Druid Park Heights Co. v. Oettinger

53 Md. 46 | Md. | 1880

Irving, J.,

delivered the opinion of the Court.

The appellant sued the appellee for the purchase money of five lots of ground, which are described in the declaration. Pleas of never indebted, and never promised as alleged, were interposed. • The case was submitted to the Court, without the intervention of a jury, upon an agreed statement of facts, which raises the question of title, the alleged want of which on the part of the appellant, the v.endor, forms the appellee’s whole defence against the claim for purchase money. The_ facts are undisputed. Edward Griffith died seized of the property in question. By his will, duly executed and admitted to probate, he first devises and bequeaths to his “friends John J. Griffith and Charles B. Key worth, and the survivor of them, and the heirs, executors and administrators of the survivor, the sum of twenty thousand dollars, in trust and special confidence nevertheless, and to and for the uses, objects and purposes, and under and subject to the limitations and restrictions hereinafter mentioned, expressed and declared of and 'concerning the same, and for no other use, trust or purpose whatever.” Then follows provisions for investment for the use of his wife, Barbara Griffith, during her life, for her sole and separate use, free from the control of any future husband she might have, and making the investments, at her death, a part of the residuum of his estate, and for distribution accordingly. After declaring this provision for his wife to be in lieu of dower, he next makes some absolute money bequests to his sister-in-law and her children. The next provision creates another trust: “ I give to my friends, John J. Griffith and Charles B. Key worth, and the survivor of them, and the heirs, executors and administrators of the survivor, the sum of one thousand dollars, in trust, that the same be placed out at interest, on good mortgage or other safe security, or vested in ground rents, loans or stocks, or other productive property, and that my old friend, Stephen Hale, be permitted and suffered, during the term of his natural life, to receive, take and apply the interest and profits arising therefrom,” &c., and after providing for the payment of his funeral expenses, gives the fund proper to his daughter. He next gives some absolute pecuniary legacies. Then follows the clause which gives rise to this controversy: “ All the rest, residue and remainder of my estate, real, personal and mixed, wherever situate or being, without reservation or exception, inclusive of the said sum of twenty thousand dollars hereinbefore set apart for the benefit of my beloved wife, for life, or the property or estate in which the same shall be invested, I give, devise and bequeath to my said friends, John J. Griffith and Charles B-. Keyworth, and the survivor of them, and the heirs, executors and administrators of the survivor, in trust and special confidence nevertheless, and to and for the uses, objects and purposes, and under and subject to the powers, limitations and restrictions hereinafter mentioned, expressed and declared of and concerning the same, and for no other use, trust or purpose whatsoéver, that is to say, in trust for the sole and separate use of my daughter, Mary Eletcher Griffith, during the term of her natural life, so that she be permitted and suffered during that period to enjoy the same, and the rents, issues, incomes and profits thereof, to take, receive and apply to her own separate use and benefit; and so that neither the said estate and property, nor any part thereof, nor the rents, issues, profits, income or proceeds of the same shall in any manner he liable or subject to the control, power or disposal of any future husband she may have, or he in anywise answerable for the payment of his debts, or hound for the fulfilment of his contracts or engagements; and the receipts of the said Mary Eletcher Griffith, alone, shall he good and effectual acquittances and discharges for such rents, issues, incomes and profits ; and from and immediately after the death of my said daughter, Mary Eletcher Griffith, then in trust, that all the said estate and property embraced in this section of my will shall go to and become the property of the child or children my said daughter, Mary Eletcher Griffith, may hereafter have, his, her or their heirs, executors, administrators or assigns absolutely; if more than one, .as tenants in common equally. The issue of any deceased child of the said Mary Eletcher Griffith, if any such issue then should he living, to take and have the part or proportion to which the parent of such issue would, if living, be entitled; and in case my said daughter, Mary Eletcher Griffith, shall depart this life without having a child or children, or descendant or descendants of the same living at the time of her death, then in trust fpr the use and benefit of such person or persons, for such uses and purposes as the said Mary Eletcher Griffith, whether sole or covert, shall or may, by any instrument of writing in the nature of or purporting to he the last will and testament, signed in the presence of and witnessed by three or more respectable persons, name, direct, limit or appoint, and if no such nomination, limitation or appointment shall he made, and the said Mary Eletoher Griffith shall depart this life without leaving a child or children, or descendants of the same living at the time of her death, then in trust, that all the said estate and property embraced in this section or clause of my will, shall go to and become the property of such person or persons as would, by the now existing laws- of the State of Maryland, be entitled to take an estate in fee simple in lands by descent from her. And in relation to my property or estate which either my said wife, Barbara Griffith, or my daughter, Mary Eletcher Griffith, may be entitled to under this will, other than the annual income or profits thereof, or which may have been devised in trust for them, or either of them, in this will, I hereby authorize and empower my said trustees, John J. Griffith and Charles B. Key worth, or the survivor of them, or the heirs, executors or administrators of the survivor of them, to sell or lease for such term or terms of years, renewable or not renewable, as they may think proper, the whole or any part thereof, either at public or private sale, if they shall deem such sale or lease beneficial or advantageous to the parties interested.” Then follow directions to the trustees to invest the proceeds, subject to the uses, purposes and limitations declared in his will, in such way as they may find most advantageous, and to hold for the purposes declared. Then comes a provision in the following language, to wit: “ And I hereby authorize and empower my executors and trustees, and the survivor of them, and the heirs, executors and administrators of the survivor, either in their capacity as executors or trustees, or both capacities, if necessary, to sell and dispose of any part or parts of my estate, real, personal and mixed, either at public or private sale, as to them, or him, shall seem most advantageous for the purpose of raising the sum of twenty thousand dollars, hereinbefore devised in trust for the benefit of my said beloved wife for life, and for the purpose of raising the amount necessary for the payment of my debts and the specific devises, bequests and legacies hereinbefore mentioned in this, my will, and to make, execute and deliver, in due form of law, necessary deeds, conveyances and assignments for the estate and property, so sold, to the purchaser or purchasers thereof; and I do, also, hereby give to and vest in my executors and trustees and the survivor of them, and the heirs, executors and administrators of the survivor, full power and authority, and I expressly order and direct that they, or he, either in their capacity as executors or trustees, or in both capacities, if necessary, shall complete, perfect, fulfil and comply with all contracts which I have already, or that I may previous to my death enter into or make and leave unaccomplished, relative to any part or parts of my estate, as for the sale, leasing or otherwise disposing of the same, and to make, execute and deliver, in due form of law, all deeds, conveyances, leases, releases of mortgage and all other instruments of writing whatsoever, connected with such contracts or engagements, or otherwise incident and necessary to the settlement of my estate, or leasing, settling or disposing of the same, or any part thereof, under this, my will, as full and effectually as I, myself, might or could do; and it is further my will, and I do direct, that my executors shall not be compelled to force any sale of my property for the purpose of paying off any of my bequests, but direct that they shall have fiveo years to pay off the same, if they think the delay would be advantageous to my estate; and it is my earnest wish and desire, that there should be no litigation whatsoever amongst my devisees or legatees touching this my will, or any devise or bequests contained therein, being satisfied that I have done justice to them all; and in case any of my devisees should make any claim for, on account of my late brother, Stephen Griffith, he, she or they, so claiming shall forfeit all right, title, interest and benefit in and to the estate and property devised to him, her or them, in and by this my last will and testament.” And, lastly, he constitutes John J. Griffith and Charles B. Key worth to be his executors.

