## Facts

- Candlelight Hills Civic Association, Inc. (the association) is a nonprofit homeowners association for the Candlelight Hills subdivision.
- The subdivision is subject to recorded restrictive covenants that require owners to pay annual “maintenance” assessments into a maintenance fund.
- The covenants list specific purposes for which maintenance-fund money may be spent and also include a catch-all clause allowing the trustees to spend funds for “any other thing necessary or desirable” that they consider of “general benefit” to owners or occupants.
- The association proposed purchasing a recreational facility for subdivision use and intended to fund the acquisition by increasing the annual maintenance assessment, conditioned on receiving sufficient owner approval.
- Gerald Goodwin, a homeowner, objected and filed a declaratory-judgment action seeking to stop the purchase and obtain a declaration that the association lacked authority under the restrictive covenants (and Texas law) to use maintenance-fund assessments to acquire real property.
- The association argued that the covenants’ broad “general benefit” language, together with Texas nonprofit-corporation law and the association’s articles of incorporation and bylaws (which authorized the corporation to own property and stated purposes tied to maintaining the subdivision’s residential character), permitted the purchase.
- The trial court ruled the covenants were unambiguous and did not authorize use of maintenance-fund assessments to purchase real property, and it granted relief to Goodwin. The association appealed.

## Issues

1. Whether the restrictive covenants authorizing a maintenance fund, including a general “general benefit” clause, permitted the association to use maintenance-fund assessments to purchase real property for a recreational facility.
2. Whether Texas nonprofit-corporation law and the association’s articles of incorporation and bylaws could authorize spending maintenance-fund assessments on real-property acquisition when the restrictive covenants did not.

## Decision

- The court held the restrictive covenants did not authorize using the maintenance fund (or maintenance-fund assessments) to purchase real property for a recreational facility.
- The court held that the association’s articles of incorporation, bylaws, and general statutory corporate powers could not expand or override the spending limits created by the recorded restrictive covenants governing the maintenance fund.
- Disposition: The court of appeals affirmed the trial court’s judgment for Goodwin.

## Legal Principles

- Restrictive covenants are interpreted from the text as written; when unambiguous, courts enforce them according to their plain meaning.
- Clauses authorizing expenditures for a listed set of purposes plus a general catch-all are read in context; general language does not convert a “maintenance” fund into a broad capital-acquisition fund.
- An association’s corporate power to own property does not, by itself, authorize funding a purchase with assessments collected under restrictive covenants that limit how those assessments may be used.
- Articles of incorporation and bylaws cannot change owners’ assessment obligations or permitted uses of assessment money set by recorded restrictive covenants.

## Conclusion

Candlelight Hills Civic Association, Inc v. Goodwin held that the association could not use subdivision maintenance-fund assessments to buy a recreational facility because the restrictive covenants limited the maintenance fund to the purposes stated in the covenants, and neither Texas nonprofit-corporation law nor the association’s corporate documents could expand those covenant-based limits.


Candlelight Hills Civic Association, Inc v. Goodwin, 763 S.W. 2d 474 (1988)