Knell v. Price

• Decision Date: 01 September 1989
• Docket Number: No. 3,3
• Citation: 318 Md. 501,569 A.2d 636
• Parties: Violet E. KNELL v. Jesse Annabelle PRICE. ,
• Court: Maryland Court of Appeals

Page 501

318 Md. 501

569 A.2d 636

Violet E. KNELL v. Jesse Annabelle PRICE.

No. 3, Sept. Term, 1989.

Court of Appeals of Maryland.

Feb. 8, 1990.

Elise Davis, Chestertown, for petitioner.

Robert H. Strong, Jr., Chestertown, for respondent.

Argued before ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL ^*, JJ., and CHARLES E. ORTH, Judge of the Court of Appeals (retired), Specially Assigned.

CHARLES E. ORTH, Judge, Specially Assigned.

The drama which was revealed by the institution of this case in the Circuit Court for Kent County had a cast of three: William A. Knell--the husband, Violet E. Knell--his wife, and Jesse Annabelle Price--the "other woman." After some 22 years of marriage, Mr. and Mrs. Knell separated. The terms of the separation were never spelled out in a written agreement, nor did the separation ever culminate in a divorce. When Mr. and Mrs. Knell went their separate ways, Mr. Knell's way was to live with Miss Price. For 27 years, thereafter, until Mr. Knell's death on 12 July 1987, he and Miss Price enjoyed a relationship akin to that of a marital status, but it was not imprinted with the legality which would have been bestowed by a marriage. As Miss Price states in her brief, she "served as his nurse during illness, homemaker, cook, and companion." She "contributed to the maintenance and care of [the several homes in which they lived]." They had a joint checking account. She acted as his "bookkeeper," and when Mr. Knell was ill, she wrote checks drawn on the account, payable to the order of Mrs. Knell for her support and sent them to her.

At the time of Mr. Knell's death, the couple were living in a dwelling in Rock Hall, Kent County, Maryland, purchased by Mr. Knell about 10 years before for $34,000. The property was conveyed to him alone, in fee simple absolute, by a deed from the sellers dated 16 October 1978. On 19 December 1978 two deeds, prepared at the instance of Mr. Knell by Anthony Libersky, Mr. Knell's attorney, were executed and duly recorded, transferring the property. Each deed recited that the conveyance was "for good and valuable consideration" but noted that there was "no monetary consideration." The first deed conveyed the property in fee simple to Libersky, designated therein as "Trustee." The second deed, by its granting clause, conveyed the property to Mr. Knell in fee simple. The habendum, however, read:

TO HAVE AND TO HOLD the said lot or parcel of land and premises, unto and to the use of the said William A. Knell for and during the term of his natural life, with the full power unto him to sell, mortgage, lease, convey and dispose (except by Last Will and Testament) of the whole and entire estate in the same property at any time he may deem expedient, without the purchaser or purchasers, mortgagee or mortgagees, lessee or lessees, or other persons taking title from him, being required to see to the application of the purchase or mortgage money, or the consideration paid for the disposal of said property; it being also the intention of these presents that the exercise by said William A. Knell of the powers hereinbefore enumerated and granted unto him, when and as exercised shall operate upon and there shall pass hereunder unto the grantee or grantees, mortgagee or mortgagees, lessee or lessees, or other persons taking title, not only the life estate hereby created but also the interest and estate in remainder hereinafter mentioned and hereby created; and immediately upon the death of the said William A. Knell, without having disposed of said property in the exercise of the powers aforesaid, or as to so much of the same as may remain, unto and to the use of Annabelle Price, her heirs and assigns, in fee simple.

Inasmuch as Mr. Knell died without having disposed of the property in exercise of the powers given him in the habendum clause, Miss Price considered that the property passed to her in fee simple at Mr. Knell's death. Mrs. Knell thought otherwise. She filed a complaint in the Circuit Court for Kent County seeking a judgment declaring that the habendum clause of the deed "in so far as it purports to give [Miss Price] the fee simple ownership of the ... property at the death of [Mr.] Knell [was] void," so that the property became a part of Mr. Knell's estate. The court "adjudged, ordered, declared and decreed that":

1. The habendum clause in the Deed from Libersky to Knell accurately reflected the true intent of William Knell. Accordingly, the straw deeds together had the effect of creating a life estate in William Knell and a remainder interest in Jessie Annabelle Price.

