Matthews v. Kernewood, Inc.

• Decision Date: 11 January 1945
• Docket Number: 80.
• Citation: 40 A.2d 522,184 Md. 297
• Parties: MATTHEWS v. KERNEWOOD, Inc.
• Court: Maryland Court of Appeals

40 A.2d 522

184 Md. 297

MATTHEWS v. KERNEWOOD, Inc.

No. 80.

Court of Appeals of Maryland

January 11, 1945

Appeal from Circuit Court of Baltimore City; William L. Henderson Judge.

Suit by Clyde V. Matthews and others against Kernewood, Incorporated to enjoin the resubdivision of the residential subdivision in which complainants owned lots. From a decree dismissing the bill of complaint, named complainant appeals.

Decree affirmed.

R. E. Lee Marshall and Richard W. Case, both of Baltimore (Marshall, Carey & Doub, of Baltimore, on the brief), for appellant.

William L. Rawls and G. Van Velsor Wolf, both of Baltimore (Marbury Gosnell & Williams, of Baltimore, on the brief), for appellee.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, GRASON, and MELVIN JJ.

COLLINS Judge.

This is an appeal from the Circuit Court of Baltimore City in dismissing a bill of complaint asking for an injunction to prohibit the resubdivision of the residential subdivision known as Kernewood.

On July 19, 1926, John W. Garrett and wife, who were the owners of a large and beautiful estate known as 'Evergreen' in the northwestern section of Baltimore City, conveyed thirty-five acres more or less of that property, which was to be divided into large lots, to a corporation known as Kernewood, Inc., John W. Garrett being one of the directors. The purpose of the corporation was the purchasing, owning, mortgaging, selling, transferring, investing, and dealing in real property and the improving, managing, and operating of real property. The original plan no doubt was that this was to be a subdivision of unusually large lots.

On March 24, 1927, Kernewood, hereinafter known as the defendant corporation, appellee, conveyed to Miles White, Jr., and Virginia P. B. White, his wife, part of said tract known as Lot No. 1. This deed recited in effect that the defendant corporation was the owner of a tract of land in Baltimore City which it had caused to be platted into lots or parcels and through which streets and avenues had been divided, which plat was attached to the deed, made a part thereof, and filed with the deed among the land records of Baltimore City; that the defendant corporation intended to develop and improve said tracts of land and offer lots for sale subjecting all of the tract and lots to certain covenants, agreements, easements, restrictions, conditions, and charges as thereinafter set out; that the parties of the second part were desirous of purchasing one of said lots as shown on said plat and of making the covenants, agreements, easements, restrictions, conditions, and charges thereinafter set out binding upon the lot so purchased as upon all the remaining land in said tract as shown upon the plat.

The restrictions thereinafter recited in this deed were divided into ten sections. Section I provided in effect that no business institution, school, apartment house or institution of like character could be erected on said property. Section II provided that 'no building of any kind whatsoever except private dwelling houses each dwelling designed for occupancy by a single family shall be erected or maintained on any of the lots or subdivisions shown and indicated on the plat above referred to and no more than one such dwelling shall be erected on any one lot or subdivision shown on said plat save only in the case of Lot No. 1 which may at the option of the owner thereof be subdivided into not more than two lots neither of which shall contain less than fifty thousand square feet in area * * *.' This section further limited the erection of dwelling houses to a cost of not less than $20,000 based upon then present building costs on some lots, $12,000 cost on some lots and $15,000 cost on other lots. There were other restrictions in this section affecting porches, garages, and the construction of the house. Section III restricted the building of fence walls and other structures to approval of the plans by the defendant corporation. Section IV related to distance of dwellings from street or road. On account of the importance of Section V, it is necessary that we quote this in full: 'The Company hereby expressly reserves the right in its absolute discretion at any time to annul, waive, change, or modify any of the restrictions, conditions, covenants, agreements, or provisions as hereinbefore set out in Sections II and III and IV hereof as to any part of said tract then owned by the Company and with the consent of the then owner as to any other land included in said tract.' For this case it is not necessary that we recite the provisions of Sections VI, VII, VIII, and IX. Section X provided that the restrictions should be in perpetuity except as provided in Section V and with other limitations thereon.

