Mercer v. Safe Deposit & Trust Co.

45 A. 865 | Md. | 1900

The appeal in this case, which is from an order passed proforma by the Circuit Court of Baltimore City, brings up for construction by this Court the deed of Samuel H. Mercer, now deceased, to Lavinia Hopkins and others in trust for the purposes declared therein. This deed, which bears date the 16th day of February, 1884, recites and grants as follows: "That whereas the said Samuel H. Mercer is about to leave this country and take up his residence in Europe, and whereas it is greatly to the interest of the said Samuel H. Mercer to leave his estate properly managed and controlled by some responsible person here, and whereas he is indebted unto the said Lavinia Hopkins and others, and is desirous to pay his just debts, and having desired the said Lavinia Hopkins for and during the period of her natural life and on her death the said Lewis N. Hopkins and A. Stirling Pennington, his near relatives and friends, to accept the trusts hereinafter provided, he has agreed with the said Livinia Hopkins, Louis N. Hopkins and A. Stirling Pennington to execute this deed, and the said Lavinia Hopkins, Lewis N. Hopkins and A. Stirling Pennington having agreed to accept the said trust for the natural affection they bear the said Samuel H. Mercer and for the compensation hereinafter provided. Therefore in consideration of the premises and agreements and advance of six hundred dollars to be paid by the said Lavinia Hopkins to the said Samuel H. Mercer in equal monthly installments of one hundred dollars per month dated from the first day of January, 1884, to the first day of July, 1884. Two hundred dollars of which has been paid by the said Lavinia Hopkins to the said Samuel H. Mercer before the execution of this deed, said loan to be paid as hereinafter provided. The said Samuel H. Mercer doth hereby grant and convey unto the said Lavinia Hopkins for life, and on her death the said Lewis N. Hopkins and A. Stirling Pennington and the survivors, his heirs, executors and administrators, jointly, in trust all his, the said Samuel H. Mercer's, property real, personal and mixed of whatsoever description and wheresoever situate, to have and to hold unto the said Lavinia Hopkins for life, and on her death unto the said Lewis N. Hopkins and A. Stirling Pennington and the survivor, his heirs, executors and administrators jointly in trust and confidence to and upon the uses and limitations and with the powers, to wit:" It then goes on with care and particularity to confer upon the trustees in express terms the power to "collect and receive the income, rents and profits" of the property conveyed and without being responsible for or charged with any debts, transfers or incumbrances," which the grantor might make, "to expend or cause to be expended for the use and benefit" of the grantor "or to pay over, as in their judgment shall be best, the entire amount of income," c., to the grantor, "provided however," that the trustees "shall not be obliged to expend for the use and benefit" of the grantor, "or to pay over" to him "a sum or money greater than four-fifths of the income;" and to apply the balance of the income "to the payment of the loan of six hundred dollars made by the said Lavinia Hopkins" to the grantor, with the interest to accrue, "and to the payment of such other debts" as were then due by the grantor with "full power and authority to settle, pay and compromise all debts" which in the judgment of the trustees were "just and owing" by the grantor, and to charge the same upon all moneys accruing as income to the grantor. Then after allowing to the trustees a commission out of the income to come into their hands the deed finally provides as follows: "It is further mutually agreed and understood that if the said Samuel H. Mercer shall leave a widow living at the time of his death and leave no children or descendants living at the time of his death, then the said trustees shall hold said property with the same powers in the trustees for the use and benefit of said widow during her life or widowhood, and at her death, or on her marriage again, then said trustees shall hold said property to and for the use and benefit of the right heirs of the said Samuel H. Mercer, according to the laws of the State of Maryland. If the said Samuel H. Mercer shall die leaving a child or children, or descendants living at the time of his death, but leaving no widow living at such time, then to said trustees in trust for such issue per stirpes. If said Samuel H. Mercer shall die leaving a widow and child, children or descendants living at the time of his death, then to said trustees in trust to and for the use and benefit of such widow and children and descendants in the manner and proportion which said widow, children and descendants would be entitled perstirpes under the laws of the State of Maryland if said Samuel H. Mercer had died intestate seized of said property. If said Samuel H. Mercer should die leaving at the time of his death neither a widow or children or descendants living at such time, then in trust for the right heirs of the said Samuel H. Mercer by the laws of the State of Maryland. It is finally mutually agreed and understood that if at any time during the continuance of the aforesaid trust it shall appear to the said trustees that it is for the benefit of the party or parties for whose use and benefit the aforesaid trust has been created that the said trust should terminate, that then the said trustees may reconvey said property upon a proper release from the party or parties who are then entitled to the use and benefit of said property."

