Kernan v. Carter

• Decision Date: 04 April 1918
• Docket Number: 57.
• Citation: 104 A. 530,132 Md. 577
• Parties: KERNAN v. CARTER et al.
• Court: Maryland Court of Appeals

104 A. 530

132 Md. 577

KERNAN v. CARTER et al.

No. 57.

Court of Appeals of Maryland

April 4, 1918

Appeal from Circuit Court No. 2 of Baltimore City; Henry Duffy Judge.

Suit by Eugenia L. Kernan, by her next friend, against Shirley Carter and others. From an order sustaining a demurrer to and dismissing an amended bill, and from an order refusing to grant leave to amend said amended bill, plaintiff appeals. Appeal from order refusing leave to amend dismissed, and order sustaining demurrer and dismissing bill affirmed.

Argued before BOYD, C.J., and BRISCOE, THOMAS, PATTISON, URNER STOCKBRIDGE, and CONSTABLE, JJ.

Walter D. Eiseman and Isaac Lobe Straus, both of Baltimore, for appellant.

Shirley Carter and Thos. Foley Hisky, both of Baltimore (Bernard Carter & Sons, of Baltimore, on the brief), for appellees.

BOYD C.J.

This case is before us on an appeal from an order sustaining a demurrer to and dismissing an amended bill filed by the appellant, and on another appeal from an order refusing to grant the appellant leave to amend that amended bill. The plaintiff, Eugenia L. Kernan, is the widow of James L Kernan, who died on the 14th of December, 1912, leaving surviving him his widow and two sons and a daughter. In 1887 the plaintiff was upon an inquisition adjudicated a lunatic upon the petition of her husband, who was appointed by the circuit court of Baltimore city the committee of her person and estate. The finding still remains in force and she is confined in Mt. Hope Retreat, where she has been for many years. The bill alleges that for many years prior to and ever since the death of her husband she "has been and is non compos mentis and incapable of acting for and in her own behalf with respect to any business matters, property rights or interests whatsoever, and incapable and disabled at all times, both at and since the death of her said husband, from making any election with respect to accepting or renouncing the provisions made for her in his last will and testament," and that "she was and had been and is still disabled and incapacitated from taking any steps whatsoever, from instituting any proceedings, or causing any steps to be taken or proceedings to be instituted, to question or deny the validity of" a deed of trust, a deed of assignment, or a deed of conveyance, which will be later referred to in this opinion. That paragraph of the bill concludes, "and that her disability and incapacity in all the respects aforesaid have been caused by the fact that she has been at all times bereft of her reason and of all understanding of her rights, interests, and matters aforesaid."

On the 20th of April, 1911, James L. Kernan executed a "deed of conveyance" to the James L. Kernan Company of Baltimore City, Incorporated, for a property which is therein described. The lot fronts partly on Howard street and partly on Franklin street, and is improved by a hotel and theater. The property is described as being in fee simple, except a portion of it which is subject to an annual rent of $64. That deed also included personal property, the businesses, franchises, good will, etc. The consideration is stated to be 5,000 shares of preferred stock of the James L. Kernan Company of the par value of $100 each, and 997 shares of the common stock of that company of the same par value, all of which stock is said in the deed to have been issued and certificates thereof delivered to said Kernan, in accordance with a resolution of the stockholders duly passed at a meeting held in Baltimore on the 15th of April, 1911, in compliance with the provisions of section 35 of article 23 of the Code. The deed also refers to a decree of the circuit court of Baltimore city, dated January 28, 1887, being the proceeding in which the plaintiff was adjudicated a lunatic, and to section 13 of article 45 of the Code, for the right of the grantor to sell and convey the real estate.

