[225 N. Y.]

Opinion, per CARDOZO, J.

[Jan.,

tradicts it" (Westchester F. Ins. Co. v. Earle, 33 Mich. 143, 153). What is excluded by one act, is restored by another. You may put it out by the door; it is back through the window. Whenever two men contract, no limitation self-imposed can destroy their power to contract again (Pechner v. Phænix Ins. Co., 65 N. Y. 195, 204, 205; Solomon v. Vallette, 152 N. Y. 147, 151; F. F. Ins. Co. v. Norwood, 69 Fed. Rep. 71; McElroy v. B. A. Assur. Co., 94 Fed. Rep. 990; Westchester F. Ins. Co. v. Earle, supra; Ewart on the Law of Waiver, p. 286). The defendant argues that there was a locus pænitentiæ. The plaintiff, we are told, did nothing on the faith of the consent, and hence the defendant should be permitted to recall it. There may be other answers to that argument, but it is a sufficient one, we think, that at the time of the consent the transaction was still executory. The plaintiff had reserved the right to withdraw from the joint enterprise if his employer disapproved of it, and in that event to treat his advances as a loan. On the faith of the consent, he turned a loan into a purchase. It is too late, years afterwards, for the employer to cancel the consent, and insist that the purchase be turned back into a loan.

We hold, therefore, that the consent, though oral, gives protection to the agent, and acquits him of a breach of contract. But if this were doubtful, another path would bring us to the same result. The question here is not whether a contract has been broken. There has been no attempt to discharge the agent, to terminate his contract, or to hold him liable for damages. The question is whether the breach, if it be assumed, demands the implication of a trust. The oral consent is at least sufficient to preclude that implication. It is at least equivalent to an election that the agent, however delinquent, shall not be charged as a trustee. To use it for that purpose is not to waive or change a provision of

1919.}

Opinion, per CARDOZO, J.

[225 N. Y.]

the contract, and so the covenant does not apply, even if it could ever be effective. Much of the trouble comes from the use of the misleading word "waiver" (Ewart Law of Waiver, p. 3). It is made to stand for many things sometimes for estoppel, sometimes for contract, sometimes for election (Ewart, supra). The oral consent may not have created an estoppel, nor modified a contract, and yet it may have established an election. Admit for the purpose of the argument that the plaintiff broke his contract when he took an interest in a mine. Even then, the employer was not bound to charge him as a trustee. At the utmost, it had a right of election (Hammond v. Hopkins, 143 U. S. 224; Kahn v. Chapin, 152 N. Y. 305, 309). It might adopt or reject the purchase. Neither adoption nor rejection would be a change of the contract. It would be an election between remedies. But plainly such an election could be made without a writing. It is one thing to hold that a writing is necessary to obliterate the wrong. It is another thing to exact a writing where there has been nothing but a choice among the remedies that are available for the redress of wrong. The plaintiff said to his employer: "I can treat this transaction either as a loan or as a joint venture. Which shall I do?" The employer answered: "You may treat it as the latter." After an election so decisive, announced while there was still an opportunity to withdraw, good conscience no longer demands that the agent be charged as a trustee. A court of equity in decreeing a constructive trust is bound by no unyielding formula. The equity of the transaction must shape the measure of relief.

Our conclusion, therefore, is that the judgment of the Appellate Division should be modified so that the award made to the plaintiff shall be limited to his share of the profits under the so-called Perry-Treadgold contract, to wit: $27,300 in cash with interest from April 1, 1908,

[225 N. Y.]

Statement of case.

[Jan.,

and 5,460 shares of the capital stock of the Yukon Gold Company of the par value of $27,300 with any dividends declared thereon since April 1, 1908; that in the event of any dispute between the parties as to the correctness of the aforesaid computation of profits either party shall be at liberty to apply to the Special Term of the Supreme Court at the foot of the judgment herein for further directions with reference thereto; that they may also make like application for further directions in respect of the enforcement of the judgment if such directions become necessary; and that as so modified, the judgment of the Appellate Division be affirmed, without costs to either party in any court.

HISCOCK, Ch. J., CHASE, COLLIN and CRANE, JJ., concur; CUDDEBACK and HOGAN, JJ., dissent and vote for a new trial.

Judgment accordingly.

ANGIE M. BOOTH et al., Appellants, v. WILLIAM H. W. KNIPE et al., Respondents.

Real property deed

restrictive covenants when restric

tions in deed as to kind of houses and use thereof to be erected upon land conveyed to grantee run with the land and bind subsequent purchasers thereof when a breach of such restrictions may be restrained by injunction.