The order of the Circuit Court was passed in a cause therein pending which was instituted to procure a sale of certain leasehold property in Baltimore City, for the purpose of making distribution and reinvestment of the proceeds thereof. In this property Samuel H. Mercer acquired, under the will of the late Johns Hopkins, an interest which became subject to the operation and effect of the deed here to be construed. A decree for sale having been passed in the cause and a sale having been made thereunder, it was ascertained in the distribution of the fund produced thereby that the share of this fund which was subject to the deed of Samuel H. Mercer amounted to $472.76-100. A petition was then filed by the appellants alleging that Samuel H. Mercer had died leaving surviving him no children or descendants, but leaving the appellant Marie H. Mercer, his widow, and the appellants, Margaret W. Schapiro and Mary M. Harding, his sisters, who are his sole right heirs and next of kin; and asking that the said share of the fund so representing the interest therein that passed under the deed of Samuel H. Mercer be distributed directly to them discharged of the trust created by said deed. In support of this prayer of their petition, they allege that the said sisters of the deceased grantor have an absolute vested interest in the share of the fund in question, that all parties in interest are desirous of having the said share distributed and paid over directly to the parties entitled thereto, and to have the trust created by the deed of the 16th of February, 1884, terminated, and that the appellee, being the trustee substituted by order of Court in the place of the original trustees, two of whom have died and the survivor having relinquished the trust, deems it for the benefit of the parties for whose use and benefit the trust was created that the said trust should terminate. The appellee, in its answer to this petition, admits the allegations thereof, and after giving a statement of the property now held by it, exclusive of the sum of money mentioned in the petition, subject to the deed of trust and expressing doubts as to the true construction of the said deed and as to its power thereunder, as substituted trustee, to terminate the trust, avers that "so far as it is authorized by said deed and so far as it can do so without committing a breach of the trusts assumed by it," it consents to the disposition of the fund asked for by the said petitioner.

Upon these facts two questions are presented for the consideration of this Court.

1st. Whether those who answered the description of heirs at the time of his death took, at his death, a vested interest in the property conveyed by the deed of Samuel H. Mercer, of the 16th of February, 1884.

2nd. Assuming that they did, whether the trustee, now substituted in the place of the trustees named in the deed, is invested with the power and discretion to terminate the trust under the concluding clause of the deed.

