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Schnader v. Cole Building Co.

Decided: July 18, 1964.

GEORGE L. SCHNADER, JR., INC.
v.
COLE BUILDING CO., INC.



Appeal from the Circuit Court for Baltimore County (BERRY, J.).

The cause was argued before Brune, C.J., and Henderson, Hammond, Prescott, Horney, Marbury and Sybert, JJ.

Horney

HORNEY, J., delivered the opinion of the Court.

Although numerous questions are raised on this appeal, the principal one is whether the purchaser and present owner of an undeveloped portion of a platted subdivision or development of land in Baltimore County is entitled to recover from the seller and former owner of the whole subdivision, by way of subrogation or otherwise, a portion of what the present owner was compelled to pay for public improvements as an assignee of the public works agreement between the former owner and Baltimore County. George L. Schnader, Jr., Inc. (Schnader) is the appellant and Cole Building Company, Inc. (Cole) is the appellee.

Cole, as the former owner of the subdivision known as "Laureldale," entered into a public works agreement with the County on January 9, 1956, and by the terms thereof agreed, among other things "to assume the full cost of street paving, curbs and gutters" for the standard pavement width of a street in a cottage type of development. It thereafter developed a substantial portion of Laureldale and partially performed its obligations under the public works agreement. Aside from the lots subsequently sold to Schnader, Cole had sold some of the Laureldale lots to others both before and after homes had been built on them by Cole.

After a part of the paving had been laid, Cole, on October 28, 1958, conveyed to the County, for public highway purposes, all its right, title and interest, first, in and to the bed of Evergreen Drive (running from Jerald Drive to a point opposite the division line between Lots No. 61 and 62); second, in and to the bed of a street designated as Ivy Place on the plat but now known as Holly Place; third, in and to the bed of Jerald Drive; and fourth, in and to the bed of Laurel Drive (running from Jerald Drive to a point opposite the division line between Lots No. 96 and 97).

Subsequently, Cole and Schnader entered into an agreement on September 17, 1959, wherein Cole agreed to sell Schnader thirty-eight of the numbered lots in Laureldale, as well as the beds of such streets as were outlined in red on a plat made a

part of the contract of sale,*fn1 including John Drive and Ivy Place and the dead-end part of the latter between the side lines of Lots No. 12 and 13, and also agreed to assign to Schnader all its right, title and interest in the public works agreement.

In compliance with the contract of sale, Cole, on December 30, 1959, conveyed to Schnader Lots Nos. 3 to 18 inclusive, 40 to 43 inclusive, 46 to 50 inclusive, 54 to 61 inclusive, and 73 to 77 inclusive, together with all right, title, interest and estate of Cole in and to the beds of any streets not theretofore conveyed to the County, but no reference was made therein to the public works agreement.

Prior thereto, however, also in compliance with the contract of sale, Cole, on December 1, 1959, had assigned to Schnader (by an assignment executed by and between Cole, Schnader and the County) all its (Cole's) right, title and interest in that portion of the public works agreement affecting the same thirty-eight lots as were designated by number in the deed. As to such lots, Schnader accepted "all obligations" under the public works agreement "as now being assigned."

Thereafter, during the spring of 1960, Schnader began constructing homes on the lots it had purchased and requested the county department of public works to put the public works agreement in operation as to such lots. The department, however, refused to do so unless such of the unassigned portion of the agreement as had not been finished was completed at the same time. Both Schnader and the department requested Cole to deposit funds to cover the cost of completing the remainder of the unassigned portion of the agreement, but it refused to do so, and continued to refuse, despite repeated demands made by Schnader for compliance.

As of that time, Schnader had more than $500,000 invested in its thirty-eight lots and the homes ...


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