Boyd v. Park Realty Corp.

Boyd, J., delivered the opinion of the court. This is an appeal from a decree of the Circuit Court of Baltimore City requiring the appellant to specifically perform a contract, dated November 15, 1919, made by him to purchase from the appellee lots Nos. 1, 2, 3, 4, 5 and 6 in Block 20, as shown on a plat of the property of the Forest Park Highlands Company of Baltimore City, which property is at the corner formed by the intersection of the northeast side of Bonner Road and the southeast side of Oakfield Road. The property was agreed to be sold free of all encumbrances, and the title was to be good and marketable. The appellant refused to comply with the contract on the ground that the lots were subject to certain restrictions which would lessen their value.

There is some confusion in the record, but our understanding is that this was originally a part of the Slingluff property, which was purchased by Abbott Morris from the trusr tees of that estate. Morris executed a mortgage to the trus ³⁸ tees for $82,500 simultaneously with the deed to' him. After-wards he sold the property, subject to the mortgage, to the Forest Park Highlands Company, which laid it out into lots, streets and avenues, and placed the plat on record. That company conveyed the lots involved in this case to1 Charles A. Thumel and Frank Harrigan (who sold them to the appellee), and also sold a number of other lotsi to various purchasers.

All of the deeds made by that company contained the same restrictions that are in the Thumel-Haxrigan deed. The mortgage given by Morris was later foreclosed, and the part of the property held by the Forest Park Highlands Company was sold under the foreclosure proceedings, except such as had been sold and released from the mortgage prior thereto. No portion of the property disposed of under those proceedings was sold subject to the restrictions. Without seb ting them out, it is sufficient to say that the restrictions in the Thumel deed applied to the kind and cost of buildings, where to be erected, the outbuildings, fences, etc., on the lots.

They are set out in full in the Thumel deed and immediately following them is this provision: “It is agreed that, all the foregoing covenants and agreements shall run with and bind on the property hereby conveyed but shall not continue for a period longer than twenty-one years.” The only covenant of the company in the deed (excepting one of special warranty and another for further assurances) is as follows: “The Forest Park Highlands Company of Baltimore City on its part covenants and agrees with the parties of the second part, their heirs and assigns, that it will macadamize the streets binding on the property herein described, lay granolithic sidewalks and cause to be introduced in the streets for the accommodation of said lot and the buildings to be erected thereon water and supply sewer drainage for said property, and that said improvements so to be made by the party of the first part shall constitute and be a part of the general system of street construction and improvements now being made and supplied said property.” ³⁹ There can be no doubt that the property sold in the foreclosure proceedings cannot be made subject to the restrictions in the deeds miado by the Forest Park Company before those proceedings, and none with restrictions have been made since. That company, which purchased subject to the mortgage, could not place restrictions on the property which would be binding on the mortgagees without their consent or unless they were in some way estopped from questioning them. The purchasers of all of the lots took their1 titles subject to the mortgage, except when released a,s to their respective lots, If the holder of a property, which was subject to a mortgage when he bought it, could burden it with restrictions without the consent of the mortgagees, the security of the mortgage might be seriously jeopardized, and it seems to be beyond controversy that, in the absence of something being done, by these mortgagees to estop them, they could sell all of the property not released by them if necessary to- pay the mortgage debt, without regard to restrictions placed on the lots by others after the mortgage was given. The record does not show how many lots were sold prior to the foreclosure, or give a definite idea as to the proportion of them to those unsold, but it is said in the appellee’s brief, and not denied by the appellant, that the largest portion of the tract which was owned by the Forest Park Company was sold under the foreclosure proceedings.

While it is clear that none of the lota or property then sold are subject to the restrictions, the important question is whether the purchasers of those bought before the foreclosure have thei right to enforce the restrictions inter sese. The Forest Park Highlands Company cannot enforce them for the obvious reason that it no longer has any interest in the property. What was. said by Judge Burke, in speaking for the gourt in Foreman v. Sadler's Executors, 114 Md. 574, 579 , in reference to the Lyndhurst Company, is very applicable here. That company, after giving, a purchase money mortgage, conveyed parts of the property subject to restrictions, and the mort ⁴⁰ gage was afterwards foreclosed.

In speaking of the restriction then before the Court it was said: “That restriction was evidently inserted for the benefit of the Lyndhurst Company, and all its property having been sold it has now no. standing in a court of equity to enforce the restriction.” The court also quoted from Sellman v. Sellman, 63 Md. 520 , that “it is a fundamental principle of equity pleading that to entitle a party to sustain a bill he must show an interest in the subject of the suit, or a right to the thing; demanded, and proper title to. institute the suit, concerning it.” But we still have to consider the rights of the purchasers of lots from the Forest Park Company, bought before the foreclosure. It is true that they knew*, or are charged with knowledge, of the mortgage, but the mortgagees released it from their respective lots, and both of those facts are to be remembered in passing on the question. Some principles in regard to such restrictions have been definitely determined and settled, but there are so many cases, and the facts vary so, that it is sometimes difficult to distinguish the effect of one decision from that of another. In Summers v. Beeler, 90 Md. 474 , Judge Pearce, with his well-known ability and industry, reviewed many cases, and he then quoted with approval from Nottingham Brick and Tile Co. v. Butler, 15 Q. B. Div. 268, where Justice Wills said: “The principle which appears to me dedueible from the cases is, that where the same vendor, selling to several persons plots of land, parts of a larger property, exacts from each of them covenants imposing. restrictions upon the use of the plots sold, without putting -himself under any corresponding obligation, it is a question of fact whether the restrictions are merely matters of agreement between the vendor himself and his vendees-, imposed for his own benefit and protection, or are meant by him, and are understood by the buyers, to be for the common advantage of the several purchasers.

If the respective covenants are simply for the benefit of the vendor, purchasers of other plots of land from the vendor cannot claim to take ⁴¹ advantage of them. If they are meant for the common advantage of a set of purchasers, such purchasers and their assigns may enforce them inter sese for their own benefit.” That was approved on appeal, and was. again quoted by us as late as Ringgold v. Denhart, 136 Md. 136 . In this case the Forest Park Company did not covenant to impose similar restrictions on all properties sold by it, or that its remaining land should be subject to them,. In Summers v. Beeler , Judge Pearce quoted from Mulligan v. Jordan, 50 N. J. Eq. 363, where it was said that the same covenant being in each deed the owner made “has. been held not sufficient evidence of the covenant having been entered into for the benefit of other lands conveyed by the same grantor.” He had just quoted from that case