McKenrick v. Savings Bank

Offutt, J., delivered the opinion of the Court. By their agreement in writing of September 1st, 1937, the Savings Bank of Baltimore sold, and C. Damer Mc-Kenrick bought, a lot of ground, 100 by 160 feet, at the southeast corner of the Reisterstown Road and Slade Avenue in Baltimore County for $3,000. Under the agreement the vendor agreed to convey the property by a “good and merchantable, fee simple title,” upon the payment in full of the purchase price. It was also agreed that time was to be “of the essence” of the contract and that settlement should be made “within a reasonable time ¹²⁰ * * * and before September 15th, 1987.” The vendor tendered itself ready able and willing to complete the contract by conveying the property, but the vendee refused to pay the price or accept the deed on the ground that the vendor was unable to convey a good and merchantable title because, he said, the land was incumbered by certain restrictions imposed by Ida Grace Parrish and Mary Laura Busey, who formerly owned it, as part of a general plan or scheme of development affecting not only the lot which is the subject of this suit but other land of which that lot was a part, which Mrs. Parrish and her sister Mary Laura Busey then owned.

The vendor then filed the bill in this case to compel the vendee to specifically perform his contract. An answer was filed setting up the defense indicated above, testimony was taken, exhibits filed, the parties heard, and at the conclusion of the hearing- the court granted the relief prayed. From that decree the vendee appealed. It is undisputed that, apart from the supposed restrictions, the vendor is ready, able, and willing to convey the land to the vendee by a good and merchantable title.

It is settled law that restrictions which limit the use which an owner may make of his land are incumbrances which are inconsistent with an absolute and unfettered title thereto, and that one who has agreed to purchase land upon the condition that the vendor convey to him a good and merchantable title is not, unless he had notice of them when the contract was made, required to accept a title burdened with restrictions. Tiffany on Real Property, 1686; 27 R. C. L. 508; 66 C. J. 909, 913; Devlin on Deeds, secs. 1514, 1520; Batley v. Foerderer, 162 Pa. 460 , 29 A. 868 ; Shea v. Evans, 109 Md. 229 , 72 A. 600 ; Newbold v. Peabody Heights Co., 70 Md. 493 , 17 A. 372 ; Bealmear v. James, 147 Md. 274 , 128 A. 40 ; Peabody Heights Co. v. Willson, 82 Md. 186 , 32 A. 386, 1077 . The single question which the appeal presents therefore is whether the land which is the subject of this proceeding is in fact burdened with any restrictions which will limit the free, unfettered, and complete use and en ¹²¹ joyment thereof by the owner. It appears from the record, and is in fact conceded, that neither the vendor nor its predecessors in title have, by any conveyance of, or contract relating to, the precise land in controversy, directly or specifically imposed or attempted to- impose any restrictions of any kind upon its use.

But the appellant contends that when Mrs. Parrish and Mrs. Busey, the common grantors, owned the property, it was part of a larger tract which they owned, and that in grants of other parts of that larger tract, they imposed restrictions upon the land granted which constituted conclusive evidence of an intention on their part that such restrictions should affect the whole of the larger tract, and, as included therein, the lot involved here, as incidents of a plan or scheme of development common to the whole of the larger tract. The doctrine that land may be thus indirectly subjected to building and use restrictions has been recognized in this state since Thruston v. Minke, 32 Md. 487 , one of the earlier cases in which it was considered. Thruston and Minke, as tenants in common, owned a lot of ground at the northwest corner of Baltimore and George Streets, in Cumberland, Maryland, Thruston owning one undivided fourth and Minke three undivided fourths thereof. The lot was improved by a three story building used and known as a hotel.

Part of the lot was vacant and unimproved. Thruston leased to Minke his undivided fourth interest in that part o-f the lot for ninety-nine years, by a lease which provided that the lessee in improving the lot might use the westerly wall of the hotel building to the height of the third-story floor as a party wall, and which further provided that the lease was upon the condititon that neither the lessee nor his assigns should build upon that part of the lot next the hotel any building higher than the third story of the hotel. Thruston then sold the reversion in the ground to one Campbell. Minke undertook to erect a building next the hotel in violation of that restriction, and Thruston then filed a bill praying an injunction restraining ¹²² Minke from proceeding with, the construction of the building in violation of that condition of the lease.

