Desser v. Woods

• Decision Date: 10 November 1972
• Docket Number: No. 40,40
• Citation: 266 Md. 696,296 A.2d 586
• Parties: Irwin H. DESSER et al., Guardians of Honor M. Woods, Incompetent, v. Lawrence WOODS et ux.
• Court: Maryland Court of Appeals

Page 696

266 Md. 696

296 A.2d 586

Irwin H. DESSER et al., Guardians of Honor M. Woods, Incompetent, v. Lawrence WOODS et ux.

No. 40.

Court of Appeals of Maryland.

Nov. 10, 1972.

Bayard Z. Hochberg, Baltimore (Jacob Matz, Stanley H. Hellman and Levin, Hochberg & Chiarello, Baltimore, on the brief), for appellants.

Ronald Willoner, College Park (DePaul & Willoner, College Park, on the brief), for appellees.

Argued before MURPHY, C. J., and BARNES, SINGLEY, SMITH and LEVINE, JJ.

BARNES, Judge.

The Circuit Court for Prince George's County (McCullough, J.), on February 22, 1972, passed an order sustaining, without leave to amend, the demurrer of the appellees, Lawrence Woods and Mary Elizabeth Woods, his wife (defendants below), to the second amended bill of complaint of the appellants, Irwin H. Desser, a trust officer of the Department of Health and Mental Hygiene of the State of Maryland, and Thomas B. Yewell, guardians of Honor M. Woods, Incompetent. This action by the lower court was based upon that court's opinion that, on the face of the second amended bill of complaint, it appeared that the equity suit was barred by the three-year statute of limitations. The basis of the lower court's decision is the issue presented to us on appeal. We have concluded that the lower court erred and we will reverse the order of February 22, 1972, and remand the case for further proceedings.

It is well settled that when we consider an order sustaining a demurrer to a bill of complaint, without leave to amend, we assume, for the purposes of the ruling, the truth of all material and relevant facts that are well pleaded in the bill of complaint and attached exhibits, as well as all inferences reasonably drawn from those well-pleaded facts. Hall v. Barlow Corporation, 255 Md. 28, 42, 255 A.2d 873, 880 (1969), cited with approval and followed by us in Thomas v. Howard County, 261 Md. 422, 430, 276 A.2d 49, 53 (1971). We shall accordingly set forth in some detail the allegations contained in the second amended bill of complaint.

It is alleged that following their appointment as guardians of Honor M. Woods, incompetent, on February 4, 1971, they obtained authority to file the second amended bill of complaint, the original bill of complaint having been filed pursuant to an order of court dated February 19, 1971. It is further alleged that on September 29, 1952, for a valuable consideration, Honor M. Woods and Mary Elizabeth Woods, one of the defendants, acquired approximately 172.302 acres of land, as tenants in common in fee simple, by a deed of the same date, and duly recorded among the land records of Prince George's County. A photostatic copy of this deed had been filed as 'Plaintiff's Exhibit No. 1' with the original bill and was prayed to be taken as a part of the second amended bill of complaint.

[296 A.2d 589] Paragraphs 3, 4 and 5 alleged the following:

'3. That subsequent thereto, on May 6, 1960, based on the examinations of Dr.John Buell and Dr. Robert McCeney, it was their opinion that the said Honor M. Woods was insane and that she be placed in a hospital or institution in which the insane are detained for care and treatment.

'4. That as a result of the findings and opinions of Drs. Buell and McCeney, the said Honor M. Woods, on May 10, 1960, was ordered to be confined in Spring Grove State Hospital of the insane and was so admitted on May 11, 1960, a fact well known to the defendants.

'5. That prior to May 6, 1960, and subsequent thereto until July, 1965, the Social Security Administration adjudicated the said Honor M. Woods as being 100% disabled and incompetent and incapable of handling her own affairs and accordingly issued payments based on said findings to a representative payee other than the said Honor M. Woods, a fact well known to the defendants.'