66

*

The owner of a block on a street in New York city sold lots therefrom during a period of thirteen years, the owner after the last sale retaining nothing for himself. Uniform restrictions were part of the plan and were imposed by the grantor upon each lot by the following provision: This conveyance is made on the agreement that he, the said party of the second part, his heirs and assigns, shall, within two years from the date hereof, cause to be erected and fully completed upon said lot, a first-class building, adapted for and which shall be used only as a private residence for one family, and which shall conform to the plans made or being made" by an architect therein named "for the whole front between 72nd and 73rd Streets, on River

1919.]

Statement of case.

[225 N. Y.]

side Drive, and said conveyance is made and said lot is sold upon that condition." The grantee of the lot in question built thereon and used the building as a private dwelling. The present occupant, a tenant of the successor in interest, is using it as a maternity hospital. Held, First, there is a negative duty imposed by the covenant to refrain from the prohibited use. That duty runs with the land, and charges all who take with knowledge of its terms. This is more than a limitation upon construction. It is a restriction of enjoyment. Second, a covenant of this kind is sometimes for the benefit of the grantor personally, and sometimes for the benefit of successive lot owners. Whether it is of the one class or of the other is a question of intention, which is to be gathered, not merely from the language of the deed, but from all the surrounding circumstances. Enough is shown here to justify the conclusion as an inference of fact that the scheme embraced the tract, and that all who might thereafter buy were within the range of the intended benefit. Third, the attempted use is a breach of the restriction which may be restrained by injunction in an action brought by owners of neighboring dwellings.

Booth v. Knipe, 178 App. Div. 423, reversed.

(Argued January 7, 1919; decided January 28, 1919.)

APPEAL, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered July 13, 1917, which reversed an order of Special Term granting a motion for an injunction pendente lite.

The following questions were certified:

"1. Is the agreement contained in the deed from Sutphen to Kleeberg of the premises which are the subject of this action, a covenant running with the land?

"2. Does it bind the present owners and occupants of the property on that block front?

"3. Is it confined to the first house erected on each lot?

"4. Is the agreement enforcible by owners of the other properties on that block front?

"5. If the agreement in the deed from Sutphen to Kleeberg is a covenant running with the land, is the use

[225 N. Y.]

Points of counsel.

[Jan.,

of the premises by the defendants as disclosed by the papers before the court a violation of such covenant?

"6. Does the complaint state facts sufficient to constitute a cause of action in favor of the plaintiffs against the defendants? "

The facts, so far as material, are stated in the opinion.

Herbert Mc Kennis, Robert F. Greacen and Theodore W. Morris, Jr., for appellants. The agreement contained in the deed from Sutphen to Kleeberg constitutes a covenant running with the land. (Graves v. Deterling, 120 N. Y. 455; Post v. Weil, 115 N. Y. 361; Avery v. N. Y. C. & H. R. R. R. Co., 106 N. Y. 142; Zweig v. Sweedler, 140 App. Div. 319; Union Stock Yards Co. v. Nashville Packing Co., 140 Fed. Rep. 701; Coleman v. Beach, 97 N. Y. 545; Morehouse v. Woodruff, 218 N. Y. 494.) The agreement is a restriction binding on the present owners and occupants of the property on the block front on Riverside Drive between Seventy-second and Seventythird streets. (R. L. Assn. v. Kellogg, 144 N. Y. 348; Mott v. Oppenheimer, 145 N. Y. 212; Silberman v. Uhrlaub, 116 App. Div. 869; Acer v. Westcott, 46 N. Y. 384; Lattimer v. Livermore, 72 N. Y. 174; Rowland v. Miller, 139 N. Y. 93; McDonald v. Spang, 55 Misc. Rep. 332; Levy v. Halcyon Casino Hotel Co., 45 Misc. Rep. 289; Zipp v. Barker, 40 App. Div. 1, 6; De Lima v. Mitchell, 49 Misc. Rep. 171.) The agreement is a restriction on the use of the premises, at least during the existence of the first house which was erected on each lot. (Horner v. C., M. & S. P. Ry. Co., 38 Wis. 175.) The restriction is enforcible by the owners of the adjoining property on the block front in question. (Korn v. Campbell, 192 N. Y. 490.) The use of the premises by the defendants, as disclosed by the papers before the court, is a violation of the agreement contained in the deed from Sutphen to Kleeberg. (Levy v. Schreyer, 177 N. Y. 293; Kalb v.