Gerson v. Gerson

• Decision Date: 10 June 1941
• Docket Number: 56.
• Citation: 20 A.2d 567,179 Md. 171
• Parties: GERSON v. GERSON et al.
• Court: Maryland Court of Appeals

20 A.2d 567

179 Md. 171

GERSON v. GERSON et al.

No. 56.

Court of Appeals of Maryland

June 10, 1941

Rehearing Denied July 11, 1941.

Appeal from Circuit Court, Allegany County; William A. Huster Judge.

Suit by Fannie Gerson against Joseph Gerson and others to vacate deeds, declare resulting trust, and enjoin payment of money to particular defendants. From a decree for defendants plaintiff appeals.

Reversed and remanded.

DELAPLAINE and SLOAN, JJ., dissenting.

William C. Walsh, of Cumberland, and Leonard J. Harmatz, of Baltimore (Edward J. Ryan, of Cumberland, on the brief), for appellant.

William A. Gunter, of Gumberland, for appellees.

Argued before BOND, C.J., and SLOAN, JOHNSON DELAPLAINE, COLLINS, and FORSYTHE, JJ.

JOHNSON, Judge.

Fannie Gerson, widow of Myer Gerson, late of Frostburg, Allegany County, Maryland, deceased, on November 24, 1939, filed her bill of complaint in the Circuit Court for Allegany County in equity, against Joseph Gerson, Samuel Gerson and Fidelity Savings Bank of Frostburg, alleging in substance (a) the death of Myer Gerson on March 31, 1938, further that in addition to herself Myer Gerson left eight children surviving him by a previous marriage, of whom Joseph and Samuel were unmarried; (b) that Myer Gerson left a last will and testament duly probated in the office of the Register of Wills for Allegany County, whereby he devised to the plaintiff his home on Ormond Street in Frostburg, together with the furniture contained therein, and of the remainder of his estate he devised one-third to her and the balance to his children, excluding Joseph and Samuel; (c) that prior to his death Myer Gerson and Fannie Gerson owned, as tenants by the entireties, two parcels of real estate located in Frostburg Maryland, known as the hotel and garage properties; (d) that the plaintiff was advised that on March 17, 1938, a paper was executed purporting to be a deed from the plaintiff and her husband conveying the garage and service station to Samuel and Joseph; that she had no knowledge of ever having signed such instrument purporting to be a deed for said properties, and that she received no consideration whatsoever for the transfer thereof; (e) that subsequently Samuel and Joseph Gerson entered into a series of discussions with the plaintiff, representing to her their willingness to purchase her interest in the estate of her deceased husband husband and pay her therefor $2,300, and such discussion resulted in an agreement between the plaintiff and her two stepsons which was executed April 25, 1938, and duly recorded; further that at the time of the execution of that paper Samuel and Joseph Gerson 'fraudulently and without consideration' caused her to execute two deeds, one conveying the hotel property and the other being a confirmatory deed intending to correct an original deed purportedly made by herself and her husband to them on March 17, 1938; (e) that the purported deeds were never read to nor understood by the plaintiff, who could neither read nor write, and she had no knowledge she was signing a deed for the hotel or for the garage property, but understood she was merely signing an agreement releasing her interest in the estate of her deceased husband for $2,300. In the seventh paragraph of the bill of complaint, the plaintiff alleged that the hotel property had been sold by Joseph and Samuel to one Joseph De Michele et al. for $3,700, and by the following paragraph she alleged that the garage property, to which Samuel and Joseph acquired title from her by fraud, was valued in excess of $25,000.

It was alleged in the ninth paragraph that Samuel and Joseph had applied to Fidelity Savings Bank of Frostburg for a loan of $15,000, to be secured by a mortgage upon the garage property, which loan if obtained would however deprive her of her interest therein; further that Joseph and Samuel had failed to account to her for the sum of $3,700 received by them for the sale of the hotel property and had failed to pay her any rent upon the garage property. The bill prayed that the deeds referred to be vacated by reason of fraud exercised upon the plaintiff by Joseph and Samuel Gerson, that a resulting trust be declared in favor of the plaintiff as to the garage property, that Joseph and Samuel be required to account to the plaintiff for the sum received from the sale of the hotel property and for rents from the date of Myer Gerson's death upon the garage property, and for an injunction restraining the Fidelity Savings Bank of Frostburg from paying to the defendants any of the proceeds of the $15,000 mortgage loan.