It is then stated that the defendants 'with full and complete knowledge of the mental and physical condition' of Honor M. Woods and realizing that there had been a 'substantial and tremendous increase in the value of the 172.302 acres of land' acquired by Honor and Mary Elizabeth, as tenants in common, 'through devious and nefarious means undertook a plan or scheme' to divest Honor of her interest in the land so that the defendants, Lawrence and Mary Elizabeth, would be its sole owners. In furtherance of the plan or scheme, on June 20, 1963, when Honor was on 'convalescent leave' from Spring Grove State Hospital, the defendants transported her to a destination arranged in advance and without her prior knowledge, and then and there, 'by means of coercion fraudulently caused her to execute a deed, without any valid consideration,' conveying away her interest in the property 'knowing full well that her mental condition was such that she was incompetent and incapable of comprehending her acts and the consequences thereof and that she was incompetent and incapable of executing a valid deed or contract.' By virtue of the purported deed of June 20, 1963, Honor conveyed her interest in the land to a straw party who then conveyed the land back to Lawrence, 'the older brother' of Honor, and to Mary Elizabeth, his wife, as tenants by the entireties, thus culminating the plan or scheme to divest Honor of her interest in the land and acquire that interest for themselves. The deed was duly recorded. It is alleged that it totally lacked consideration and that Honor 'was incompetent on June 20, 1963 to execute a valid deed or contract, that she was incapable of comprehending her actions and the consequences thereof, and that she had lost her capacity to engage in responsible business transactions, a conclusion drawn by her treating physicians.'

Paragraphs 12 and 13 allege:

'12. The plaintiffs further allege that when the said Honor M. Woods was granted convalescent leave from Spring Grove State Hospital, on March 2, 1963, she was placed in the care of her father, Stephen Woods, who was about eighty-one years of age at that time, so that it became necessary for other members of the family, including the defendants, to render aid and assistance in handling the personal affairs and business matters of both the said Honor M. Woods and her father; that between March 2, 1963 and June 20, 1963, the defendants did actually manage and handle some of the personal and business affairs of Honor M. Woods and as a result thereof the said Honor M. Woods relied heavily on the defendants for their guidance and advice in the handling of her personal and business affairs and actually carried out their advice and suggestions, so that there was created a confidential relationship between Honor M. Woods and the defendants which relationship was in existence on June 20, 1963, the date the aforementioned deed was executed.

'13. That subsequent to the execution of the purported deed on June 20, 1963, the said Honor M. Woods was returned to Spring Grove State Hospital from convalescent leave on July 18, 1963, and continued therein as an inpatient until December 7, 1963, when she was again placed on convalescent leave under medication and subject to further out-patient treatment. That on March 12, 1966, the said Honor M. Woods was readmitted for a second time to Spring Grove State Hospital on the basis of two medical certificates and on December 17, 1967 she was again placed on convalescent leave under medication and subject to further out-patient treatment. On May 28, 1970, she was again readmitted and as of the filing of the original Bill of Complaint was still a patient at Spring Grove State Hospital.'

It is then stated that condemnation proceedings had been instituted by Prince George's County against Lawrence and Mary Elizabeth, as well as the Washington Suburban Sanitary Commission, in regard to the subject property, which proceedings had been settled by Lawrence and Mary Elizabeth for $570,000. It was agreed between the guardians of Honor and the defendants that, after deducting legal fees and other expenses, the balance of the $570,000 was divided into two equal parts, one disbursed to Lawrence and Mary Elizabeth, the other equal part retained by counsel for them in trust pending the outcome of the present litigation.

There were eleven prayers for relief, i. e., that the lower court decree that:

1. The deed of June 20, 1963, be declared null and void.

2. When the deed of June 20, 1963, was executed, Honor was incompetent and incapable of executing a valid deed or contract.

3. A confidential relationship was created between Honor and the defendants and existed when the deed of June 20, 1963, was executed.

4. The act of the defendants in acquiring absolute ownership of the land on June 20, 1963, 'was in violation of said confidential relationship.'

5. Honor was coerced by the defendants to sign and execute the deed.

6. Honor was fraudulently induced by the defendants to sign and execute the deed without any valid consideration.

7. The defendants exercised undue influence on Honor to obtain her signature to the deed.

8. The lower court impress a trust on the net one-half of the condemnation proceeds.

9. A trustee be appointed to administer Honor's estate.

10. Pending the litigation the funds are to be retained by counsel for the defendants in accordance with the agreement of February 26, 1971.

11. The plaintiffs have other and further appropriate relief.

On January 11, 1972, the defendants filed their demurrer to the second amended bill of complaint and stated as one of the grounds:

'That the statute of limitations and laches apply where suit is brought eight (8) years after the alleged cause of action in the absence of any excuse for the delay in bringing the suit.'

As we have indicated, the chancellor was of the opinion that the suit was barred by the three-year statute of limitations, Maryland Code (1957, 1972 Repl.Vol.) Art. 57, § 1, stating:

'The initiation of this action of April 20, 1971, was barred by the Statute of Limitations. That being the case, it is unnecessary to...