We think both of these questions are to be answered in the affirmative. The law favors the early vesting of estates. This is a familiar rule of law which has been frequently recognized and enforced in the decisions of this Court. In the case of Tayloe v. Mosher et al., 29 Md. at p. 456-7, this Court said: "The law favors the vesting of estates and to make an estate contingentit must appear from the language used and the nature and circumstances of the case that the time of payment was made the substance of the gift, and that the testator meant that time as the period of vesting." And again at page 457, "Estates will be held to be vested wherever it can fairly be done without doing violence to the language of the will, and to make them contingent there must be plain expressions to that effect, or such intent must be so plainly inferrible from the terms used as to leave no room for construction." Equally emphatic is the language of the Court in the case of Crisp, Trustee, v. Crisp et al., 61 Md., where at page 152 it is said: "In the absence of plain expressions, or an intent plainly inferrible from the terms of the will, the earliest time for the vesting will be adopted where there is more than one period mentioned in the will." In the same case it is also said: "The testator has ample power to fix the period of vesting to suit himself (always within the rules the law fixes), but he must indicate his wish with reasonable certainty, for if he does not the law will presume he intended the earliest time." If the law is thus exacting in respect to the question now being considered, in construing wills, where it is always indulgent to the intent of the testator, it will certainly be no less strict in its application to the construction of a deed, under which the question arises here. Now looking to the language of the deed we are construing, we look in vain for the "plain expressions," that "leave no room for construction," and indicate "with reasonable certainty," that the earliest time for the vesting of the interest which his heirs were to take, in the contingency that has happened, was not intended by the grantor therein. On the contrary looking to the language of the deed, the character of its provisions, its declared purpose and its whole scheme in connection with "the nature and circumstances of the case," just the contrary is indicated. The object of the deed, as expressed therein and clearly manifested in its provisions, was mainly for the use and benefit of the grantor himself, to promote his personal purposes and to serve his convenience, and as long as he should live. It was to enable him to promote his comfort and pleasure by a residence abroad, to have in the meantime his property interests cared for and managed by competent persons, to get his debts paid, to secure the accommodation of the advance of money made to him by his relative and trustee and to make provision for its repayment. For all of these objects very careful and express provisions are made in the deed, and it is very evident that these were the primary considerations that were in the mind of the grantor in making it, and that those that suggested the limitations over after his life-estate were incidental and secondary. The deed manifesting in its provisions no evidence of having been conceived and executed with any direct reference to subjecting the grantor's property to ultimate limitations, or to creating and protecting future interests in the property, but rather for the personal purposes of the grantor himself, as already indicated, there would seem to be no good reason for imputing to him a purpose, when limiting his property over, after the main object of his deed had been served, of having a care for remote and uncertain objects of his bounty, rather than of providing that the limitations should have the effect to immediately vest his property in those who were nearest to him in blood and kinship, and who would more naturally be objects of his consideration. Not only is this so, but the deed furnishes affirmative, intrinsic evidence that the grantor intended that, upon the determination of his equitable life-estate, the title to, and interest in, his property should thereupon vest in those who in ordinary course would have taken the same in case he died intestate and the deed involved in this controversy had not been executed, subject only to the provision made for his widow in the contingency which has now happened; for in providing for the four several contingencies that might happen at his death, in every one, except the one which has now actually happened, he provided that the property should go to the same persons, and be enjoyed by them in the same manner, and in the same proportions as the law itself provided in case he had died possessed of the property and intestate. In the contingency that has actually happened, it is reasonable to suppose, that if in making the provision for his widow during life or widowhood, the grantor intended that his estate should not vest in those who might be his heirs at the time of his death, after indicating just the contrary in respect to all the other contingencies that he provided for, he would have made this appear without a resort to construction; and in order to exclude the period of earliest vesting, the rule of law laid down in the authorities quoted required this of him.

In ascertaining the intention of the grantor, there is force also in the suggestion of the counsel for appellants that an intention to postpone the period of the vesting of his estate beyond the time of his death and to leave it uncertain during the life or widowhood of his widow in whom the estate was finally to invest, is inconsistent with the covenant and provision in the deed in question that the trust may be terminated when deemed "for the benefit of the party or parties for whose use and benefit" the trust was created. From any fair construction therefore of the deed here in question we can discover no intention of the grantor to postpone the vesting of his estate beyond the period of his death. Now what did he actually do, or rather what are the legal results of what he did, in the way of limiting over his estate after his death? By his deed the grantor gave the legal estate in his property to the trustees named in his deed, and created for himself an equitable life-estate, with a contingent remainder to his right heirs, upon his dying leaving no children or descendants, or widow living at the time of his death; or in case of his leaving no children so living, and leaving a widow surviving him, then after providing the equitable life-estate for himself, he gave an equitable life-estate to such widow and remainder to his right heirs. As the preceding life-estate in the grantor was an equitable estate, and the remainder to the heirs a legal estate, this limitation is not within the rule in Shelley's case, and the limitation over to the heirs was good as a contingent remainder. Mercer v.Hopkins, 88 Md. 309-310, and cases there cited, 4 Kent, 210-11 (marg.) Now when the contingency provided for in the deed, of the dying of the grantor without children or descendants, and leaving a widow, happened, no other contingency was to happen to let the heirs of the grantor into the enjoyment of the estate than the death of the widow, and the heirs therefore became entitled to the remainder, with no uncertainty in regard to it, other than the uncertainty as to the time of the enjoyment of the estate, which depended on an event that must happen. This is the distinguishing quality of a vested remainder. If there is "a present fixed right of future enjoyment," the remainder is vested. Clearly, that is the position of the heirs of Samuel H. Mercer in this case, as respects the remainder limited to them by the deed here under consideration. By the happening of the only contingency provided by the deed, upon which their right to the remainder depended, the remainder became vested, only leaving uncertain the time of the enjoyment. In other words, they have now a vested remainder, which is an "actual estate." 4 Kent, 205 (marg.) This is easily distinguished from the cases to which reference was made by the counsel for the appellee, where it was said that when a contingent remainder is limited to a class, only those can take who answer the description at the time the contingency happens, "and when theestate falls into possession." Those were cases where the happening of the contingency upon which the right to the remainder depended, and the "falling into possession," were simultaneous. There was no vested remainder or estate prior to the falling into possession, because the contingency upon which the right depended had not previously happened. Whether looking, therefore, to the intention of the grantor, as manifested upon the face of the deed here being considered, or to what appears to be the clear legal effect of the provisions contained therein, we are of opinion that the heirs of Samuel H. Mercer, the said grantor, who are here before the Court, have a vested title to the property granted in the deed, and subject to the trust thereby created, subject only to the life-estate of the widow of the said grantor, as the same is limited in and by said deed.

