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Franklin v. Spadafora, 447 N.E.2d 1244 |
Supreme Judicial Court of Massachusetts |
1983 |
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Chapter |
23 |
Title |
Creation and Validity |
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Page |
462 |
Topic |
Creation and Validity |
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Quick Notes |
The trustees amended the by-laws of the condominium trust limiting the number of units that could be owned by any one person or entity to two units. Franklin owned 6 units and tried to purchase an additional unit from the Clarkes. The trustees said this was a violation and the deed was void.
Restraint on Alienation Factors 1. The one imposing the restraint has some interest in land which he is seeking to protect by the enforcement of the restraint; 2. The restraint is limited in duration; 3. The enforcement of the restraint accomplishes a worthwhile purpose; 4. The type of conveyances prohibited are ones not likely to be employed to any substantial degree by the one restrained; 5. The number of persons to whom alienation is prohibited is small Restatement Notes o None of these factors is determinative, nor is the list exhaustive. o Each case must be examined in light of all the circumstances.
Rule o "[i]f a [by-law amendment] serves a legitimate purpose, and if the means the [condominium association] adopted are rationally related to the achievement of that purpose, the [amendment] will withstand constitutional challenge." |
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Book Name |
Fundamentals of Modern Property Law: Rabin; Kwall, Kwall. ISBN: 978-1-59941-053-1. |
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Issue |
o Whether a trust by-law adopted by the defendants, trustees of the Melrose Towers Condominium Trust (trust), limiting to two the number of units in the Melrose Towers Condominium (condominium) which may be owned by any one person or entity, represents an unreasonable restraint on alienation or operates to deny the plaintiffs equal protection of the laws or due process of law? No. |
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Procedure |
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Trial |
o Ruled that the by-law was valid and not unconstitutional. |
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Supreme |
o |
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T-Analysis |
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Franklin |
Spadafora (Trustees) |
Court |
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o |
o The amendment was duly recorded in the registry of deeds. o In adopting the amendment, the trustees acted pursuant to the applicable by-law and with the written consent of condominium unit owners holding 80.45% of the beneficial interest under the trust. |
o |
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o None |
o |
Interest in land Analysis o No interpreted to own a specific unit. o So long as they possess an interest in the condominium complex where the unit is situated. |
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o None |
o |
Duration of Restraint Analysis o The Pl - did not argue before the trial judge that the restraint is unreasonable in duration. o The issue as waived. o The amendment is not by its terms limited in duration. o The trust by-laws may be amended at any time by the trustees, provided they have the written consent of unit owners "entitled to not less than fifty-one percent (51%) of the beneficial interest" under the trust. Might Be Different o Our decision might well be different if, for instance, the by-laws could not be amended at any time or if the restraint at issue precluded all alienation of the property or allowed alienation only to an unreasonably small number of people. |
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o There was no evidence to support that the by-law would promote owner occupancy. o |
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Worthwhile Purpose o Those who live in condominiums must be willing to give up a certain degree of personal choice in order to promote the welfare of the majority of the owners |
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o The by-laws themselves belie [misrepresent] the purpose of the amendment because the by-laws would not prohibit a person who owns two units from leasing either or both of them. |
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o The amendment may also be construed as a compromise between the desire of the majority of unit owners to maintain the residential character of the condominium and the right of a person owning one or two units to use his property as he desires. |
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o None |
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Type of Conveyance Analysis Prohibited o The conveyance prohibited by the amendment is not any sale of a unit but only sale of a unit to a person who already owns two. o The amendment applies to all unit owners and not just the Clarkes. o The amendment passed with the consent of persons holding 80.45% of the beneficial interest under the trust |
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o The amendment is unreasonable because it has been applied against Franklin in an arbitrary and discriminatory manner. |
o |
Number of Persons Affected o The amendment allows alienation of the property to all persons except those who already own two units. o It has not been applied against Franklin at all. . |
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The Constitutional Challenges o The amendment has denied them equal protection of the laws and due process of law under the Fourteenth Amendment to the United States Constitution and arts. 1 and 10 of the Massachusetts Declaration of Rights. o Franklin has been "effectively denied his right to own property," and that both Franklin and the Clarkes have been denied "their constitutional rights to dispose of their property as they see fit. |
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o The judge found that there was no State action sufficient to trigger the constitutional guarantees claimed. o Because we conclude that the amendment did not deprive the plaintiffs of any constitutional rights, we may assume, without deciding, that the amendment represents State action |
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o |
o |
o |
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Facts |
Discussion |
Reasoning |
Rules |
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Pl Franklin Df Spadafora (Trustees)
Amendment of By-Laws o On September 25, 1980, the trustees voted to amend the by-laws of the trust to restrict to two the number of condominium units which could be owned by any one person or entity. o The amendment was duly recorded in the registry of deeds. o In adopting the amendment, the trustees acted pursuant to the applicable by-law and with the written consent of condominium unit owners holding 80.45% of the beneficial interest under the trust. Superior Court o Ruled that the by-law was valid and not unconstitutional. Facts Franklin owned 6 units o On the date of the amendment, the plaintiff George J. Franklin, Jr., owned six units in the condominium complex. Purchase additional units o On October 17, 1980, Franklin, as buyer, executed a purchase and sale agreement with the plaintiffs, Daniel and Florence A. Clarke, as sellers, for the purchase of a condominium unit owned by the Clarkes. Required to inform trustees o As required by the Master Deed, the Clarkes then informed the trustees of the pending sale so that the trustees might exercise their right of first refusal. Trustees said sale was a violation o Thereafter, the trustees notified the Clarkes that the sale was in violation of the by-law amendment. Sought declaratory relief o Franklin and the Clarkes then brought this action in the Superior Court for declaratory relief from the by-law amendment. Clarkes sold to Franklin o After the action was filed, the Clarkes sold the unit to Franklin on April 16, 1981. Deed is null and void o In his judgment upholding the validity of the by-law amendment, the judge also declared that "the Clarke-Franklin deed . . . is null and void." |
Restraint on Alienation Factors 1. The one imposing the restraint has some interest in land which he is seeking to protect by the enforcement of the restraint; 2. The restraint is limited in duration; 3. The enforcement of the restraint accomplishes a worthwhile purpose; 4. The type of conveyances prohibited are ones not likely to be employed to any substantial degree by the one restrained; 5. The number of persons to whom alienation is prohibited is small Restatement Notes o None of these factors is determinative, nor is the list exhaustive. o Each case must be examined in light of all the circumstances.
