Clark & Stevens v. Gerke

Jones, J., delivered the opinion of the Court. The facts of this case are that the appellees are the owners; of the lot of ground and premises in the city of Baltimore mentioned in the proceedings as No. 5 West Lexington street now occupied by the appellants for the .purposes of their business, as merchants. On the 30th day of April, 1903, the appellees gave to the appellants an agreement to lease to the latter these premises for the period of ten years with the priv ⁵¹⁴ ilége of an extension of the term of said lease for a further period of four years at a rental of six thousand dollars per year, and ón the 31st of October, 1903, accordingly executed a lease containing the stipulations and agreements provided for in the said agreement. Among the stipulations of the lease and agreement was one for the making by the appellants, (lessees) of certain repairs and alterations in the premises or the building thereon which were specifically provided for and definitely described in carefully prepared specifications accompanying the lease.

These specifications make no provisions for repair of the side walls of the building, and make no reference at all to these walls in that connection other than to require some underpinning at designated places in the cellar. The term of the appellants (lessees) under the lease was to begin on the first of March, 1904, at which time they were to have possession of the leased premises. In anticipation of their occupancy of the premises, the appellants sought from the proper authorities of the city of Baltimore, a. permit, as required by the ordinances of the city, for doing the repairs and making the improvements required by the stipulations of the lease. The attention of these authorities being thus drawn to the premises in question and to the condition of the building thereon they pronounced the side walls unsafe and dangerous; and after making formal inspection of the same sent on February 29th, 1904, to the owners ■of the building and property (appellees here) a notice, through the Inspector of Buildings, to the effect that the walls in question had been “reported to be a menace to the safety of persons or property;” and that “the said building” was “therefore condemned, and in order to insure the safety of persons and property” the owners were “directed to have the same made safe and secure immediately, as required by sec. 94, Ordinance No. 82,-approved .July 25th, 1902, or to be removed as per instructions of the Inspector of Buildings * * * to avoid the possibility of danger.” On the 17th of March, 1904, the appellants filed in the Court below their bill of complaint against the appellees in ⁵¹⁵ which, and in the exhibits therewith filed, appear the facts which have been stated, and in which it is further alleged that appellees (lessors) “did guarantee the general good condition of the improvements on said premises at the time of the making of said agreement and lease;” that the appellees had not put them (lessees) in possession of the premises under the agreement and lease but were putting “unreasonable obstacles” in the way of the appellants “carrying out the specifications and stipulations” of the lease.

The bill then prayed the Court to “take jurisdiction of all the matters aforesaid” and to “specifically enforce and cause to be carried out the contract contained in said agreement and lease and specifications;” that the appellants (lessees) be, by order of Court, forthwith put in possession of the premises in question; and that the appellees be enjoined from disturbing them (the appellants) in the possession of the same; that the appellants might have the protection of the Court, in making the repairs specified in the agreement, lease and specifications and that the same be made under “the direction, control and protection of the Court;” that “the repairs' or changes, not contained in said agreement, and lease and specifications, which may be lawfully required by the Inspector of Buildings of Baltimore City” might “also be made under the direction and protection” of the Court; “and the cost thereof * * be charged up in settlement against the lessors;” that the appellants might “have the benefit and protection of the adjudication of the Court” as to the settlement of the same, in set-off against the rent stipulated to be paid under said agreement and lease, in case the defendants will not or do not of their own accord, indemnify the plaintiffs (appellants) under the direction” of the Court; and that the appellants might have “other and further relief. ” On the same day the bill was filed the Court passed an order that a subpoena issue as prayed; that the appellants be, forthwith, put into possession of the premises in question; that an injunction issue enjoining the appellees (defendants below) from disturbing the appellants (plaintiffs below) in such possession “pending further orders or decrees” of the Court— ⁵¹⁶ unless cause to the contrary should be shown before April ist, 1904. On the 28th of March the appellees filed an answer to the bill which admitted the lease, agreement and specifications; also the receipt, prior to March ist, 1904, of the notice from the Inspector of Buildings of the city of Baltimore which has been herein referred to. , But the appellees deny that they had not put the appellant in possession of the leased premises under the lease; deny that they warranted the condition of the leased property; deny that they had put “unreasonable obstacles” in the way of the appellants “carrying out the sped-, fications and stipulations” of the lease; and aver that the latter “were not only at liberty to make repairs and alterations, and otherwise comply with the specifications but by a covenant in the lease, were bound” to do so, and the appellees were desirous that the stipulation as to these should be carried out to place the property in a condition to produce revenue. The answer then admits that the appellees, as owners of the property in question, were “responsible to the Inspector of Buildings in his official capacity for the condition of their property;” but denies “that under the terms of the lease they are compelled to establish such new conditions in their property as would allow the improvements and alterations to be made by” -the appellants; and avers that on the contrary “by an agreement signed and sealed’ ’ by the appellants the latter agreed to save the appellees harmless which agreement is incorporated in the answer and is as follows: “Concurrent with lease of premises No. 5 W. Lexington street, of even date herewith and in consideration thereof, the undersigned lessees (appellants) therein named, as a condition precedent thereto, do hereby promise and agree that the lessors (appellees) therein named * * * are to be put to no cost, directly, or indirectly, for the changes in the building recited in the lease, or the making of said changes and the lessees hereby agree to use all diligence to cause said changes to be made as speedily as possible after the ist day of March, 1904, under penalty of forfeiture of said lease and of all interest therein, or ⁵¹⁷ the lessors may for want of such due diligence, cause the same to be done at the lessees’ expense; all the rents and profits due and accruing before and up to the 1st day of March, 1904, to belong by right to the lessors. Witness the hands and seals of Clark & Stevens, as lessees, this 31st day of October, 1903.” Subsequent to the answer there were other agreements between the parties filed in the cause which have a bearing on the questions to be determined.

