Baer v. Kahn
| Citation | 101 A. 596,131 Md. 17 |
| Decision Date | 27 June 1917 |
| Docket Number | 24. |
| Parties | BAER v. KAHN et al. |
| Court | Court of Appeals of Maryland |
Appeal from Circuit Court No. 2 of Baltimore City; Henry Duffy Judge.
Bill by Lena Kahn and another against Lewis Baer, trustee. From an order of the court, assuming jurisdiction of the trust estate, and from an order directing the trustee to pay solicitor's fees, the trustee appeals. Orders reversed and bill dismissed, with costs to appellant.
Argued before BOYD, C.J., and BRISCOE, BURKE, THOMAS, PATTISON URNER, STOCKBRIDGE, and CONSTABLE, JJ.
Chester F. Morrow and Alfred S. Niles, both of Baltimore (Carlyle Barton, of Baltimore, on the brief), for appellant.
Allan H. Fisher, of Baltimore (Samuel J. Fisher and Fisher & Fisher, all of Baltimore, on the brief), for appellees.
The appeal in this case is from two orders of the circuit court No. 2 of Baltimore City. By the first of these orders the court assumed jurisdiction of the trust estate of Lena Kahn. The second directed the trustee to pay to her solicitor for his services the sum of $100, $75 of it to be paid out of the corpus of the estate, and $25 out of the income. The facts alleged in the bill filed by the appellees are substantially as follows:
Lewis Moses, and Solomon Baer for a number of years successfully conducted the hide, fur, and wool business in the city of Baltimore under the firm name of Lewis Baer & Co. In 1905 the firm purchased about $9,000 of the capital stock of B. Kahn & Bros. Company, a corporation of which Benjamin Kahn, husband of Lena Kahn, was manager. This corporation was not prosperous, and as a result of said investment Lewis Baer & Co. lost about $3,000. This loss, it is alleged, produced an unfriendly feeling on the part of Lewis Baer for both his sister and her husband, Benjamin Kahn, in consequence of which, he wrongfully contended that the said $9,000, although in the nature of an investment, was in fact a loan to his sister and her husband, and he unreasonably demanded and received from them their note for the payment of said sum of $3,000, the amount so lost by the firm. Solomon Baer died in 1913. In his will be bequeathed certain sums of money in trust to Lewis and Rebecca Baer, for the benefit of Lena Kahn and her minor children. A petition was filed by those named as trustees, asking to be relieved of the administration of the trust; but thereafter Lewis Baer consented to serve, and Samuel J. Fisher, the appellees' solicitor in this case, was appointed to serve with him as cotrustee. Lewis Baer afterward withdrew as trustee, and Fisher thereafter acted as sole trustee. In March, 1915, Moses Baer died, and by his will, dated May 27, 1914, he bequeathed $2,000 to Arthur Kahn, $2,000 to Lewis Kahn, and $8,000 to Rosanna Kahn, children of Lena Kahn, and $24,000 to Lewis Baer, in trust for Lena Kahn. The provision creating said trust is found in the fourth item of his will, which is as follows:
In the further disposition of his property, one-third of his estate was devised to his wife, Mamye Baer, and after making smaller bequests to another sister and several nieces and a nephew he gave the residue of his estate to his brother Lewis, absolutely. In the seventh clause of his will is found the following provisions:
Several days after the death of Moses Baer his will was read, and immediately thereafter, as the bill alleges, Lewis Baer "burst into tears," and told his sister Lena Kahn "that the sudden death of his two brothers within so short a time necessitated the withdrawal of an unusually large amount of cash from the firm of Lewis Baer & Co., which he feared would cause financial disaster to him," and "that if he had the amount which he had lost in the B. Kahn Bros. Company that it would to some extent help him out of his difficulty." It was then that Lewis Baer informed his sister that, in addition to the bequest made to her in his will, Moses Baer had a policy of insurance on his life for the sum of $5,000, which upon his death was payable to her and her daughter, Rosanna, in equal shares, "and begged her to assign that to him in part payment of the alleged indebtedness." She finally agreed, over the protest of her husband, to pay $1,500 out of the proceeds of the policy upon the note previously given by her and her husband. It was then charged that, notwithstanding the alleged need of money to save the firm from financial difficulties, Lewis Baer shortly thereafter purchased an automobile for his own pleasure, for which he paid about $1,400. The further charge was made against Lewis Baer that, in order to increase the residue of the estate that was devised to him, he delayed stating his final account as executor, which resulted in financial loss and injury to Lena Kahn. The bill then alleges that on April 18, 1916, she requested her attorney, Mr. Fisher, to write Judge Niles, attorney for the defendant, for information regarding the manner in which the corpus of her trust estate would be invested, suggesting that as much as possible of it be invested in ground rents, yielding a net income of from 5 to 6 per cent., and that the estate be administered under the supervision, direction, and control of a court of equity. Mr. Fisher wrote Judge Niles, as requested, and received in response thereto two letters. In the first Judge Niles stated "that his letter had been referred to Mr. Baer"; and in the second "that he did not represent Mr. Baer in the matter of the trust estate of Lena Kahn, and suggested that Mr. Fisher write Mr. Baer direct," which he did. "Several days thereafter, Mr. Baer called to see Mr. Fisher, and informed him that he had procured a safe deposit box exclusively for the securities of this trust estate; but he refused to divulge the securities in which the corpus of the estate had been invested, and declined to ask one of the equity courts of the city to assume jurisdiction of the trust." On July 5, 1916, Mrs. Kahn received from Lewis Baer, as trustee, his check for the amount then due and owing to her as income from the trust estate, and accompanying said check was a statement showing how a part of said funds was at that time invested. Thereafter, on the same day, Mr. Fisher, at the request of his client, again wrote the trustee, Mr. Baer, asking how the remainder of the trust fund had been invested, and asking him to petition to a court of equity to assume jurisdiction of said trust, to which letter no answer was received, either by her or her attorney. The bill concludes with a prayer, asking the court to assume jurisdiction of the trust, and that the trustee be directed to administer said trust under the supervision, direction, and control of the equity court.
Lewis Baer admitted many of the allegations of the bill, but denied that he had lost his affection for his sister or that he had ever treated her with rudeness or incivility, or had by undue pressure induced her to sign the note alluded to, or to make payments thereon, or that he had ever refused to give her or her counsel any information "that she was entitled to receive," or that he had ever made untruthful statements to her or to her counsel, or that in his actions as trustee he had shown or that he would show any spirit of vindictiveness. The answer then avers that he is not impressed with the safety or desirability of such ground rents as can now be had which will yield 5 or 6 per cent. net upon the money invested. He then, in his answer, gives a full statement showing how and in what securites the entire trust estate was at such time invested.
The answer further avers his unwillingness to retire voluntarily from said trusteeship, as it was his brother's will that he should serve as trustee, and that in his opinion the provisions found in the will of his brother were made for the express purpose of confiding the management of the estate and the investment of the funds solely to his judgment, and because of the wishes of his brother, expressed not only in the will, but to him personally, and...
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