El Di, Inc. v. Town of Bethany Beach case brief

El Di, Inc. v. Town of Bethany Beach case brief summary
477 A.2d 1066 (Del. 1984)

CASE SYNOPSIS

Appellant corporation sought review of a permanent injunction granted by the Court of Chancery (Delaware) upon petition of appellee town prohibiting the corporation from selling alcoholic beverages at a restaurant owned and operated by the corporation.

CASE FACTS
The corporation was granted a license to sell alcohol, by the State Alcoholic Beverage Control Commission, at a restaurant owned and operated by the corporation, on the finding of public need and convenience. The corporation herein appealed a permanent injunction granted on application by the town enjoining the sale of alcoholic beverages under the license on the basis of the undisputed chain of title for the restaurant that included a restrictive covenant prohibiting such sales. 

DISCUSSION

• The court reversed the grant of the permanent injunction finding that the trial court erred in holding that the change of conditions was insufficient to negate the restrictive covenant. 
• Since 1901, the character of that area of the old-town section now zoned C-1 was so substantial as to justify modification of the deed restriction. 
• The business uses, the availability of alcohol in close proximity to this section of town, and the repeated use of "brown-bagging" in the C-1 district rendered the originally intended benefits of the covenants unattainable in what had become an area detached in character from the strictly residential surroundings to the west and made enforcement of the covenant unreasonable.

CONCLUSION
The court reversed the grant of a permanent injunction enjoining the corporation from serving alcoholic beverages at the restaurant owned and operated by the corporation.

NOTES
-P (Bethany Beach) sought to enforce a restrictive covenant prohibiting the sale of alcoholic beverages, even though the nature of the neighborhood had changed greatly since the creation of the covenant.

1. Rule: A restrictive covenant will not be enforced where a fundamental change in the nature of the neighborhood has made the purpose sought by the covenant unattainable.