631 P.2d 680 (1981)

[681] Gough, Shanahan, Johnson & Waterman, Helena, Ward Shanahan, argued, Helena, for defendants and appellants.

Poore, Roth, Robischon & Robinson, Butte, James Poore, argued, and Urban Roth, argued, Butte, for plaintiffs and respondents.

SHEEHY, Justice.

Both sides appeal from a judgment entered by the Third Judicial District Court, Powell County, imposing a constructive trust for more than 40 cabin sites at Rock Creek Lake in Powell County, on real property now owned by Castle Mountain Ranch, Inc., successor to Ward Paper Box Company (Ward).

The cabin sites which surround Rock Creek Lake abut 15 or 20 miles from Deer Lodge, Montana, were owned until 1972 by Rock Creek Irrigation, Inc., a subsidiary of [682] Williams and Tavenner, Inc. (Tavenner), which operated the surrounding ranch. In 1972, Tavenner sold the ranch, including the lakeshore property, to Ward Paper Box Co. The ranch has since been transferred to Castle Mountain Ranch, Inc. Louis Ward is the principal shareholder or owner in both corporations and was the primary actor in the purchase of the ranch, including the cabin sites around Rock Creek Lake.

The respondents and cross-appellants here (plaintiffs in the District Court) are owners of summer homes and cabins around the lake. They and their predecessors, acting individually, at various times since 1922, built and improved summer homes, some quite substantial, on the Rock Creek Lake front, on real property owned by Tavenner, and with the consent and permission of Tavenner. The issue for us to decide, as in the District Court, is the nature and extent of any agreement between the cabin owners and Tavenner, individually or collectively, express or implied, for termination of the permission.

The cabins were built around the lake over a course of many years, by friends, neighbors and employees of the ranch owners, with their consent and possibly with their implied invitation. These were permanent structures, sometimes built with timber from the ranch and sometimes with the assistance of the ranch owners. The ranch owners owned one of the cabins. Reasons given for the ranch owners extending permission include the wish for companionship at the ranch, the help of the cabin owners in protecting the ranch properties, their availability for fire lookout and fire fighting, and their help in maintaining the roads, as well as their friendship and society.

For at least 50 years, relations between the cabin owners and the ranch owners were amicable. The cabins were inherited, bought and sold without interference from the ranch owners. Cabins were expanded and renovated, and the ranch owners were advised of sales or inheritance of the cabins, sometimes after the fact. Through the years, the cabins were modernized, expanded and improved. The ranch owners were aware of the continuing maintenance of the summer homes. County records, at the time of trial, indicated that the summer cabins had an assessed value of $300,000. The ranch owners did insist on permanent structures to be located on the cabin sites; no trailers or movable homes were permitted.

On some occasions, various cabin owners attempted to purchase the underlying cabin sites, but the ranch owners advised that the lake provided water for the ranch, and the ranch owners wanted to maintain control over the lake itself. The use of the lake for irrigation did not interfere with the owners' use of their cabins.

In the very earliest years, no documents were entered into between the ranch owners and cabin owners. After some period of time, some of the cabin owners entered into lease agreements with the ranch owners, but these agreements expired by their own terms. Starting in 1963, however, the cabin owners signed documents that were entitled "license agreements." These documents had been drafted by the lawyer for the ranch owners. All of the license agreements had the same general provisions, and essentially provided as follows:

1. A license from Rock Creek Irrigation, Inc. to the cabin owner for the use of the cabin site together with right of access thereto.

2. A term for the license, solely for a summer camp or cabin site, beginning January 1, 1963 and ending on termination.

3. A fee for $6.00 per year payable in advance or 50 cents per month for any part of a year on or before January 1 of each year.

4. A provision for the erection of structures on the cabin site by the licensee, to be approved in advance by the licensor, and providing that such structures should be removed by the licensee at termination, or the structures became the property of the licensor.

