87 Md. 377 | Md. | 1898
delivered the opinion of the Court.
This proceeding was instituted to set aside a declaration of trust made by the appellant to the Mercantile Trust and Deposit Company of Baltimore (referred to hereinafter as “ The Trust Company.”)
The complainant alleges in the bill that he inherited a considerable fortune from his father, the late George Brown, and being utterly unacquainted with business affairs, but anxious to have certain parts of his personal estate placed in the hands of some corporation who would manage the same profitably for him, but also believing that any such arrangement as he contemplated making would be subject to revocation, and being then possessed of stocks and securities aggregating in value the sum of $ 140.000, delivered the same on the 29th of June, 1894, to the Trust Company ; that said delivery was made for his personal use and convenience, and was understood by him to continue and be of force only so long as he might consider it desirable, and it remained unrevoked, but not to be permanently binding on him, and such was his belief at the time of making such delivery; that the Trust Company desiring to make declaration of the purpose of such delivery of the stocks and securities, which had been purely voluntary and without consideration, executed of its own volition the declaration of trust; a copy of which was filed with the bill: that by the terms of the said declaration, the entire income, less compensation to the trustee, is to be paid over to the complainant during his life ; and no present interest passed to others until his death ; that such declaration is entirely testamentary and can be annulled and set aside by a Court of Equity; “ that the delivery of the stocks and securities were delivered to the Trust Company at a time when he believed that he had sufficient income to pay all his obligations and support his family, but
The declaration of trust referred to in the bill bears date the 29th of June, 1894. It declares that, whereas George Brown “hath at the execution of these presents,” delivered to the Trust Company certain stocks, bonds and securities (which are specifically set out and described in the paper) ; and inasmuch as the title to said stocks, etc., passed by the delivery, it was deemed important that some permanent record should be preserved of the terms upon which said transfers were made, and the duties assumed and the trust to be performed by said corporation in respect thereto, etc. The Trust Company is to ta^<e charge of and keep the stocks, etc., and to collect the income and profits thereof, and after deductions of lawful and necessary expenses of the administration (including as compensation for its services as trustee a commission of three per cent, on said income, and no charge for reinvestment) to pay over as collected to the appellant, the whole net income during his life ; and from and after his death, one-third of said income to his widow, and to divide the remaining two-thirds thereof among his childred living at the time of his death (the child or children of any deceased child to take the share its or their parent would have been entitled to if living), until the youngest of said children shall arrive at the age of twenty-one years, when said trustee is to divide two-thirds of the corpus of the estate equally among them, share and share alike (the child or children of any deceased child to take the share its or their parent would have been entitled to if living). Upon
All the adult appellee defendants have answered admitting the facts set forth in the bill; except the Trust Company, which, after admitting the delivery of the securities and the making of the declaration of trust, and the attempt of the complainant to revoke the trust, and its refusal to comply with the demand to return the property, avers that it accepted the stocks and securities and executed the said declaration in good faith and believes it to be its duty to decline to comply with the demand of the complainant, but being a mere trustee, submits itself to such decree as the Court shall deem proper to pass.
It will be observed there is no charge made in the bill, and, as will appear hereafter, none was set up in the proof, that the appellant had had any actual fraud or imposition practised upon him in the procurement of the paper. The grounds upon which it is contended that the declaration of
1st. That confidential relations existing between the appellant and appellee, being that of principal and agent, rendered the declaration of trust prima facie void.
2nd. The appellee is therefore bound to show “ to the full satisfaction of the Court, that it was the free, unbiassed act” of the appellant, and that he “ voluntarily and deliberately performed the act knowing its nature and effect.”
3rd. That the appellant executed the paper under an entire misapprehension of the provisions, and under the belief that he had the right at any time to revoke it.
4th. That the absence of the power of revocation is fatal to its validity, under the circumstances.
5th. That the paper is in its nature a testamentary disposition of his personal property, which he is at liberty ta revoke at any time during his life.
It may be seriously questioned whether the facts of this case bring it within the well-established rule, applicable to cases where a gift or conveyance of property is made to one standing in a confidential or fiduciary relation to the donor. That rule is designed in some degree as a protection to the parties against the effects of overweening confidence and self delusion, and the infirmities of hasty and precipitate judgment. 1 Story Eq. Jur. 307. Where such relations do exist, and a benefit is obtained, the burden is on the donee to establish to the full satisfaction of the Court that the deed or instrument was the free, unbiassed act of the donor. But it is sometimes difficult to lay down with precision what is meant by the expression “ confidential relations ” or “ relations in which dominion may be exercised by one person over another.” Cook v. Lamotte, 15 Beav. 299, cited in Whitridge v. Whitridge, 76 Md. 73. Such a relation will undoubtedly be presumed in certain cases ; as for instance, in that of a guardian and ward, parent and child, attorney and client, and also in that of principal and agent, and may exist in many other situations.
Under the declaration of trust the company gets a benefit of three per cent, commission on the net income, and in the final distribution two and one-half per cent, on the principal. In no case we have been referred to has it been' held that a provision for reasonable commissions was a benefit conferred by the grant such as will bring the case within the doctrine, applicable to parties standing in confidential relations. Judge Miller, with the concurrence of Judge Robinson, in his opinion in Williams v. Williams, said the law regards such commissions as compensations for services rendered, and not as a benefit granted by the deed. 63 Md. 409. This was part of a dissenting opinion, it is true, but there is nothing in the opinion of the Court in conflict with it, and the utterance of so able and experienced a Judge, concurred in as it was by the late Chief Judge Robinson, is undoubtedly entitled to great consideration.
