Court Opinion

ID: 7899511
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:54:33.951971+00
Date Added: 2024-06-11T16:32:12.611916
License: Public Domain

Bryan, J.,
dissented and delivered the following opinion :
In the year eighteen hundred and seventy, William Holmes owned a tract of land lying in that portion of Baltimore County, which has since been annexed to the city. It was estimated to contain thirty-six acres, more or less. On the fourteenth day of October, in the year just mentioned, he signed, sealed and acknowledged a lease of all this land (with the exception of a small portion hereafter to be noticed) to the Peabody Heights Company of Baltimore City, for the term of ninety-nine years, renewable forever. The lease was not delivered to the lessee, but was placed in the possession of an agent of Holmes to be held as an escrow. Before the delivery of the lease an agreement was made between the lessor and lessee under their respective seals, whereby they covenanted with each other that a certain contract of sale, dated September the twentieth, eighteen hundred and seventy, should be binding on them and their assigns, “ so that the covenants, requirements, restrictions, regulations and reservations contained therein should be fully complied with and carried out, as if they had been embodied in the lease of the property.” The contract of September stipulated that after the payment of twenty-five thousand dollars by certain persons, who, with others, afterwards formed the corporation styled the Peabody 'Heights Company of Baltimore City, one hundred and fifty *209thousand dollars should be placed at ground rent on the property at the rate of six per cent, per annum. And it contained a stipulation that Holmes would receive, in reduction of the ground rent reserved in the lease, such ground rents as might be created by leases of portions of. the land, after such portions should have been improved by the erection of buildings thereon. And the lessor reserved one-fourth interest in the property; the understanding being that when a joint stock company should be formed, he should receive one-fourth of the number of the shares issued. The land not embraced in the lease was a square fronting four hundred feet on the west side of St. Paul street, as extended into Baltimore County. Holmes reserved this square to his own use, and he agreed to build upon it a good house, setting it twenty feet back of the building line of St. Paul street extended. And it was also agreed that reference should be made to a memorandum appended to the agreement which was signed by George W. Tinges agent, dated September 13th, eighteen hundred and seventy, for the better understanding and explanation of the agreement, and for further details in reference thereto ; said memorandum having been approved in the September contract by him and the parties of the second part as the basis of the agreement. In this memorandum a plan of the joint stock company (to be formed) was exhibited, and certain by-laws were set forth. The by-laws are thus stated:
1. No land to be sold or leased without a pledge to build speedily; design of buildings to be approved by the directors.
2. Buildings to be 20 feet back of building line, and front to be ornamented with shrubbery and flowers.
3. No nuisance, factories, lager beer saloons, &c., to be permitted. Clause in deed to this effect.
4. To regulate other proceedings.
If the stipulations in these contracts and in the memo- . randum had been contained in the lease, they would have been covenants running with the land. This has been settled ever since Spencer's case, 5 Coke. In the language of *210that case, they “touch and concern the thing demised;” and the things to be done are “ to be made on the thing demised.” But as they were not inserted in the lease, they do not run at law. Nevertheless, as they are matters capable of running with the land at law, and as they were made the basis of the negotiations on which the lease was founded, and the lessee covenanted that they should be binding on it and its assigns as if embodied in the lease, they are an equitable charge and burden on the leasehold. According to the rule in such cases, it is enforceable against the covenantor and those claiming under him with notice ; and to this extent it runs with the land in equity. That is to say, the burden of performing these covenants is imposed on the lessee’s assignees with notice, and the benefit of them, by virtue of Statute Henry VIII chapter 24 is conferred on the assignors of the lessor. I am not aware that any other or greater effect has ever been claimed for a transaction of this kind in any book, decision, dictum or any other declaration of opinion known to the law. We are informed by the record that Holmes’s reversion is now vested in the Peabody Heights Company. Both lease and reversion are held by the same person. The burden of the covenants and the benefit of them are united in the same estate. The lease has been merged in the reversion. They are both held by the Peabody Heights Company, and by their consolidation have become a fee-simple. If the covenants were in existence the burden of them would be performed and the benefit received by the same person. It appears to me to be an inevitable consequence that the covenants in favor of Holmes, the original reversioner, are entirely annulled.