5. A provision making the licensee liable for damages to the crops, timber, fences and improvements of the licensor.

[683] 6. A save harmless provision for the licensor.

7. A termination provision which is the heart of this lawsuit and which provided:

"Either party may terminate this agreement at any time, without regard to payment periods, by written notice to the other specifying the date of termination, which notice shall be given not less than thirty (30) days prior to the termination date therein specified ..."

8. A provision that the relationship of landlord and tenant was not created between the parties, and that the license is personal to the licensee and not transferable to administrators, executors, successors or assigns of the licensee.

9. A provision for written notice by certified mail.

Tavenner did not ever serve a notice of termination upon any of the cabin owners. In the years from 1963 to 1972, the provisions of the license agreement were breached in many respects by various owners, without objection from Rock Creek Irrigation, Inc. Particularly, the cabins were bought and sold or transferred by inheritance without objection from the licensor.

Robert Tavenner testified, however, that the reason there were no terminations was "we had no thought of selling the ranch." He further said they had no reason to terminate the permissions, but "we wanted to be in a position to terminate if we had to."

It was probably assumed by all parties that the ownership of the ranch property would remain unchanged through the years. However, in 1969, on the death of one of the ranch owners, the position of the ranch owners changed, and the ranch property became available for sale. In 1972, Ward Paper Box Company entered the picture in the person of Louis Ward, its chief officer. He visited the ranch in the spring or early summer of 1972, and on July 21, 1972, his company (Ward) entered into a contract to purchase the ranch including the land surrounding Rock Creek Lake. The contract provided for a closing date of December 1, 1972. Attached to the contract for sale was a schedule of the license agreements which included the notation "consent of licensees to assignment not required."

Robert Tavenner, one of the ranch owners, testified that near the end of the negotiations, Louis Ward requested that Tavenner terminate the cabin owners. Tavenner refused. He testified:

"Q. Now as a matter of fact if that had been made a condition of the sale you wouldn't have gone through with the sale? A. We wouldn't have gone through, we told him that. If that had been we wouldn't have gone through.

"Q. So, basically he took the sale and lake as it was, isn't that right? A. After I told him that we had a family conference, he said let me have a little time to think about it. And a day or two went by and he said he would take the ranch as planned, the cabins and all."

On October 13, 1972, counsel for Ward mailed a letter to all cabin owners advising that the impending transfer of ranch property would be consummated on December 1, 1972, and which letter included the following paragraph:

"We are writing on behalf of Ward Paper Box Company to advise you of this impending transfer and also to advise you that the purchaser has examined your license agreement and will construe it according to its literal terms. There have been no oral representations made to anyone with respect to the purchasers' intentions as to this property. You should therefore not assume that you have any rights or privileges other than those arising from your license agreement."

The transfer of the ranch property occurred according to schedule and on July 11, 1973, the new owners sent each of the cabin owners a notice of termination of their licenses. On December 20, 1973, the cabin owners filed their action in the District Court for interlocutory and permanent injunctive relief, and to quiet the title in their cabins and establish permanent easements thereto. The litigation limped along through various motions, hearings, discovery and briefing schedules until November [684] 13, 1979, when the District Court entered its findings of fact, opinion, conclusions of law, judgment and decree. After post-trial motions by both parties, the court issued its final order of January 15, 1980. Timely notice of appeal was filed by Ward, and the cabin owners thereafter cross-appealed.

THE APPEAL

Ward raises essentially the following issues:

1. The District Court erred in specified findings of fact made, and in refusing offered findings from Ward.

2. The evidence does not support the District Court's decision.

3. The District Court decree violates the statute of frauds and the parol evidence rule, and disregards waiver by the cabin owners in signing the license agreements.

