                  IN THE COURT OF APPEALS OF TENNESSEE
                              AT NASHVILLE
                                    March 20, 2002 Session

              TENNSCO CORPORATION v. ELIAS H. ATTEA, JR.

                   Appeal from the Chancery Court for Williamson County
                            No. 27393   R. E. Lee Davies, Judge



                      No. M2001-01378-COA-R3-CV - Filed June 13, 2002


This is a complaint to remove a cloud on the title to two parcels of property. The Chancery Court
of Williamson County granted summary judgment to the plaintiff, holding that as a matter of law a
restrictive covenant in a prior deed in the plaintiff’s chain of title did not run with the land and did
not create an equitable servitude. We affirm.

          Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                                Affirmed and Remanded

BEN H. CANTRELL, P.J., M.S., delivered the opinion of the court, in which WILLIAM C. KOCH , JR.
and PATRICIA J. COTTRELL, JJ., joined.

James A. Freeman, III, Richard H. Sforzini, Jr., and Talmage M. Watts, Nashville, Tennessee, for
the appellant, Elias H. Attea, Jr.

Coburn Dewees Berry and Kim B. Watson, Nashville, Tennessee, for the appellee, Tennsco
Corporation.

                                              OPINION

       In 1988, Larry H. Daugherty and wife, Patricia R. Daugherty, owned a large tract of land in
Williamson County north of the Cool Springs Shopping Center. The Daughertys lived in an historic
home approximately in the center of the property. In February of 1988, they conveyed the property
north and south of their home to Bill Wills, effectively dividing the property into three parts. The
warranty deed to Mr. Wills contained the following restriction:

        This conveyance is made subject to the restriction that any buildings constructed on
        the land shall be single family dwellings of traditional design at least 4,000 square
        feet in size and on lots of one (1) acre or greater in size.
         In December of 1988, Mr. Wills quit-claimed the property to Mallory Park, L.P., subject “to
all restrictions, easements and encumbrances or (sic) record.” In February of 1989, Mallory Park
gave a deed of trust to Tennsco Corporation (Tennsco) to secure a loan. In 1994, Mallory Park
defaulted on the loan and conveyed the property to Tennsco by warranty deed in lieu of foreclosure.
The warranty deed did not contain any restrictions on the use of the property.

        In 1993, the Daughertys conveyed their home and the surrounding property unrestricted to
Gerald and Carolyn Butters. In 1994, the Butters conveyed the property unrestricted to the
defendant, Elias H. Attea, Jr. The complaint in this case, however, alleges that Mr. Attea insists on
enforcing the restriction contained in the Daughertys’ deed to Wills. Mr. Attea’s answer admits that
allegation. The Chancery Court of Williamson County held that the restriction did not run with the
land, and removed the restriction as a cloud on Tennsco’s title.

                                                 II.

       Private owners of property in Tennessee may restrict the use of the property, not only for the
present but also when the property passes into the hands of subsequent purchasers. The law does
not favor such restrictions because they interfere with the free and unrestricted enjoyment of the
property. Lowe v. Wilson, 250 S.W.2d 366 (Tenn. 1952). Nevertheless the courts will uphold
covenants running with the land “where the intent of the parties to bind their remote successors can
be determined by the language of the covenant and the circumstances of its making.” Hillis v.
Powers, 875 S.W.2d 273 at 275 (Tenn. Ct. App. 1993).

        Restrictions that bind remote grantees are sometimes called “real covenants” at law and
“equitable servitudes” or “reciprocal negative easements” in equity. Land Developers, Inc. v.
Maxwell, 537 S.W.2d 904 (Tenn. 1976). As students of the differences between law and equity
might expect, the requirements allowing a covenant to “run with the land” at law were more
technical and specific than the requirements imposed by courts of equity. Some of the differences
are discussed at 5 Powell & Rohan, The Law of Real Property § 673 (1991):

       Different requirements have developed for the running of real covenants and the
       running of equitable restrictions. The elements most often said to be required for
       covenants to run at law are that: (1) the covenant “touch and concern” the land; (2)
       the original covenanting parties intend the covenant to run; and (3) there be some
       form of privity of estate. A fourth requirement, that the covenant be in writing, is
       also sometimes mentioned. For covenants to run in equity, courts require that; (1)
       the covenant “touch and concern” the land; (2) the original covenanting parties intend
       the covenant to run; and (3) the successor to the burden have “notice” of the
       covenant.




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                                              A.   A REAL COVENANT

         As to what covenants “touch and concern” the land there seems to be no universal test, see
2 American Law of Property § 9.13 (A.J. Casner ed. 1952), but covenants containing building
restrictions, entered into between owners in fee, are almost universally held to satisfy the “touch and
concern” requirement – both as to the burden and the benefit. Id. Therefore, we are satisfied that
this restriction touches and concerns the land.

