I dissent and vote for affirmance. The February contract, as written, constitutes an assignment of the January contract and makes no exception to its provision that title was to be "SUBJECT to covenants, restrictions and easements of record." If more were needed to show the intent of the parties another clause specifically recites that the January contract "has been initialed by the parties hereto and made part hereof". When such plain words are given their usual and ordinary meaning, it is quite apparent that the parties intended to incorporate the provisions of the January contract into the February contract. Surely had the intent been *Page 195 otherwise, specific language to the contrary could very well have been used. Experienced real estate operators, as these parties undoubtedly are, take into consideration that subdivision developments will have, almost without exception, certain restrictive covenants as to use, common to the tract. To now say that an agreement fails because a title insurance company merely lists as an exception these common restrictive covenants which are a matter of public record, is to provide an unwarranted escape mechanism which is in complete derogation of the operative provisions of this writing that title was to be subject to covenants and restrictions of record.
Admittedly, the presence of a restrictive covenant running with the land is sufficient ground for the rejection of title by a vendee if the contract is to sell free from all incumbrances. In this event only may a covenant be regarded as such an incumbrance as to render a title unmarketable. (See Kimball Co. v. Fox, 239 N.Y. 554.) Nor is Bull v. Burton (227 N.Y. 101) to the contrary. The dissenting opinion therein (p. 114) clearly shows that no mention of the covenants there at issue — which were, indeed, much more restrictive than that here — was included in the contract. In addition we place considerable reliance upon the second sentence of the covenant before us which ties it affirmatively to the local municipal zoning regulations. The restrictions therefore amount to no more than those which bylaw an owner would be compelled to observe in any case.
The judgment should be affirmed, with costs.
LOUGHRAN, Ch. J., CONWAY and BROMLEY, JJ., concur with LEWIS, J.; DYE, J., dissents in opinion in which DESMOND and FULD, JJ., concur.
Judgment accordingly. *Page 196