## Facts

- A developer sold Paul and Evelyn Caullett a one-acre lot in Holmdel Township, New Jersey, by warranty deed for $4,000.
- The deed included a clause stating that the grantor “reserve[d] the right to build or construct the original dwelling or building” on the premises.
- The clause was placed among “covenants, agreements and restrictions” and was labeled a “covenant running with the land,” binding the purchasers and their successors.
- The buyers asserted there was no separate contract requiring them to hire the developer to construct a house.
- The developer asserted that an understanding that it would serve as general contractor for the first dwelling was a primary condition of the sale and a factor in the lot price.
- After negotiations over construction failed, the buyers sued to quiet title and remove the clause as a cloud on title.
- The trial court granted summary judgment for the buyers, declaring the clause null and that the developer had no right or interest in the land by virtue of the clause.

## Issues

1. Whether a deed provision reserving to a grantor-developer the right to construct the original dwelling on the grantee’s lot creates an enforceable covenant or servitude running with the land.
2. Whether a clause that burdens the land but provides only a personal, in-gross benefit to the developer is unenforceable, including as an undue restraint on alienability.

## Decision

- The Appellate Division affirmed summary judgment for the buyers.
- The court held the clause unenforceable because it imposed a burden on the land while conferring only a personal commercial benefit on the developer.
- The court concluded New Jersey servitude law requires a benefited “dominant” estate; a person or business interest cannot serve as the dominant estate.
- The court also treated the clause as an unjustified restraint on alienability because it impaired marketability without any corresponding land-use benefit to other property.
- The clause was declared void and of no further force and effect, and the developer was adjudged to have no claim arising from it.

## Legal Principles

- A servitude burdening land is not enforceable as running with the land when the benefit is purely personal (in gross) rather than attached to a dominant tenement.
- For a covenant to run with the land under New Jersey law, there must be a dominant estate benefited by the restriction; the beneficiary cannot be merely an individual or commercial enterprise.
- Courts disfavor recorded restrictions that hinder alienability and marketability without a corresponding enhancement or benefit to land, such as a legitimate neighborhood or development scheme.

## Conclusion

A deed restriction compelling the owner (and successors) to use the grantor as the builder of the first dwelling is void where it burdens the land but benefits only the grantor personally; without a dominant estate or a land-use scheme benefiting other property, the clause cannot run with the land and operates as an improper restraint on alienability.


Caullett v. Stanley Stilwell & Sons, Inc., 170 A.2d 52 (N.J. Super. Ct. App. Div. 1961)