       As to the intent requirement, the courts in Tennessee have given conclusive effect to the
language in the deed. If the covenant does not specifically bind the heirs and assigns of the grantees,
the covenant cannot be held to run with the land. Lowe v. Wilson, 250 S.W.2d 366 (Tenn. 1952).
While this result has been criticized, see Case Comment, 22 Tenn. L. Rev. 971 (1953), this court has
consistently followed the rule, and the Supreme Court so far has refused to review it. See Essary v.
Cox, 844 S.W.2d 169 (Tenn. Ct. App. 1992). In Hillis v. Powers, 875 S.W.2d 273 (Tenn. Ct. App.
1993), we held that the covenant could be enforced against remote grantees where it purported to
bind the grantees’ “assigns” only, but we think that the rule requiring specific language in the deed
remains intact.1

         Therefore, the restriction in the deed from Daugherty to Wills did not run with the land.

                                            B.   EQUITABLE SERVITUDE

      As we have indicated, courts of equity have enforced restrictions on the use of property that
would not have been considered real covenants at law. As one leading treatise has put it:

         [w]here an owner of land enters into a contract that he will use or abstain from using
         his land in a particular way or manner, equity will enforce the agreement against any
         purchaser or possessor with notice who attempts to use the land in violation of its
         terms, irrespective of whether the agreement creates a valid covenant running with
         the land at law or not.

2 American Law of Property § 9.24 (A.J. Casner ed. 1952). See Tulk v. Moxhay, 2 Phillips 774, 41
Eng. Rep. 1143 (ch. 1848).

        It results that grantees seeking to enforce reciprocal negative easements are not necessarily
limited to the recitals in their deeds. They may, of course, rely on their deeds and other deeds from
a common grantee, Land Developers, Inc. v. Maxwell, 537 S.W.2d 904 (Tenn. 1976), they may also
rely on recorded plats, Stracener v. Bailey, 737 S.W.2d 536 (Tenn. Ct. App. 1986), or even on parol
evidence of the circumstances surrounding the purchase of the property. Ridley v. Haiman, 47


         1
          The appellant correctly points out that other courts have applied the rule we have adopted in this state only
to covenan ts that concern things not in esse. This also appears to be the co rrect interpre tation o f the secon d rule in
Spen cer’s Case, 5 Coke 16a (Q.B. 1583), but our courts have not made that distinction.

                                                           -3-
S.W.2d 750 (Tenn. 1932); Owenby v. Boring, 276 S.W.2d 757 (Tenn. Ct. App. 1954). The one
essential, that the one charged with the burden of the restriction have notice of it, may be also shown
by circumstantial evidence. Ridley v. Haiman, 47 S.W.2d 750 (Tenn. 1932).

       Equitable servitudes are not favored, however, for the same reason that other restrictive
covenants are not favored. Land Developers, Inc. v. Maxwell, 537 S.W.2d 904 (Tenn. 1976). They
should be enforced with extreme caution. Id. It is in accord with this reluctance to restrict the use
of property – for an indefinite period of time – that the Supreme Court said in Land Developers that
the common grantor must have imposed the restrictions on the use of the property in furtherance of
a scheme or plan of development so that each grantee may enforce the restrictions against any other
grantee. 537 S.W.2d at 912-913. Therefore, in order to enforce an equitable servitude or a
reciprocal negative easement it must appear that the grantor had in mind a general plan of
development and intended for the restrictive covenant to benefit all the property involved. Ridley
v. Haiman, 47 S.W.2d 750 at 755 (Tenn. 1932). In Essary v. Cox, 844 S.W.2d 169 (Tenn. Ct. App.
1992), we said:

       “[o]utside the context of restrictions which evidence a common development plan,
       however, plaintiffs have cited no authority in this jurisdiction for the proposition that
       restrictive covenants may be imposed on remote grantees based upon their
       knowledge of the existence of a prior restriction.”

844 S.W.2d at 172. The Court thus distinguished Stracener v. Bailey, 737 S.W.2d 536 (Tenn. Ct.
App. 1986) and Owenby v. Boring, 276 S.W.2d 757 (Tenn. Ct. App. 1954), both of which held that
the reciprocal negative easements were enforceable. Both cases involved a common plan of
development.

         We think the undisputed facts show that there was no general plan or scheme of development
adopted to cover the property held by the Daughertys. As the trial judge observed there was no map
or sales brochures showing the restrictions. And there is no restriction on the property the
Daughertys retained. When they conveyed the property to the Butters they did not include any
restrictions. Since, there was no reciprocal easement, the conclusion is inescapable that the
restriction placed in the Wills deed was personal to the Daughertys.

        The judgment of the trial court is affirmed and the cause is remanded to the Chancery Court
of Williamson County for any further proceedings necessary. Tax the costs on appeal to Elias H.
Attea, Jr.


                                               _________________________________________
                                               BEN H. CANTRELL, PRESIDING JUDGE, M.S.




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