On the 18th of April, 1904, an agreement was filed in which after some preliminary matter which does not affect such questions it was “agreed by all the parties” that the appellants should “forthwith make actual entry” on the premises “without the hindrance of any of the parties” to the cause and “without prejudice to the rights * * * of any of the parties” thereto; “and in case it should be necessary for the making of said entry “the appellants (lessees) were to have the right” to use the power and authority of any or all of the other parties.” It was then further agreed that the lessees on their part and the lessors on their part should “keep memoranda of their several claims under the exhibited agreement and lease and account with each other, and in case of a disagreement between them as to any account, or the rendering or settlement thereof, either party “might apply to the Court” in this cause to state a proper account thereof in due course.” On the same day there appears to have been passed by the Court the following order: “Upon the above bill and exhibits, answer and agreement it is this 18th day of April, 1904, ordered by the Circuit Court for Baltimore City by consent that this Court take jurisdiction in this case and retain the bill for the purpose of carrying out said agreement; and that the plaintiffs (appellants) are hereby authorized and directed to take possession of the premises number 5 West Lexington street under the terms of said agreement.” On the 27th day of May, 1904, an agreement was filed in the cause to the effect that the lessees might “make such other and further changes and repairs in the demised premises ⁵¹⁸ as they” might “think reasonable and convenient for their use and enjoyment of said premises over and above those mentioned in said lease—provided they should in the first place make all the repairs and changes stipulated in the lease and expend thereon the full amount specified therein—the lessees to give bond to be approved by the Court if necessary in an amount named “to secure the restoration of said premises at the end of the term of said lease, to the same condition as contemplated by the specifications (if the lessors shall then desire the said restoration); and that upon the execution of the agreement by the lessors the lessees would forthwith pay the rent stipulated monthly, according to the form of said lease, until an account should “be passed by the Court determining the respective rights of the parties as to any claim (if any) to be allowed by way of set-off or damage or cross-claims of the lessors against the lessees, or of the lessees against the lessors; as the case from time to time shall be, and in accordance with the former agreement as explained by this present agreement.” In connection with this last agreement it was further agreed that the lessees should advance the amount due from the lessors for taxes for 1903 and that such advance should be reimbursed to the lessees out of the rent in the mode indicated. On the first day of February, 1905, the lessees filed in Court a petition in which they allege that they file with the same three accounts marked respectively “Building Account,” “Tax Account” and “Rent Account,” and ask that the papers in the case be referred to an auditor of the Court to state an account between the parties as to all of the matters involved in the proceedings in the case.” The “Building Account” consisted of charges of contractors and architects for expenses incurred by the appellants in making repairs and alterations according to. specifications accompanying the lease and in making further improvements under the authority of the subsequent agreement of the 27th of May, ^04; and also for like charges for expenses of tearing down, rebuilding and restoring the part of the building 'on the leased premises which ⁵¹⁹ the Inspector of Buildings had condemned. The Court ordered a reference of the proceedings to the auditor, who upon testimony taken before him stated two accounts on the theory contended for by the appellants (plaintiffs below). In the one designated “Account Rebuilding” the appellants were allowed as against the appellees for expen’ses incurred in tearing down and rebuilding the condemned building.

