Gilbert v. Findlay College

• Decision Date: 08 June 1950
• Docket Number: 191.
• Citation: 74 A.2d 36,195 Md. 508
• Parties: GILBERT et al. v. FINDLAY COLLEGE et al.
• Court: Maryland Court of Appeals

74 A.2d 36

195 Md. 508

GILBERT et al. v. FINDLAY COLLEGE et al.

No. 191.

Court of Appeals of Maryland.

June 8, 1950

F. Neal Parke and D. Eugene Walsh, Westminster, (Charles O. Fischer Westminster, on the brief), for appellants.

Theodore F. Brown, Westminster, (A. Earl Shipley Westminster, on the brief), for appellees.

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

MARBURY, Chief Judge.

Alva C. Garner died on February 27, 1947, leaving a last will and testament which is the cause of the controversy in this case. By the first five paragraphs of his will he made pecuniary bequests to various legatees, and then by the 6th, 7th, 8th, 9th and 10th paragraphs he made bequests in identical form, three of which are before us in this case. Paragraph 6 is as follows: 'I give and bequeath unto Findlay College Findlay, Ohio, as an annuity the sum of Five Thousand Dollars, for the benefit of my niece, Minnie R. Garner during her life. The interest to be paid to her semi-annually, at a rate according to her age.'

Paragraph 7 is to the Foreign Mission Board of the General Eldership of the Churches of God, is for the benefit of the testator's sister, Emma F. Garner, and is for $5,000. Paragraph 8 is to the Board of Missions to the Jews Brooklyn, New York, is for the benefit of the testator's sister Emma F. Garner, and is for $2,000. Paragraph 9 is to the Moody Bible Institute Chicago, Illinois, and is for William E. King, the testator's clerk, and the amount is $2,500. Paragraph 10 is to the Moody Bible Institute, Chicago, Illinois, and is for Mrs. William E. King, wife of William E. King, the testator's clerk, and the amount is $1,500.

The executor, together with Minnie R. Garner, Emma F. Garner and Isabel Garner, a great niece of the testator, who was the beneficiary under paragraph 11 of the will, filed a bill of complaint for the construction of the will. Emma F. Garner later died. Minnie R. Garner, her administratrix, represents her interest in this appeal. Proper parties were made in the case, and the Chancellor, on December 16, 1948, assumed jurisdiction of the further administration of the estate and decreed that the bequests made in paragraphs 6, 7, 8, 9, 10, 11 and 12, were valid. Subsequently, the executor filed his report and account which was ratified on May 11, 1949, except as to the distribution under the above seven paragraphs, which was reserved. Thereafter, Minnie R. Garner, filed an election to take the legacy of $5,000 left her under paragraph 6, and Minnie R. Garner, administratrix of Emma F. Garner, filed an election to take $5,000 under paragraph 7 and $2,000 under paragraph 8. Isabel Garner also filed an election to take $3,500 left her under paragraph 11. The Chancellor filed a decree on December 20, 1949 in which he directed, among other things, that Findlay College issue its annuity bond for $5,000 for the benefit of Minnie R. Garner under paragraph 6 of the will, and that the bequests under paragraphs 7 and 8 of the will should be paid respectively to the Foreign Mission Board and to the Board of Missions, since the annuitant, Emma F. Garner, had died November 25, 1949. The decree also provided that the collateral inheritance tax, at the rate of 7 1/2% on the bequest under paragraph 6, should be proportioned between Minnie R. Garner and Findlay College, 3/10 payable by Minnie R. Garner and 7/10 by the College. The entire taxes due under paragraph 7 and 8 were directed to be paid by the Foreign Mission Board and the Board of Missions, respectively. From this decree, the executor of Alva C. Garner, Minnie R. Garner, Isabel Garner and Minnie R. Garner, administratrix of Emma F. Garner, appealed, the executor's appeal being for the benefit of the other appellants. Isabel Garner's appeal was apparently based upon the requirement that she pay a proportion of the collateral inheritance tax on the bequest made in paragraph 11, but this contention has been abandoned, and there is no question before us respecting either this bequest or the tax to be paid upon it. The only questions before us are the proper construction of paragraphs 6, 7 and 8, as there is no appeal by the parties interested in paragraphs 9 and 10. If the decree is affirmed, the appellants raise no objection to the division of the collateral inheritance tax, and the respective corporations mentioned in these paragraphs have not appealed, so that any question as to the tax will arise only if we agree with the appellants on the construction of the three paragraphs, in which case they admit that they will have to pay it all. Under these circumstances, the entire case will be disposed of by the construction placed upon these three paragraphs.

