Capitol Federal Savings & Loan Association v. Smith

The Smiths (plaintiffs), persons of color, owned property subject to a restrictive covenant purporting to create a right of reversion to the original grantors if any signatory sold or leased to persons of color; Capitol Federal Savings (defendant), a predecessor in title, held an interest tied to that covenant. The Smiths sued to quiet title and obtain a declaration voiding any claim arising from the covenant, and the trial court agreed the covenant was void as violating the Fourteenth Amendment, quieting title in the Smiths' favor; Capitol Federal appealed, arguing the covenant's reversionary interest vested automatically without needing judicial enforcement, placing it outside the reach of the Fourteenth Amendment's state-action requirement.