4. Ward was a bona fide purchaser without notice.

5. The court erred in imposing an equitable lien on the Ward properties.

These are proceedings of an equitable nature. Under section 3-2-204(5), MCA, our duty is to review all questions of fact arising upon the evidence presented in the record, whether presented by specifications of error or not and to determine the same as well as questions of law. Rule 52(a), M.R.Civ.P., requires findings of fact made by the District Court to be upheld unless they are clearly erroneous. Rule 52(a), does not make any distinction between causes of an equitable nature and cases at law, as far as the appellate review of the District Court findings of fact is concerned. We have stated in other cases that in appeals of equity causes, we will review both questions of law and questions of fact, but we will not reverse the trial court in an equity case on questions of fact unless there is a decided preponderance of the evidence against the findings of the trial court. Boz-Lew Builders v. Smith (1977), 174 Mont. 448, 452, 571 P.2d 389, 391; Barrett v. Zenosek (1957), 132 Mont. 229, 315 P.2d 1001. However broad those statements may appear, they should not be taken to mean that this Court will dodge the statutory duty fastened on it to make an independent review of questions of fact in equity cases. We cannot shirk the statutory duty. Rather, the statements should be taken to mean that in equity cases, where the issues are close, as they are here, a degree of deference will be accorded the findings of the trial court since it is in a better position to make decisions of fact. Such statements are merely a reflection of the long-standing reluctance of appellate tribunals merely to substitute their judgment for that of the trial court in close issues of fact.

The findings of fact of the District Court to which Ward objects are the essential findings upon which the decision of the District Court is based. In essence, those findings include: that Tavenner did not intend to cancel the cabin site arrangements while it owned the ranch; that although there were no express assurances, Robert Tavenner allowed cabin improvements, assuring the cabin owners from time to time that the license agreements were a "formality" and there was to be no change in the way the cabins were held by the cabin owners; that while the Tavenner corporation was involved in selling the ranch, it permitted Martin Olsen and James Blodgett to purchase homes from previous owners without informing the new purchasers of the impending sale, merely submitting the usual license agreement to the new owners for execution; that by allowing the cabin owners to make improvements and to assume a long-term occupancy, Tavenner misled the cabin owners into believing they did not have to fear the loss of their investment and so allowed them to act to their detriment; that Louis Ward was advised Tavenner would not sell the ranch if Ward insisted on the cancellation of the license agreements; that Ward agreed to take the property although he knew, or through the reasonable exercise of inquiry, should have known, that the cabin owners hoped for a long-term occupancy and had made substantial improvements based upon the implied [685] assurances of Tavenner; and, that such conduct amounted to constructive fraud against the cabin owners.

To be sure, there were no express assurances from Tavenner that the cabin owners had any right of possession of the real property beyond the permission stated in the license agreements. It is equally clear that Tavenner engaged in a course of conduct, as we have set forth in our statement of the facts, that gave the cabin owners an implied assurance of a somewhat permanent tenure sufficient that they made substantial investments in erecting and maintaining the cabins openly recognized by Tavenner. From our review of the record, it is abundantly clear to us that while Tavenner, through the license agreements, wanted to be in position to terminate the permission for any cabin owner it might find undesirable, it was never the intention of Tavenner, in procuring the agreements or in permitting the improvements, to use the license agreements for a wholesale termination of every cabin owner's permission in one clatter. In fact, Tavenner refused to do just that. We determine from the record that it was the intention of Tavenner to have a degree of control over who possessed the cabins, though it never exercised that control; that it wanted to be in a position, if it felt the need, to terminate any undesirable possessors of the cabins; and perhaps that the execution of the license agreements and the requirement of a nominal sum per year eliminated any potential future claim of adverse possession or prescriptive right.

We therefore conclude, though from a slightly different viewpoint, that the findings of the District Court are correct.

Ward particularly objects to the finding that it was not a bona fide purchaser. Ward contends that it relied on the language of the license agreements, that it had its counsel write the October 13, 1972 letter to the cabin owners, and that the contract for deed with Tavenner included the statement that the consent of the licensees was not necessary to the execution of the contract for deed. The cabin owners point to the fact that Ward made no inquiry of the cabin owners with respect to their rights, and that the physical examination of the premises by Ward showed possession of the lake property by persons other than the record holder in the form of substantial permanent improvements, which put Ward on notice of something more than a 30-day terminable interest in the possession of the lands.