John J. Griffith and Chas. B. Keyworth bonded as executors, and two years afterwards the letters of Key-worth were revoked for a want of counter security, and he afterwards renounced all participation in the trusts of the will. John J. Griffith afterwards died leaving a son as his heir-at-law who was a minor. His administrators declined to execute the trusts of the said will, and they paid over to an administrator de bonis non of Edward Griffith, the funds of that estate which came to their hands as administrators of John J. Griffith. That administrator de bonis non was Andrew J. Myers. A bill was filed in the Circuit Court for Baltimore County, for the appointment of a trustee to execute the trusts created by the will of Edward Griffith, alleging the minority of the heir-at-law of John J. Griffith the trustee who had died, and the necessity for a new trustee to be appointed to secure to the several persons interested the enjoyment of their rights. It is admitted, that all parties in interest in esse were brought in. That proceeding culminated in a decree appointing Andrew J. Myers trustee, “instead of the said John J. Griffith, deceased, with full and ample power and authority to execute the several trusts created in and by the last will and testament of the said Edward Griffith, deceased; and the said Andrew J. Myers, is hereby directed to seek a suitable mode of investment for the said sum of twenty thousand dollars in said will and the bill of complaint mentioned, and report the same for the consideration and approval of this Court, and also to proceed to the execution of his other duties in the premises,” &c. Subsequent to said decree, Andrew J. Myers, the trustee appointed, gave bond in the penalty of one hundred and fifty thousand dollars, as he was directed by the decree. He afterwards sold, at private sale, to one Sauerherg, the land mentioned in the will of Edward Griffith, being in the main unimproved property in the neighborhood of Druid Hill Park for $90,000, and it is admitted that the land would not by leasing, have produced an income at all commensurate with its value. This sale was reported to the Court and was ratified and confirmed hy it. The appellants purchased of Sauerherg. The sole question in the cause is, was this sale by Andrew J. Myers properly authorized and valid. The appellee contends, that the will of Edward Griffith created a special and discretionary trust in the persons he names as trustees, and the heirs, executors and administrators of the survivor, and that the decree of the Court did not give to Myers, the new trustee, the power to make the sale, and could not do it — that the estate and powers passed irrevocably, under the circumstances stated hy the will and the common law to the son of John J. Griffith, the acting trustee as his heir-at-law, and that the sale made by Myers was without authority and void.

