Lynn v. Gephart

| Md. | Jul 19, 1867

Bowtm, G. <L,

delivered the opinion of this Court.

As these appeals involve principles common to both, and which control the relief prayed in each, they have been argued together, and will he decided and dispos.-d of as one. The appellee Gephart, on the 26th December, 1860, filed a creditors’ hill, charging that/George Lynn, deceased, had died intestate, indebted to him and others in large sums, without leaving personal estate sufficient to pay his debts, hut seized of real estate, which descended to his heirs, and prayed the same might be decreed to be sold for payment of debts, and made the appellant his widow, his heirs at law, and his administrator only, parties. Subsequently, Messrs. John G. Lynn and James M. Schley, claiming to be creditors of the deceased, filed their petrion in the cause, setting forth the filing of the bill and its object, but alleging it did not specify what real estate the deceased died seized of; that the deceased, with others, had executed a deed of trust, therewith exhibited, dated 17th of December, 1850, by which certain lands were conveyed to said James M. Schley. The petitioner Lynn claimed a lien on George Lynn’s share of the same, and the petitioner Schley as a creditor, and prayed that they might be made defendants in the cause, in order that it might be determined whether the said lands were liable to be sold under the creditors’ bill.

The prayer of the petitioners being granted, they filed their answers, setting out their claims, and insisting that by virtue of the deed of trust the interest of George Lynn in all the lands therein described was converted into personalty, and not liable to be sold, at the instance of the creditors, as real estate.

John G. Lynn claiming a lien irpon all proceeds of sale to be made by James M. Schley, under the deed of trust, to the extent of the interest of George Lynn therein, and also, upon the wharf property and dues as by certain agreements, dated respectively the 8th of September, 1849, and the 21st of October, 1852.

James M. Schley, trustee, claiming, as creditor, a balance of $16,666.66f, as by an agreement between himself, his co-petitioner, and George Lynn. The respondent, John G. Lynn, further relied on his bill of complaint, filed 21st of March, 1861, against Virginia Lynn, James M. Schley et al., claiming an equitable lien on the proceeds of the trust property aforesaid, as far as George Lynn was entitled to a share thereof, and in such property as remained unsold, including the Wharf and Cement property. The answer of Virginia Lynn, widow of George, (the appellant in each of these cases,) admits seizin of George Lynn and others, as tenants in common, during the life of said George, prior to the 3d of October, 1849, in the property described in the bill of complaint, subject to the life estate of Mary Lynn, widow of David. She admits the execution of the deed of trust by her husband and others on the 3d of October, 1859, to James M. Schley, hut insists its object, as declared in the deed, was “merely to vest the legal title of the land in the trustee for greater certainty and convenience of conveying the same to purchasers, and thereby avoiding the legal difficulties that would result should any of the grantors die leaving infant heirs.” Consequently, George Lynn continued seized during, his life as tenant in common of an equitable estate in fee, in all the property conveyed by said deed to Schley, except such as was sold; and the undivided equitable estate in fee of which said George died seized, descended upon his heirs at law, subject to the respondent’s right of dower, of which she prayed the benefit, as if she had not united in the deed of trust, which, as she alleged, was executed for no other consideration, than to facilitate the transfer of the titles to various purchasers.

The questions presented by these conflicting pretensions are, first, whether there was any change in the character, of the property described in the deed of trtist, by virtue of its mere execution, on which depend, the subordinate questions, whether the appellee was entitled to a preference over other creditors, and to the exclusion of the appellants claim for dower.

As to the primary question, we may safely adopt the views of the Judge who decided this case below, and who, in his opinion, has very clearly announced the result of the best considered cases. “ The inclination of Courts of Equity upon this branch of jurisprudence, is not generally to change the quality of the property unless there is some clear intention or act by which a definite character either as money or as land, has been unequivocally fixed upon it throughout. 2 Story’s Eq. Jur., sec. 1214. If this intention do not clearly appear, the property retains its original character, there being no equity between the heir and the next of kin in such cases ; in construing instruments of this kind, Courts of Equity will regard the substance and not the mere form of the agreement, and give to it the precise effect which the parties intended.” 1 Story Eq., sec. 791; 3 Wheaton, 335.

