Lets simplify the facts a little to isolate the doctrinal issues:
Assume Grutz owns lots 1-100 in Grutz Acres, a subdivision.
Dates 1-99 Grutz conveys lots 1-99 to Pls . Most of these lots --say, 80 out of 99--- are sold with Grantee covenants pursuant to which the Grantee agrees to restrict use to single family residential only.
Date 100 Grutz conveys lot 100 to Lenich without covenants
Lenich subsequently conveys to X who subsequently conveys to Poor Duncan
Is Poor Duncan subject to the burden of any covenant running with Lot 100?
Notice there are 3 problems here:
1. There is no covenant restricting lot 100.
2. Even if a court infers an implied restriction, based upon a "common scheme" of development, it is not in writing as required by the Statute of Frauds.
3. In any event, Poor Duncan appears to be a BFP without actual or record notice of the mystical implied reciprocal servitude.
Which covenant?
Was it in writing under the Statute of Frauds?
How is Poor Duncan charged with notice of a covenant that was never expressly created in writing or even orally?
Take a look at p. 643:
"Is defendants’ lot subject to a reciprocal negative easement? If the owner of two or more lots, so situated as to bear the relation, sells one with restrictions of benefit to the land retained, the servitude becomes mutual, and, during the period of restraint, the owner of the lot or lots retained can do nothing forbidden to the owner of the lot sold. For want of a better descriptive term this is styled a reciprocal negative easement [let's call it an implied reciprocal servitude]. It runs with the land sold by virtue of express fastening and abides with the land retained until loosened by expiration of its period of service or by events working its destruction. It is not personal to owners, but operative upon use of the land by any owner having actual or constructive notice thereof. It is an easement passing its benefits and carrying its obligations to all purchasers of land, subject to its affirmative or negative mandates. It originates for mutual benefit and exists with vigor sufficient to work its ends. It must start with a common owner. Reciprocal negative easements are never retroactive; the very nature of their origin forbids. They arise, if at all, out of a benefit accorded land retained, by restrictions upon neighboring land sold by a common owner. Such a scheme of restriction must start with a common owner; it cannot arise and fasten upon one lot by reason of other lot owners conforming to a general plan. If a reciprocal negative easement attached to defendants’ lot, it was fastened thereto while in the hands of the common owner of it and neighboring lots by way of sale of other lots with restrictions beneficial at that time to it."
What does that mean? I think the case suggests that if the developer [Grutz] begins to sell lots pursuant to a common plan of Grantee covenants--often making oral representations about the singe-family development grantees are buying into--at some point the covenants become mutual and the grantor is presumed to have restricted the lots he still owns in accordance with the plan. It is not an express mutual covenant; it is implied by the court based upon the Grantor's oral promises and representations.
But did I take with notice of this "implied" servitude when I purchased lot 100 from Lenich? Is it in my chain of title? Is it recorded anywhere? What does the court say? See page 644 (some kind of magical inquiry notice--I should have sensed the existence of the IRS)! Prof. Larry Berger: "What the Sanborn doctrine does is to impose a burden of search beyond the grantee's own back title and even beyond a search of other deeds not in the chain of title purporting to bind his property. It requires him to search the record for covenants which apparently have no connection with the very land with which he is involved or to sense the existence of the covenants by noting the uniform appearance of the area,"
Now suppose that Grutz inserts a clause in the deeds to lots 1-100 providing:
"Nothing contained herein shall be construed as imposing any restrictions, express or implied, upon any land of the Grantor not hereby conveyed."
Now is there any justification for the courts to infer an implied reciprocal servitude running with Lot 100?