In Yost Farm Company v. Cremer (1968), 152 Mont. 200, 209, 447 P.2d 688, 693, we held that a purchaser of lands with actual knowledge of an intervening contract for purchase from the same owner was not an innocent purchaser without notice, and was subject to the prior contract holder's rights. It is generally conceded that when someone purchases land under circumstances which suggest outstanding equities in third parties, there is imposed on the purchaser a duty to make a reasonable investigation as to the existence of outstanding claims against the property, and one who fails to use due diligence to ascertain the facts within his reach is not an innocent purchaser. Berge v. Fredericks (1979), 95 Nev. 183, 591 P.2d 246; Modrok v. Marshall (Alaska 1974), 523 P.2d 172; MacEwen v. Peterson (1967), 102 Ariz. 209, 427 P.2d 527. When there appears possession of land by persons other than the record holder, which possession is inconsistent with the record title, there is a duty of inquiry imposed upon a purchaser of that land. See, Valley National Bank of Ariz. v. Avco Develop. Co. (1971), 14 Ariz. App. 56, 480 P.2d 671.

Applying those rules here, Ward is not an innocent purchaser. The letter of October 13, 1972 did not fulfill the reasonable diligence that was imposed upon Ward to make further inquiry.

We therefore determine from a review of the evidence presented in the record, that the District Court findings are supported by the evidence and that Ward is not entitled to the status of an innocent purchaser without notice.

[686] In its conclusions of law, the District Court determined that the cabin owners had no right, title or interest in the lake property under the doctrine of adverse possession or prescriptive right, and their occupancy was based on permission from Ward's predecessors in interest. The District Court further concluded that the conduct of the predecessor landowners created a constructive trust in the improvements placed on the property by the cabin owners and that the trust was imposed upon Ward, as the landowners' successor in interest, as an equitable lien on the property in favor of the cabin owners. The court determined, as an exercise of equity, that the equitable lien could be satisfied by a continued use by the cabin owners for a reasonable period of time or by compensation and money for the value of the structures from Ward.

The evidence supports these conclusions sitting in equity, and we find the District Court properly so concluded. In its judgment and decree, the District Court provided that in lieu of cash payment from Ward, the cabin owners may continue to occupy their particular cabin sites with the right of ingress and egress until December 31, 1987, at which time the licenses to occupy should terminate and if the improvements were not removed as set forth in the license agreements, the improvements should become the property of Ward without payment. Additionally, the District Court provided that the cabin owners had the option (to be exercised by them before May 1, 1980), to receive payment from Ward for the cabin structures and fixtures. If any cabin owner and Ward could not agree on the purchase price, the court would reserve jurisdiction to hear evidence and to make a determination as to the amount Ward should pay for the improvements.

Ward contends that the judgment and decree violates the statute of frauds, the parol evidence rule, and disregards waiver by the cabin owners in signing the license agreements.

The statute of frauds, section 70-20-101, MCA, provides in essence that no estate or interest in real property can be created except by an instrument in writing.

The parol evidence rule is found in two statutes, sections 28-2-904, and 28-2-905, MCA, which provide in essence that the written agreement supersedes the oral negotiations or stipulations and that when the agreement is reduced to writing, it is to be considered as containing all the terms between the parties.

The written agreements relied upon by Ward are the purchase contract of July 21, 1972, the warranty deed from the seller to Ward, dated September 25, 1972, the further warranty deed, dated December 1, 1972, and a relevant commitment for title insurance, dated December 1, 1972. Attached to the contract for purchase was a schedule of the license agreements with the cabin owners, and, of course, the notation thereon, "consent of licensees to assignment not required."

