Horowitz v. Horowitz

• Decision Date: 14 June 1938
• Docket Number: 34.
• Citation: 199 A. 816,175 Md. 16
• Parties: HOROWITZ v. HOROWITZ.
• Court: Maryland Court of Appeals

199 A. 816

175 Md. 16

HOROWITZ v. HOROWITZ.

No. 34.

Court of Appeals of Maryland

June 14, 1938

Appeal from Circuit Court of Baltimore City; George A. Solter Judge.

Suit in equity by Shirley Horowitz, administratrix of the estate of Isadore E. Horowitz, deceased, against Jacob Horowitz, to establish plaintiff's ownership of shares of stock in the Gerrison Realty Holding Corporation and restrain defendant from assigning or transferring them. From a decree adjudicating the title to such shares to be in deceased's estate, defendant appeals.

Reversed and remanded.

A decree, dismissing bill of complaint in suit by decedent's widow and infant children to impress decedent's stock in corporation with trust, but providing that nothing therein should prejudice third party's right to assert his rights respecting subject matter in separate suit, was not res judicata against defendant in widow's subsequent suit as administratrix of decedent's estate to establish plaintiff's ownership of stock and restrain defendant from assigning or transferring it, as decree contained nothing from which defendant could have appealed as matter of fact. Code Pub.Gen.Laws 1924, art. 5, § 30. Randolph Barton, Jr., of Baltimore (Albert Moss, of Baltimore, on the briefs), for appellant.

Edward L. Ward and J. Paul Schmidt, both of Baltimore (Ben Weintraub and Isaac Lobe Straus, both of Baltimore, on the brief), for appellee.

Argued before BOND, C.J., and URNER, OFFUTT, SLOAN, MITCHELL SHEHAN, and JOHNSON, JJ.

MITCHELL Judge.

The appeal in this case is from a decree entered in the Circuit Court of Baltimore City on the 20th day of December, 1937 adjudicating the title to 100 shares of common stock of the Garrison Realty Holding Corporation as being in the estate of Isadore E. Horowitz, deceased, upon which estate Shirley Horowitz, his widow, the appellee herein, is the sole administratrix.

Because of prior litigation, of which the shares of stock involved were in part the subject matter, and the reference to such prior litigation embraced in the decree appealed from, that decree is set out in this opinion, and is as follows:

'The above cause coming on for hearing, and the Court having read the papers, heard the testimony produced, and considered arguments to counsel, it holds and decides that the title to the one hundred shares of the common stock of the Garrison Realty Holding Corporation, in question in this cause, is vested in the estate of Isadore E. Horowitz, deceased, for the reason, that the defendant herein affirmatively asserted in his answer title in himself to said stock in the case of Shirley Horowitz, et al., against Jacob Horowitz, et al., heretofore pending in the Circuit Court No. 2 of Baltimore City, by virtue of an alleged gift from Isadore E. Horowitz, a few days before his death, thus making said gift to and title in the defendant an issue in said cause; upon this issue the defendant offered testimony, which was adjudicated by the Court adversely to him. That said adjudication is implicit in its refusal to grant affirmative relief to the defendant upon said claim and issue thus tendered.

'It is therefore this 20th day of December, 1937, by the Circuit Court of Baltimore City, Adjudged, and Decreed, that the title to said one hundred shares of common stock of the Garrison Realty Holding Corporation, referred to in the bill of complaint and evidence, is hereby declared to be vested in the Estate of Isadore E. Horowitz, deceased, and the defendant is hereby directed to deliver unto the plaintiff herein, as administratrix of said decedent's estate, the certificate representing said stock properly endorsed by him, so that a certificate for said stock may be issued in the name of the plaintiff herein, as a part of the assets of said decedent's estate; And it is further adjudged and decreed, that the costs in this proceeding be paid by the defendant.'

As has been indicated, it will be noted by reference to the foregoing decree that the same is based upon the decree in the prior proceeding in the Circuit Court No. 2 of Baltimore City. It therefore becomes necessary to some extent, to review the former proceedings for the purpose of setting forth the basis upon which the decree now under consideration was reached; for the reason that it appears from the record that all the pleadings and testimony, as well as the opinion and decree, in the former case, over the appellant's objection, were admitted by the Chancellor in the instant case 'only for the purpose of showing the defense made in the earlier case as bearing on the question of res adjudicata.'

