Condos v. Home Development Co. - 77 Ariz. 129, 267 P.2d 1069

In Condos v. Home Development Co. (1954), the Supreme Court of Arizona addressed the enforceability of a restrictive covenant prohibiting the sale of intoxicating liquors within a residential subdivision [1]. Key Facts of the Case On January 4, 1945, the Home Development Company platted National City Subdivision No. 5 as a subdivision in Tucson, Arizona [2]. On May 25, 1945, the Company recorded fifteen restrictive covenants declared to run with the land as equitable servitudes [2]. Covenant 15 strictly prohibited the sale or manufacture of intoxicating liquors on any lot or building in the subdivision, with the sole exception of Lot 14 in Block 67 [3]. Tom and Sophia Condos subsequently purchased Lot 8, Block 67, receiving a deed of conveyance that incorporated these restrictive covenants [4]. Despite the restriction, the defendants applied for and obtained a state liquor license, beginning the sale of intoxicating liquors on their lot on February 6, 1951 [4]. The Company, subsequently joined by several other lot purchasers in the subdivision, sued to enjoin the defendants from violating the covenant [1, 4]. The trial court ruled in favor of the plaintiffs, issuing an injunction and denying the defendants' motion for a new trial [1]. The defendants appealed [1]. Main Issues on Appeal The primary issue was whether prior violations of other covenants within the subdivision (such as side-line violations, unpainted frame houses, unplastered adobe homes, and the presence of outside toilets) constituted an abandonment or waiver of the entire restrictive plan, thereby rendering the liquor restriction unenforceable [5-8]. The defendants also raised several secondary issues, arguing that: The Company's failure to protest the liquor license before administrative boards waived its right to object [9]. The restriction created an unlawful monopoly [10]. Enforcing the restriction would impose an inequitable hardship given their business investment [11]. The Company lacked the right to enforce the covenant [11]. Court's Ruling and Final Outcome The Supreme Court of Arizona affirmed the trial court's judgment enjoining the defendants [1, 12]. First, the Court rejected the abandonment argument, holding that minor and scattered violations of other covenants did not change the character of the neighborhood or defeat the purpose of the restrictions [6]. The Court emphasized that restrictive covenants are separate and independent; the tolerance of breaches regarding other distinct restrictions does not constitute a waiver or abandonment of a separate, beneficial restriction like the prohibition on liquor sales [8, 13-15]. Second, the Court ruled that a restrictive covenant running with the land is a vested property right in the nature of an easement, which controls even when in conflict with an administrative liquor license [9]. Thus, the Company was not required to protest the license before administrative boards [9]. Third, the Court found no unlawful monopoly, noting that liquor was freely sold in adjacent subdivisions immediately to the north and south [10]. Fourth, the Court dismissed the hardship defense, noting that the defendants knowingly purchased the property and opened their business with full knowledge of the restriction, meaning they could not complain of subsequent losses [11]. Finally, the Court affirmed that the Company had a clear right to enforce the covenant because it was an original party to the agreement and still owned unsold lots in the subdivision [11]. Case Details: Case ID: condos-v-home-development-co Docket: 77 Ariz. 129, 267 P.2d 1069 For more AZ HOA transparency resources visit https://azhoawatch.org Legal & Accuracy Notice - azhoawatch.org is operated by Hound LLC, a homeowner-run project, not a law firm. Nothing in this video is legal advice or creates an attorney-client relationship. We analyze public court, ADRE, OAH, and related public records and may express opinions. Not affiliated with any court, ADRE, or the OAH. Read the full Legal & Terms: https://azhoawatch.org/legal