In the other designated “Improvements” the appellants were charged with certain expenses for alterations and repairs incurred by them, under the contract for doing such contained in the lease, but not for those incurred for tearing down and restoring the condemned building. The lessors (appellees) excepted to both of these accounts. To the “Account Rebuilding” because it charged them with the costs which have been indicated; and to the account “Improvements” because it did not charge to the lessees (appellants) such costs as well as the costs for alterations, repairs and improvements other than those for tearing down and rebuilding the part of the building on the leased premises that was condemned. The Court sustained the exceptions and dismissed the bill.

The appeal is from this decree. The evidence before the auditor showed that the appellants had made the contracts and incurred the expenses indicated in their “Building Account” filed with their petition of the first of February, 1905, and as to this there is no dispute. The foregoing recitals from the pleadings and proceedings make it apparent that at the time of the decree below the only question the Court was called upon to decide was whether the obligation to assume the cost of, and payment for the removal and rebuilding of that portion of the building on the leased premises which was condemned and ordered removed by the Inspector of Buildings devolved upon the appellants or the appellees. At the end of all of the proceedings in the case which preceded the final decree the appellees filed in the cause a petition in which is the allegation “that there is not now at issue any question between the plaintiffs and defendants in this ⁵²⁰ cause” and that the Court was without jurisdiction therein.

It was accordingly prayed that the bill of complaint be dismissed. Looking to the allegations of the bill the Court undoubtedly acquired jurisdiction thereunder. The bill asked for the enforcement of the specific execution of the agreement that was the subject of controversy in the case alleging that the appellees were failing to carry it out. The question presented upon the statement of account between the parties by the auditor was made by the bill and under the peculiar circumstances of the case and in the thep attitude of the parties before the Court was necessarily associated with the carrying out of the agreement.

The charter of the city of Baltimore (sec. 6) authorizes the city to. provide for “the entry into and examination of all dwellings * * and buildings to ascertain their condition for health, cleanliness and safety; for the taking down and removal of buildings, walls, structures and superstructures that are or may become dangerous, or to require owners to remove them or put them into a safe and sound condition at their own expense;” and “to regulate the height, construction and inspection of all new buildings * *; and the alteration and repairs of any buildings already erected * * or to be erected.” And in sec. 79 it provides that the Inspector of Buildings “shall have the supervision of the construction of all buildings erected in the said city, and shall see that the building- laws relating to the construction of said buildings shall be complied with.” By sec. 82 .the duty is imposed upon the Inspector of Buildings “to enforce the execution of all existing or hereafter enacted building regulation! and ordinances relating to the construction, alteration arid removal of buildings, or other structures, walls, or parts of buildings or other structures. ” It was in pursuance of ordinances enacted, and regulations prescribed, by virtue of the powers conferred in the foregoing provisions of the charter of the city of Baltimore that the inspection, condemation and order for removal of the structure upon the leased premises here in question were made, and its ⁵²¹ rebuilding was regulated. We do not understand that the existence or extent of these powers, or the propriety of the exercise of them in the circumstances appearing is called in question. No more specific reference to the powers or to the regulations in pursuance of them, needs therefore to be made-The appellees admit, as we understand them, that as between themselves and the city authorities the obligation was imposed upon them to remove the part of their structure that was condemned as dangerous and ordered to be removed or made safe; and that when the same had been removed or taken down as ordered, if they elect to rebuild, they would have had to conform to the regulations prescribed by the said authorities in doing such rebuilding. The evidence shows that the expenses incurred by the appellants in taking down and restoring the building in question were so incurred in doing the said removing and rebuilding in conformity with such regulations.

In claiming therefore to be reimbursed by the appellees for such expenses the appellants call upon the appellees to pay only what would have devolved upon them to pay if, in view of their contractual relations with the appellants and of the conditions under which the rebuilding was done, they had undertaken to remove and restore the condemned structure themselves. In support of their exceptions to the account of the auditor which charges them with the expenses incurred in the removal and rebuilding the condemned structure they insist that they are relieved of the obligation to pay such expenses by virtue of their contractual relations with the appellants—that the latter in carrying out their contract with them necessarily and legally incurred the obligation to do and pay for, the removal and rebuilding in question at their own (appellants) expense in order to secure to themselves the use of the premises for which they had ob ligated