The appellants on the other hand insist, that the intent of the testator is apparent to create trusts, without intending that the persons named should, at all events and at all hazards, execute them to the exclusion of all others, or of the control of the Courts for their protection and preservation; and that it was within the power of the Court of equity when the trust would fail for the want of a competent person to execute it, coming within the description and designation of the will, to appoint a trustee to preserve and execute the trusts. And if it be conceded that there was a’discretion reposed in the trustees named in the will, which could not be reposed in a trustee appointed by the Court, still the Court could order the sale, and could direct and approve the investment, and having approved the sale which was made, it was doing a legitimate thing, and the sale is therefore good and valid; and the title of the purchaser cannot he questioned.

The first thing to he ascertained is, what did the testator intend to do, or to he done; for if that can he ascertained by considering the will as a whole, that intention must be carried out, unless some imperative rule of law will prevent. The first object in the mind of this testator was to provide a fund of twenty thousand dollars, to produce an annuity for the benefit of his wife, as long as she might live ; which fund and the proceeds thereof he desired effectually to protect from the control of any future husband she might marry, and to secure from liability for the debts of such possible husband. That fund, it appears from his will, did not exist in tangible form, but had to he raised by sales of certain portions of his estate, and for that reason he gives the persons named as executors and trustees and the survivor, and the heirs, executors and administrators of the survivor the power of sale for the purpose of raising this fund and paying certain pecuniary legacies. The next object of his bounty was his daughter, and for her he designed all the residue of his estate, including the fund set apart for his wife, after her death, to go, after paying the legacies, for life, and then to her children. He discovers the same object here again, to protect what he gave his daughter from the control of any future husband she might have, and from his debts. To accomplish these objects he creates a trust; and for the purpose of making the estate productive he gives the trustees the power of selling and leasing, as might he most advantageous, in their judgment, to the parties. These were trusts the testator could not have intended to fail by reason of the death, refusal, or incapacity of any of the parties coming within the express terms which he has used to designate the trustees. The estate needed to be watched, managed, changed, sold or leased, so as to make it productive, and the testator was endeavoring to provide, so that in no event should there be wanting a trustee or trustees who could perform the duties necessary to produce that result. The multiplicity of words and terms he has used has produced the difficulty as to construction. It will be observed that in creating the trust fund of one thousand dollars, for the benefit of his friend Stephen Hale, during his life, and paying his funeral expenses after his death, he has used the same language in designating the trustees for the purpose of supporting the trust and executing it, that he has with reference to the trusts created for the benefit of his wife and daughter and her children. Now there was a trust, imperative in its character, and which he intended should be executed at all events whether the trustees he named failed to accept the trust or not; and it aids in getting the intent the testator had throughout the will. The exigencies of this trust might require the interposition of the Court to execute it, and it is very clear that a Court of equity would have power to prevent this provision failing, for want of a trustee to discharge the duties. By the last clause of the will sales were authorized to meet the legacies, and to raise the twenty thousand dollar fund, and there he uses the same language to indicate the duty he lays on the trustees, and the discretion he gives them as to a public or private sale. That was clearly an imperative trust, which the Court would compel to be executed, and if the trustees named refused to execute it the Court would appoint one or more to sell and to execute the trusts fully. To that extent certainly it was a power attaching to the office, which the beneficiaries could insist on having executed. It was necessary to the successful carrying out the testator’s will. It does not appear from the objects and scope of the will that the testator intended reposing especial confidence, in the sense of personal trust because of especial fitness, beyond the persons designated by name. In the language used to designate their successors, in the event of death, such phrases are employed as would admit utter strangers to the testator to the execution of the trusts, and it might he persons who had no interest in him or his beneficiaries. The administrators of the trustees named might succeed to the trust. They might he the creditors of the trustees, or any stranger who might secure the appointment. There is strong reason therefore, for regarding this language as intended only to create a continuing trust. True, the word “ assigns” nowhere appears, and its omission may prevent the trustees from assigning the estate or their powers and trusts, as was the case in Cook vs. Crawford, 13 Simons, which was relied on hy appellee’s counsel to sustain his view; but it does not. exclude the idea that the testator was attempting to create a continuing trust, to the trustee for the execution of which, whoever he might he, he was giving discretion as to the management thereof, in the particulars designated. The omission of “ assigns ” does not conflict with the idea that the discretion respecting the sale and manner of it, was intended to be attached to the office. In Loring vs. Marsh, 6 Wallace, 352, the Supreme Court held, that the word “successors ” superadded to the trustees named, to whom a discretion is given to choose the charities to receive the testator’s bounty, made it clear the testator was not reposing especial confidence in the trustees first named, but gave a power attached to the office.

