## Facts

- A recorded deed covenant required that any building on the servient parcel maintain a four-foot “air space” above a plane fifteen feet above street grade, for the benefit of the adjoining dominant parcel.
- The dominant parcel was later acquired by Maluan P. Gilpin; the servient parcel was later acquired by Jacob Ellis Realties, Inc. (Ellis).
- Gilpin’s building had second-story windows facing Ellis’s lot.
- Ellis constructed a building to the property line, intruding into the four-foot air space and partially obstructing Gilpin’s second-story windows.
- Ellis lacked actual knowledge of the covenant during construction; the restriction was discovered in the public record only after completion.
- Gilpin refused to release the restriction and sued for a mandatory injunction requiring removal of the offending construction, or alternatively damages.
- Evidence showed modification would cost Ellis about $11,500 and likely result in loss of a long-term tenant paying substantial rent.
- Gilpin claimed a large continuing rental loss, but evidence showed the second floor had been unrented for years, was in disrepair, and was not rentable without major renovation.
- The trial court found a covenant breach, denied the mandatory injunction, and awarded Gilpin $1,000 in permanent damages.

## Issues

1. Whether a clear violation of a recorded restrictive covenant required a mandatory injunction removing the encroaching structure, or whether damages could be awarded instead based on equitable considerations.
2. Whether the $1,000 permanent-damages award was inadequate compensation for the loss of the protected air space.

## Decision

- The Appellate Division affirmed the denial of a mandatory injunction.
- The court held that damages in lieu of injunctive relief were proper because the hardship of removal to Ellis was grossly disproportionate to Gilpin’s proven injury.
- The court affirmed the $1,000 award as an adequate measure of the permanent diminution in value attributable to the encroachment.

## Legal Principles

- Mandatory injunctive relief to enforce a restrictive covenant is discretionary and may be denied in equity despite a clear violation.
- A court may award damages in lieu of an injunction when the plaintiff’s injury is small or readily compensable in money and the cost of removal or alteration would impose an oppressive, disproportionate hardship on the defendant.
- Lack of actual knowledge of a recorded covenant does not excuse breach, but the absence of bad faith is relevant to equitable choice of remedy.
- Permanent damages may be awarded as a substitute remedy where the encroachment is effectively permanent and injunctive relief is denied.

## Conclusion

The court enforced the restrictive covenant through a monetary remedy rather than demolition, holding that equitable relief may be withheld when removal would impose severe, disproportionate hardship compared to the plaintiff’s demonstrated harm, and upholding a lump-sum award for permanent loss in value.


Gilpin v. Jacob Ellis Realties, Inc., 47 N.J. Super. 26, 135 A.2d 204 (N.J. Super. Ct. App. Div. 1957)