Court By-Law is sufficient demonstration of reasonableness. o However, we think that consideration of these factors in the context of the condominium housing arrangement is sufficient to demonstrate the reasonableness of the restraint here at issue. o We consider the factors seriatim [One after another; in a series].
Interest in land Analysis o No interpreted to own a specific unit. o So long as they possess an interest in the condominium complex where the unit is situated. o There is no question here but that the trustees possess such an interest.
Duration of Restraint Analysis o The Pl - did not argue before the trial judge that the restraint is unreasonable in duration. o The issue as waived. o The amendment is not by its terms limited in duration. o The trust by-laws may be amended at any time by the trustees, provided they have the written consent of unit owners "entitled to not less than fifty-one percent (51%) of the beneficial interest" under the trust. Might Be Different o Our decision might well be different if, for instance, the by-laws could not be amended at any time or if the restraint at issue precluded all alienation of the property or allowed alienation only to an unreasonably small number of people.
Worthwhile Purpose Analysis
Pl Arg o There was no evidence to support the judge's further conclusions that "[i]mplicit in this purpose is the desire to impart a degree of continuity of residence, inhibit transiency and safeguard the value of investment" and that enforcement of rules and regulations against tenants is more difficult than with resident owners. o To the extent that the by-law would promote owner occupancy.
Court o We cannot conclude on this record that such an objective is against public policy or in itself not worthwhile. o We agree with the trial judge o Those who live in condominiums must be willing to give up a certain degree of personal choice in order to promote the welfare of the majority of the owners
Pl Arg o The by-laws themselves belie [misrepresent] the purpose of the amendment because the by-laws would not prohibit a person who owns two units from leasing either or both of them.
Court o The amendment may also be construed as a compromise between the desire of the majority of unit owners to maintain the residential character of the condominium and the right of a person owning one or two units to use his property as he desires. o As so construed, the amendment is a reasonable means of achieving the majority's proper goal.
Type of Conveyance Analysis Prohibited o The conveyance prohibited by the amendment is not any sale of a unit but only sale of a unit to a person who already owns two. o The amendment applies to all unit owners and not just the Clarkes. o We can safely assume that an amendment passed with the consent of persons holding 80.45% of the beneficial interest under the trust is not one which would prohibit a conveyance likely to be employed by those persons. o The plaintiffs have failed to produce any evidence.
Number of Persons Affected
Court o The amendment allows alienation of the property to all persons except those who already own two units.
Pl Arg o The amendment is unreasonable because it has been applied against Franklin in an arbitrary and discriminatory manner.
Court o It has not been applied against Franklin at all. o The plaintiffs have made no showing that the amendment has not been or would not be applied to void sales to others in a position similar to Franklin.
The Constitutional Challenges
Pl Arg o The amendment has denied them equal protection of the laws and due process of law under the Fourteenth Amendment to the United States Constitution and arts. 1 and 10 of the Massachusetts Declaration of Rights. o Franklin has been "effectively denied his right to own property," and that both Franklin and the Clarkes have been denied "their constitutional rights to dispose of their property as they see fit.
Court o The judge found that there was no State action sufficient to trigger the constitutional guarantees claimed. o Because we conclude that the amendment did not deprive the plaintiffs of any constitutional rights, we may assume, without deciding, that the amendment represents State action.
Court Holding o Since the plaintiffs' decisions to purchase units within the condominium were no doubt voluntary, any restrictions imposed on the plaintiffs' rights to buy or sell property within the condominium are, for this reason, essentially self-imposed. Rule o Accordingly, we hold that, "[i]f a [by-law amendment] serves a legitimate purpose, and if the means the [condominium association] adopted are rationally related to the achievement of that purpose, the [amendment] will withstand constitutional challenge." |
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Rules |
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Rule o "[i]f a [by-law amendment] serves a legitimate purpose, and if the means the [condominium association] adopted are rationally related to the achievement of that purpose, the [amendment] will withstand constitutional challenge." |
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Class Notes |
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