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Present:  All the Justices


SONOMA DEVELOPMENT, INC.

v.  Record No. 982098  OPINION BY JUSTICE CYNTHIA D. KINSER

                                                               June 11, 1999

GIRARD C. MILLER, ET AL.



FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA

John E. Kloch, Judge



       In a decree dated July 29, 1998, the circuit court

upheld the validity of a "Declaration of Restriction" and

ordered Sonoma Development, Inc. (Sonoma), to remove all

improvements that were within three feet of the north wall

of a residence owned by Girard C. Miller and Lynn E. Miller

(the Millers).  In granting the Millers' motion for summary

judgment, the circuit court stated that "there was a valid

declaration of restriction on the property recorded, that

there was privity between the original parties, that it was

the intent and, in fact, actually said in the restriction

itself that it was to run with the land.  And certainly, it

does touch and concern the land."

This appeal concerns the circuit court's finding that

horizontal privity existed between the original covenanting

parties.  Because the "Declaration of Restriction" was part

of a transaction that included a transfer of an interest in

the land to be benefited by the restrictive covenant, we

will affirm the judgment of the circuit court.

Prior to the incident that prompted the present

litigation, Alfred E. Schaer and Mary Schaer (the Schaers)

owned two adjacent lots, numbered Lot 38 and Lot 39, in the

area commonly known as "Old Town" in the City of

Alexandria.  Facing the lots from the street on which they

are situated, Lot 38 lies to the left of Lot 39.  The lots

are long and narrow, and share a common sideline that runs

from the front to the back of the lots.

When the Schaers owned both lots, a three-story, brick

house was situated on Lot 38, but Lot 39 was vacant.  The

north wall of the house on Lot 38 physically encroaches

upon the southern boundary line of Lot 39 by 0.1 foot at

the northeast corner of the dwelling and by 0.2 foot at the

northwest corner of the dwelling.

       In 1995, the Millers entered into a real estate

contract with the Schaers for the purchase of Lot 38.  

Because the Millers were concerned about future development

on Lot 39, the contract included a provision requiring the

Schaers to provide a deed restriction on Lot 39 prohibiting

the use of a common wall with Lot 38 and requiring a

sufficient easement to facilitate maintenance of the

portion of the dwelling that encroaches on Lot 39.  On June

30, 1995, in furtherance of their obligations under the

contract, the Schaers executed a "Declaration of

Restriction" requiring "[t]hat no improvement of any kind

be constructed upon Lot 39 within three (3) feet of the

north wall of the existing dwelling on Lot 38."  Although

the Schaers were designated as the "Grantor" in the

declaration, the document did not name any entity or

individual as the "Grantee."

On the same day, the Schaers executed a "Declaration

of Easement" in which they granted an easement on Lot 39

"for the benefit of lot 38 to permit the house to remain in

its present position . . . and to permit ingress and egress

unto lot 39 as reasonably necessary to repair and maintain

the northern wall of the house."  Like the "Declaration of

Restriction," the "Declaration of Easement" named the

Schaers as the "Grantors" but did not specify anyone as the

"Grantee."  The "Declaration of Easement" did, however,

state that the Schaers had agreed to sell Lot 38 to the

Millers.  In addition, both documents were recorded in the

clerk's office of the circuit court.

Also on June 30, 1995, the Schaers executed a deed

conveying Lot 38 to the Millers.  The deed states that the

"conveyance is made subject to recorded conditions,

restrictions and easements affecting the property hereby

conveyed."

       In February 1997, Sonoma purchased Lot 39 from the

Schaers.  The deed from the Schaers to Sonoma, dated

February 21, 1997, specifies that the conveyance is

"subject to easements, restrictive covenants, restrictions

and rights-of-way of record."

       In the spring of 1997, Sonoma contracted with

Mitchell, Horn & Associates, Inc., for the construction of

a house on Lot 39.  The Millers commenced this action

because the house that was constructed on Lot 39 violates

the three-foot setback requirement contained in the

"Declaration of Restriction."  According to a plat of Lot

39, the dwelling on that lot is situated between 2.5 and

2.6 feet away from the north wall of the house on Lot 38.

