Fitzpatrick v. Mercantile-Safe Deposit & Trust Co.

• Decision Date: 16 November 1959
• Docket Number: No. 11,MERCANTILE-SAFE,11
• Citation: 155 A.2d 702,220 Md. 534
• Parties: Mary FITZPATRICK et al. v.DEPOSIT AND TRUST CO., trustee, etc.
• Court: Maryland Court of Appeals

Page 534

220 Md. 534

155 A.2d 702

Mary FITZPATRICK et al. v. MERCANTILE-SAFE DEPOSIT AND TRUST CO., trustee, etc.

No. 11.

Court of Appeals of Maryland.

Nov. 16, 1959.

L. Franklin Gerber, Jr., Baltimore (Charles E. Orth, Jr., and Orth, Orth & Gerber, Baltimore, on the brief), for appellants.

Albert F. Wheltle and Eugene A. Alexander, III, Baltimore, for appellee.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

PRESCOTT, Judge.

This appeal is the natural sequel to Hawkins v. Ghent, 154 Md. 261, 140 A. 212, wherein it was held that the primary life estates created under the will of Amanda M. Hawkins were not violative of the rule against perpetuities (Rule) and, therefore, valid; but the question of the validity of the subsequent limitations--all being contingent--was left open.

In 1876, John W. Hawkins and Amanda Hawkins, his wife, conveyed certain real and personal property to Augustine James Dalrymple in trust for Amanda Hawkins, one of the grantors, during her life. The deed of trust, among other things, directed that the property was to be held:

'[I]n trust for the sole and separate use of the said Amanda Hawkins during her life free from the control of her present or any future husband * * * with full power to the said Amanda to devise and bequeath the aforesaid property or any part thereof or any estate or interest therein to or for the use and benefit of such of her children and descendants and in such proportions as she may see fit and such part thereof as the may see fit to her present or any future husband for life and to devise and bequeath the whole or any part of said property as she may see fit in case she shall leave no child or descendant living at the time of her death and from and immediately after the death of the said Amanda in case she shall not have disposed of the aforesaid property under the powers above expressed and in so far as she shall not have made such disposition thereof in trust for the child or children of the said Amanda who may be living at the time of her death to take in equal shares if more than one and the issue then living if any deceased child or children of hers such issue to take the share or portion which its or their parent or parents would be entitled to if living.

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'And in case the said Augustine James Dalrymple or any trustee appointed in his place as herein provided for should die or make resignation in writing to said Amanda of said trust or become incapacitated to execute the same in the life time of the said Amanda full power is hereby reserved and given to her as if she were a feme sole to appoint by deed to be duly executed and recorded another trustee in his place and stead with all the powers of the original trustee hereunder or at her option by such deed to cancel revoke rescind and annul this deed and thereupon in the latter case she shall stand seized and possessed to her own use of the property hereby conveyed or then held hereunder and the title thereto shall be as fully vested in her to all intents and for all purposes as if these presents had not been made * * *.'

On July 24, 1895, Augustine James Dalrymple, trustee, died. Thereafter, upon the authority contained in the deed of trust to appoint by deed another trustee or at her option by such deed to cancel, revoke, rescind and annul the deed of trust, Amanda M. Hawkins, by deed dated August 6, 1895, appointed Alexander H. Robertson, as successor trustee under said deed of trust.

Amanda Hawkins died in 1924, leaving a will by which she devised and bequeathed all of her residuary estate 'including all the property mentioned in the deed of trust' from which we have quoted, and 'in pursuance of the power therein contained in respect of said property,' to Alexander H. Robertson, in trust to divide the net income into four equal parts, which she directed to be paid, respectively, for life to her sons, Joseph Mowell Hawkins and John W. Hawkins, Jr., and her daughters, Sarah E. Ghent and Amanda M. Carter, subject to the payment of specific life annuities out of three of the portions to designated children of the principal beneficiaries for life. The will then provided that upon the death of each of her said children, the trust with relation to each child's portion would continue for 20 years after said child's death, at which time the trust would terminate and the corpus be distributed. There was, of course, a provision concerning the distribution of income between each child's death and the termination of the trust.