Looking to the whole of this will and the objects intended to be secured, we may well hold that this testator intended that whoever might be the trustee to carry out the provisions of his will, should have the power of sale, or leasing his estate for the purpose of making it productive and available for the cestuis que trust. In other words that he was giving • a discretionary power, which he designed to attach to the office of trustee he was creating. Still the question arises whether under the circumstances of this case, the trustee, who has attempted the exercise of a discretion given, as to the sale of the real estate, if deemed necessary and beneficial, hy the will, has done so legitimately. If the Court had the jurisdiction or power to appoint Andrew J. Myers, trustee, to execute the trusts of the will with the discretion respecting the sale of the real estate, it is very clear that the language of the decree is sufficiently broad to cover all the trusts and powers created hy the will. The language of the decree has already been quoted. The decree also provided for a bond' and security from the trustee for the faithful discharge of his duty, which was given. It is admitted that all the parties necessary to he made such, were parties to the proceeding in which this decree was passed. The position of the appellees that the hill was only instituted to secure a trustee for the investment of the fund for Barbara Griffith, and that therefore the decree cannot he held to cover any thing more, cannot he maintained. One of the allegations of the bill is, that it will he for the benefit and advantage of the infant children of Mrs. Fletcher and all the parties, that the entire trust estate should he in the hands of a trustee who should administer the same, subject to the supervision of a Court of equity, where all the parties would enjoy the safeguard of a'good bond and security; and to this they had the right under section 138, Art. 16, of the Code. Besides, the prayer of the hill covers the rest and residue of the estate which was devised for the testator’s daughter, as well as the twenty thousand dollars devised for the use of his wife. It is true, that the object of the hill was not in express words to procure a sale of the land, hut it was to procure a trustee’s appointment to carry out the trust, which, hy reason of the minority of the heir-at-law and the renunciation of the executors of John J. Griffith, was without an active trustee to discharge the duties; and if the power of sale attached to the office of trustee; or if, without attaching to the office, the trust was under the control of the Court, and the Court could direct the sale without further proceeding; the appellant contends that the sale made and reported to the Court and approved by it, was valid. There is, by this will, certainly no power given to the trustees to designate their own successors in office; and they have not attempted it; hut the Court because of the renunciation of some, the death of another, and the minority of the heir to whom the legal title had descended, has interposed to appoint a trustee. It is now the universal rule that those who take under the trustee, take subject to the trust, and must either execute it or convey to a new trustee to he appointed by the Court. Perry on Trusts, section 346. Keyworth having renounced, there can he no doubt that the trust devolved on John J. Griffith, who accepted it. Perry on Trusts, sec. 502, and Code, Art. 93, secs. 381 and 382. Upon the death of John J. Griffith, under our statute, Code, Art. 47, sec. 24, the legal estate descended, as at common law, to his oldest son, who is a minor about fifteen years old.

The general doctrine now is, that Courts of equity will not allow trusts to fail for the want of proper persons to execute them. In this case the Court, on application, and it appearing that the infant son of the deceased trustee, on whom the estate and trust had devolved by law was unsuitable, and unable to execute the trust, all the parties in interest being before the Court, has appointed a new trustee. The trust being imperative, the Court conformably with its power has taken charge of it and executed the trust by such appointment. Perry on Trusts, sec. 249. The infant being unable to convey, the decree does not so direct, hut the decree devests the title of the infant heir, and vests it in the new trustee for the preservation of and purposes of the trust. This brings us to inquire whether the decree conferred the power of sale on Myers, the newly appointed trustee; or if it did not, whether the ratification of the sale hy the Court perfected the purchaser’s title.