Moreover, in Todd v. Grove, 33 Md. 193, in the opinion adopted by this Court, the words of Sir G. J. Turner, delivered in Rhodes v. Bate (1 Chancery App., 256), were cited approvingly as follows : “As to the nature of the benefit, the injury to the party by whom the benefit is conferred, cannot depend upon its nature. This general principle, however, must, as it seems to me, admit of some limitation, It cannot, I think, reasonably be said, that a mere trifling gift to a person standing in a confidential relation, or a mere trifling liability incurred in favor of such a person, ought to stand in the same position as a gift of a man’s whole property or a liability involving it would stand in.”
But, however this may be, we will now examine the case on its merits, as disclosed by the proof. There is no suffi
But is contended, the declaration of trust is invalid because it contains no power of revocation. The ancient doctrine was, that a voluntary settlement made without fraud was binding on the settlor, although the settlor had not reserved a power of revocation. In Bill v. Cureton, 2 Mylne & Keen, 510 (decided in 1835), it was stated that this doctrine had then never been disputed, and had been the subject of repeated decisions from the cases of Villers v. Beaumont (1 Vernon, 100), in the year 1682, and of Brookbank v. Brookbank (1 Eq. Ca. Abr. 168), in 1691, down to the modern cases of Ellison v. Ellison, 6 Ves. 656; and Pulvertoft v. Pulvertoft, 18 Ves. 84; Petre v. Espenasse, 2 Mylne & Keen, 502. This doctrine has been much relaxed by the modern decisions, and the rule now seems to be, the one stated by Lord Justice Turner, in Toker v. Toker, 3 De. G. J. & S. 491: “ That the absence of a power of revocation may be evidence that the party did not understand the transaction and so of undue influence. But whether it would be so or not, would depend. upon all the circum
The grantor, George Brown, at the time of the making of the declaration of trust, was forty-seven years of age. There is nothing to show that he is deficient in ordinary intelligence, though it is admitted he has had no business education and is utterly unacquainted with business affairs. He inherited a considerable fortune from his grand-father, and at the time of the making the declaration of trust, he was possessed of one hundred and forty thousand dollars in stocks and securities and also was the owner of the Brooklandwood tract of land in Baltimore County, containing about 1,700 acres, on which he had expended in permanent improvements and betterments about thirty thousand dollars, ($30,000). A considerable portion must have been owed by him when the declaration was made, for he “ was much disturbed about the amount of money he was spending for improvements going on at Brooklandwood.” He told Mr. Gill he “had already expended a large amount of money and would have to sell more securities.” The evidence implies strongly, he had already been compelled to sell part of the securities, and his disturbance clearly arose from the apprehension that the remainder would be lost to him, unless some steps were taken to preserve it. He visited Mr. Gill on several occasions, and it was during one of his visits that Mr. Gill suggested to him to make a deed of trust of the remainder of his personal property, “ that thereby he would save a considerable sum of money for his children.”
“ He said it was his desire to make this deed of trust.” There is nothing in the record, but what we have thus stated, and the terms of the declaration itself, that indicate the purposes of the declaration of trust, except the very loose and vague statement of Mr. Brown himself, that he put his property in the hands of the company “ for his own use.”
It is clear that it was made for the purpose of protecting his property from his own improvidence. He was disturbed about his expenditures, and was without the capacity to
The appellant further contends, that the trust is in its nature testamentary and revocable. The declaration of trust sets forth that the stocks, bonds and securities had passed out of the possession of Mr. Brown and had been delivered to the company. The transaction, therefpre, was complete, and all present interest had become vested in the trustee. To sustain his position the counsel for the appellant has cited (mostly from Pennsylvania) the following cases: Frederick's Appeal, 52 Pa. St. 328; Turner v. Scott, 51 Pa. St. 126, Gingrick's Appeal, 17 At. Rep. 23; Rick's Appeal, 105 Pa. St. 5 28, and Flester v. Young, 2 Kelly, 46. We will briefly examine these cases. In Frederick's Appeal it was held that the act of the donor by the true construction of the deed was a mere power of attorney, that the “manifest intention of the grantor was to promote his own convenience and protect his own interests, and that the utmost that can be made of it is that it was a mere covenant for posthumous gifts, and as such midum pactum.”
But that is not this case; here the present interest did pass, as we stated, to the donee. In such a state of facts the law in Pennsylvania is clear. In Stocket v. Ryan, 176 Pa. St. 71, decided in 1896, when the deed was made for the purpose of preserving the grantor’s estate, for his own benefit during life and of disposing of it among his family, in accordance with his wishes, after his death, the Court said, “ Where a deed conveys, as this one does, a present interest for life to the grantee, the fact that it contains provisions to take effect by way of contingent remainders upon the death of the grantor during the life o'f the grantee, does not convert it into a will or make it testamentary.” Such limitations cannot be revoked by the grantor, and to sustain this position a number of Pennsylvania cases are cited, including Lines v. Lines, 142 Pa. St. 149, and Mattocks v. Brown, 103 Pa. St. 16.
In Maryland it is clear, that if the obvious purpose of an instrument in any form is not to take place until after the death of the person making it, it shall operate as a will. Cover v. Stem, 67 Md. 453; Cary v. Dennis, 13 Md. 17. In Mayor and C. C. v. Williams, 6 Md. 254, this question arose in the following manner: The plaintiff Williams brought suit
For these reasons the decree must be affirmed.
Decree affirmed.