Holloway v. Safe Deposit & Trust Co. of Baltimore

• Decision Date: 12 January 1927
• Docket Number: 59,60.
• Parties: HOLLOWAY ET AL. v. SAFE DEPOSIT & TRUST CO. OF BALTIMORE.
• Court: Maryland Court of Appeals

136 A. 269

152 Md. 289

HOLLOWAY ET AL. v. SAFE DEPOSIT & TRUST CO. OF BALTIMORE.

Nos. 59, 60.

Court of Appeals of Maryland

January 12, 1927

Appeals from Circuit Court No. 2 of Baltimore City; Duke Bond, Judge.

"To be officially reported."

Separate petitions by the Safe Deposit & Trust Company of Baltimore against Grace Suzanne Holloway, an infant, and Marie Calou guardian of the person and estate of Grace Suzanne Holloway and others, and against Marie Calou, executrix of the estate of John E. Holloway, deceased, and others, for construction of the will of John E. Holloway, deceased, and for the administration of trusts under the will of Susanna Holloway. From orders overruling exceptions to and ratifying and confirming separate accounts pursuant to decrees previously entered, defendants named appeal. Affirmed in part, and in part reversed and remanded, with directions in each case.

See also, 134 A. 497.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, and PARKE, JJ.

Isaac Lobe Straus, of Baltimore (Leslie E. Burks, of San Francisco, Cal., and J. Paul Schmidt, of Baltimore, on the brief), for appellants.

John B. Deming, of Baltimore, for appellee.

PARKE J.

John Q. A. Holloway died testate on January 14, 1904, and devised and bequeathed one-sixth of his residuary estate to the Safe Deposit & Trust Company of Baltimore in trust to pay the net income arising to his son, John E. Holloway, for life, and, at his son's death, to divide the corpus of trust among the son's children and descendants as the son should appoint by will, but, if he should fail to exercise the power of appointment, then to divide the trust estate in equal portions among the said son's children then living and the issue then living of any dead child of said son, per stirpes; and should the said son die without leaving any issue, then the one-third of the estate was given absolutely to testator's son, Edward Lee Holloway, and the remaining two-thirds was to remain in trust for the equal benefit of testator's daughter, Anna Elizabeth Holloway, and his son, Clarence J. Holloway, subject, however, to the provision that if the said John E. Holloway should leave a widow, who was born in testator's lifetime, the trustee should retain at the son's death, ""for division at her death or remarriage, whichever should first occur, one hundred thousand dollars of the trust fund and property," and shall pay, during her life or widowhood, the income thereof to said widow.

Susanna Holloway, widow of John Q. A. Holloway, and mother of John E. Holloway, survived her husband until December 5, 1911, and left at her death a will which disposed of the one-fourth of her residuary estate by giving it to the same trustee for the benefit of her son, John E. Holloway, during his life, and then over as provided in her husband's will, except no provision was made for a surviving widow, and except that, upon the death of John E. Holloway without issue him surviving, the trustee was to transfer one-sixth part of the trust estate to Edward L. Holloway absolutely, and another one-sixth part should continue to be held in trust for the benefit of Anna Elizabeth Holloway, the daughter of testatrix, during life, and then over to the daughter's descendants as she might by will appoint, and, in the event of a failure of such appointment, then in equal portions among the children of said daughter, and, if any of such children be dead, to their issue per stirpes, and, if there be a complete failure of issue, then one-third of said one-sixth to Edward L. Holloway absolutely, and the remaining two-thirds of said one-sixth to remain in the hands of said trustee upon the trusts declared, but which it is unnecessary to set forth. Another one-sixth part remained upon a trust for the use of Clarence J. Holloway, like that created for the benefit of Anna Elizabeth Holloway; and the remaining three-sixths part of said trust was to be divided among a number of charitable organizations.

The Safe Deposit & Trust Company assumed the administration of the trusts and was engaged in discharging its fiduciary duties on January 29, 1925, when John E. Holloway, the beneficiary for life under the trusts created by the two wills, died. He was survived by his widow, Anne McClellan Holloway, who was born during the life of his father, but by no descendants born in lawful wedlock. His brother, Clarence J. Holloway, and his sister, Anna Elizabeth Holloway, now intermarried with Charles Nones, survive him, but his brother, Edward Lee Holloway, had previously died and had devised and bequeathed all his estate to this sister.