In this State as in almost all the United" States, Courts of equity take the supervision of all trusts. “ Relief has been decreed when the original trustees declined to act; or were desirous of being discharged; or had absconded; or were incapable of acting through age or infirmity; or could not discharge the trust through disagreement amongst themselves; or had been guilty of breaches of trust; or had become bankrupt.” Hill on Trustees, 290, 291. The substituted trustee, when so appointed and qualified, sustains to the estate the character of trustee, as fully as if he had been originally appointed. Cole vs. Wade, 16 Ves., 44. But where the discretionary powers are such as would not belong to the Court because of its jurisdiction over the subject-matter of the trust, independent of the authority of the will; as for instance, where the power is one of selecting the beneficiaries to enjoy the testator’s bounty, the Court will not exercise it, and under the rules of law cannot confer such discretion on a trustee.

In such case the Court will execute it equitably, hy equal distribution among those named. But it is otherwise where any body could properly exercise the discretion about the thing to he done; as for instance, the felling of timber, &c. Hill on Trustees, 317, and Ambler’s Reports, 508. When the discretion applies to some ministerial act connected with the estate, such as felling timber, leasing or selling the land, such powers are much more under the control of Courts than those depending on the exercise of opinion and judgment. Perry on Trusts, 454, and cases there cited. In this case, the Court had undoubted jurisdiction over the trust. All the parties were "brought in, and the whole trust was taken in charge by the Court. The trustee was directed to seek proper investments, and to report to the Court for its approval. A sale of the land for the purpose of accomplishing the objects contemplated, was, by tbe will, directed to be made if advantageous to tbe parties. The Court had unquestionable power tó order the sale, and would have compelled the sale on its appearing necessary or beneficial. If, in point of fact, the power of sale did not attach to the office of trustee created by the will, or by the decree substituted a trustee to carry out the trust, the Court could have authorized such a sale to' be made, and would have ordered such a sale as that is represented to have been. Under our statute, 1868, cphater 273, Courts of equity, with all the parties before them, who are interested, may decree the sale of any kind of an estate. Here the parties were all before it, under the proceeding to secure a new trustee for-the management of the entire estate or trust. The bill, in seeking a new trustee for the management of the trust, necessarily contemplated the sale of the real estate if necessary to the trust, or advantageous to the cestuis que trust. After the decree appointing the trustee on his ex parte application, the Court would have ordered a sale. Without such application or previous order, the trustee has made a sale, and reported it to the Court, and the Court has ratified it after usual notice. All intendments that can be made, ought to be made in favor of such sale so adopted by and ratified by the Court, for the security of the purchaser who has acted on such ratification. There are occasions and circumstances when a trustee must exercise a discretion, though none is given by the instrument creating the trust, otherwise great loss may happen to the estate; or a great opportunity may be lost by delay. Hence the rule has been adopted in equity, that a trustee may do that without a special order, which the Court, on a case made, would order. Perry on Trusts, sec. 476; Hatton vs. Weems, 12 G. & J., 83.

There was certainly no injury to the cestuis que trust in ratifying such a sale as that was, or objections would have been interposed. The trustee reported the sale to the Court, in the very cause wherein the decree appointing him was passed, for its approval; the usual nisi order was passéd, giving notice thereof and opportunity for objection thereto, and no objection appearing, the Court finally ratified the sale. No appeal was taken from the decree, nor from this order of ratification. The title of the purchaser who has paid the purchase money for the property, ought to be upheld by every intendment that can be made in favor of the sale. The majority of the Court are of opinion, that the power of sale according to the intention of this testator in this will attached to the office of trustee, and .passed by the terms of the decree to Andrew J. Myers; and, that if this were not so, the jurisdiction of the Court over the matter was full, and was sufficiently exercised to make the sale good.

(Decided 29th January, 1880.)

The learned Court below rejected the prayers of the plaintiff, which asked the Court to rule that upon the proof he had valid title, and granted the prayer of the defendant that, “the plaintiff had offered no sufficient evidence to establish any authority in the trustee, Andrew J. Myers, to make the sale and execute the conveyances of the property mentioned in the evidence, and the plaintiff is not entitled to recover.”

It follows from what we have said, that we think the Court erred in these rulings, and the judgment must be reversed and a new trial ordered.

Judgment reversed, and new trial ordered.

At.vtsy, J., dissented.

Case Details

Case Name: Druid Park Heights Co. v. Oettinger

Court Name: Court of Appeals of Maryland

Date Published: Jan 29, 1880

Citation: 53 Md. 46

Court Abbreviation: Md.