafter to be recorded, as and for business purposes, and the foregoing covenants, conditions, restrictions, easements and reservations shall not apply to lot no. 1, Block 1, as said lot is shown on a plat of Swanwyck now recorded in the Office for the Recording of Deeds, in and for New Castle County and State of Delaware, in Deed Record M., Volume 28, Page 601, which said lot is hereby reserved and designated for business purposes, provided, however, the designation of said lot no. 1 of Block 1 and of other lots on any additional recorded plat of Swanwyck for business purposes, shall not prevent the erection of dwelling houses on such designated lots in ...