There can be no question as to the nature of the trust or the object of the parties in this case. They are indelibly stamped on the face of the deed and. expressed in the most explicit terms, viz: “The said James W. Schley shall convey the said legal title so vested in him to the same by this conveyance, to such person or persons or company or companies, in such manner and under such restrictions as the majority shall direct him to do.” Again “ The said Jas. M. Schley is to receive no per centum or commission, all expenses of conveyancing, etc., to be borne by the parties of the first part, except said Edger-ton, by first deducting the same out of the amount of the purchase money, the balance to be distributed or divided among themselves according to their respective rights to the same, it being the object of the said parties as to the last named land, merely to vest the legal title of the same in the said James M. Schley, for the greater certainty and convenience of conveyancing the same to purchasers, and thereby avoiding the legal difficulties that would result should any of the parties of the first part (except said Edgerton) die leaving infant heirs.” It is further recited in said deed, “ whereas, there are existing judgments and mortgages against some of the parties of the first part, which are liens on their respective shares of said property,” it is enjoined upon the said Schley, John and Jas. Lynn, out of the proceeds of sale, instead of paying the same to the cestuis que trust, to apply the same to the ex-tinguishment of said liens.” They are further enjoined in the distribution of-proceeds,-to carry out and execute the provisions of the will of David Lynn, in regard to advancements to his several children, so as to produce equality.

There being no conversion of the real estate conveyed by the deed of trust to James M. Schley, the grantors in said deed retained an equitable interest in the same until sold, and in its proceeds after sale, to the extent of their respective shares, which are to be treated as real estate. The next inquiry is, what rights or liens attached to this equitable estate either through the acts of the parties, or by operation of law. The Judge who decided this case below held it unnecessary to determine what title, if any,John Gf. Lynn had acquired to the land or its proceeds, but reserved the question until the proceeds might be brought into Court, but held the appellant was excluded from dower by the operation of the deed of trust in the lands as such. It is not distinctly declared in the decree, that she is not entitled to dower of the proceeds, but as such an inference may be drawn from it, we think it erroneous to that extent.

In the present attitude of these cases it becomes necessary to determine the relative rights of these parties.

On the 2'lst of October, 1852, John Gr. Lynn and George Lynn entered into articles of agreement Tinder- seal for the purchase by the latter, of four hundred shares of stock for the aggregate sum of $12,000. By these articles, it is agreed on the part of George Lynn, as additional security to the said John, that the agreement should operate as a lien and be binding in law on his interest in the Eose Hill Estate, including the Wharf and Cement property; that the said John shall, at any time he desires, have the agreement recorded in the clerk’s office, and it shall be as binding in that respect as if recorded at the date of the instrument. The instrument does not appear to have been acknowledged before a Justice of the Peace or recorded.

As between parties and privies, this agreement was a pledge of the property or its proceeds, for the specific purpose to which it was dedicated, and gave the creditor a prior claim, to satisfaction out of the fund ; it was in equity an assignment of the fund pro tanto, being made for a valuable consideration. The appellant, as widow of George Lynn, claims a right of dower in the equitable estate of her husband by virtue of the Act of 1818, ch. 193, sec. 10, which enacts, “ That widows shall be entitled to dower in lands held by equitable title in the husband, unless the same be devised by a will made before the passage of this Act; but such right of dower shall not operate to the prejudice of any claim for the purchase money of such lands, or other lien on the same.”

The first case in which the Act of 1818, ch. 193, sec. 10, was referred to by this Cotirt, is that of Hopkins et al., vs. Frey, 2 Gill, 363. The facts of that case are, that Erey, the husband, acquired the land, of which the widow sought to be endowed in the year 1802, and executed a mortgage to secure the purchase money. In the year 1803, he married. In 1818, there was an arbitration between mortgagor and mortgagee, and an award, that upon payment of a sum ascertained, the mortgagees should release the mortgaged premises. The mortgagees filed their bill against the mortgagor for sale, “ but the mortgagor .relying upon the award, the bill was dismissed. In 1816, before the award, Frey mortgaged the equity of redemption to others, who afterwards filed a bill and obtained a decree to sell the premises, which were sold in July, 1823. The Court held the widow was not entitled to dower at common law, or under the Act of 1818, ch. 193, sec. 10, because the law was passed after the execution of the mortgage; vide 2 Gill, 365.

