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Smith v. Mitchell

269 S.E.2d 608 (1980)

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Smith v. Mitchell

North Carolina Supreme Court

269 S.E.2d 608 (1980)

Facts

W. O. Smith, Jr. and Roberta Smith (the Smiths) placed a restriction on their subdivision requiring that if any future owner wished to sell a lot, the owner must grant the Smiths or their heirs or assigns a right of first refusal to purchase the lot. To protect future sellers, the restriction required that any purchase price under the right of first refusal could be no lower than the seller would accept from any other purchaser. The right was to last for the life of the Smiths’ son, Osmond Smith (plaintiff), plus 20 years. Osmond succeeded the Smiths in interest and conveyed a lot in the subdivision to the Mitchells (defendants). The following year, the Mitchells conveyed the lot to the Barbers (defendants) without first offering to sell to Osmond. Osmond brought suit for specific performance. The trial court granted the Mitchells summary judgment, finding that the covenant requiring a right of first refusal was an unlawful restraint against alienation. The court of appeals affirmed. The North Carolina Supreme Court granted Osmond’s petition for review.

Rule of Law

Issue

Holding and Reasoning (Carlton, J.)

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