But there is another question to be considered. Holmes retained a portion of his land when he and the Peabody Heights Company entered into the covenants with each other. His covenant was for the benefit of the leasehold conveyed to the Peabody Heights Company, and the covenant of the company was for the benefit of the land which he retained. These mutual covenants conferred on each party respec*211tively rights in the soil of the other. Holmes acquired an easement in the property of the Peabody Heights Company for the benefit of the land which he retained, and to that extent his land became the dominant tenement; on the other hand that company acquired an easement in Holmes’s remaining land for the benefit of the leasehold, and to that extent it also became the dominant tenement. Each tenement was both dominant and servient in certain particulars. Although the instruments executed 'by the parties are in the form of covenants, they show an intention to create a charge or burden on the lands respectively held by them,, and are in effect grants of easements. Speaking of instruments of this kind, Lord Wensleydale, in Rowbotham v. Wilson, 8 House of Lords Cases, 362, said: “ No particular words are necessary for such a grant; any words which clearly show the intention to give an easement, which is bylaw grantable, are sufficient to effect that purpose. If the words used could only be read as amounting to a covenant, it must be admitted that such a covenant would not affect the lands in the hands of assignees of covenantors, but if they amount to a grant, the grant would be unquestionably good and bind the subsequent owners.” The legal title to these easements has not been perfected by deed acknowledged and recorded as required by the registry laws, Baltimore, &c., Railroad v. Algire, 63 Md. 323; but they will be protected in equity against the covenantors (or grantors) and their assigns with notice. It maybe stated that an easement does not require the owner of the servient tenement to do anything or perform any service for the benefit of the dominant tenement. In Washburneon Easements5) it is said: “ It is the nature of servitude not to constrain anyone to do, but to suffer something; tit aliquid patiatur ant non faciat.” And in Gale on Easements, 7, we find the law stated as follows: “ The right conferred by an easement attaches upon the soil of the servient tenement; the utmost extent of the obligation imposed upon the owner being not to alter the state of it, so as to interfere with the enjoyment of the *212easement by the dominant.” In Tulk v. Moxhay, 1 Hall and Twell, 105 (reported also in 2 Phillips, 774), Tulk had conveyed to Elms by indenture a parcel of ground called Leicester Square Garden or Pleasure Ground, which was surrounded by an iron railing, and planted with trees and shrubs, and ornamented by an equestrian statue; and Elms had covenanted in the indenture that he would keep and maintain the garden with the iron railing around the same in its then present form, in neat and ornamental condition uncovered with buildings, and would not permit the’ equestrian statue to be defaced or taken down, and that the inhabitants of Leicester Square, tenants of Tulk, and that Tulk himself should have the privilege of admission to the garden at all times on the payment of a reasonable rent. By a number of mesne assignments Moxlay had become entitled to the property with notice of the covenant, In disregard of it, he was proceeding to pull down the iron railing, and to cut down the trees and shrubs, and he had formed a plan for the erection of lines of shops and buildings on the ground. Lord Chancellor Cottenham decided that Tulk was entitled to a perpetual injunction to restrain Moxlay from converting or using the garden and the iron railing around it to or for any other purpose than a pleasure ground uncovered with buildings. He said that the parcel of land was purchased subject to an equity created by a party competent to create it; and that the defendant took it with distinct knowledge of such equity existing, and that it ought to be enforced against him, as it would have been enforced against the original purchaser from Tulk. (1 Hall & Twell, 116.) It will be seen that the decree of the Lord Chancellor did not require the defendant to do anything affirmatively; but merely prevented him from doing what he had no right to do. It was because the decree was merely prohibitory, that it was approved by the Court of Appeal in Haywood v. Brunswick Bidlding Society, L. R. 8 Queen’s Bench Division 406. This last case was said by Jessel, Master of the Rolls in *213London, &c., v. Gomm, L. R. 20 Chancery Division 583, to decide that the Court would not extend the doctrine of Tulk v. Moxlay to covenants compelling a man to lay out money or do any other thing of an active character; but that it was to be confined to restrictive covenants. And substantially the same thing was said by the Court of Appeal in Austerberry v. Corporation of Oldham, L. R. 29 Chancery Division 750. I have thought it proper to make these remarks for the purpose of showing the nature of the decree, which it is competent for a Court of Equity to make in cases of this kind. But they are not necessary to a decision of this particular controversy, because