3 Md. Ch. 320 | New York Court of Chancery | 1850
The first and most important of the questions raised in this case, by the exceptions of the Baltimore Life Insurance Company, to the report of the Auditor, and upon which I have had the advantage of hearing a very good argument on both sides, was raised and discussed in the case of Peyton vs. Ayers, recently decided by this Court, and reported in 2 Md. Chancery Decisions, 64.
In that case, which was brought before me on two occasions, I expressed the opinion founded upon the case of Dorsey vs. Smith, 7 H. & J., 345, that the ancient rule of the Court, adopted for the purpose of fixing the allowance to a woman in lieu of dower, was proper to be followed in all cases, when it became necessary to ascertain the present value of a life interest, and when the case was last under consideration, the rale was not applied, because the particular point to be decided did not necessarily present the question. But in disposing of the case of Peyton vs. Ayers, upon a ground which relieved me from the obligation to apply a rule, with which I think there is some reason to be dissatisfied, I most distinctly recognised its controlling power over this Court so long, at least, as the rule remains unrescinded.
I then said: “ But although the Court of Appeals might, and I think would at this day, establish a different rule for ascertaining the value of life annuities, I certainly do not feel myself at liberty to do so. So long as the case of Dorsey vs. Smith stands unreversed and unqualified by the high tribunal which decided it, it would be, it appears to me, unbecoming in this Court, and inconsistent with that subordination to superior authority so necessary to the orderly and harmonious administration of justice, to adopt a different principle.” 2 Md. Ch. Decisions, 70, 71.
The rule of this Court, which the Court of Appeals adopted
But even if this Court could with propriety change the rule, it appears to me the change should be prospective, because it may reasonably be supposed that in transactions like the present, the parties have shaped their conduct with some reference to the existing rule. I do not mean to be understood as saying, that the Insurance Company, in buying or selling annuities, is governed by the rule, because it appears they have adopted tables for their guide, which do not conform with the rule, subject of course to be varied according to circumstances ; but it is by no means an extravagant supposition, that when this Company, or any other holder of a life estate, or annuity for life, consents to a sale of such interest by the decree of this Court, that regard is had to the Chancery rule, and that some of the parties, at least, to the cause would be taken by surprise, if that rule should be set aside and another substituted for it.
In the present case, it is said the sale, of the property was sought by the parties entitled in remainder, and by Mrs. Abercrombie, for their own accommodation; and the bill does allege that a sale will be for their benefit, and that the Insurance Company is willing that the property (consisting of bank stock) should be sold, the Company receiving of the proceeds the value of the life interest of Mrs. Abercrombie, of which they were the purchasers.
Now it may very well be, that these plaintiffs considered it
It has been observed, that though this Court may possess the power to change prospectively the rule regulating the proportions in which the proceeds of property sold under its authority shall be distributed between the dowress and heir-at-law, or between the holder of the life estate and those entitled in remainder, its authority to make such alteration with regard to an actually depending case, when it may well be supposed the parties have had the rule in contemplation, is liable to very grave doubts. The case of Wall vs. Wall, 2 H. & G., 79, is well calculated to confirm these doubts, it having been there decided that the Courts have no dispensing power over their rules and long-established practice, and that a party to whoso prejudice an innovation upon the rulo of the Court is made, has a right to seek redress in the Appellate Court.
I am, therefore, of opinion, that the first exception of the Insurance Company cannot be maintained, and that the rule of the Court applies to and must govern this cause.
And as it is thought the distribution must be made in conformity with the rule, and the rule has no reference to the case of a healthy person, it follows that some abatement must be made on account of the delicate health of Mrs. Mary F. Abercrombie, the cestui que vie. This, it appears to me, is as imperatively required by the rule as the ratio of distribution prescribed by it; and hence I think the second exception of the Insurance Company is not well taken.
The Auditor, in his account 33, has added five years to the
In the very nature of things it is absolutely impossible to establish a fixed standard upon a subject like this. Every case must depend upon its own peculiar circumstances, and with all the lights which science can shed upon it, we can only hope to approximate to that which the future alone will reveal. Evidence has been taken in this case, which certainly does show that the cestui que vie is in infirm health, but we have not the benefit of the opinions of her physician with regard to the probable duration of her life. Even with the aid of such an opinion, we might wander far from the true mark, but without it our conjectures are much more likely to lead us astray. Certain it is, as appears by some of the depositions, that the disease of Mrs. Abercrombie, though alarming, and though, judging from her frail condition, her death is an event which cannot long be deferred, is not likely, if we may judge from the past, to bring her existence to a very speedy conclusion. Her constitution seems to have resisted it for many years, and there is nothing in the evidence from which it can be inferred that it is now so broken down as to be incapable of yet further resistance. The hope can scarcely be indulged that she will live beyond or ¡ perhaps attain the age usually allotted to human existence, but the presence of the disorder which forbids this hope, may probably furnish some security that her life will not be brought to a very speedy termination, as it
The remaining question arises upon the third exception of the Insurance Company to the accounts reported by the Auditor, marked A, .B, and E, because they do not give to the Company, as assignee of Mrs. Abercrombie, a proportionate part of the dividends on the stock sold, which had accrued up to the day of sale.