There is an exception to the parol evidence rule when the validity of the agreement is the fact in dispute (section 28-2-905(1)(b), MCA). Here the validity of the terms of the license agreements is the fact in dispute. When the validity of the agreement is a fact in dispute, parol evidence is admissible, not to vary the terms of the instrument, but to show that what appears on its face as a valid, binding contract is in fact no such thing. Smith v. Fergus County (1934), 98 Mont. 377, 390, 39 P.2d 193.

As to the statute of frauds set forth in section 70-20-101, MCA, the next following statute, section 70-20-102, MCA, provides an exception to the statute of frauds for "any trust ... arising or being extinguished by implication or operation of law." This exception, of course, applies to a constructive trust.

Ward's contention on the waiver argument is again based on a 30-day clause in the license agreements, and the probable existence of a similar clause in the earlier lease agreements. The waiver argument is another way of saying that the provisions [687] of the license agreements control absolutely, and thus is another string to Ward's bow in contending that the court should not look outside the license agreements to determine the intention of the parties. Waiver is a voluntary relinquishment of a known right (Kelly v. Lovejoy (1977), 172 Mont. 516, 565 P.2d 321) and since the District Court concluded that the license agreements were not executed with the intention that the cabin owners abandoned their permissive rights in favor of a 30-day cancellation, a finding of waiver in the execution of the license agreements would be inconsistent with the court's conclusion that the license agreements did not reflect the true intention of the parties at the time.

The final issue raised by Ward is whether the court erred in imposing an equitable lien on the ranch owners properties. Since this involves to some extent the cross-appeal, we will discuss these matters at the same time.

Following the judgment, the cabin owners moved the District Court to amend the judgment to provide for a possession of 50 years instead of the 13 years granted in the court's decree. The 50 years is contended to be the life expectancy of the cabins built on the lake properties.

The cabin owners raise other grounds on cross-appeal, but these are not argued.

Ward's contention that the District Court went beyond its power in establishing its decree for an equitable lien for a term of years, and the cabin owners contention that the term should be for 50 years, go to the power of the District Court in an equity case to fashion an equitable result. A court sitting in equity causes is empowered to determine the questions involved in the case and to do complete justice. Hames v. City of Polson (1950), 123 Mont. 469, 477, 215 P.2d 950, 955. The court has all of the power requisite to render justice between the parties, particularly if the intent and disposition of one of the parties is not to perform his contractual obligations. Link v. State By & Through Dept. of Fish & Game (1979), Mont., 591 P.2d 214, 222, 36 St.Rep. 355, 365. The court obviously framed its judgment and decree in this case so as to give the cabin owners an option to receive, from Ward, the value of the cabin improvements, or to enjoy their lakeside cabins for a term of years considerably shorter than the useful life of the cabins. Under either option, Ward will not be unjustly enriched, and recognition is given by the District Court to the long-term intentions of Tavenner and the cabin owners. Both parties won something from the District Court: the cabin owners, a recognition of their long-term rights and the value of their cabin improvements; and Ward, a method of obtaining eventually an unimpeded title to the lakeshore property. We find the result is equitable.

The judgment of the District Court granted the cabin owners a period of six months from the date of judgment in which to notify Ward in writing that the cabin owners were exercising their option to receive payment for the cabin structures and fixtures. The prosecution of this appeal has taken the case beyond the date fixed by the District Court for the exercise of such option. We therefore modify the judgment and decree and grant the cabin owners a period of six months from and after the date remittitur is handed down from this Court to the District Court, in which the cabin owners shall have the option to be exercised by written notice to the defendant Ward, to receive payment for the cabin structures and fixtures. Except as so modified, we deny the cross-appeal, and affirm the judgment and decree of the District Court, and remand the cause to the District Court for further proceedings therein in accordance with its judgment and decree.

WEBER and MORRISON, JJ., concur.

SHEA, Justice, specially concurring:

I concur in the opinion of the Court, with the exception that I would permit the plaintiffs to use the property for a substantially longer time than until December 31, 1987.