In the case of Miller vs. Stump, 3 Gill, 310, 311, this Court referred to the Act of Assembly in these words, Our Act of Assembly of 1818, ch. 193, is the only law of Maryland,-which gives the widow a right to dower in an equitable estate; and that Act as expounded by this Court in Hopkins vs. Frey, does not give the defendant in error, dower in this land. iGwas there decided, that the claim to dower in an equitable estate, can be asserted with success only when the allowance of it cannot operate to the prejudice of any, but creditors, heirs and devisees, in a will executed subsequently to the passage of the law. It would operate to the prejudice of others, if in this case, when the equitable title had been parted with, by the husband, during his life, the widow was allowed dower. The Act of Assembly does not say and it ought not to be construed to mean, that the widow shall be entitled to dower in lands held by equitable title in the husband” at any time during the coverture.”

The husband Willson, (the mortgagor in that case) held the lands in fee by deed subject to. the life estate, before the termination of which, he mortgaged the land and then applied for the benefit of the insolvent laws. The trustee afterwards sold the lands for a sum exceeding that due on the mortgage. It was held, the widow was not entitled to dower of the lands in specie, in the hands of the purchaser. As to the surplus of the proceeds, this Court held “ In some eases, it may be argued, that the widow is entitled to a portion of the surplus. It is not necessary, however, upon this appeal, to enquire if such be the law of this case, if indeed, she be entitled to receive anything, she is not entitled to receive it of the purchaser, and he is the only person of whom she is now claiming.” This would imply if the application had been made for dower in the surplus, it would have been allowed. The same question was directly presented and decided by the late Chancellor Johnson, in the case of Mantz vs. Buchanan, 1 Md. Ch. Dec., 205. In that case, the widow, although joining with her husband, the mortgagor, was allowed dower out of the surplus of the proceeds of sale, after satisfying the mortgage debt. The Chancellor said there cannot be a question that, under the Act of Assembly of 1818, ch. 193, sec. 10, Mrs. Buchanan would, but for the proceedings on the Equity side of Washington County Court, be entitled to dower to some extent in these lands; because, notwithstanding the mortgage, the equitable title was in the husband, and the Act in terms declares, that widows shall be entitled to dower in lands held by such title, and the question therefore is, whether such proceeding shall deprive her of this right, when it is obvious her title to the lands assigned her in that proceeding, must yield to the subsequent sale, to satisfy the mortgage.” This language imports that the widow is entitled to dower out of an equitable estate however created, provided it is not to the prejudice of the vendor, or other lien attaching before her marriage or subsequently with her consent. Referring to the Act of Assembly again, and the nature of the liens embraced therein, the Chancellor proceeds, “The Act of Assembly, however, makes no discrimination between the lien of the vendor and other liens. It says, “such right of dower shall not operate to the prejudice of any claim for the purchase money of such lands, or other lien on the same.” This other lien, if by the act of the husband without the concurrence of the wife, must, it is said, have refererree to liens created prior to the marriage, and this it is thought is. the sound construction. But if the wife does concur, by uniting in the mortgage or' relinquishing her dower, the lien must be attended with the same consequences, as if created before the marriage, or residing in the vendor for the security of the purchase money.” 1 Md. Ch. Dec., 207.

In the case of Stewart vs. Beard, 4 Md. Ch. Dec., 321, the widow was allowed dower out of.an equitable estate of which her husband died seized in fee, in preference to a junior judgment creditor. The conclusion to be drawn from these decisions is that by virtue of the Act of 1818, ch. 193, sec. 10, the provisions of which are since incorporated into the Code of Public General Laws, the widow is entitled to dower out of an equitable estate of inheritance held by her husband, or not parted with at tire time of his death, without prejudice to prior liens. The right of dower has always been deemed a meritorious one, founded on the highest consideration, and favored in law. The object of the Act of 1818, was probably to remove that anomaly in the administration of justice, which allowed the husband of a cestui que trust, an estate by the curtesy, but denied dower to the widow — an inequality which was long considered a reproach to our jurisprudence.

(Decided 19th July, 1867.)

It results from the preceding views, that the share or interest of the late George Lynn in all the estate conveyed by the deed of trust to James M. Schley is liable to be sold for the payment of his debts, in aid of his personal estate, that the said sale will be made free, clear and discharged of all claim of the parties to the cause ; the proceeds thereof to be applied first to the satisfaction of the lien of John G. Lynn, and the surplus to be subject to the claim of dower of Virginia Lynn, widow of said George, according to the rules of the Circuit Court, in relation to dower, in preference to all other liens not acquired prior to her marriage or created afterwards by her husband with her consent. For these reasons, the decrees appealed from are reversed as far as the same conflict with the views ■ hereinbefore expressed, and the cause is remanded.

Decrees reversed and 'cause remanded.