Before the bill of complaint had been answered by Joseph and Samuel Gerson an agreement between the Fidelity Savings Bank of Frostburg and the other parties to the cause was entered into, whereby the bank was reimbursed for all sums advanced the Gersons on account of the loan, released its mortgage and was by the plaintiff dismissed as a defendant.

Samuel and Joseph Gerson answered the bill of complaint, denied its material allegations, and although admitting that their stepmother could not read, asserted that no fraud was practiced upon her, because she fully understood the facts concerning her husband's estate and agreed to sell them the properties mentioned for $2,300, of which sum they had paid her $2,000 in cash, but were unable to pay a $300 note representing the balance, and because of this she was so offended that she engaged counsel, as a result of which the bill of complaint had been filed against them.

Testimony in the cause was taken orally before the Chancellor in open court, as a result of which the plaintiff contended that she was a victim of constructive as well as actual fraud practiced upon her by her two stepsons and their cousin, Milton Gerson, who had recently been admitted to the Bar of Allegany County. The constructive fraud was claimed by her to exist because of the fact that she was ignorant and entirely illiterate and the three persons mentioned occupied a fiduciary relationship toward her, and it became their duty to inform her fully of the transactions she was entering into; that they failed in this duty by representing or causing her to believe that her late husband owned the Ormond Street property and furniture therein as well as the hotel and garage properties, whereas the two properties last mentioned were upon his death owned by the plaintiff absolutely by virtue of the fact that title to them was in herself and husband as tenants by the entireties, and they had not met the burden cast upon them to show the fairness and justice of the transaction, because for $2,000 in cash she had parted with property worth many times this amount. The actual fraud which she claimed had been established consisted in falsely representing to her that Myer Gerson himself owned the hotel property, the garage property in addition to the home; that he owed considerable sums of money and since under her husband's will she took the home on Ormond Street and sold them her interest in his entire estate for the price mentioned she was making a good sale and receiving at least full and fair value for what she was parting which, because when his debts were paid Samuel and Joseph Gerson, in order to acquire title to the properties in question, would necessarily have to pay them, a fact that would render less valuable a one-third interest in the residue of Myer Gerson's estate.

Mrs. Gerson further asserted that to the best of her judgment and understanding she had not signed any of the deeds produced for any of the properties and had not signed a renunciation to act as one of the executors of her husband's estate which on April 2l, 1938, was presented to the Orphans' Court for Allegany County and resulted in establishing Milton Gerson as sole executor.

The Chancellor in an opinion filed in the cause rejected Mrs. Gerson's contention that her signatures to the deeds and renunciation were forged. He concluded that because she accepted the home and furniture therein contained on Ormond Street under the will without question she must have understood the other terms of settlement. He also recognized an equitable claim of $5,000 which the defendants had set up against their father for money expended by them in improving the garage property, but failed to give any consideration as to whether the grantees in the deeds and their cousin, Milton Gerson, occupied a fiduciary relation to Mrs. Gerson and therefore did not consider the effect of such a relation upon the transactions here attacked.

Fannie Gerson was fifty-three years of age at the death of her husband in March, 1938. She married Myer Gerson in July, 1918. No children were born as a result of that marriage, but at the time of its celebration he was a widower with eight children ranging in ages from six to eighteen years. From the date of her marriage to him, Fannie Gerson entered him home, took up her duties as a faithful and obedient helpmate and assisted in rearing his infant children by the former marriage. Mrs. Gerson is to the fullest extent illiterate, being unable to read or write, but has learned to copy her own name in crude fashion. Indeed, her acquisition of this habit, coming as it did the hard way, has produced a signature which may be characterized as inimitable.

As already stated, at the time of his death, Myer Gerson and Fannie Gerson held as tenants by the entireties title to two valuable pieces of property located in Frostburg, Maryland known as the 'hotel property' and the 'garage property', the former worth $4,000 and the latter at least $12,000. There was a mortgage of $5,000 on them when he died. Myer Gerson also owned individually a home on Ormond Street worth $3,000 and other real and personal...