       In Virginia, we recognize two types of restrictive

covenants:  "the common law doctrine of covenants running

with the land and restrictive covenants in equity known as

equitable easements and equitable servitudes."  Sloan v.

Johnson, 254 Va. 271, 274-75, 491 S.E.2d 725, 727 (1997);

accord Mid-State Equip. Co., Inc. v. Bell, 217 Va. 133,

140, 225 S.E.2d 877, 884 (1976).  In the present case, the

Millers acknowledge that the "Declaration of Restriction"

does not fall within the second category of restrictive

covenants.  Thus, the issue is whether that document

creates a valid common law restrictive covenant that runs

with the land, frequently referred to as a "real covenant."

       To enforce a real covenant in Virginia, a party must

prove the following elements:  (1) privity between the

original parties to the covenant (horizontal privity);  (2)

privity between the original parties and their successors

in interest (vertical privity); (3) an intent by the

original covenanting parties that the benefits and burdens

of the covenant will run with the land; (4) that the

covenant "touches and concerns" the land; and (5) the

covenant must be in writing.  Sloan, 254 Va. at 276, 491

S.E.2d at 728.  Sonoma contends that the element of

horizontal privity is absent in this case.  It argues that

horizontal privity did not exist between the original

covenanting parties, the Schaers and the Millers, because

only the Schaers were named as a party in the "Declaration

of Restriction."  In other words, Sonoma posits that

horizontal privity must be demonstrated within the four

corners of a single document.

       In two of this Court's recent cases upon which Sonoma

relies, we did, indeed, include horizontal privity as one

of the elements of a covenant running with the land.  

Waynesboro Village, L.L.C. v. BMC Properties, 255 Va. 75,

81, 496 S.E.2d 64, 68 (1998); Sloan, 254 Va. at 276, 491

S.E.2d at 728.  However, because the real covenants at

issue in those cases were contained in deeds between named

grantors and grantees, we did not focus on the essential

components of horizontal privity.  Waynesboro Village, 255

Va. at 78, 496 S.E.2d at 66; Sloan, 254 Va. at 277, 491

S.E.2d at 728-29.  Thus, in Waynsboro Village and Sloan, we

did not resolve the issue that is currently before us.

       With regard to the precise issue presented in this

appeal, we conclude that horizontal privity did exist

between the Schaers and the Millers.  We are not willing to

say that, in every situation, only one document can be

examined in order to determine if horizontal privity

existed between the original covenanting parties.  See Cook

v. Tide Water Associated Oil Co., 281 S.W.2d 415, 419 (Mo.

Ct. App. 1955) (upholding restrictive covenant that was

entered into prior to deed); Leighton v. Leonard, 589 P.2d

279, 281 (Wash. Ct. App. 1978) (upholding restrictive

covenant created in agreement after deed conveying real

estate was executed).

In order to establish horizontal privity, the party

seeking to enforce the real covenant must prove that "the

original covenanting parties [made] their covenant in

connection with the conveyance of an estate in land from

one of the parties to the other."  Runyon v. Paley, 416

S.E.2d 177, 184 (N.C. 1992); accord 7 Thompson On Real

Property   61.04(a)(2).  The Restatement of Property  

 534(a) (1944), provides that horizontal privity is

satisfied when "the transaction of which the promise is a

part includes a transfer of an interest either in the land

benefited by or in the land burdened by the performance of

the promise."    In other words, the covenant must be part

of a transaction that also includes the transfer of an

interest in land that is either benefited or burdened by

the covenant.  Johnson v. Myers, 172 S.E.2d 421, 423 (Ga.

1970); Moseley, 470 N.E.2d at 778; Runyon, 416 S.E.2d at

184-85; Bremmeyer Excavating, Inc. v. McKenna, 721 P.2d

567, 569 (Wash. Ct. App. 1986).

       The term "transaction" is defined as "an act or

agreement, or several acts or agreements having some

connection with each other, in which more than one person

is concerned, and by which the legal relations of such

persons between themselves are altered."  Black's Law

Dictionary 1496 (6th ed. 1990); cf. Virginia Housing Dev.

