Capitol Federal Savings & Loan Association v. Smith

136 Colo. 265, 316 P.2d 252 (1957)

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Nature of the Case

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Facts

The Smiths (P) owned a lot in a subdivision. Before P purchased their lost, several lot owners in the subdivision, including P's predecessor in title entered into a restrictive covenant which provided that no person subject to the covenant would sell their land to blacks. The covenant stated that it was binding on the signatories' heirs and assigns, and that, in the event, the covenant was breached, the land would be forfeited to the other persons who were parties to the covenant. P, who were black, filed suit to quiet title in themselves. Other lot owners who were parties to the covenant (D) argued that they were the owners of P's lot pursuant to the provisions in the covenant. The trial court found that P were the owners of the lot free and clear of any claim or interest asserted by D. The court further found that the covenant was violative of the Fourteenth Amendment, and was unenforceable. D Appealed, arguing that the agreement at issue did not create a restrictive covenant, but an executory interest, which vested automatically upon the occurrence of the event stated in the agreement. D further argued that the failure of the trial court to recognize that they had a vested interest in the land amounted to an unconstitutional taking, entitling D to just compensation.