Lauderbaugh v. Williams - 409 Pa. 351, 186 A.2d 39 (1962)

Rule:

Every restraint on alienation of real property is not necessarily void, although such restraints are not favored in the law. An absolute restraint is against public policy and is therefore of no legal effect. However, a limited and reasonable restraint on the power of alienation may be valid.

Facts:

When plaintiff sold lots of land, she entered into an agreement with defendant lot purchasers providing that future purchasers would be required to become members of a private association. Several years later, plaintiff instituted suit to quiet title and to have the agreement declared void. Defendants instituted suit to set aside an unauthorized conveyance and to enjoin similar conveyances. The trial court upheld the agreement's validity but limited its application to certain lots, set aside the conveyances, and enjoined future conveyances. Both parties appealed.

Issue:

Was it valid to restrict the alienation of lakeshore property to the members of Association only? 

Answer:

No.

Conclusion:

The court reversed the judgment in part, finding the agreement invalid because it unreasonably limited plaintiff's freedom of alienation of land since conveyances could be made only to members of the association, and control of association membership did not lie with plaintiff but with association members, who were free to deny membership for any or no reason.