One of these four children, J. Mowell Hawkins, was en ventre sa mere at the time of the execution of the deed of trust in 1876; hence, it is conceded that the secondary limitations with reference to the one-fourth part primarily limited to him for life are good. The other three were born after the execution of the deed of trust in 1876, but before 1895.

Mrs. Hawkins had another child by a previous marriage, Emma P. Fusselbaugh, who was born prior to 1876 and predeceased her mother, leaving descendants surviving her, some of whom are still living.

The Court, on the former appeal, decided that the primary life estates were valid whether the execution of the power, with respect to the application of the Rule, were referable to the date of the execution of the deed of trust or the time when Mrs. Hawkins' will took effect, and left open the question as to the date when the Rule began to operate in regard to the secondary limitations. 154 Md. at page 266, 140 A. at page 214.

John W. Hawkins, Jr., one of the sons of the testatrix died in 1951, bringing to an end the uncertainties that rendered the secondary limitations contingent, insofar as one-fourth of the estate was concerned. Thereafter the appellee, as the present trustee under the will of Mrs. Hawkins, instituted this suit for the construction of the deed of trust and will. Since then, two of the other life beneficiaries, Mrs. Carter and Mrs. Ghent, have also departed this life.

The matter was referred to the Master of the Equity Courts of the Supreme Bench of Baltimore, and both he and the Chancellor below concluded that the secondary limitations were valid, one determining that the Rule was properly referable to the death of Mrs. Hawkins; the other to the time of the expiration of the power in Mrs. Hawkins to revoke the deed of trust in 1895, following the death of the original trustee.

In considering the rule againt perpetuities and determining its application to given facts, what it is and certain generally recognized rules and principles relating thereto must be borne in mind; and the same applies to a proper consideration of powers.

It has frequently been said that no full, complete and comprehensive definition has ever been given of the Rule. Many courts and text-writers, however, have adopted the statement of Professor Gray that '[n]o interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest ¹.' It sets out practically the same requirements that were enumerated in the previous appeal in this case, with the exception that the Court there stated that the period of time for an interest to vest was '21 years and 10 months ².' It is a rule of law, not one of construction, ³ and it applies to legal and equitable estates ⁴ of both realty and personalty. It is not a rule that invalidates interests which last too long, but interests which vest too remotely; in other words, the Rule is not concerned with the duration of estates, but the time of their vesting. ⁵

Powers of appointment are generally classified as to the manner or mode of their exercise and the authority conferred upon the donee of the power. They may be directed by the donor to be exercised by the last will and testament of the donee (testamentary) or by his deed (presently) exercisable, if no postponement of the exercise is directed) or both (also presently exercisable if no postponement is directed). A power of appointment is said to be general when there is no limitation as to its exercise (except as to the manner), nor as to the persons in whose favor it is to be exercised, nor as to the amounts to be given to such persons. Lamkin v. Safe Deposit & Trust Co., 192 Md. 472, 479, 64 A.2d 704. Maryland has not followed the majority rule, in all respects, when dealing with general testamentary powers. ⁶ In the instant case, however, we are not dealing with general testamentary powers, but refer to general powers because of certain analogies to be made later concerning general powers exercisable by deed. If the donee of a power be limited in making the appointments to a relatively small group of persons, not including the donee, the power is clearly special. ⁷

The appellants contend that Mrs. Hawkins' reserved power to revoke the deed of trust was exercisable only upon the possible happening of uncertain events, and, therefore, did not render the estate 'destructible' as that term is used in relation to the application of the Rule; and viewing the secondary limitations prospectively from the date of the deed of trust, in accordance with the general rule, they are invalid because they would have vested too remotely so as to violate the Rule. The appellees, on the other hand, claim that the terminus a quo from which the time is to be reckoned under the Rule is the date of the death of Mrs. Hawkins in 1924, but, at the earliest, it should be determined as of August 6, 1895, when Mrs. Hawkins' power to revoke expired; because from the 24th of July until August 6 of that year she had had the absolute and unconditional power and authority to destroy the estate.

Mrs. Hawkins concededly did not exceed the power to appoint contained in the deed of trust with reference to the persons to whom she could make the secondary limitations, nor to the interests created in those persons, unless the Rule prevents the limitations from being effective and...