No. 2061 October Term, 1979, Appeal from the Decree in the Court of Common Pleas of Potter County, Civil Division, No. 2 Equity, 1979.
Daniel F. Glassmire, Coudersport, for appellants.
Thur Young, Coudersport, for appellees.
Price, Cavanaugh and Watkins, JJ.
[ 287 Pa. Super. Page 473]
Appellants commenced this action in Equity on January 8, 1979, to enjoin appellees, Joseph and Charlotte Duca, from operating a business on a certain tract of land. Appellants contend that the operation of the business violates a restrictive covenant limiting the use of the property to residential and recreational purposes. The chancellor held that the restrictive covenant did not prohibit limited commercial usage of the property. For the following reasons we disagree and reverse the decree of the court below.
[ 287 Pa. Super. Page 474]
The pertinent facts are as follows. Appellants are the owners of residences in or near a development known as Hillcrest Acres.*fn1 The deeds to appellants' property contained, inter alia, a restrictive covenant that limited the use of the property to "residential and recreational purposes only." Record at 12a. In May of 1976, appellees purchased property in Hillcrest Acres, the deed to which includes the above restrictive covenant.
Shortly after moving to Hillcrest Acres, Mr. Duca began using his garage to conduct an automotive and tractor repair business. In addition, appellees expanded the garage and, in July of 1978, began using it as their place of business for repairing and selling snowmobiles.*fn2 Appellants sought to enjoin the operation of appellees' business, and on September 13, 1979, the trial court found that appellees' use of their property was consonant with the general use of residential properties in the area. On this basis, the court held that appellees' activity did not violate the restrictive covenant and this appeal ensued.
We first address the question whether the trial court erred by sua sponte raising the issue of deed interpretation.*fn3
[ 287 Pa. Super. Page 475]
Instantly, the court was required to construe the restrictive covenant in order to decide whether appellants were entitled to relief under the allegations raised in their complaint. Appellants' complaint averred that appellees' commercial ventures violated the covenant. Appellees' answer specifically denied that their activity transgressed the limits imposed by the covenant. Since the nature of the restriction imposed by the covenant was clearly in dispute, we concur with the chancellor's holding that this issue was a matter properly presented for his determination.
We next turn to the question whether the restrictive covenant prohibited appellees' commercial activity. The subject covenant provides that: "The within conveyed premises shall be used for residential and recreational purposes only." Record at 12a. The chancellor concluded that the term "residential" must be interpreted by reference to the use of neighboring residential properties. Although none of the residences within Hillcrest Acres are used for commercial purposes, some other residences in the immediate area are put to such use. The chancellor concluded that, in absence of an express prohibition, the covenant would not be breached so long as the property substantially retained its residential and recreational character. Since ...