Bean v. Steuart Petroleum Co.

Finan, J., delivered the opinion of the Court. The appellants appeal from a decree of the Chancellor in the Circuit Court for St. Mary’s County perpetually enjoining them, their agents, servants and employees from conducting the retail sale of petroleum products on a parcel of land found to be the subject of a restrictive covenant running with the land. Two of the appellants, James A. Bean, et ux., were the owners of two tracts of land in St. Mary’s County, one tract consisting of one hundred acres, lying on the east side of the State Road leading from Valley Lee to Calloway; the other tract, a one acre triangular parcel, lying on the west side of said road, which was known as the “Knott Property”. The appellants, James A. Bean, et ux., some years past constructed a service station, from which they dispensed Sunoco products on the property on the east side of the road.

By deed dated January 26, 1962, appellants, James A. Bean, et ux., conveyed the service station and the ground immediately surrounding it (about one acre) for $30,000.00 to the appellee, Steuart Petroleum Co. The Beans at the insistence of the appellee in ⁴⁶² corporated in this deed a covenant running with the land, binding in perpetuity upon the grantors and their successors in title, which covenant restricted the remaining land of the grantors within 5,000 feet of the service station (on either side of the road), from being used for the retail sale of petroleum products. There was testimony to the effect that the consideration paid was considerably in excess of the actual value of the service station and the one acre surrounding it, because of the inclusion of the restrictive covenant. After the purchase, the appellee forthwith discontinued selling Sunoco products and converted the station into a Chevron service station selling gasoline under that brand name. On April 15, 1963, the appellants, James A. Bean, et ux., sold the one acre triangular parcel on the other (west) side of the road diagonally across from the Chevron Station, to their son, Edward Bean, et ux., the other appellants.

On the same day, April 15, 1963, Edward Bean, et ux., acquired a small parcel of land, allegedly rectangular in shape (80' x 140') and contiguous to the one acre triangular piece, from Rose Stone, et vir for $1401.80. The Stone parcel was not subject to any restrictive covenants regarding its use. There was testimony that when James A. Bean bought the triangular piece of one acre in 1961, from the Will Knott estate, that James A. Bean went on the property and, together with Mrs. Rose Stone, discussed the probable location of the common boundary line between the two parcels. Neither of them had any positive knowledge as to the location of the boundary line and finally, to their mutual satisfaction, reached a parole agreement as to its location.

This line was subsequently pointed out by the father, James A. Bean, to his son, Edward Bean, when the latter and his wife acquired title to both the triangular and rectangular parcels in April of 1963. Edward Bean testified that when he purchased the rectangular parcel from the Stones in April of 1963, he did so with the purpose in mind of constructing a Sunoco service station thereon. The descriptions in the deeds to both the triangular (Knott) property and the rectangular (Stone) property are so ambiguous as to render them incapable of protraction by courses and distances with any resulting logic. ⁴⁶³ There is the testimony of William E. Cosdin, employee and local representative of the appellee, that as early as the late fall of 1962, he noticed land clearing activity, by a bulldozer operator, on the land of James A. Bean, et ux., adjacent to the appellee’s service station. Shortly thereafter this was discontinued and activity was commenced again on the opposite side of the State Road, on what appeared to Cosdin to be the triangular parcel subject to the restrictive covenant.

Cosdin was sufficiently disturbed by this as to be prompted to check the building permits in the St. Mary’s County Court House, in an effort to ascertain what was going on. He testified that his inquiry revealed that Edward Bean was constructing a service station on the property and reported this to his employer, the appellee, who instructed him to contact an attorney, which he did in the fall of 1962. In the summer of 1963, after the service station was constructed and open for business, Cosdin and the appellee’s attorney visited the property and were ordered off the property by Edward Bean. The appellee finally filed its Bill of Complaint for a restraining order on October 17, 1963, and a petition for a survey was filed on February 25, 1964.