On the 20th of April, 1911, being the same day the deed of conveyance was made, a "deed of trust" was made by said Kernan, as party of the first part, to Frederick C. Schanberger and Shirley Carter, parties of the second part, in which it is recited that whereas the party of the first part had granted and assigned to the parties of the second part, upon the trusts therein set out, the 5,000 shares of preferred stock, and he was about to cause the same to be transferred to them on the books of the company, and desired to have the trust upon which they were granted and assigned fully set out in that instrument of writing, so that the same might be recorded, therefore, in consideration of the premises and of the sum of $10, he granted, bargained and sold, assigned, transferred, and confirmed unto the parties of the second part, and the survivor of them, and the successors of the survivor of them, as therein provided for, the 5,000 shares of preferred stock in trust for the purposes therein set forth. They were to hold the said shares of stock, collect the dividends and income, and pay over the net dividends and income therefrom to the said Kernan during his life, and after his death to hold said shares for the following purposes: To collect and pay over the net dividends and income from 3,400 shares of that stock to the James Lawrence Kernan Hospital and Industrial School of Maryland for Crippled Children, during the joint lives of the trustees, and upon the death of either of them the survivor to transfer and assign the said 3,400 shares to said Hospital and Industrial School. It was then provided that of the remaining 1,600 shares of preferred stock they were to hold 534 shares for each of his two sons and 532 shares for his daughter. The provisions of the trusts for each of them are set out at length, and under certain contingencies the share left to a son or daughter was to go to St. Agnes Hospital.

On the 22d of April, 1911, he made what is spoken of as a "deed of assignment," in which he stated that he had assigned to Frederick C. Schanberger 385 shares of the common stock of the James L. Kernan Company, absolutely, and to Shirley Carter 165 shares of said stock, absolutely, and to himself 447 shares for life, with remainder as to 315 of them to said Schanberger, and as to 132 shares to said Carter, and he desired to have said transactions evidenced by that deed so that it could be duly recorded. The deed then, in consideration of $5, assigned and transferred said stock according to what was stated in the preamble. All of the deeds were promptly put on record.

On the 24th of June, 1911, James L. Kernan executed his last will and testament, by which he gave to Bernard Carter and Shirley Carter, and to the survivor of them, $20,000 in trust to invest and reinvest the same from time to time, to collect the income therefrom, and apply the net income, or so much thereof as shall be necessary, to the proper maintenance and support of his wife for and during the term of her natural life, and from and after the death of his wife, and after the payment of her funeral expenses, to divide the corpus of said $20,000 and any accrued income therefrom into two equal shares, and to pay one share absolutely to St. Agnes Hospital and the other to the Institute of Mission Helpers of Baltimore City, to be applied by it to the education and care of the deaf and dumb or otherwise afflicted children under its care. He then left $3,000 to each of his two sons, and said he did not make a bequest to his daughter because he had his life insured and held the policy for her benefit. He made the James L. Kernan Company of Baltimore city his residuary legatee and devisee. He appointed Messrs. Bernard Carter and Shirley Carter, and the survivor of them, executors of his will, which was probated on December 18, 1912, and letters testamentary were granted to Shirley Carter, the survivor.

The bill asks the court: (1) To renounce the provision made for the plaintiff in the will, and elect to take and receive, in lieu thereof, the share allowed her by law in the personal property of the estate, belonging to her husband at the time of his death; (2) to decree and declare that said Kernan died seised of all the real estate mentioned in the deed of conveyance of April 20, 1911, and that she is entitled to dower therein; (3) that the three deeds be declared null and void, and that the plaintiff be declared and decreed to be entitled to one-third of the personal estate and her dower rights in all real property of which her husband died seised; (4) that the bequests and gifts in the residuary clause of the will be declared null and void; (5) that the executor be required to pay over to a trustee to be appointed her legal share, interest, and portion of all the personal estate of which her husband died possessed; (6) that the court direct such further proceedings as may be proper and necessary to assign the plaintiff her dower; (7) that there be an accounting with the defendants who have received profits, revenues, income, or interest to which she was entitled; and (8) for general relief.

Section 13 of article 45 provides that:

"Where any married man or married woman is a lunatic or insane, and has been so found upon inquisition and the said finding remains in force, or where any married man or married woman has been absent or unheard of for seven years, the husband or wife of such lunatic or insane or absent person may grant and convey by his or her separate deed, whether the same be absolute or by way of lease or mortgage, as fully as if he or she were unmarried, any real estate which he or she may have acquired since the finding of such inquisition or since the beginning of such absence."

Mr Kernan unquestionably had the power to convey the real estate included in the deed of conveyance of April 20, 1911,...