The stocks, it appears, were sold some short time before the declaration of the dividends, and it is of course conceded that the title to the dividends subsequently declared passed by the sale and transfer of the shares to the purchaser. There cannot, therefore, be any claim to a proportion of the dividends as such, nor has any such claim been asserted in the argument. The exception is pressed, not upon the ground that the Company is entitled to any part of the dividend received by the owner of the stock when it was declared, but upon the hypothesis that as the value of the stock must have been enhanced by the near approach of the period when a dividend might be expected, it is reasonable to presume its price in the market was improved in proportion to such enhancement in the value. That is, it is supposed the purchaser gave not only the value of the stock, irrespective of the dividend, but in addition thereto, the proportion of dividends which had accrued to the
But if this be so with regard to stocks bearing a fixed rate of interest, when the amount accrued can be calculated with absolute certainty, how much more cautious should the Court be in saying, that stocks which have no determinate rate of interest have appreciated in precise proportion to the dividend which had accrued upon them at the period of the sale, when a dividend is subsequently declared ? In this case the Insurance Company, the owner of the stocks for the life of Mrs. Abercrombie, might have refused to consent to the sale until after the usual dividend day, and then, of course, they would have received it. But this delay would have exposed the Company to some danger, and it may be that this consideration had some influence in inducing them to accede promptly to the application for a sale.
The solicitor of the Company has urged, in arguing this exception, that portion of the bill which says it will be for the benefit of Mrs. Abercrombie and her children that the stock should be sold, “ and the proceeds divided among the parties in an equitable manner.” This, it is said, may fairly be construed
No case has been cited which, in its material features, is analogous to this. In the case of Wiegal vs. Brome, 9 Eng. Cond. Ch. Rep., 188, the fund out of which the annuities were payable was actually received by the trustee, and it was decided, that as the period fixed by the testator for the termination of the annuities occurred after the last half-yearly day of payment, that the annuitant was entitled to a proportional part, from such day to the time when the annuity was to cease altogether. But here, no time was definitely fixed when the dividends which might be declared upon these stocks should cease to be payable to the Insurance Company. And in the very nature of things, the amount of the dividends was always more or less conjectural, until actually declared. In Wiegal vs. Brome, the time for which the annuity was to be paid was fixed, and the rents upon which it was charged, were received by the trustee. But in this case, the title of the Company to receive the dividends was liable to be defeated at any time, by the demise of Mrs. Abercrombie, the amount uncertain, and, by the act of the Company itself, the right to this contingent profit upon the stock was transferred to third persons. The Company does not, and can not claim the dividends, or a proportion of them, upon the ground that they have been, eo no-
The case of Ex parte Rutledge, Harp. Eq. Rep., 65, resembles the present case in this, that it was a question as to the apportionment of the dividends on bank stock between the donee for life, who died a few days before a semi-annual dividend was declared, and the party entitled in remainder. The Court there decided that the dividend should be apportioned, and the amount which had accrued at the donee’s death should be paid to his executor. But in that case the dividend, as such, was actually received by the party who was to make the apportionment. There was no sale of the stock, before the dividend was declared, by consent of the parties, and the Court was not consequently required to act upon the assumption that the purchaser gave precisely so much more for it as the dividend then accrued amounted to. That circumstance, as I conceive, separates that case from this by a broad and clearly defined line. The Court there was acting upon a reality. The dividend was in hand, and it was thought, and I think justly thought, that the intei’position of Providence, in terminating the existence of the donee for life, a few days before its declaration, should not deprive his representative of that proportion which had accrued in his lifetime.
I have read with attention the deposition of Mr. John F. James, and assuming that it would be proper, in a case circumstanced like the present, to change the existing rule, I should doubt very much the authority of this Court to do so upon the facts therein stated. It seems to me that the ancient, steadily adhered to, and highly sanctioned rule of this Court, should not be varied, unless demonstrated to be erroneous by more conclusive evidence than is furnished by this deposition. This remark is made without intending the slightest disrespect to Mr.
My opinion, therefore, is, that the account B, reported by the Auditor, is correct, and I shall pass an order ratifying it.