551 P.2d 1213 (Cal. 1976)
In February 1964, Alpine Slopes Development Company conveyed Lot 101 of Alpine Meadows Estates Subdivision No. 3 in Placer County to Ernest H. and Jewel Riley by grant deed recorded on March 13, 1964.1 The deed contained no restrictions upon the use of the plaintiffs’ property nor any reference to any instrument purporting to impose restrictions upon Lot 101.2 At the time of the conveyance there was no document of record purporting to restrict the use of Lot 101.3
Nine months later, on November 25, 1964, the grantor recorded a declaration of covenants, conditions, restrictions and reservations on lots 72 through 116 of the subdivision.4 The declaration recited that the grantor had established a general plan for the improvement and development of the property and set forth 26 numbered paragraphs of restrictions, covenants and conditions, including paragraph 6, which required submission of plans and specifications to the Bear Creek Planning Committee and its approval before any dwelling, garage, building, fence, wall or other structure or excavation could be commenced or maintained.5
At a time not established by the record the Rileys constructed a snow tunnel on their lot.6 On January 12, 1972, the committee recorded a notice of violation of covenants, conditions and restrictions that referred specifically to Lot 101 and the declaration recorded November 25, 1964, and recited the probable violation of paragraph 6 in that a covered walkway had been constructed without prior compliance.7
The Rileys filed a complaint to quiet title and for damages for slander of title.8 The planning committee and some of its members cross-complained for declaratory relief.9 The trial court entered judgment quieting title in the Rileys against all claims of defendants and ruling for the Rileys on the cross-complaint.10
The Court of Appeal, Third Appellate District, affirmed the judgment.11 The California Supreme Court granted a hearing for the purpose of giving further consideration to the issues raised.12
Whether plaintiffs’ property is burdened by an equitable servitude for the benefit of other lots in the tract of which plaintiffs’ property is a part?13
When the owner of a subdivided tract conveys the parcels by deeds containing appropriate language imposing restrictions on each parcel as part of a general plan common to all and designed for their mutual benefit, mutual equitable servitudes are created.14 The mutual servitudes spring into existence as between the first parcel conveyed and the balance of the parcels at the time of the first conveyance.15 The intent of the parties must be expressed in the deeds which constitute the final and exclusive memorial of their understanding.16
No. The grant deed conveyed Lot 101 to the Rileys on February 26, 1964, and was recorded March 13, 1964, without any restrictions upon the use of the property or any reference to any instrument purporting to impose restrictions.17 Nine months later the grantor recorded the declaration containing the general plan and paragraph 6, but by then the grantor no longer held any interest in Lot 101.18 Because the deed to the Rileys contained no language referring to a common plan or expressing agreement that the lot was taken subject to restrictions, no mutual equitable servitudes were created at the time of that conveyance, and the later-recorded declaration could not burden property the grantor had already conveyed.19
Plaintiffs’ property is not burdened by an equitable servitude for the benefit of other lots in the tract.20
Related opinions on this issue
Justice Tobriner dissents on the ground that a buyer who takes a deed with actual knowledge of a general plan of mutual restrictions, and who conducts himself for many years in compliance with those restrictions, should remain bound by them. He argues that the majority’s result defeats the actual intent of the parties.21 The holding allows plaintiffs to reap the benefits of neighbors’ restrictions while enjoying complete freedom on their own lot.22
Tobriner contends that the decision rests on an antiquated view of property rights that ignores recent decisions abandoning rigid four-corners-of-the-deed analysis.23 He would hold the restrictions enforceable because plaintiffs received copies of the restrictions before purchase.2425 The title company’s mistake caused the omission.26
Plaintiffs sought committee approval for construction and tree removal, demonstrating their understanding that the restrictions applied.27
Whether extrinsic evidence is admissible to establish the mutual intention of the parties to the conveyance that the lot be subject to restrictions identical to those contained in the declaration recorded subsequently by the grantor?28
The doctrine of Werner v. Graham, though related in part to the parol evidence rule, independently derives vitality from the policies underlying the statute of frauds.29 Every material term of an agreement within the statute of frauds must be reduced to writing.30 The understanding of the parties must be definite and clear rather than left to conjecture or extrinsic proof.31 Extrinsic evidence of a collateral oral agreement is inadmissible when the deed constitutes the final and exclusive memorial of the parties’ intent.32
No. Defendants offered extrinsic evidence that the grantor intended to convey and the Rileys intended to purchase a parcel governed by building restrictions.33 Plaintiffs received copies of the restrictions before purchase. Plaintiffs initially complied with what they understood to be binding controls.34 The trial court correctly struck this evidence because the deed to the Rileys is conclusive of the parties’ intention with respect to mutually restrictive covenants.35
Allowing such evidence would make title to real estate dependent upon the uncertain recollection of interested witnesses.36 The ruling would violate the requirement that the written deed alone express the joint intent necessary to create mutual equitable servitudes.37
Extrinsic evidence is not admissible to establish the mutual intention of the parties that the lot be subject to the later-recorded restrictions.38
Related opinions on this issue
Justice Tobriner contends that the modifications of the parol evidence rule announced in Masterson v. Sine and Pacific Gas & Electric Co. v. G. W. Thomas Drayage apply to deeds and permit admission of the extrinsic evidence here.39
He notes that the deed’s silence regarding restrictions, coupled with its reference to the subdivision, raises a doubt as to whether the lot was sold pursuant to a common scheme.40 Plaintiffs’ subsequent acts of seeking committee approval constitute strong evidence of the parties’ actual understanding.41 Tobriner argues that the proffered evidence is credible because the restrictions were embodied in a writing plaintiffs received before purchase.42
This satisfies the requirement that proof not depend on uncertain recollection.43
Whether the doctrine of Werner v. Graham remains a viable rule of property after modifications of the parol evidence rule?44
Although language in Werner v. Graham was susceptible of the conclusion that the principle rested on the parol evidence rule, the decision is supported by every consideration of sound public policy that has led to the enactment of statutes of frauds.45 The rule remains a viable rule of property because it independently implements the statute-of-frauds requirement that the understanding of the parties be definite and clear and not left to mere conjecture.46 The doctrine is unaffected by later modifications of the parol evidence rule.47
Yes. The court reaffirms that Werner v. Graham is not exclusively a function of the parol evidence rule but draws independent strength from statute-of-frauds policies requiring written evidence of the extent of property affected by restrictions.48 The rule protects the expectations of grantees through the recording statutes.49 It prevents uncertainty that would frustrate orderly subdivision development.50 Therefore the doctrine continues in full force even after Masterson v. Sine relaxed the face-of-the-document test for collateral agreements.51
The doctrine of Werner v. Graham remains a viable rule of property after modifications of the parol evidence rule.52
Related opinions on this issue
Justice Tobriner maintains that Werner v. Graham is based upon the strict parol evidence rule then in effect, and must be reexamined and overruled in light of Masterson v. Sine and Pacific Gas & Electric Co. v. G. W. Thomas Drayage.
He points out that the Werner court itself treated the deeds as the final and exclusive memorials of the parties’ understandings.53 That language directly applies the parol evidence rule.54 Subsequent California decisions have recognized the exclusion of extrinsic evidence in interpretation of deeds as emanating from that rule rather than the statute of frauds.55
Tobriner concludes that the policy of the statute of frauds does not independently bar the evidence because the grantor provided plaintiffs a written document containing the restrictions.56 Plaintiffs’ part performance through compliance with the restrictions renders enforcement equitable.57