Part of the land was subdivided and sold only to people who agreed to subscribe to the tenets of Assembly of God church.
P's parents bought two lots, defendant issued deed to P when contract paid in full.
Contract contained restrictions on occupancy and resale.
Restriction 6: No residents shall conduct themselves in a manner in conflict with general practices and principles of church.
Restriction 8: Property shall not be resold without written approval by the Seller or its agent.
P attempted to sell the property, and D refused to remove the restrictions.
P sued for a declaration that restrictions were invalid and for reformation of the deed.
Procedural History
Trial court held for P, restrictions void.
COA affirmed.
Issues
Can a church restrict occupancy and resale on an estate in fee?
Holding/Rule
Estates in fee cannot be subject to restrictions on occupancy and resale.
Reasoning
EWBC (D) claims that restriction limiting sale of land to members of a church is reasonable and should be enforced by courts.
Restriction 8 is a direct restrain on alienation. WA rule is that such a clause is void as repugnant to the nature of an estate in fee.
Exception allows reasonable restraints that are justified by legitimate interests.
Ex: "Due on Sale" clauses in real estate mortgages.
Doctrine of estoppel (P knew about restrictions) does not apply, because this is a disabling restraint upon which there is a presumption of invalidity.
Restriction 6 is also invalid, because Law Against Discrimination forbids restrictions on conveyance to persons of a certain creed.
It is understandable that Ds want a quiet lake with no drinking or gambling or Sunday working, but the outright grant of fee in the deed is fatal to their hopes.
