Barnes v. Lednum

• Decision Date: 16 March 1951
• Docket Number: No. 114,114
• Citation: 197 Md. 398,79 A.2d 520
• Parties: BARNES v. LEDNUM et al.
• Court: Maryland Court of Appeals

Page 398

197 Md. 398

79 A.2d 520

BARNES v. LEDNUM et al.

No. 114.

Court of Appeals of Maryland.

March 16, 1951.

William H. Price, Snow Hill (Staton, Whaley & Price, Snow Hill, on the brief), for appellant.

J. Cookman Boyd, Jr., Baltimore (Henry M. Decker, Jr., Baltimore, and Henry P. Walters, and Godfrey Child, both of Pocomoke City, on the brief), for appellees.

Before MARBURY, C. J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.

MARKELL, Judge.

This is an appeal from an order in a pending suit in equity denying plaintiff's petition for discovery. Defendants move to dismiss the appeal for the reason that the order is not a final appealable order and incidentally that it is a discretionary and therefore not appealable order.

In 1926 Ella M. Wilson, plaintiff's aunt, made a will, leaving all her estate to plaintiff, and appointed him her executor. In 1933 she married Robert I. Lednum, defendants' testator. On December 17, 1937, she died. On December 30, 1937, by an agreement between plaintiff and Mr. Lednum, the surviving husband, the husband agreed (1) not to renounce the will and (2) to pay then unpaid debts of testatrix, and plaintiff agreed to convey to the husband (1) a life estate in a farm and specified lots with buildings and improvements in Pocomoke City, and (2) a life estate in a note for $6,000 (balance) and the mortgage securing it and a note for $10,000 and the mortgage securing it, with full power to the husband (in each instance) 'to sell or otherwise dispose of' the note and mortgage and 'any and all investments into which the principal of said note and mortgage may hereafter be invested' during the life of the husband, '(the intention to exercise said power shall be evidenced by notice in writing to [plaintiff]) and after the death of said husband, if said power has not been exercised' by him, the note and mortgage or investments into which the proceeds may be invested to be the property of plaintiff, absolutely. All other property of testatrix was to be the property of plaintiff, absolutely. All covenants and agreements were to bind and inure to the benefit of heirs, executors and administrators and assigns. The fee value of all the real estate (other than the two mortgages) was about $6,800. By two assignments dated January 28, 1938, plaintiff assigned the two mortgages to Mr. Lednum for life with the powers stated in the agreement of December 30, 1937. After communications with Mr. Lednum and the late Mr. George H. Myers, his counsel, plaintiff by two assignments dated February 25, 1938, assigned the two mortgages to Mr. Lednum absolutely, superseding the January assignments and transferring all reversionary interest in plaintiff under them. These absolute assignments plaintiff sent to Mr. Lednum with a letter of the same date, stating that the absolute assignment were desired by Mr. Lednum and executed by plaintiff for the practical reason of convenience in dealing with purchasers, with the understanding by plaintiff that the execution of these assignments 'in no way affects or prejudices the agreement of December 30, 1937 * * * [and] is not to be construed as an exercise of the power of disposition * * * in * * * [that] agreement * * * but that [the] provisions of [that agreement] * * * are effective as between you and myself', the execution of the absolute assignments 'being intended only to put you in a position where as between yourself and any purchaser you can freely dispose of the notes and mortgages.'

Mr. Lednum died on March 19, 1948, leaving a will by which he gave all his residuary estate to defendants, a nephew and the nephew's wife, and appointed them his executors. Mr. Lednum was totally blind at the time of his wife's death and for the rest of his life. In January, 1938, defendants came to live with him, and under his direction transacted business affairs for him.