Several weeks after the death of John E. Holloway, the trustee was advised by an attorney of Berkley, Cal., where the death occurred, that the only descendant of John E. Holloway was a young girl called Grace Suzanne Holloway, who had been born to Marie Calou and John E. Holloway on September 23, 1912, while the two were living together, and that John E. Holloway had left a will, dated March 24, 1913, whereby, in the attempted exercise of his powers of appointment, he had given everything subject to his power of disposal under his parents' wills absolutely to Grace Suzanne Holloway, and had appointed Marie Calou his executrix.

This communication was the result of a request made by the father a few days before his death when he had employed the attorney to represent the interests of his infant daughter, and it assumed that the trustee would want record evidence of the probate of the will and "of the existence of said Grace Suzanne Holloway as the party entitled to take under the will of said John Q. A. Holloway, deceased," and concluded with the statement that it would "take some months to complete the probate of this will so that such records will be available."

This information caused the trustee to seek legal advice of John B. Deming, Esq., which resulted in a petition being filed in chancery in the cause wherein the trust created by the will of John Q. A. Holloway was being administered, and an original proceedings being begun to have equity assume jurisdiction of the trust declared by the will of Susanna Holloway. Both of these proceedings were begun on March 2, 1925, and Clarence J. Holloway, Anna E. Holloway Nones, individually and as executrix of Edward Lee Holloway, Grace Suzanne Holloway, infant, and Marie Calou, purported executrix of the will of John E. Holloway, were made parties defendant in both, while Anne McClellan Holloway was the additional defendant in the petition, and the various religious corporations named in the will of Susanna Holloway were the other defendants to the bill of complaint. The two proceedings set forth, among other things, the terms of the respective trusts and the property embraced in each, the parties entitled, and claiming to be entitled, as the beneficiaries of each trust, the undistributed income, and concluded with a prayer that an accounting might be had, the language of the will construed, the respective rights of the parties entitled adjudicated, and general relief accorded.

The parties defendant answered, and it appeared that the principal point of contention would be whether or not Grace Suzanne Holloway was a child of John E. Holloway within the meaning of the wills of his father and mother by reason of the daughter having acquired the status of a legitimate child pursuant to the provisions of the statutory law of Nevada, where the father and her mother lived at, and some time after, her birth. At the close of the proceedings on this issue, the chancellor, on December 8, 1925, adjudged in both cases that John E. Holloway had died without lawful issue, and directed a distribution to be made, and in what manner, to the distributees specifically determined by each of said decrees.

In the two decrees, there was a reference of the several proceedings to the auditor for the statement of such accounts as might be necessary, "whereby after due allowance to the trustee of its commissions and the proper charges and expenses of its administration, including a reasonable counsel fee payable out of the corpus of the trust estate, the net corpus and accrued income thereof shall be ascertained and distributed as herein decreed." Grace Suzanne Holloway and her guardian and the executrix of John E. Holloway took an appeal on January 22, 1926, from the decree in each cause, but, pursuant to the decrees the auditor had previously stated and filed on January 13th separate accounts of income and principal in each cause. These accounts were not attacked until January 22, 1926, the day of the appeals, when the parties appealing filed similar exceptions in both causes. The record shows that the chancellor passed an order granting leave to take testimony on the exceptions, and the exceptions came on for hearing in open court, but were submitted, without testimony, on February 19, 1926. On February 24th, the chancellor passed an order in each case overruling the exceptions and ratifying and confirming the accounts as stated. On the following April 21st an appeal was taken. The record was not certified by the clerk of the equity court where the causes were pending until July 19th, and on the same day the record was transmitted to and filed in this court, which was eleven days after the reversal of the two decrees of the chancellor.

The first ground of exception to the reports and accounts in both causes is that the appeals from the decrees of December 8th "is undisposed of and pending," and the fourth ground is that these reports and accounts "are premature and unauthorized." These two grounds are substantially the same, and present no tenable basis for exception. The appeals from the decrees of December 8th were permitted since the...