The only evidence in the record on the length of time the plaintiffs should be permitted to stay on the premises, was presented [688] by the plaintiffs, and the evidence presented was 50 years. After the trial court made its decision, plaintiffs moved the trial court to amend its findings and conclusions to permit the 50 years, but the trial court refused to so amend the findings and conclusions.

I do not say that 50 years must be the figure, but there is no evidence in the record for the trial court's decision to permit the plaintiffs to stay on the land until only December 31, 1987. I do not, however, deem it proper for an appellate court to set the number of years; that is the function of the trial court.

I would affirm the trial court in all respects except that I would remand for a determination of the number of years the plaintiffs should be permitted to stay on the land, based on the evidence in the record. That evidence supports a decision far beyond December 31, 1987.

This case is a prime example of what Corporate America through its activities in the State of Montana is doing to the citizens. It demonstrates the difference between ownership of land owned by residents of Montana and ownership of land owned by outside corporations who use this state as an economic playground.

HARRISON, J., concurs.

SANBORN et al.
v.
McLEAN et al.

Appeal from Circuit Court, Wayne County, in Chancery; George O. Driscoll, Judge.

Suit by Jessie L. Sanborn and others against John A. McLean and others to enjoin erection of gasoline filling station. Decree for plaintiffs, and defendants appeal. Modified and affirmed.

Argued before McDONALD, C. J., and CLARK, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ. [496] Clark, Emmons, Bryant & Klein, of Detroit, for appellants.

Warren, Cady, Hill & Hamblen, of Detroit, for appellees.

WIEST, J.

Defendant Christina McLean owns the west 35 feet of lot 86 of Green Lawn subdivision, at the northeast corner of Collingwood avenue and Second boulevard, in the city of Detroit, upon which there is a dwelling house, occupied by herself and her husband, defendant John A. McLean. The house fronts Collingwood avenue. At the rear of the lot is an alley. Mrs. McLean derived title from her husband, and, in the course of the opinion, we will speak of both as defendants. Mr. and Mrs. McLean started to erect a gasoline filling station at the rear end of their lot, and they and their contractor, William S. Weir, were enjoined by decree from doing so and bring the issues before us by appeal. Mr. Weir will not be further mentioned in the opinion.

Collingwood avenue is a high grade residence street between Woodward avenue and Hamilton boulevard, with single, double, and apartment houses, and plaintiffs, who are owners of land adjoining and in the vicinity of defendants' land, and who trace title, as do defendants, to the proprietors of the subdivision, claim that the proposed gasoline station will be a nuisance per se, is in violation of the general plan fixed for use of all [497] lots on the street for residence purposes only, as evidenced by restrictions upon 53 of the 91 lots fronting on Collingwood avenue, and that defendants' lot is subject to a reciprocal negative easement barring a use so detrimental to the enjoyment and value of its neighbors. Defendants insist that no restrictions appear in their chain of title and they purchased without notice of any reciprocal negative easement, and deny that a gasoline station is a nuisance per se. We find no occasion to pass upon the question of nuisance, as the case can be decided under the rule of reciprocal negative easement.

This subdivision was planned strictly for residence purposes, except lots fronting Woodward avenue and Hamilton boulevard. The 91 lots on Collingwood avenue were platted in 1891, designed for and each one sold solely for residence purposes, and residences have been erected upon all of the lots. 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. 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. This leads to inquiry as to what lots, if any, were sold with restrictions by the common owner before the sale of defendants' lot. While the proofs cover another avenue, we need consider sales only on Collingwood.

December 28, 1892, Robert J. and Joseph R. McLaughlin, who were then evidently owners of the lots on Collingwood avenue, deeded lots 37 to 41 and 58 to 62, inclusive, with the following restrictions:

‘No residence shall be erected upon said premises which shall cost less than $2,500, and nothing but residences shall be erected upon said premises. Said residences shall front on Helene (now Collingwood) avenue and be placed no nearer than 20 feet from the front street line.’