2. The transfer was not a fraudulent conveyance and therefore a valid transfer of title.

3. William Knell therefore died owning a life estate with a remainder interest in Jessie Annabelle Price.

4. Upon the death of William Knell, the property passed by operation of law to Jessie Annabelle Price in fee simple absolute. The property therefore is not includable in the estate of William Knell.

Having so declared, the court stated that it was "unnecessary for the Personal Representative of the estate of William Knell to take any further action to effectuate a transfer of title of the property."

Mrs. Knell was not content. She appealed to the Court of Special Appeals. It affirmed the judgment. Knell v. Price, 77 Md.App. 331, 550 A.2d 413 (1988). Still not satisfied Mrs. Knell sought our review. We granted her petition for the issuance of a writ of certiorari and ordered that the case be certified to us. The petition presented two questions:

1. Whether a conflict between the granting and habendum clauses of a deed should have been resolved in favor of the granting clause?

2. Were the deeds executed by the deceased husband and trustee in December 1978 for purposes of defrauding [Mrs. Knell] of her statutory share in her deceased spouse's estate?

In the circumstances of this case, the answer to the first question is "no" and the answer to the second question is "yes."

The Granting Clause v. The Habendum Clause

It is not disputed that the granting clause and the habendum are not harmonious and cannot be reconciled. Ordinarily, we have abided by the general rule that where the granting clause and the habendum clause are in conflict, the granting clause will prevail. Adams v. Parater, 206 Md. 224, 236, 111 A.2d 590 (1955); Literski v. Literski, 166 Md. 641, 644, 171 A. 874 (1934); Marden v. Leimbach, 115 Md. 206, 209, 80 A. 958 (1911); Pritchett v. Jackson, 103 Md. 696, 698, 63 A. 965 (1906); Winter v. Gorsuch, 51 Md. 180, 184-185 (1879).

The traditional reasoning behind this result is that such an habendum clause is considered repugnant to the granting clause. More broadly, the repugnancy doctrine states that as between any two clauses, if the second is repugnant to the first, the former controls. No consideration is given to the overall intention of the parties to the deed. This doctrine operates as a matter of law and not as a principle of construction.

6A Powell on Real Property, p 901 [a] (1949, 1989 rev. ed.). 4 Tiffany on Real Property, § 979 (3d ed. 1920, 1975 rev. ed.) at 99 explains:

In case of a clear repugnancy between two clauses of the conveyance, the earlier clause should, it is said, prevail over the later clause.... [This rule] will be applied, however, it is said, to prevent the revocation by implication, by a later clause, of an earlier provision made in clear, explicit and unambiguous words, such a revocation being required to be in terms no less clear and explicit than those of the earlier provision.

(footnotes omitted). The general rule may be tempered, however, in certain circumstances. Tiffany continues:

But inharmonious provisions should be reconciled and effect given to all of them so far as that is possible by reasonable interpretation. Otherwise, provisions repugnant to what is determined to be the intention of the parties should be rejected.

Id. (footnotes omitted). In Hammond v. Hammond, 159 Md. 563, 152 A. 107 (1930), the circumstances before the Court were that

[a]n owner in fee simple of certain real estate in Baltimore conveyed it to one who immediately reconveyed it to the first grantor by a deed purporting in the granting clause to transfer a fee simple title, but containing an habendum clause, which defined the regranted estate as being vested in the grantee for his life only, with power of disposition by sale, lease, or mortgage, and with remainder to three of his children, as joint tenants, if the reserved powers were not exercised. Subsequently the original owner, and grantor in the first deed, executed a will bequeathing in trust a pecuniary legacy, for the payment of which his personal estate, at the time of his death, six years later, was insufficient. The trustee under the will, invoking the rule that an habendum repugnant to the granting clause in a deed is inoperative, ... advanced the theory that the reconveyance to the first grantor effected no change in the fee simple title with which he was previously invested, and that, not having disposed of the property in his lifetime, it passed as his absolute estate under the residuary clause of his will, subject to the charge of the pecuniary legacy to the extent of the deficiency resulting from the inadequacy of his remaining estate.

Id. at 564, 152 A. 107. We held that the habendum controlled. We explained that the provisions of the habendum clause

represent the sole object for which the two deeds were executed and recorded is perfectly clear from the method of conveyance and re-transfer thus employed. Unless the habendum is given effect, the execution of the deeds was wholly futile. It was obviously intended that they should accomplish a change of title. If the habendum should be ignored as technically repugnant to the granting clause in the second deed, the title would be in precisely the same tenure as though neither of the deeds had been executed. Therefore, to hold the...