A brief review of the pleadings and testimony reveals the following state of facts: That for some time prior to November 16, 1933, the said deceased was owner of said stock, as evidenced by a single certificate, issued in his name; that the remaining outstanding stock in the above company was originally held by Jacob Horowitz, the appellant, and Joseph Schlessinger, to the extent of 100 shares each, and that at the time of the death of Isadore E. Horowitz, the Schlessinger stock was vested in the Union Trust Company of Baltimore. That Isadore was a son of Jacob Horowitz, and that on November 15, 1933, the former entered the Maryland General Hospital, where two days later he was operated upon, and there a week following the operation he died. The day after Isadore entered the hospital he assigned his certificate of stock to his father, having, out of the presence of the father, and as far as the record goes, without the latter's knowledge, expressed his desire to transfer the stock to his father, in a conversation had with his brother, Louis Horowitz, and stated as his reason for such action, that he wished to protect his father against the loss of money the latter had invested in the company, whereas, as an asset of his own estate, it would be of small value. To the end that the certificate might be procured by Louis, the latter was given the key to a safe deposit box in which it was contained and instructed to get the same and bring it to the hospital for the purpose of effecting the assignment. These instructions were followed by Louis, who in the course of the transaction found that it was necessary to have the co-operation of Albert Moss, the attorney of the deceased, in order to gain entrance to the deposit box. Upon obtaining the certificate, Moss retained it in his possession and accompanied Louis to the hospital, where the deceased, in the presence of only Louis and Moss, in his own handwriting filled in the assignment to his father, designated Moss as the attorney to make the transfer, formally executed the same, and handed it to Louis, with instructions to deliver it to his father.

After her qualification as administratrix of the estate of her husband, Mrs. Horowitz made demand upon the appellant for the return of the stock; and upon his refusal to do so, a bill of complaint was thereafter filed by her, both individually and as administratrix, and by Rose Lee Horowitz and Elwood Horowitz, infant children of the deceased, by their mother and guardian, Goldie Horowitz, the divorced wife of the deceased, against the said Jacob Horowitz, in which among other things, it was alleged that the assignment of the certificate of stock was secured by undue influence practiced upon the deceased by his father, with intent to defraud, at a time when he was about to undergo a serious operation, the result of which was doubtful. In substance, the bill set forth that the deceased was induced to assign the stock because, in event of his death, the beneficiaries of his estate would mismanage and waste it; that through this mismanagement the remaining interests in the corporation would be seriously affected; and that the father secured the assignment of the same upon the express understanding that he would hold the stock in trust for the use and benefit of the said widow and children, share and share alike. The bill prayed that the stock be impressed with a trust for the use and benefit of the widow and children; that the defendant be required to deliver up and transfer the certificate representing said stock; and that meanwhile the company be restrained from permitting any transfer of said shares of stock, and the defendant enjoined from disposing of the same. The answer of the defendant denied the allegations of fraud and undue influence, and set forth the circumstances under which the stock was assigned to him, as hereinbefore detailed, as effecting a free and voluntary gift of the said stock to him by the deceased. After the filing of the answer, upon the petition of Mrs. Horowitz, she was dismissed as a party to the proceedings in the capacity of administratrix of her husband. To the bill as thereby amended, a demurrer was interposed, upon the ground (a) that the administratrix was a necessary party to the suit, and (b) that because the bill alleged that the stock was obtained by the defendant through undue influence, with intent to defraud the plaintiffs, it followed that if the allegations of the bill were substantiated, and the assignment of the stock declared null and void, then the same would necessarily be deliverable only to the administratrix as such. The demurrer being sustained, with leave to amend, the original plaintiffs, other than the administratrix, filed an amended bill in which, omitting the charge of fraud and undue influence in the procurement of the stock, they set forth that the deceased had endorsed the stock certificate and caused the same to be transferred to his father in trust, for the benefit of his widow and tow infant children, to be delivered to them in event of his death from the contemplated operation. The said amended bill alleges the demand upon ...