the covenants obnoxious to the litigating parties have been released by the assignee of Holmes. The record shows that the land which he reserved has been conveyed to the Kelso Home for Orphans, and that by recorded conveyance it has released to the Peabody Heights Company all its right to enforce the first and second^ by-laws, except the requirement that buildings shall be set back twenty feet from the building line. If this release is held to be operative to discharge the Peabody Heights Company from the obligation of these by-laws (with the exception named), the parties to this cause agree that the cause of contention is removed. It is extremely difficult to see a reason why the release should not have this effect. The assignee of Holmes had an easement binding on the property of the Peabody Company, and his property was subject to a corresponding servitude for the benefit of this company. It was a simple case of an owner disposing of property which belonged exclusively to himself. It must be remembered that these “restrictive covenants" acquire all their efficacy in favor of assignees because they are grants. If they were merely covenants, and nothing more, they would not bind the assignee of the covenantor. This is perfectly clear upon principle, and also on the highest authorities known to the law. The question is elaborately discussed in the notes to Spencer's case, 1 Smith’s Leading Cases.; and the conclusion is stated that there is no authority that *214the burden of a covenant will run with land in any case except that of landlord and tenant. And this view of the law is approved as “the better opinion” by the most eminent English Judges. Austerberry v. Corporation of Oldham, 29 Chancery Division, 750, and other cases. Inasmuch as it has not been contended in this case that these covenants were capable of running with the land, I do not think that the occasion requires a full discussion of the question. I may be allowed, however, to say that in all the cases which have been argued in this Court on questions of this kind, these covenants have been regarded as impositions of servitudes or easements on the land sold, and’ enuring for the benefit of the land retained by the grantor. In no case has it ever been intimated that this right (easement, servitude, equity or by whatever name it may be designated) could be enforced in favor of anyone, except the grantor for whose benefit it was created, or his assignees. That is, to apply the doctrine to tiie present case, in favor of the assignee of the square reserved by Holmes.
I have stated what I think is the proper construction of these “ restrictive covenants.” But independently of the effect which the law attributes to them, I can discover no intention on the part of Holmes to exact covenants for any other purpose than the benefit of his own property. All of the instruments executed by him and his grantees were in the form of indentures under their respective hands and seals; Holmes contracting as the party of the first part, and the grantees as parties of the second part. Each party contracted for his own interest and for that of no other person. The covenants were expressed to be made with each other ; and the parties of the first and second parts bound “ themselves, their heirs, executors, administrators, representatives and assigns,” and no one else. As no one else was or could be bound, so no one else was mentioned as entitled to enforce any obligation which was created. The form and language of the instrument confined its benefits and obligations to the parties who executed it. It can hardly be supposed *215when Holmes was contracting for the purpose of benefiting his own land, that he intended to put it out of his power to release the other party from the contract, if his own interest or convenience should be promoted by such release. At all events the contract expresses no such intention ; and it contains no language from which such intention can by any means be inferred. The circumstance that he stipulated that he would become the owner of one-fourth of the stock of the corporation to be formed, could have no effect on the meaning of the “ restrictive covenants.” In Newbold v. Peabody Heights Company, 70 Md. 493, the scope and effect of these restrictions were fully and clearly stated. It was said: “ The interest in Holmes for imposing the restrictions and conditions specified in the memorandum is very apparent. He reserved to himself and for his own use, as the site for a residence, a block or square of the parcel of land owned by him, all of which, except the square reserved, was embraced in the lease. He manifestly intended his own property to be benefited by the restrictions imposed upon that leased to the company; and, as we have seen, those restrictions are of a character that will be enforced by a Court of Equity.” In that case it was argued that Holmes had waived them in his lifetime. The Court was not satisfied that there had been-a waiver; but forbore to determine the question because there was no one before the Court to represent the estate of Holmes. It was not suggested that they could not have been waived by Holmes or his assignee. The case was decided distinctly on the authority of Tulk v. Moxhay which I have above cited.
