Gallagher v. Bell

69 Md.App. 199, 516 A.2d 1028 (1986)

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Nature of the Case

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Facts

The land at issue had been owned by the Sisters of Mercy. The land contained a mansion house and a tenant house. The Sisters sold the mansion house and some of the land surrounding it to the Franciscans. Later, they sold the rest of the land, except for the tenant house and the land immediately surrounding it, to the Bells (P). It was understood that P was buying the land in order to develop it. The deed contained a clause which acknowledged that the tenant house and lot were excluded from the sale, and providing that the eventual purchaser of the tenant house would agree to dedicate half of the street surrounding the lot and to share in the cost of installing the street and utilities. When Gallagher (D) bought the lot in 1960, he agreed to dedicate the street and share in the costs. In return, P agreed to give D an easement to gain access to his property until streets were built. The parties further agreed that the agreement would be binding on P and D's heirs, successors and assigns. In 1979, D sold his property to Camalier, who insisted on an indemnity agreement with respect to D's agreement with P. In 1983, P finally began constructing the roads and demanded payment of $18,000 from Camalier. Relying on her indemnity agreement with D, Camalier refused to pay. P then made demand on D. D rejected the demand, and P sued. The Gallaghers argued that their agreement with P was a covenant running with the land, and their liability on it terminated when they sold the property. At trial, D was found to be liable for $7000. The trial court denied D's motion for judgment n.o.v. D appealed.