The results of the survey showed that the new service station was 465 feet from the Chevron station. The surveyor Koval, who was an unregistered surveyor, endeavored to reconstruct the descriptions from the physical features found on the property, while reconciling them as best he could with the descriptions in the deed and with information supplied by local residents; his main effort being directed at locating the common boundary between the triangular parcel (Knott property) and the rectangular tract (Stone property). Koval and the appellee’s witnesses placed a substantial part of the service station on the triangular parcel or “Knott Property” (subject to the restrictive covenant), while the appellants assailed the qualifications of the surveyor Koval and produced witnesses who placed the common boundary at such a location that the service station was on the Stone property. The Chancellor below heard testimony, most of which was non-expert, and after a personal visit to the properties found, “that a substantial part of the Sunoco Service Station building ⁴⁶⁴ as well as the pump island and entrance roadways are on the Knott property.”; and rendered an opinion deciding the case in favor of the appellee.

Accordingly, a decree was signed July 17, 1965, restraining the appellants from selling at retail, petroleum products on the triangle tract (Knott property) owned by. Edward Bean, et ux. The court below directed its attention mainly to the question of the physical location of the boundary line between the property subject to the restrictive covenant and the property not subject to the covenant. Once it resolved that question and determined the additional fact that the service station was, in its opinion, constructed on the property covered by the restriction, it had no difficulty finding in favor of the appellee.

Because, as stated in its opinion “In this case the Court has no difficulty with the law, * * *.” However, this Court finds it difficult to reconcile the manner in which the lower court applied the law to the facts in the case. We are concerned with the question of estoppel operating against the appellee, a consideration which does not find its way into the rationale of the lower court. It should be noted that counsel for all parties made the question of the site of the service station and the common boundary location between the subject and non-subject property, the main thrust of their arguments. True, appellants also raised the question as to the admissibility of the testimony of the surveyor, Koval, contending, that since he was not a registered surveyor, he was not a qualified witness competent to testify regarding the survey of the properties.

This, might well have given us some pause for reflection, if we thought it was controlling in this case, but we do not. We are concerned with the contention embraced in the argument of the appellants, wherein they raised the issue that injunctive relief should be denied the appellee because it was guilty of laches. We, however, approach it from the ground of estoppel. The testimony reveals that the appellee’s representative first observed building activity, on what the court below found to be the property subject to the covenant (triangular parcel), in the fall of 1962.

He immediately verified the fact that a service station was being constructed on the property by Edward Bean. ⁴⁶⁵ Still, in the fall of 1962, the appellee consulted legal counsel concerning the problem. Cosdin, the local representative of the appellee, drove past the location almost daily. The construction of the new service station took place only 465 feet from the appellee’s Chevron station and could be easily and continually observed by the appellee. Yet, it was not until the summer of 1963, after the service station was constructed and open for business, that the appellee took any steps to register its objections to the actions of the appellant, Edward Bean.

The testimony shows that in the summer of 1963, Cosdin in company with the appellee’s attorney visited the new service station and made inquiry of Edward Bean, as to where the property lines were located, and were immediately ordered off the premises. It was not until October 17, 1963, that any definitive legal action was taken and then by way of the appellee filing its Bill of Complaint. It would certainly appear to have been in order for the appellee to have properly protected itself, by lodging a protest or serving notice of its objection on the appellants, orally or in writing, when the construction work was in its incipient stages. The older cases followed the doctrine of estoppel as it is set forth in Cityco Realty Co. v. Slaysman, 160 Md. 357, 363-64 , 153 Atl. 278, 281 (1931): “It has long been settled that ‘one who stands by and sees another laying out money upon property to which he has some claim or title, and does not give notice of it, cannot afterwards, in good conscience, set up such claim or title.’ Browne v. M. E. Church, 37 Md. 124 ; Tongue v. Nutwell, 17 Md. 212 ; Carmine v. Bowen, 104 Md. 203 et seq., 64 A. 932 .

But that principle has no application where * * * the true state of the title is equally available to both parties (Browne v. M. E. Church, supra, * * *; Schaidt v. Blaul, 66 Md. 141 , 6 A. 669 ; Park Ass’n v. Shartzer, 83 Md. 10 , 34 A. 536 ); * * *. Fraud, actual or constructive, in some form, is an essential ingredient of the