July 24, 1893, the McLaughlins conveyed lots 17 to 21 and 78 to 82, both inclusive, and lot 98 with the same restrictions. Such restrictions were imposed for the benefit of the lands held by the grantors to carry out the scheme of a residential district, and a restrictive negative easement attached to the lots retained, and title to lot 86 was then in the McLaughlins. Defendants' title, through mesne conveyances, runs back to a deed by the McLaughlins dated September 7, 1893, without restrictions mentioned therein. Subsequent deeds to other lots were executed by the McLaughlins, some with restrictions and some without. Previous to September 7, 1893, a reciprocal negative easement had attached to lot 86 by acts of the owners, as before mentioned, and such easement is still attached and may now be enforced by plaintiffs, provided defendants, at the time of their purchase, had knowledge, actual or constructive, thereof. The plaintiffs run back with their title, as do defendants, to a common owner. This common owner, as before stated, by restrictions upon lots sold, had burdened all the lots retained with reciprocal restrictions. Defendants' lot and plaintiff Sanborn's lot, next thereto, were held by such common owner, burdened with a reciprocal negative easement, and, when later sold to separate parties, remained burdened therewith, and right to demand observance thereof passed to each purchaser with notice of the easement. The restrictions were upon defendants' lot while it was in the hands of the common owners, and abstract of title to defendants' lot showed the common owners, and the record showed deeds of lots in the plat restricted to perfect and carry out the general plan and resulting in a reciprocal negative easement upon defendants' lot and all lots within its scope, and defendants and their predecessors in title were bound by constructive notice under our recording acts. The original plan was repeatedly declared in subsequent sales of lots by restrictions in the deeds, and, while some lots sold were not so restricted, the purchasers thereof, in every instance, observed the general plan and purpose of the restrictions in building residences. For upward of 30 years the united efforts of all persons interested have carried out the common purpose of making and keeping all the lots strictly for residences, and defendants are the first to depart therefrom.

When Mr. McLean purchased on contract in 1910 or 1911, there was a partly [498] built dwelling house on lot 86, which he completed and now occupies. He had an abstract of title which he examined and claims he was told by the grantor that the lot was unrestricted. Considering the character of use made of all the lots open to a view of Mr. McLean when he purchased, we think, he was put thereby to inquiry, beyond asking his grantor, whether there were restrictions. He had an abstract showing the subdivision and that lot 86 had 97 companions. He could not avoid noticing the strictly uniform residence character given the lots by the expensive dwellings thereon, and the least inquiry would have quickly developed the fact that lot 86 was subjected to a reciprocal negative easement, and he could finish his house, and, like the others, enjoy the benefits of the easement. We do not say Mr. McLean should have asked his neighbors about restrictions, but we do say that with the notice he had from a view of the premises on the street, clearly indicating the residences were built and the lots occupied in strict accordance with a general plan, he was put to inquiry, and, had he inquired, he would have found of record the reason for such general conformation, and the benefits thereof serving the owners of lot 86 and the obligations running with such service and available to adjacent lot owners to prevent a departure from the general plan by an owner of lot 86.

While no case appears to be on all fours with the one at bar, the principles we have stated, and the conclusions announced, are supported by Allen v. City of Detroit, 167 Mich. 464, 133 N. W. 317,36 L. R. A. (N. S.) 890;McQuade v. Wilcox, 215 Mich. 302, 183 N. W. 771, 16 A. L. R. 997;French v. White Star Refining Co., 229 Mich. 474, 201 N. W. 444;Silberman v. Uhrlaub, 116 App. Div. 869, 102 N. Y. S. 299;Boyden v. Roberts, 131 Wis. 659, 111 N. W. 701;Howland v. Andrus, 80 N. J. Eq. 276, 83 A. 982.

We notice the decree in the circuit directed that the work done on the building be torn down. If the portion of the building constructed can be utilized for any purpose within the restrictions, it need not be destroyed.

With this modification, the decree in the circuit is affirmed, with costs to plaintiffs.