Newbold v. Peabody Heights Co.

| Md. | Mar 27, 1889

Alvey, C. J.,

after stating the case as above reported, delivered the opinion of the Court.

The question is, whether the agreements of the 20th of September and the 19th of October, 1810, contain such restrictive covenants and conditions as will hind the parties to those contracts, and those claiming title through or under them; for if so, there would appear to be ground for the objection taken by the defendant. That the covenants and conditions referred to were not actually incorporated in the lease can make no difference, as to the effect that they may have upon the parties holding property embraced by the lease. Nor can it make any difference that the memorandum of the plan of the organization of the plaintiff company, and the conditions upon which such company was to hold and dispose of the property leased, was adopted only by reference to such memorandum in the subsequent agreements, and that the agreements were not recorded as parts of the lease. Noonan vs. Lee, 2 Black, 499, 504; Nicholson vs. Rose, 4 D. &. J., 10. The covenant contained in the agreement of the 19th of October is very explicit, that the preceding agreement, with the memorandum attached, should be binding upon the parties and their assigns. They stipulate “that the covenants, requirements, restrictions, regulations and reservations contained therein shall he fully complied with and carried out, as if they had been embodied in the lease of the property therein referred to, or as if the said Peabody Heights Company had been one of the original contracting parties.” The reason and policy for the adoption of such conditions and restrictions are manifest; and that Mr. Holmes, the lessor of the property, attached great importance to the plan of improvement, and the restrictions and conditions embodied in tbe memorandum, is made apparent from tbe fact of his requiring the execution of the agreement of the 19th of October. It was his purpose, by that agreement, to require that the Peabody Heights Company should be bound by the conditions and restrictions referred to as well as the individuals who originally contracted for the land ; and that the lease, though making no reference to the preceding agreements, should not be construed as a waiver on his part of the conditions and restrictions specified in the memorandum. The covenant, and the conditions and restrictions contemplated by it, were in all respects legal, and such as the owner of land has a right to impose. And being so, he and those holding under him, have the right to insist upon the enforcement of the covenant, not only as against the Peabody Heights Company, but as against every other person, acquiring right or title under that company with notice of the covenant.

It may be very true that the covenant is not of a character to run with the land, in the strict legal technical sense of those terms ; but if it be of a character to create a right and an equity in favor of the vendor or lessor, and those claiming in his right, as against those holding and occupying the land, a Court of equity will assume jurisdiction and administer relief. This is a well settled principle, and it has been considered and applied by this Court in two recent cases, — the case of Thruston vs. Minke, 32 Md., 487, and Halle vs. Newbold, 69 Md., 265, though in respect to facts somewhat different from those of the present case. But, in both of those cases, the general principle of equity was acted on and fully adopted, that a restrictive covenant entered into between a vendor and vendee, or lessor and lessee, in respect to the manner of using the property, would be enforced by a Court of equity, as against the vendee or lessee, and his assigns, without respect to the question as to whether the covenant did or did not, in a legal sense, run with the land. The relief may he furnished either by way of injunction, or upon application for specific performance, according to the circumstances of the case calling for the exercise of equitable jurisdiction.

In the leading case upon this subject, that of Tulk vs. Moxhay, 2 Phill., 774, it was held that a covenant between a vendor and purchaser, on the sale of land, that the purchaser and his assigns should use or abstain from using the land in a particular way, would be enforced in equity against all subsequent purchasers with notice, independently of the question whether it be one which ran with the land so as to be binding upon subsequent purchasers at law. In that case the principle, as applied by Courts of equity, is stated by Lord Chancellor Cotteííham with such admirable clearness that we cannot do better than to quote his language. He said : “Here there is no question about the contract ; the owner of certain houses in the Square sells the land adjoining, with a covenant from the purchaser not to use it for any other purpose than as a Square Garden. And it is now contended, not that the vendee could violate that contract, but that he might sell the piece of land, and that the purchaser from him may violate it, without this Court having any power to interfere. If that were so, it would be impossible for an owner of land to sell part of it without incurring the risk of rendering what he retains worthless. It is said that, the covenant being one which does not run with the land, this Court cannot enforce it; but the question is, not whether the covenant runs with the land, but whether a party shall be permitted to use the land in a manner inconsistent with the contract entered into by his vendor, and with notice of which he purchased. Of course, the price would be affected by the covenant, and nothing could be more inequitable than that the original purchaser should be able to sell the property the next day for a greater price, in consideration of the assignee being allowed to escape from the liability which he had himself undertaken. That the question does not depend upon whether the covenant runs with the land, is evident from this, that if there was a mere agreement and no covenant, this Court would enforce it against a party purchasing with notice of it; for if an equity is attached to the property by the owner, no one purchasing with notice of that equity can stand in a different situation from the party from whom he purchased."

The principle thus clearly stated has been applied in a great variety of cases of restrictive covenants and agreements, both in the English and American Courts; and they all concur .in holding that whoever purchases land upon which a former vendor or lessor has imposed an easement, charge, or restriction in the manner of its use, such as would be enforced by a Court of equity as against his vendee or lessee, the party purchasing the land with notice, will take it subject to such Qasement, charge, or restriction, however created. De Mattos vs. Gibson, 4 De G. & J., 282; Wilson vs. Hart, 1 Ch. App., 463; Catt vs. Tourle, 4 Ch. App., 654; Whitney vs. Union Railway Co., 11 Gray, 329; Trustees vs. Lynch, 70 N. Y., 440.

The interest in Holmes for imposing the restrictions and conditions specified in the memorandum are very appafent. 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 he enforced hy a Court of equity.

(Decided 27th March, 1889.)

It is, however, insisted that there has heen a waiver of the restrictive conditions contained in the memorandum of the plan of organization referred to in the .agreements, hy Holmes in his life-time, hy the making of certain deeds for portions of the land embraced in the lease, without reference to such restrictive conditions, and, as stockholder and director in the company, hy acquiescence in the making of certain conveyances hy the corporation to purchasers without any such reference. But, as the case is now presented, it would he a little difficult to see any sufficient ground for concluding , that there had heen any such acts of waiver on the part of Holmes, as would bring the case within the operation of the principle of waiver, as established hy the authorities in such cases. German vs. Chapman, 7 Ch. Div., 271, 281. We forbear however the determination of that question, as the estate of Holmes has no one before the Court to represent it, and there being no other parties to the cause than the immediate parties to the contract of sale sought to he enforced. If those who are legally interested in the enforcement of the restrictive conditions think proper to waive them, all difficulty may he easily removed out of the way of making a good title to the defendant; hut without such waiver it- would appear that the plaintiff cannot make a title of the land sold to the defendant free, clear and discharged of the covenant and the restrictive conditions thereby imposed, as to the mode of improvement and the use of the property. Halle vs. Newbold, supra; In re Higgins and Hitchman’s Contract, 51 L. J. Ch., 772.

It follows that the decree of the Court below must he reversed and the bill dismissed.

Decree reversed.