The appellants claim that, under the common law of England in force in this State, where an annuity is given in a will, the annuitant has the right to elect to take the principal sum bequeathed for the purpose of purchasing such an annuity, that in the case before us Minnie R. Garner did so elect under paragraph 6, and that Minnie R. Garner, administratrix of Emma F. Garner, who died after the testator, also elected to take the principal of the annuities of her intestate, under paragraphs 7 and 8. They, therefore, contend that the account should distribute to Minnie R. Garner $5,000 under paragraph 6, and to Minnie R. Garner, administratrix of Emma F. Garner, $5,000 under paragraph 7, and $2,000 under paragraph 8.

It is provided by Article 5 of the Declaration of Rights, that the inhabitants of Maryland are entitled to the common law of England and the benefit of the English statutes existing on the fourth day of July, 1776, which by experience have been found applicable to their location and other circumstances. This section of the Declaration of Rights appeared first as Section III of the Declaration of Rights in the Constitution of 1776, as Article 3 in the Declaration of Rights of the Constitution of 1851, and as Article 4 of the Declaration of Rights in the Constitution of 1864. It was construed in the case of State v. Buchanan, 5 Har & J., 317, 358, 9 Am.Dec. 534, as having no reference to adjudications in England anterior to the colonization of the country, but to the common law en masse existing here either potentially or practically, as it prevailed in England on the given date, except such portions as are inconsistent with the spirit of the Constitution and the nature of our political institutions. In the concurring opinion filed by Chief Judge Chase, it is stated that whether parts of the common law are applicable because of our circumstances and situations and our general code of laws and jurisprudence, is a question which comes within the province of the courts of justice and is to be decided by them. 5 Har. & J. at page 366. This interpretation has been continuously adopted in this State, and was reaffirmed in the case of Price v. Hitaffer, 164 Md. 505, 510, 165 A. 470. It therefore becomes our duty to determine what was the common law of England on July 4, 1776 with respect to the payment of annuities.

The English rule, disregarding the expressed intention of the testator, was based upon the theory that the courts would not compel an executor to perform an act which would be entirely nugatory. Some of the cases stated that when a testator directed an executor to purchase an annuity, he would be presumed to do that with the knowledge that the annuitant could claim the cash principal instead of the annuity. The theory was that if an annuity was purchased for a legatee's benefit, he could then immediately sell his annuity and get the purchase price. Accordingly it would be a useless act for the executor to buy the annuity. Annuities were purchased more frequently in England than in this country, (Williams Case, 3 Bl. 186, 228) and while we must accept the statements made by the English courts that they could there be immediately sold, it is doubtful whether that condition obtains in this country. If it does not, then the reason for the rule does not exist. We have no facts before us on this question, but we do not have to decide, in this case, whether the English law fits our circumstances and conditions, because of the conclusion we have reached that it could not apply to these particular bequests.

The earliest English case seems to have been Barnes v. Rowley, 3 Ves.Jr 305, 30 Eng. reprint, 1024, decided in 1797, where the Chancellor said 'Could I have prevented her selling the annuity the next day, if it had been laid out in an annuity for her? The whole 252 pounds would have gone. The interference of the court against the will of the legatee to compel the laying out the money in an annuity for a person, her own mistress, would have been perfectly nugatory and vain. The executor can never benefit by it. I cannot raise a doubt upon it.' This case has been followed for 150 years by a series of cases in the English courts. Bayley v. Bishop, 9 Ves.Jun. 6, 32 Eng. Rep. 501 (1803), Palmer v. Craufurd, 3 Swans, 36 Eng. Rep. 945 (1819), Dawson v. Hearn, 1 Russ. & M. 606, 39 Eng. Rep. 232 (1831) and Ford v. Batley, 17 Beav. 303, 51 Eng. Rep. 1051 (1853). See also additional cases referred to in Parker v. Code, 208 Mass. 260, 94 N.E. 476, 33 L.R.A.,N.S., 978, 21 Ann.Cas. 1100, in the note to that case in 33 L.R.A., N.S. page 979, in Re Maybaum's Will, 296 N.Y. 201, 71 N.E.2d 865, 169 A.L.R. 1357, in the annotations in 169 A.L.R., beginning on page 1360, and in Theobald, Law of Wills, Chapter XXXIX 'Gifts of Annuities'. Massachusetts and New York have followed the English rule, but, in New York, this was modified by statute after the decision in Re Bertuch's Will, 225 A.D. 773, 232 N.Y.S. 36. In re Cole's Estate, 219 N.Y. 435, 114 N.E. 785, Ann.Cas. 1918E, 807, in ...