Marathon Builders, Inc. v. Polinger

Barnes, J., delivered the opinion of the Court. The question presented to us for determination in this case is whether the applicable provisions of the zoning ordinance of Montgomery County together with the violation by the grantors in the deed of the ¡and involved of the Montgomery County subdivision regulations are a breach of the covenant against encumbrances in that deed. The present case is the aftermath of our decision in Marathon Builders, Inc. v. Montgomery County Planning Board, 246 Md. 187 , 227 A. 2d 755 (1967) in which we affirmed an order of the Circuit Court for Montgomery County denying the issuance of a mandatory injunction to command the Montgomery County Planning Board of the Maryland-National Capital Park and Planning Commission to approve a preliminary plan for the subdividing of the same 8.762 acre tract involved in the present case in accordance with the R-30 (Multiple-Family, Low Density Residential) zone classification, the Planning Board having disapproved the proposed subdivision on the ground that the 3.762 acre tract constituted part of the net lot area already devoted to the existing apartments lying south of the 3.762 acre tract. The facts in the present case are undisputed and were submitted to the Circuit Court for Montgomery County (Miller, J.) upon a stipulation of facts.

The stipulation indicated that in December, 1953, the appellees, Milton Polinger and others (collectively referred to as the Po-lingers) owned a 9.895 acre tract in Montgomery County. ⁴¹² At that time they applied to build 15 apartment buildings consisting of 217 units. The zoning ordinance then in effect in Montgomery County permitted construction of apartments with an area density of one unit per 625 square feet. In January, 1954, a new comprehensive zoning ordinance became effective in Montgomery County. The entire 9.895 acre tract was rezoned R-30 which required 3,000 square feet of land for each apartment unit.

Under the new zoning, 217 apartment units would not have been permitted, but the zoning ordinance allowed the construction under a “saving” or “grandfather” clause. -Thereafter, the 9.895 acre tract was developed. Fifteen apartment buildings containing a total of 217 units were erected on that tract. These buildings were so situated that a 3.762 acre area of the entire tract remained unimproved, as well as a strip of land used for parking which separates the 3.762 acre tract from the apartment buildings. After completion of the apartment buildings, but prior to 1961, the Polingers conveyed all of the various buildings to third persons until all that remained of the original 9.895 acre tract was the strip of parking lot and the 3.762 acre tract (the subject property) which was conveyed to the appellant, Marathon Builders, Inc. (Marathon) in December, 1961.

In Marathon v. Montgomery County Planning Board, supra, we held that the conveyances made between January 1, 1954, and December, 1961, including the conveyance of the subject property to Marathon, were made in violation of Sections 101-3 and 104-4 c (1) (a) (b) of the Montgomery County Code (1960) inasmuch as subdivision plats of the various tracts were not filed and recorded. Subsequent to its acquisition of the subject property, Marathon attempted to have the property rezoned from R-30 to R-10 (Multiple-Family, High Density Residential). All attempts to have the subject property rezoned or to use the property have been denied on the grounds that the property is part of the net lot area for the orig ⁴¹³ inal 9.895 acre tract; and since the entire density has already been used, the subject parcel cannot now be used. This Court stated in the Marathon case that theoretically the Polingers could have, prior to January of 1954, subdivided the entire 9.895 acre tract into several lots and thus have computed the density independently, thereby insulating the subject property; but this was not done.

This Court further held that Marathon knew, or should have known, that at the time of the purchase, apartments had been built by the sellers and that the land purchased by Marathon had not theretofore been subdivided. Thus, Marathon knew that its land could not be used. On December 18, 1961, the subject property was conveyed by the appellees, Polinger et al., to Marathon by a deed duly recorded on February 6, 1962, among the Land Records of Montgomery County, the appellees being referred to in the deed as the “parties of the first part” and the deed containing, inter alia, the following language: “And the said parties of the first part hereby covenant that they have not done or suffered to be done any act, matter or thing whatsoever to encumber the property hereby conveyed; that they will warrant specially the property granted and that they will execute such further assurances of the same as may be requisite.” Marathon contends that its inability to use the subject property results from an “encumbrance” thereon in violation of the covenant against encumbrances, while the appellees, who were defendants below, contend that such inability to use the land does not constitute an encumbrance in violation of the covenant. The trial court in a carefully considered opinion held that there was no violation of the covenant against encumbrances and entered a judgment for costs in favor of the defendants-appellees.

From this judgment, Marathon filed a timely appeal. We have concluded that the ruling of the lower court was correct and we will affirm the judgment. ⁴¹⁴ The covenant against encumbrances is one of the covenants of title to land currently in frequent use in deeds for conveying land in Maryland. This covenant, like the covenants of seisin and of the right to convey, is a personal covenant which does not run with the land, which operates in praesenti and is broken, if at all, when the deed containing the covenant is delivered. Tiffany, The Law of Real Property (3rd ed. 1939); 21 C.J.S. Covenants §§ 40, 41, 42, pp. 911-15.