On August 23, 1948, plaintiff filed a bill against defendants, individually and as executors, praying (A) answer under oath and discovery of (1) the property in which Mr. Lednum invested the $16,000 received by him from the liquidation of the two mortgages from the time he received it until his death, (2) the property, real and personal, remaining in his name at the time of his death, and (3) the property transferred by Mr. Lednum to, or in trust for, defendants or either or them since February 25, 1938, and the consideration said; (B) that any property in which the $16,000 may have been invested or reinvested, that is now in the hands of defendants or either of them, be declared to be impressed with a trust in favor of plaintiff (if more than $16,000) or (if not more than $16,000) [subject] to an equitable lien to secure to plaintiff the payment of $16,000 with interest from Mr. Lednum's death; (C) that defendants be decreed to pay plaintiff $16,000 with interest, as may appear appropriate under the evidence; (D) assumption of jurisdiction over the administration of Mr. Lednum's estate; and (E) general relief. The bill alleges that Mr. Lednum 'was possessed of a large amount of property in his own right and a considerable income independent of' his wife's estate, and the agreement of December 30, 1937, 'was part of and collateral to a broader agreement between [plaintiff and Mr. Lednum]', a further part of which was that 'the principal sum represented by [the two] mortgages, [$16,000], would not be sold or otherwise disposed of so as to eliminate [plaintiff's] remainder therein unless and until said sum or a part thereof became necessary to the maintenance and support of [Mr. Lednum].' The answer admits that Mr. Lednum 'was possessed of property and estate independent of' his wife's estate, but denies that there was any agreement between plaintiff and him 'which superseded or altered the absolute assignment' of the mortgages, and alleges that the absolute assignments transferred the mortgages to Mr. Lednum, 'free from all claims of * * * plaintiff as to the * * * mortgages or the proceeds thereof.'

Defendant's demurrer to the bill was filed on September 21, 1948 and overruled on February 18, 1949. Defendant's answer was filed on July 15, 1949 and an amended answer on March 6, 1950. The bill alleges, among other things, that testatrix' estate consisted of real and personal property, including the two notes and mortgages specifically mentioned, and that Mr. Lednum liquidated the mortgages without loss of principal and reinvested the resulting principal of $16,000, but plaintiff is not informed as to the nature or the disposition of the reinvestment. Defendants' answer denied knowledge of these allegations, neither admitted nor denied them but demanded strict proof. The amended answer admits these allegations and alleges that Mr. Lednum 'used the proceeds [of the mortgages] in the operation and conducting of his canning business.' The inventory of personalty filed by defendants as executors included only 'one-third interest in' four named motor vehicles, aggregating $1,450.

On May 11, 1950 plaintiff filed a 'request to admit facts and genuineness of documents * * * pursuant to Discovery Rule 6', which defendants answered on June 15, 1950. The answer admits, among other things, the genuineness of copies of a number of letters and other documents, including plaintiff's letter of February 25, 1938 to Mr. Lednum and the registry receipt therefor; and also admits that the $6,000 mortgage was assigned by Mr. Lednum for foreclosure, was foreclosed, the assignee's check to Mr. Lednum's order, for $6,289 (including $289 interest), was deposited to the credit to Mr. Lednum's account, defendant Mary endorsed the check for deposit and made the deposit for Mr. Lednum, 'who used [the] $6289 in connection with his business, which was that of a tomato canning factory;' and that on February 20, 1939 the $10,000 mortgage was released and replaced by a new mortgage to Mr. Lednum for $13,500, the only money that passed was the $3,500 excess of the new mortgage over the old, on March 11, 1939 the new mortgage was assigned of record to defendant Mary, on June 30, 1943 the mortgagors executed a new mortgage to Baltimore Life Insurance Company for $13,000 to refund the $13,500 mortgage, the company issued a check for $13,000 to the order of the mortgagors, which was endorsed by them and defendant Mary, and the proceeds were deposited in a joint bank account entitled 'R. I. Lednum or Mary W. Lednum.'

On June 28, 1950, plaintiff filed a 'petition for discovery under Discovery Rule 4' in which he prayed an order (1)(2) requiring defendants to authorize two named banks respectively to exhibit to plaintiff and permit him to copy such records of the bank as will show deposits and withdrawals from any accounts in the names of Mr. Lednum, R. I. Lednum and Company and 'Robert I. Lednum and/or Mary W. Lednum' or like names between December 31, 1937 and July 15, 1949, (3) requiring defendants to exhibit to plaintiff the books and records of Mr. Lednum, R. I. Lednum and Company and defendant Mary...