Safe Deposit Co. v. Flaherty

This appeal is from an order sustaining the exceptions filed by the appellee to the ratification of a sale made to him, by the appellant as trustee, of two lots of ground in Baltimore City. The exceptions are based upon the claim that the title to the lots has been rendered unmarketable by certain alleged restrictive covenants or conditions as to their use contained in a deed made in April, 1847, of the land of which they form part, from the Canton Company to Hugh Gelston.

The obnoxious clause in the deed to Gelston is as follows: "And the said party of the second part, for his heirs, executors, administrators and all persons claiming under him or them hereby agrees with the Canton Company of Baltimore aforesaid that these presents are upon the express condition that no buildings shall be erected on the premises aforesaid, for the purpose of prosecuting any business, trade, calling or manufacture prohibited by the existing laws of the State of Maryland, or the ordinances of the city of Baltimore, aforesaid, or which shall cause or produce a nuisance injurious or prejudicial to any of the adjacent lots or calculated to prevent the beneficial use and occupation of the same, and that no such excepted business, trade, calling or manufacture shall be prosecuted or carried on within the premises aforesaid, unless the consent of the aforesaid, the Canton Company of Baltimore, shall first be had and obtained therefor, on penalty of rendering this indenture and all parts thereof void."

At the date of the deed to Gelston the Canton Company owned considerable ground in the neighborhood, including that immediately adjoining the parcel sold to him. It subsequently sold or leased to other persons all of the land belonging to it in the same block with the Gelston lot without inserting in the conveyances therefor any restrictive clause similar to the one contained in the deed to him.

Gelston's lot was subdivided by him and came to be owned in separate parcels under mesne conveyances by a number of persons, all of whom in January, 1900, united in a written request to the Canton Company to release the land from the restrictions imposed upon it by the deed to Gelston in 1847. The Canton Company thereupon executed and delivered to them a deed of release and quit-claim on behalf of itself, its successors and assigns of all its title to the land and its right to rely upon or in any manner enforce the restrictions contained in the deed to Gelston; but this release expressly disclaimed any purpose to affect or impair the rights, if any there were, of other persons to whom the Canton Company might be held to be under obligations as trustee or otherwise to enforce the restrictions.

The question for us to determine is whether in the present state of the title the restriction in the Gelston deed of 1847 imposes upon the lots sold to the appellee such conditions or limitations as to prevent the trustees from conveying them to him by a good and marketable title.

Inasmuch as the Canton Company has, in the most formal manner, released all of its interest in the lots and all right on its part to enforce the restriction, the issue before us is narrowed down to the inquiry whether any other person possesses the right to enforce it. Of course no one who is a total stranger to the title has any such right. If the right exists at all, it must exist in favor of some one claiming under the Canton Company, which was the grantor in the deed to Gelston.

By the premises of that deed an absolute and unqualified estate in fee in the land is conveyed to Gelston, and it is in thehabendum alone that the restrictive clause appears. The restriction, which only prohibits unlawful uses of the property, is in terms made in favor of the grantor alone, no mention being made of its successors or assigns, and the clause in effect provides that the land may be applied to the prohibited uses with the assent of the grantor. The only persons, other than the parties to the deed, in any manner referred to in connection with the restriction are the owners of adjacent lots and there is no reservation in their favor, and they are but incidentally mentioned in defining the prohibited uses of the property. The deed contains no covenant on the part of the grantor to hold the remainder of the land subject to the same restrictions or to exact similar conditions from the purchasers thereof.

Looking then to the contents of the deed itself there is nothing approaching a clear intent manifested on the part of the parties to it to confer upon any other persons the right to enforce the restrictions which it attempted to put upon the use of the land conveyed by it.

In a number of cases, where, although the covenant or condition in a deed imposing restrictions upon the use of the property thereby conveyed was expressed in such terms as to be binding by way of contract only upon the parties to the deed, it has been held that "in order to carry out the plain intent of the parties, it will be construed as creating a right or interest in the nature of an easement to the remaining land of the grantor and the right and burden thus created will respectively pass to and be binding on all subsequent grantees of the respective lots of land." Whitney v. Union R.R., 11 Gray, 359. This principle has been recognized and Whitney's case cited in support of it in Thurston v. Minke, 32 Md. 494; Halle v. Newbold,69 Md. 270, and Summers v. Beeler, 90 Md. 474.

But this proposition has been held by high authority to be "confined to cases where there is proof of a general plan or scheme for the improvement of property and its consequent benefit, and the covenant had been entered into as part of a general plan to be exacted from all purchasers and to be for the benefit of each purchaser, and the party has bought with reference to such general plan or scheme and the covenant has entered into the consideration of his purchase." Mulligan v. Jordan, 50 N.J. Eq. 364 and cases there cited.

The case of Mulligan v. Jordan, was cited with approval by this Court in the opinion in Summers v. Beeler, supra, and we think it correctly states the law.

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 restrictions inter sese.

Neither a fair interpretation of the language of the Gelston deed nor any evidence appearing in the record would justify us in holding that it conferred upon any other persons than the grantor the right to enforce the restrictions contained therein.

As the grantor has released its right to enforce the restrictions, we hold that they are no longer binding on the property. The exceptions of the appellee should be overruled and he be required to comply with the terms of his purchase.

Order appealed from reversed and case remanded for furtherproceedings in accordance with this opinion.

(Decided June 15th, 1900.)