## Facts

- First Securities Company platted the Crestview Heights Fourth Addition subdivision and retained a buildable remainder of Lot 20 and Outlot A (a lake and earthen dam).
- Access to Outlot A included a 15-foot access easement connecting to a platted 52-foot road and utility easement crossing Outlot A; vehicle access to Lot 20 would require crossing the dam.
- In 1984, a homeowners association sued First Securities and others; the dispute was settled.
- As part of the settlement, Evelyn Guenther, acting as First Securities’ corporate secretary (and a 50% shareholder and director at the relevant time), executed and recorded an affidavit in the land records.
- The affidavit stated that First Securities relinquished any right to improve Outlot A, that Outlot A would continue to be used for recreational purposes by residents, and that Outlot A would not be used as access to any other property by First Securities or its successors.
- Christine Dahl later acquired Lot 1 and the Nakamarus owned Lot 2 in the subdivision.
- First Securities later sought to sell Lot 20 for development and asked Dahl and the Nakamarus to release the recorded restriction; they refused.
- First Securities filed a declaratory judgment action seeking to eliminate or avoid the restriction; the district court denied relief.

## Issues

1. Whether First Securities was bound by the restrictive covenant in the recorded affidavit, including whether its secretary had actual or apparent authority to impose the restriction on the corporation’s property.
2. Whether the recorded affidavit created an enforceable land-use restriction benefiting subdivision lot owners and burdening First Securities’ retained property interests.

## Decision

- The Iowa Supreme Court affirmed the district court’s judgment.
- The court held that Guenther had sufficient actual or apparent authority to bind the corporation when she executed the affidavit in connection with the settlement.
- The court treated the recorded affidavit as an effective, definite restriction limiting Outlot A to recreational use and prohibiting its use as access to Lot 20 or other property.
- Because the restriction was valid and enforceable by subdivision lot owners, First Securities was not entitled to declaratory relief removing it.

## Legal Principles

- A corporation may be bound by a restrictive covenant affecting real property executed by a corporate officer who has actual authority or whose position and conduct support apparent authority.
- A recorded instrument that clearly expresses intent to limit land use and is placed in the chain of title can create an enforceable restrictive covenant or servitude benefiting subdivision lot owners.
- Purchasers and residents may rely on recorded land-use restrictions, and courts may enforce such restrictions to protect reasonable reliance interests and settled subdivision arrangements.

## Conclusion

The court enforced a recorded settlement-based affidavit restricting an outlot and easement, concluding the corporate secretary had authority to bind the corporation and that the restriction was definite, recorded, and enforceable by subdivision lot owners against later development plans.


First Sec. Co. v. Dahl, 560 N.W.2d 327 (Iowa 1997)