It remains for us to consider whether the appellee, the substituted trustee, is authorized to terminate the trust under the deed here in question, by virtue of the power conferred by the grantor upon the trustees to so terminate it, which has already been cited. It is agreed on all hands that the condition described by the grantor, upon which he authorized the trust created by him to be terminated, now exists, and the only question is whether this authority to terminate the trust was intended to be confided solely to the judgment and discretion of the trustees originally named, or whether it passed with the trust to the substituted trustee. Such a question is always one of intention, depending upon the construction to be given to the instrument by which the trust is, in the particular instance, created. Safe Deposit Co. v.Sutro, 75 Md. 361. If upon such construction of the instrument it appears that a power lodged with the trustees in connection with the trust is a special confidence reposed in this particular trustee or set of trustees, or is to be exercised only upon his or their personal judgment and discretion, such power can only be exercised by the designated donees, and will not pass to a substituted trustee. On the other hand, if it appears that the power is annexed to the office of the trustee, for the purposes of the trust, and to promote its objects, then it will pass with the trust to the successors of the original trustees, and can be exercised by them. To the latter class of powers must be referred the power here in question. This power is not such a one as, in itself, would indicate mere personal confidence, and it was designed to be exercised upon a condition with respect to the trust and those interested in it that it may be supposed the grantor thought might well and safely be referred to the judgment and discretion of any competent trustee. It is indefinite as to the time of its exercise, and it may well be supposed the grantor contemplated that changes in those in charge of the trust might occur before the condition arose in view of which the power was to be exercised, and supposing this, it is significant that if he intended a mere personal power that he did not plainly make it so. In conferring the trust upon the trustees he gave it to the first-named trustee for life, then to the others named and to the survivor, "his heirs, executors and administrators." Here was an express provision in the deed for the continuance of the trust in the hands of other persons than the trustees specifically named, and when he came to confer the power to terminate the trust he provides, "that ifat any time during the continuance of the trust it shall appear to said trustees," c. It is to be noted here that although, as we have seen, he provided that others might succeed to the duties of the trust he does not provide that this power is only to be exercised while the trustees named by him are in office but, "atany time during the continuance of the trust" and the general term "said trustees" is used to denote those who are to exercise the power, which is broad enough to include such trustees as might be in charge of the trust when the conditions, described in the deed as authorizing its exercise, should arise. In defining other powers and duties of the trustees in connection with the trust, the grantor uses the language, it is "mutually agreed and understood" that the particular thing should be done. In conferring the power in question he uses the same language. This is not the language in which mere personal confidence would ordinarily be indicated, but is rather that which would be employed if the idea was to make the particular agreement of the substance of the trust. For these reasons, and in the light of the nature and objects of the trust, in connection with which the power under consideration was granted, and the obvious reasons that may be deduced from these, why the grantor may be supposed not to have designed the exercise of this power to terminate the trust to be confined to the trustees specially named in his deed, we are of opinion that the power in question in this case is annexed to the office of the trustees and has passed with the trust to the appellee in this case, as substituted trustee, and can be exercised by it.

It follows from the foregoing views that the pro forma order of the Circuit Court of Baltimore City must be reversed and the cause remanded to that Court that a decree may be passed in conformity with the views herein expressed.

Order reversed and cause remanded.

(Decided March 23rd, 1900.)

Case Details

Case Name: Mercer v. Safe Deposit & Trust Co.

Court Name: Court of Appeals of Maryland

Date Published: Mar 23, 1900

Citation: 45 A. 865

Court Abbreviation: Md.