The covenants of general and special warranty, of quiet enjoyment and for further assurances, on 'the other hand, are covenants in futuro which are not necessarily breached when the deed is delivered but which may be breached by subsequent events. These covenants run with the land. Tiffany, The Law of Real Property, supra; 21 C.J.S. Covenants §§ 46, 47, 48 and 49, pp. 917-21. By the Laws of 1864, ch. 252, the General Assembly provided a shorter form for all of these covenants of title so that thereafter conveyancers in Maryland could use the shorter form without the burden of the rather ponderous form in use by the common-law conveyancers who, quite naturally, were unwilling to eliminate a single word of the long form of covenant generally in use and theretofore construed by the courts.

The provisions of the Laws of 1864, ch. 252 now appear as Code (1966 Repl. Vol.) Art. 21 “Conveyancing,” §§ 86-94. The General Assembly by providing for the abbreviated form of covenant, however, did not intend either to enlarge or to diminish the meaning and scope of the common law forms. The legislation states that the short form “shall have the same effect” as the old long form.

This is reinforced by the provisions of § 9 of ch. 252 of the Laws of 1864 (Art. 21, § 94), as amended, that all deeds executed in pursuance of the prior provisions “shall be as valid and effectual as if the covenants in said deed had been expressed therein, in full.” The Laws of 1864, ch. 252, § 7 (Art. 21, § 92) is the provision relating to covenants against encumbrances. It states, as amended: ⁴¹⁵ “A covenant by grantor, in deed for land, ‘that he has done no act to encumber said land/ shall be construed and have the same effect as if he had convenanted that he had not done or executed, or knowingly suffered any act, deed or thing whereby the land and premises conveyed, or intended so to be, or any part thereof, are or will be charged, affected or encumbered in title, estate or otherwise.” The language in the covenant used in the deed involved in the instant case, as we have seen, covenants against the doing or suffering to be done by the grantors of “any Act, matter or thing whatsoever to encumber the property hereby conveyed,” so that the full language of the older form of covenant provided for in Art. 21, § 92 is applicable. By virtue of Art. 21, § 86 this covenant binds the grantors, their heirs, devisees and personal representatives and enures to the benefit of the grantee “his heirs, devisees, personal representatives and assigns” — in the present case — Marathon’s successors and assigns. An excellent statement of the Maryland law in regard to covenants against encumbrances appears in the late Judge Eli Frank’s book entitled, Title to Real and Leasehold Estates and Liens (1912).

Judge Frank was a recognized authority on this subject. He stated at page 98: “The Covenant Against Encumbrances is still frequently used. It has for its object security against those rights to or interest in the property conveyed, which subsist in third persons to the diminution in value of the estate, though consistent with the passing of the fee in the estate. This covenant usually does not run with the land, but is only for the benefit of the covenantee.

Its shortened form now reads ‘that he (the grantor) has done no act to encumber the land/ but this is the full equivalent of the older form ⁴¹⁶ ‘that he had not done or executed or knowingly suffered any act, deed or thing whereby the land or premises conveyed, or intended so to be, or any part thereof, are or will be charged, affected or encumbered in title, estate or otherwise.’ Code, Art. 21, sec. 74. Even though the grantee has knowledge of the existence of encumbrances at the time of delivery of the deed to him containing a covenant against encumbrances, he is still entitled to the full benefit of the covenant. He is not bound to insist upon the removal of the encumbrances prior to the acceptance of the title, even though the contract of sale bound the vendor to convey a title, free of encumbrances. He may prefer to accept the encumbered title and rely on his action in personam against the grantor.

Bryant v. Wilson, 71 Md. 440, 442, 443 .” To the same effect is Notes on Titles published by the Title Guarantee Company in 1903, § 56 at page 73, except reference is made to James v. Jenkins, 34 Md. 1, 11 (1871) in regard to the purchase of land subject to a visible easement. It thus appears that the covenant against encumbrances protects the covenantee, its successors and assigns, against rights or interests in the property conveyed which subsist in third persons and diminish the value of the estate even though they are consistent with the passage of the fee in the estate. Liens, including tax liens, mortgage liens, attachment liens and judgment liens, breach the covenant unless excepted from its operation either expressly or by implication and regardless of whether or not the covenantee knew of their existence. In Bryant v. Wilson, 71 Md. 440 , 18 A. 916 (1889), Chief Judge Alvey stated for the Court: “* * * it is quite immaterial that it is not alleged in the bill for specific performance that the property is, to the knowledge of the plain ⁴¹⁷ tiff, subject to incumbrances; for whether the vendee has knowledge of the existence of incumbrances or not, at the time of taking the deed with covenant against incumbrances, his rights on the covenant would in no manner be affected by such knowledge.” (Citing cases and Washburn on Real Property.) ( 71 Md. at 442-443 ; 18 A. at 916 .) Easements may be a breach of the covenant against encumbrances, Wolff v.