In granting that relief this court said: “It is plain, from the nature of the condition, that it was inserted, as alleged in the bill, only for the benefit and protection of the hotel property, in which the lessor retained his estate, and that it was not in any respect intended for the benefit of the lessor as owner of the reversion in the property leased. It was, in its nature, an independent covenant or condition, made with Thruston, as owner of the contiguous property, for the benefit and protection of which it was intended; it was not a covenant running with the land demised, and did not pass to the assignee of the reversion. “The effect of the condition was to create a right or interest in the nature of an incorporeal hereditament or easement appurtenant to the contiguous hotel property, and arising out of the parcel of land demised by the lease. The principle is correctly stated by the court in Whitney v. Union R. R. Co., 11 Gray [Mass.] 359 as follows: “ ‘When it appears, by a fair interpretation of the words of the grant, that it was the intent of the parties to create or reserve a right in the nature of a servitude or easement in the property granted, for the benefit of the other land owned by the grantor, and originally forming, with the land conveyed, one parcel, such right shall be deemed appurtenant to the land of the grantor, and binding on that conveyed to the grantee, and the right and burden thus created will respectively pass to and be binding on all subsequent grantees of the respective parcels of lands.’ ” The question came up again in Halle v. Newbold, 69 Md. 265, 270 , 14 A. 662, 663 , where it was said “that a grantor may impose a restriction, in the nature of a servitude or easement, upon the land that he sells or leases, for the benefit of the land he still retains; and if that servitude is imposed upon the heirs and assigns of the grantee, and in favor of the heirs and assigns of ¹²³ the grantor, that it may be enforced by the assignee of the grantor against the assignee, with notice, of the grantee. “It will be observed that in each of the cases above cited, the grantor imposed the servitude or conditions upon the land he sold in favor of the land that he retained. In the case at bar the grantors imposed the condition upon the land they retained, and in favor of the land they sold.

But the principle is the same in both cases.” Those cases settled the principle that one granting a part of a tract, the remainder of which he retains, may impose restrictions upon the part granted for the benefit of the part retained, or upon the part retained for the benefit of the part granted, or both, and in Summers v. Beeler, 90 Md. 474 , 45 A. 19, 20 , the court was called upon to determine the quantum of evidence necessary to establish an intent to impose restrictions upon the use of land granted and of land retained which might be enforced inter sese by grantees of such land. In that case it appeared that Rev. C. L. Keedy owned a tract of land which he divided into twenty-eight lots. He “sold and conveyed the plaintiffs lot No. 11 January 2nd, 1890; he had then sold and conveyed eight lots (Nos. 1, 2, 14, 3, 5, 9, 8, and 6), the first five without restriction, and the last three with the restriction mentioned, and he imposed upon the grantee of lot 11 the same restriction; but he imposed no servitude upon the land he retained, which embraced lot 10, in favor of the land he then sold, lot No. 11. “He sold and conveyed the defendants lot No. 10, December 16th, 1890, and he imposed the same restriction upon that lot which he had imposed upon lot 11. But this restriction cannot inure to his benefit, as respects lot 11, upon the principle stated in 69th Md., because he had sold lot 11 nearly a year before ; nor can it inure to the benefit of the plaintiff, upon that principle, as owner of lot 11, because there is no privity either of contract or estate between the plaintiff and the defendant.” The court, after referring to Mulligan v. Jordan, 50 ¹²⁴ N. J. Eq. 363, 24 A. 543 , and Nottingham Brick & Tile Co. v. Butler, 15 Q. B. Div. 268, where it was said: “The principle which appears to me deducible 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 restrictive covenants are simply for the benefit of the vendor, purchasers of other plots of land from the vendor cannot claim to take 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,” said: “in the case before us, though Mr. Keedy took the pains to record, before sale, a plat of the land, and a description of the lots, he nowhere mentioned any restrictions or conditions as to their use. There was no auction sale at which such restrictions or conditions were made known to the public, nor was such announcement made in any other manner. Not only so, but the five lots first sold were sold without any restrictions, and the purchasers of all the other eleven lots on Mulberry Street (which were sold with restrictions) , except Mrs. Summers, have treated these restrictions as not made for the common benefit of all these purchasers, both by their own violation of these restrictions, and by their failure to resist similar violations by the other purchasers.

We think, therefore, the conduct both of the vendor and of the purchasers forbids the conclusions that their intent and understanding were that these restrictions were part of a general plan or scheme for the benefit of all the purchasers.” In Safe Deposit Co. v. Flaherty, 91 Md. 489 , 46 A. 1009 , the Canton Company sold to a certain Hugh ¹²⁵ Gelston a tract of land, retaining, however, other land in the neighborhood of that granted to Gelston, a part of which adjoined the Gelston lot. The deed to Gelston imposed various use restrictions upon the land granted. The Canton Company subsequently released its right to enforce the restrictions. The defendant in that case agreed to buy a part of the Gelston tract, but refused to accept it on the ground that it was subject to the restrictions notwithstanding the release.

In overruling that objection it was said: “In the present case there is a total absence of proof of the existence of any general plan or scheme for the improvement of the land of which the lot sold to Gelston formed a part, as there is a complete absence from the deed of any undertaking on the, part of the grantor to subject the adjacent lands, which were then owned by him, to similar restrictions, and thus secure to his grantees that mutuality of benefit which lies at the basis of their right to enforce the restriction inter sese.” In Foreman v. Sadler’s Excrs., 114 Md. 574, 576 , 80 A. 298 , much the same question was presented. In that case a corporation sold subject to certain restrictions three lots which were part of a large tract of land. The grantee sold one of the three lots subject to the same restrictions, and two without referring to restrictions.