APPEAL from the Circuit Court of Peoria County; the Hon.
ALBERT PUCCI, Judge, presiding.
MR. JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:
"The Knolls" subdivision is a residential subdivision located within the corporate limits of the city of Peoria containing approximately 250 homes ranging in market value from $70,000 to $140,000. All lots are improved. The subdivision is bordered on three sides by public roadways; on the west by Sheridan Road, on the south by War Memorial Drive, and on the east by Knoxville Avenue. The Knolls is bordered immediately to the north by a separate residential subdivision known as Knollcrest.
"The Knolls Association" is an association incorporated under the General Not-for-Profit Corporation Act and formed pursuant to a declaration of restrictions for The Knolls subdivision dated July 9, 1928, and recorded in the office of the Peoria County Recorder. The Knolls Association is the plaintiff in this action. Jack D. Hinton and Anna L. Hinton are owners of the property at 114 West Stratford Drive, which is located within The Knolls. Lincoln National Realty, Inc., conducts business from a commercial building located at 114 West Stratford Drive. The Hintons and Lincoln National Realty, Inc., are the defendants in this cause.
Plaintiff brings this action seeking to enjoin the defendants from maintaining advertising signs presently located on the exterior of the south and east wall of the commercial building located at 114 West Stratford Drive. The signs allegedly violate restrictive covenants affecting property in The Knolls subdivision. The Circuit Court of Peoria County found that the signs described in plaintiff's complaint were in violation of the declaration of restrictions for The Knolls. That court also found that no substantial change in the character and environment of the area had occurred such that enforcement of the restrictions would be inequitable, nor had the plaintiff association waived or abandoned the restrictions by inaction and failure to enforce. Based upon these findings the circuit court entered an order on July 28, 1978, perpetually restraining and enjoining the defendants from maintaining the signs located on the exterior of the south and east wall of the commercial building located at 114 West Stratford Drive. That order was stayed pending appeal to this court.
The declaration of restrictions for The Knolls contains several pertinent passages which must be set forth verbatim for a complete understanding of the discussion which follows:
"3. The word `Lot' may mean any lot as platted, or any tract or tracts of land as conveyed, which may consist of one or more lots or a part or parts of one or more lots as platted and upon which a residence may be erected in accordance with the restrictions hereinafter set forth (except as provided in Section XIV Article One for Business Lots) or as set forth in individual deeds * * *.
During the period or periods of time that the restrictions herein set forth shall be effective, the construction or maintenance of billboards or structures exceeding five (5) square feet in size for posting, painting, or printing of signs or advertisements on any of the land in this Subdivision, including streets or roads or public places, is hereby prohibited * * *.
Section XIV. Business Lots:
All of Block One (1) and all of Block Two (2), except lots Nineteen (19), Twenty (20), and Twenty-one (21), are business, or semibusiness, and not bound by the restrictions herein for residence lots except as follows:
* * * 5. A building or buildings not to exceed two (2) full stories above ground fronting the North, and three (3) stories above the ground fronting the South, the ground floor of which shall be used for stores with entrance fronting South and with no windows, doors, passages, or other openings therefrom to the North, may be erected to Lots Six (6), Seven (7), or Eight (8), in Block Two (2). Stories above the ground are to be used as residences with entrances from the North, and the North front of such building or buildings is to be of residential architecture without commercial aspect, nor shall any commercial display or signs appear on the North side of such buildings. All of said lots shall be under the same restrictions and control for residences as they may apply."
The restrictions as excerpted are central to the issues in this dispute.
1 On appeal, the defendant presses three alternative theories. On the one hand he argues that the advertising signs in question do not violate the restrictive covenants of the subdivision. This issue is first raised in defendant's reply brief on appeal. We believe that the new issue raised in defendant's reply brief should be treated as waived, however, because of the importance of the substantive issue of law involved here we have elected to decide the question of whether the advertising signs violate the restrictive covenants of the subdivision. In that brief the attention of this court is directed to the case of Kessler v. Palmeri (1972), 3 Ill. App.3d 901, 278 N.E.2d 813. That case held that where the intent of subdividers is ambiguous regarding the application to commercial property of restrictive covenants designed to govern the use of residential property, then such ambiguity must be resolved with a construction favoring the free use of property. The case has no application to the facts before us, inasmuch as the restrictive covenants before us exhibit no such ambiguity. The covenant which limits the size of signs or advertisements to five square feet applies to "any of the land" in The Knolls. The restriction does not apply solely to "lots" or solely to "residential lots." Even if the above referenced covenant can be construed as limited to residential lots, the intent of the subdividers is unequivocal that Lots 7 and 8 in Block 2 are "under the same restrictions and control for residences as they may apply."
The subdividers of The Knolls provided an additional restriction with regard to business lots 7 and 8 in Block 2. It is provided that any structure erected on those lots may be used for commercial purposes and the entrance must front on the south. Also within the permissible scope of the restrictive covenants is the residential use of the second and third floor of structures located on those Lots 7 and 8. It is further provided that the entrance for the residential second and third floors must front on the north of such structures. In keeping with this residential-commercial dichotomy which the covenant establishes between the north and the south front of the building, no commercial display or signs of any type are allowed on the north front. There is no inference in the covenant that this north side prohibition is in lieu of the dimensional restrictions earlier provided for. To draw such an inference would be in disregard of well-established rules of construction. In construing these covenants and determining the intention of the subdividers, the instrument must be read and considered as a whole. (Keep Productions, Inc. v. Arlington Park Towers Hotel Corp. (1977), 49 Ill. App.3d 258, 364 N.E.2d 939.) Examination of the whole instrument evidences an overriding concern on the part of the subdividers to establish a tranquil and aesthetically pleasing atmosphere for residential life. Where commercial activity is provided for, it is circumscribed. And where, as here, residential and commercial activity are mixed together in the same structure on the same lot, additional and supplemental limits are placed upon the commercial activity. Such additional and supplemental protections are consistent with the subdivider's scheme as a whole. What is more, the subdividers provided that all other restrictions should apply to these residential lots. Meaning and effect must be given to every part of this instrument. (Heifner v. Board of Education (1975), 32 Ill. App.3d 83, 335 N.E.2d 600.) Only if we hold that the north side ...