Peabody Heights Co. of Baltimore City v. Willson

• Decision Date: 05 October 1895
• Parties: PEABODY HEIGHTS CO. OF BALTIMORE CITY v. WILLSON.
• Court: Maryland Court of Appeals

32 A. 1077

82 Md. 186

PEABODY HEIGHTS CO. OF BALTIMORE CITY v. WILLSON.

Court of Appeals of Maryland

October 5, 1895

Dissenting opinion.

For majority opinion, see 32 A. 386.

Per Bryan, J., dissenting.

BRYAN J.

In the year 1870 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 36 acres, more or less. On the 14th day of October, in the year just mentioned, he signed, sealed, and acknowledged a lease of all of 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 99 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 20, 1870, 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 $25,000 by certain persons, who, with others, afterwards formed the corporation styled the "Peabody Heights Company of Baltimore City," $150,000 should be placed as ground rent on the property, at the rate of 6 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 400 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 20 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 13, 1870, 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, etc., to be permitted. Clause in deed to this effect. (4) To regulate other proceedings.

If the stipulations in these contracts and in the memorandum 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, 15b. In the language of that 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 St. 32 Hen. VIII. c. 34, 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' 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, respectively, 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' 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 H. L. Cas. 362, said: "No particular words are necessary for such a grant. Any words which clearly show the intention to give an easement which is by law 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, etc., R. R. v. Algire, 63 Md. 323. But they will be protected in equity against the covenantors (or grantors) and their assigns with notice. It may be 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 Washburn on Easements (marginal pp. 4, 5) it is said: "It is the nature of servitude not to constrain any one to do, but to suffer, something. 'Ut aliquid patiatur, aut non faciat.' " And in Gale on Easements (page 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 easement by the dominant." In Tulk v. Moxhay, 1 Hall & T. 105 (reported also in 2 Phil. Ch. 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,...