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Clayten v. Proutt

Decided: December 8, 1961.

CLAYTEN ET UX., ETC.
v.
PROUTT ET AL.



Appeal from the Circuit Court for Baltimore County; Berry, J.

Brune, C. J., and Henderson, Hammond, Prescott, and Sybert, JJ. Prescott, J., delivered the opinion of the Court.

Prescott

A decree of the Circuit Court for Baltimore County ordered the appellants, as sellers, to convey, upon the payment

to them of $2,000, a parcel of land known as Lot 16 in "Dunmore Estates" unto the appellees, and they have appealed.

In June of 1958, Robert G. and Thomas G. Proutt, the appellees, entered into a contract with Benjamin Clayten and his wife, two of the appellants, whereby the Claytens agreed to convey unto a corporation to be formed by the Proutts a tract of land containing sixteen building lots for the sum of $104,000. The company, Halcyon Land Corporation, was incorporated, and on June 30, 1958, the lots were conveyed to it. At that time, the Proutts paid $6,000 in cash and the corporation executed a purchase money mortgage for $98,000 secured by all of the lots except Lot 16, which was conveyed to the Proutts unincumbered. The Proutts began the construction of a residence on Lot 15. From June to November 21, 1958, the Proutts paid an additional $6,000 to the Claytens, but were in default under a provision of the original contract, whereby they had agreed to "use one lot per month." In the latter part of November, the Claytens claimed a default in the mortgage, and took all the stock of the Halycon Land Corporation, pursuant to an escrow agreement. At, or about, this time, the Proutts had obtained a buyer for Lot 15, upon which they had by now completed the dwelling, but were not in a position to convey title thereto. They did, however, own Lot 16, which was not encumbered.

In an attempt to resolve the unpleasant situation that had arisen, the parties, on January 15, 1959, entered into the agreement sued upon in this case. By this agreement, the Proutts agreed to convey Lot 16 to the Claytens, and the Claytens (as sole owners of the corporation) agreed to convey Lot 15 to the Proutts. The Claytens further agreed that the Proutts would have the right to have Lot 16 reconveyed to them if they: (1) paid $2,000 as an adjustment of the purchase price and public works agreement for Lots 15 and 16; (2) agreed to commence construction of a house, according to plans and specifications to be approved by the Claytens, within 120 days; and (3) furnished satisfactory assurance of completion of said house. The Proutts also agreed to remove the underbrush and loose limbs that had been left on the remaining lots as a result of the Proutts' having removed trees when they had had the property.

Lots 15 and 16 were exchanged on January 15th. On April 27, the Proutts secured approval of a commitment for a construction loan in the amount of $24,000. On May 12, through their attorney, they tendered $2,000 to the Claytens, suggesting that settlement be completed on May 13 or 14 and agreeing to furnish assurance of completion at such time. Settlement did not take place on either of those dates nor thereafter (although the 120 day limitation was extended several times by mutual agreement) due to the Claytens' refusal to approve any of the plans and specifications (these latter being labeled "Description of Materials") submitted to them, basing their refusal principally upon an alleged lack of completeness of the plans and the effect of the proposed house on the development as measured by its relation to the house that had been built on Lot 15. It would prolong this opinion to an undue length should we attempt to set forth all of the details relating to the furnishing of plans and specifications by the Proutts to the Claytens, and the Claytens' refusal to approve the same and their reasons therefor. Involved therein are many pages of oral testimony, correspondence of counsel, restrictive covenants,*fn1 and numerous exhibits, including sets of plans and amended plans made by the Proutts in attempting to comply with the Claytens' demands, as well as the specific and detailed terms of the provisions relating to the approval by the appellants of plans and specifications for any house proposed to be built upon Lot 16, in the contract and also in the deed. This, under the circumstances, we deem unnecessary. The appellees do not attack the validity or legality of the provision, but claim compliance therewith, asserting arbitrary conduct on the part of the appellants in refusing to approve the plans and

specifications submitted. The appellants, on the contrary, claim good faith on their part, and that their refusal was in no way arbitrary, unreasonable or capricious.

The chancellor found that the plans and specifications submitted by the appellees were sufficiently complete for the "basis of a decision" by the appellants; that the house proposed for erection was reasonably suitable to the development; and that the appellant's refusal to approve the plans and specifications was arbitrary and unreasonable. After a careful reading of the entire record extract and an examination of the exhibits, we are unable to say that he was in error (even considering the requirements of the restrictive covenants); hence the appellants should have approved the plans and specifications as submitted (unless the other question raised, but not yet considered, justified a refusal). Kirkley v. Seipelt, 212 Md. 127, 133, 128 A.2d 430; Miller, Equity Procedure, § 660; 49 Am. Jur., Specific Performance, § 41. Cf. Peabody Heights Co. v. Willson, 82 Md. 186, 205, 32 A. 386; Yorkway Apts., Inc. v. Dundalk Co., 180 Md. 647, 26 A.2d 398; Abell v. Green Mount Cemetery, 189 Md. 363, 367, 56 A.2d 24; 14 Am. Jur., Covenants, Conditions and Restrictions, § 212.

This disposes of the principal question involved, but there is one other matter that must be considered in determining whether the appellees were entitled to the remedy of specific performance. We pointed out above that they had agreed in the contract to remove "the underbrush and loose limbs." The chancellor found the "lots were not cleared as thoroughly as they might have been but what remained to be done does not seem to be of any great consequence." In reviewing this finding, we cannot say he was clearly wrong. Maryland Rule 886 a. The pictures of the lots, offered as exhibits, lend support to the finding, and Claytens' own testimony indicates that the clearing of the lots did not play an important role in his refusal to approve the plans. His bald statement that, in his opinion, it would ...


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