The plat filed showed a subdivision of thirty-five acres into thirty-four lots. Between the years of 1927 and 1929 about one-half the lots were sold, and one lot was sold in 1944 to Mr. William F. Schmick at a reduced price, leaving fourteen lots to be disposed of. Before his death in June, 1942, Mr. John W. Garrett personally paid after 1929 taxes in the amount of $11,700 on the unsold lots, and since his death, the trustee has paid $3,599.72 in taxes on the unsold lots out of the sale of the lot to Mr. William F. Schmick aforesaid.

By his will Mr. Garrett bequeathed his stock in defendant corporation, consisting of 2250 shares of a total of 2500 shares issued, in trust to the Safe Deposit & Trust Company. Johns Hopkins University is to be the eventual recipient.

The trustee, being unable to dispose of the remainder of the property, consulted the owners of the lots in the development, which resulted in the sale of the one lot in 1944 at a reduced price to Mr. Schmick, one of the then owners. Being unable to make any further sales, the trustee then consulted various real estate brokers and the Roland Park Company and was advised to resubdivide these fourteen unimproved lots into thirty-four lots and modify the restrictions as to the cost of dwellings to be erected thereon. As a result of this advice, the trustee had a new plat prepared, making the unsold property into thirty-four lots and modifying the restrictions as to costs of residences by providing for architectural approval before any house was built.

As a result of this action on the part of the trustee, the appellant, Clyde V. Matthews, together with seven owners of lots in the development of Kernewood, filed a bill of complaint in the Circuit Court for Baltimore City reciting in effect that they were the owners of lots aforesaid, the incorporation of the defendant, the execution of the deed by John W. Garrett aforesaid to the defendant, the execution by the defendant corporation of the aforesaid deed to the Whites. They further alleged by paragraph eight of the bill of complaint that Section II stipulated that not more than one dwelling may be built on any lot shown on the plat filed with the White deed; further that the purpose of this restriction was the adoption of a general plan for the subdivision, an integral part of which was that private dwellings would be spaced at distances greater than that found in ordinary suburban subdivisions. In this paragraph it is further stated that the adoption of the original plan enhanced the value of all lots in the subdivision and that the complainants purchased their lots in reliance on this general plan. In paragraph nine of the bill of complaint they allege how the defendant proposed to subdivide the remaining property. Paragraph ten of the bill of complaint alleges that by Section II of the restrictive covenants the cost of the dwellings was limited to certain amounts, and by the proposed plan the defendant intends to sell lots which would not be subject to this price restriction. They further alleged in paragraph eleven that Section V of the restrictive covenants could not possibly be exercised in such a way as to destroy or impair the general plan of the subdivision and would not be a reasonable or proper or legal exercise of the power reserved in Section V. By paragraph twelve of the bill of complaint they charge that the direct violation of the restrictive covenants defined in paragraphs eight and ten of the bill of complaint would destroy or impair the general plan of said subdivision, namely, the spacing of houses of certain character and cost at distances greater than that found in the ordinary suburban subdivision; that the proposed resubdivision would destroy or impair the value of all the lots in said subdivision, the general plan having been relied on by the complainants as particularly described in paragraph eight of the bill of complaint and further, the value of the property owned by the complainants would be greatly depreciated if the new plan were put into effect. They asked the Court to restrain and enjoin the defendant from putting into effect the new plan and that the defendant be restrained and enjoined from resubdividing the subdivision known as Kernewood, and for other and further relief.

After answer filed and hearing before the Chancellor, the bill of complaint by decree was dismissed and the appellant, Clyde V. Matthews, one of the complainants, appeals from that decree to this Court.

It is contended by the appellant that the restriction against any redivision is not found in Sections II, III and IV of the appellee's deed, but is expressed as an appurtenance to the premises granted and conveyed by the deed and that this restriction is therefore not subject to the reserved power of revocation contained in Section V of the deed which is expressly limited to restrictions set out in Sections II, III, and IV. It is strenuously argued that the recording of the map in itself constitutes a restriction on the size...