This section contains the nature of the case and procedural background.

Lauderbaugh purchased land and subdivided it. As a condition precedent to future purchasers, each buyer of a lot was required to be members of the Lake Watawga Association. The Association was formed to control the development along the shore of the lake. Mrs. Lauderbaugh then instituted a quiet title action seven years later to remove a cloud on her title by seeking to have the agreement restricting the sale of property to members of the Association declared void. Mr. Lauderbaugh had died. Mrs. then sold her property to Asher Seip, Jr. and Jacob Seip and the Association sued to set aside the deed as a violation to sell only to members of the Lake Watawga Association. The plaintiffs in the equity case were the defendants in the quiet title action. The trial judge found against Mrs. and the Seip' but restricted the application of the restrictions to the west shore of the lake. Both sides appealed.

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