If I have correctly stated the effect of these restrictive covenants, it does not seem important to consider the meaning of other intruments couched in different terms and executed under different circumstances. Many cases which are frequently cited in discussions of this kind arose on what have been called “ building schemes.” The owner of a parcel of land divides it into lots and causes a map of it to be made, showing squares, avenues, streets and lanes, with *216plans for buildings, their locations and other details connected with them, and exhibits this map to purchasers, and sells lots to them with reference to it. Without anything more, a covenant on the part of the vendor is implied that the purchasers shall be entitled to all the advantages to their property which are shown on the map. With respect to streets so delineated, the principle was settled in White v. Flannigan, 1 Maryland, 540, and Moale v. Mayor, &c., 5 Maryland, 314. And there can be no difference in the case of other valuable rights which would be enjoyed if the land were used in the manner designated on the map. Sometimes there are express covenants mutually made between the seller and each of the purchasers, as was done in Whatman v. Gibson, 9 Simon, 196. Sometimes the contract is implied from circumstances, as was done in Nottingham Patent, &c., Company v. Butler, L. R. 15 Queen’s Bench Division, 261. In this last case a body of land containing about forty-two acres was offered for sale by auction in thirteen lots, with certain conditions of sale ; one of the conditions was that no part of the land should be used as a brickyard, or for the making of bricks, except lot number 13. All of the lots except No. 13 were sold either by auction or at private sale, subject to the restrictions. The questions were whether they were for the common benefit of the purchasers, and whether they could enforce them against each other; excepting, of course, the purchaser of number 13. The learned Judge who decided the case, in delivering his opinion, said: “ It appears to me that where land is put up to auction in lots, and two or more persons purchase according to conditions of sale containing restrictions of the character of those under consideration in the present case, it is very difficult to resist the inference that they were intended for the common benefit of such purchasers ; especially where the vendor purposes (as in the present case) to sell the whole of his property. Where he retains none, how can the covenants be for his benefit; and for what purpose can they be proposed except that each *217purchaser, expecting the benefit of them as against his neighbors, may be willing on that account to pay a higher price for his land than if he bought at the risk of whatever use his neighbor might choose to put his property to ? Where, therefore, the vendor desires to sell at the auction the whole of his property, the inference is strong that such covenants are for the common benefit of the purchasers.” It is very evident that in all cases of this nature the rights of the parties interested must depend on the effect of the contract made with the vendor of the land. When the construction of that is determined, all other questions are easily settled. When the owner of land sells a portion of it, and it is agreed between seller and purchaser that neither the land sold nor the land retained shall be used in a certain specified manner, or that it shall be used only in a particular way; if either vendor or purchaser shall violate the contract, the injured party must be entitled to redress. The vendor has imposed a servitude on his portion of the land for the benefit of the purchaser ; and the purchaser has imposed a servitude on his portion of the land for the benefit of the vendor. The assignees of each party take the land with the servitude binding it. When the owner divides his land into lots and offers them for sale, and makes it a condition of the sale that none of the lots shall be used in a particular way, as soon as one of the lots is sold a contract with the purchaser springs into existence. He acquires a right over all the land offered for sale, which enables him to prevent it from being used in the forbidden way; and also, the vendor has a right of the same kind over the lot which he has purchased. That is to say, reciprocal servitudes have been created. When another lot is sold, the purchaser, with knowledge of the terms on which the first was sold, takes his lot bound by the servitude. And so on, as the lots are successively sold. In this way it occurs that each purchaser can maintain the servitude over the whole body of land, whether it be in the ownership of the original vendor, or whether it be in the *218hands of a purchaser from him with notice. No principle which can be evolved from any case of authority will militate against what has been said in respect to the servitude in question in this case. It is very clear that the Peabody Heights Company made the contract concerning the by-laws with Holmes alone, and that it is bound only to Holmes and his assignees. And it is equally clear that Holmes made his contract concerning the building on the square retained by him with the Peabody Heights Company and with no one else, and that he became bound only to the company and its assignees. And it is also clear that the contract binding Holmes is a distinct thing from the contract binding the company.
I agree with the majority of the Court that the'by-law “ to regulate other proceedings ” is totally ineffective. But as the release from the Kelso Home removes the only objections which the purchaser makes to the title, I think that this is a proper case for specific performance.
(Filed October 3rd, 1895.)