Auth. v. Fox Run Ltd. Partnership, 255 Va. 356, 364-65, 497

S.E.2d 747, 752 (1998) (quoting Richmond Postal Credit

Union v. Booker, 170 Va. 129, 134, 195 S.E. 663, 665

(1938)) ("`[N]otes and contemporaneous written agreements

executed as part of the same transaction will be construed

together as forming one contract.'").  In the context of

the present case, we find that the transaction of which the

covenant was a part commenced with the real estate contract

between the Schaers and the Millers, and culminated with

the deed conveying Lot 38 to the Millers.  The "Declaration

of Restriction" fulfilled the Schaers' contractual

obligation to establish a restriction on Lot 39, which lot

was being retained by the Schaers at that time, and was

executed in conjunction with the deed to the Millers.  

Thus, it was part of a transaction that included the

transfer of an interest in the land benefited by the real

covenant.

        Sonoma also assigns error to the circuit court's

award of injunctive relief without receiving evidence with

regard to an appropriate remedy in equity.  Sonoma contends

that the facts necessary to determine the remedy remained

in dispute and that summary judgment was, therefore, not

warranted.  We find no merit in this argument.

Sonoma does not dispute that it had notice of the

"Declaration of Restriction."  Indeed, it was in Sonoma's

chain of title and was specifically excluded from coverage

in its title insurance policy.

If parties, for valuable consideration, with their

eyes open, contract that a particular thing shall not

be done, all that a court of equity has to do is to

say by way of injunction that which the parties have

already said by way of covenant--that the thing shall

not be done; and in such case the injunction does

nothing more than give the sanction of the process of

the court to that which already is the contract

between the parties.  It is not, then, a question of

convenience or inconvenience, or of the amount of

damage or injury.  It is the specific performance, by

the court, of that negative bargain which the parties

have made, with their eyes open, between themselves.

Spilling v. Hutcheson, 111 Va. 179, 182, 68 S.E. 250, 251

(1910).  We further stated in Lindsay v. James, 188 Va.

646, 661, 51 S.E.2d 326, 333 (1949), that "[r]elief by way

of a mandatory injunction will not be denied merely because

the loss caused will be disproportionate to the benefits

accruing to the opposing party where it appears that the

obstruction or the violation of a right was made with full

knowledge and understanding of the consequences which

result."  See also Marks v. Wingfield, 229 Va. 573, 577,

331 S.E.2d 463, 465 (1985) (remanding to trial court for

entry of injunction to enforce restrictive covenant).

Thus, we find no reason why the circuit court needed

to hear additional evidence on this issue.  An injunction

was the appropriate remedy to enforce the terms of the

"Declaration of Restriction."

       For the reasons stated, we will affirm the judgment of

the circuit court.

Affirmed.

 First American Title Insurance Company issued a title

insurance policy to Sonoma on February 26, 1997.  The

policy lists the "Restrictive Covenants" and "Declaration

of Easement" as items that are excluded from coverage under

the policy.



 Covenants affecting the use of land that run to the

benefit or burden of remote successors in interest to the

land came to be called "real covenants."  9 Richard R.

Powell and Patrick J. Rohan, Powell on Real Property

 60.01[2] (1999).



 A number of jurisdictions have abolished the

requirement of horizontal privity.  7 Thompson on Real

Property   61.04(a)(3) (David A. Thomas ed., 1994); 9

Powell on Real Property   60.11[3].  The Restatement

(Third) of Property: Servitudes   2.4 (Tentative Draft No.

1, 1989), states that horizontal privity between the

parties is not required to create a servitude.  See Moseley

v. Bishop, 470 N.E.2d 773, 778 n. 1 (Ind. Ct. App. 1984)

for a discussion regarding the status of the horizontal

privity requirement.





 The Restatement's comment on clause (a) states that

"[a] transfer of an interest in land as a part of a

transaction in which a promise respecting the use of land

is made is sufficient to create the relationship essential

to the running of the burden of the promise."



 Sonoma does not dispute the validity of the

"Declaration of Easement" even though the Schaers were the

only parties named in that document.  Yet, it is part of

the same transaction as the "Declaration of Restriction."



__________________

1644



10




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