Appeals, Nos. 202, 203, 234 and 235, Jan. T., 1962, from decrees of Court of Common Pleas of Wayne County, Jan. T., 1960, No. 1, in cases of Mildred B. Lauderbaugh v. Mervyn M. Williams, Ethel P. Williams, his wife, Rufus P. Duckworth, Tillie Duckworth, his wife, et al., and Mervyn M. Williams et al. v. Mildred B. Lauderbaugh. Decrees reversed.
Joseph P. Flanagan, Jr., with him Lewis R. Crisman, and Ballard, Spahr, Andrews & Ingersoll, for Mildred B. Lauderbaugh.
H. R. Van Deusen, Jr., with him Clement J. Reap, for Mervyn M. Williams.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen and O'brien, JJ.
OPINION BY MR. JUSTICE O'BRIEN
These appeals are from decrees entered in an action to quiet title and an equity action to set aside a deed of conveyance of land. The cases involve the same questions and were tried together. In 1940, Mildred B. Lauderbaugh and her husband, Dayton S. Lauderbaugh, became the owners by purchase of land in Wayne and Monroe Counties which included a lake known as Watawga. The Lauderbaughs laid out some lots in a plan on the westerly shore and began the sale of lots in 1949. In June, 1951 the purchasers of the lots and the Lauderbaughs entered into an agreement whereby, as a condition precedent, future purchasers of land along the shore of the lake were required to be members of the Lake Watawga Association. The Association
was formed to control the development along the shore of the lake. Many attractive homes representing a substantial investment had been erected. After the formation of the Association and agreement other lots were sold to those who became members of the Association and homes were built. Mrs. Lauderbaugh instituted an action to quiet title in March, 1958, her husband being deceased, to remove a cloud on her title by seeking to have the agreement restricting the sale of property to members of the Association declared void. In February, 1960, Mrs. Lauderbaugh, together with Asher Seip, Jr., and Jacob Seip were named defendants in a complaint in equity to set aside a deed of December 3, 1959, for land along the lake shore from Mrs. Lauderbaugh to Asher Seip, Jr., - Jacob Seip being the partner of Asher Seip, Jr., grantee in the deed - as a violation of the agreement of June 1951, and to enjoin Mrs. Lauderbaugh from conveying land along the lake shore except to persons approved for membership in the Lake Watawga Association. The plaintiffs in the equity case were mostly the persons named as defendants in action to quiet title. The trial court entered a decree upholding the validity of the agreement but restricted its application to the westerly shore of the lake and entered a decree setting aside the deed from Mrs. Lauderbaugh to Asher Seip, Jr., and enjoining her from conveying land on the western shore of the lake except in accordance with the agreement of June, 1951, and in accordance with the rules, regulations and by-laws of the Lake Watawga Association. Both sides filed exceptions, which exceptions were dismissed, thereby giving rise to the instant appeals.
The agreement of June, 1951 provides that: "The First Parties [the Lauderbaughs], for themselves, their heirs and assigns, agree that membership in the Lake Watawga Association shall be a condition precedent for future purchasers of land along the shore of Lake
Watawga; that in the event such prospective purchasers qualify as members as aforesaid, the First Parties will, upon payment of purchase price, execute and deliver to them deeds. ..."
The pertinent portions of the by-laws of the Lake Watawga Association provide as follows: "Article V. Membership. Section 1. No person shall be eligible to membership in the Association who does not meet the requirements hereinafter specified. Such person shall be either the owner or a prospective owner of property along the shore of Lake Watawga, but such ownership or prospective ownership shall not in itself entitle such person or persons to become a member of this ...