Mallery v. Quinn
| Decision Date | 28 June 1898 |
| Citation | 40 A. 1079,88 Md. 38 |
| Parties | MALLERY v. QUINN et al. |
| Court | Maryland Court of Appeals |
Appeal from circuit court, Prince George county.
Suit by Allen W. Mallery, assignee of John B. Contee, Annie E. Keech and others, against Jemima C. Quinn, Harry E. Quinn, and Henry W. Clagett. From an order dismissing the petition plaintiff appeals. Reversed.
Argued before MCSHERRY, C.J., and BRYAN, PAGE, FOWLER, ROBERTS BOYD, and PEARCE, JJ.
Marion Duckett and John B. Contee, for appellant. Charles H. Stanley and Jos. K. Roberts, for appellees.
There are two questions presented by this record. One is a question of equity pleading, and the other involves the merits of the controversy. The order appealed from was based exclusively on the technical ground raised by the first inquiry, but the appeal brings both before us for final decision. These two questions arose in the following manner: Under the will of John D. Bowling, an annuity of $5,000 was bequeathed to his wife, Elizabeth Bowling. He directed John Bowling, Joseph K Roberts, and Henry W. Clagett, trustees, to set apart and to hold in trust a sufficient portion of his estate to raise this annuity. He further provided, by the residuary clause, that upon the death of his widow the corpus of the trust fund yielding this annuity should be divided among his children, to be held by or for them subject to the limitations prescribed with regard to other property devised and bequeathed to them, respectively, by antecedent clauses of his will. By one of these antecedent clauses (the sixth) there had been given to the same trustees considerable property to be held in trust for Mrs. Contee, one of the testator's daughters, during her life; and there was superadded a power of appointment in her, and a limitation over of the property to her children upon her death in default of the execution of that power. Both John Bowling and Joseph K. Roberts died, and Henry W. Clagett became sole trustee under a decree passed by the circuit court for Prince George county, in equity,--cause No. 1,031 on the equity docket of that court. When, ultimately, in September, 1896, Henry W. Clagett, the sole and the surviving trustee, was forced to state an account, it was discovered that he was a defaulter to the Elizabeth Bowling trust fund, out of which the annuity issued, to the extent of $47,870, and that he was likewise a defaulter to the Mrs. Contee trust fund--the fund arising under the sixth clause of the will--to the amount of $13,069. John Bowling, the son of the testator, John D. Bowling, and one of the trustees under his will, died some time in the year 1887, leaving a last will and testament, under which his widow, Jemima Bowling, became entitled to that portion of the estate of John D. Bowling which had been devised and bequeathed to John Bowling, both directly and under the residuary clause. In November, 1887, after the death of John Bowling, Jemima Bowling, his widow and legatee and devisee, borrowed from Joseph K. Roberts and Henry W. Clagett, the then surviving trustees, the sum of $3,000. Of this amount, the sum of $1,500 belonged to the trust estate of Mrs. Contee, under the sixth clause of John D. Bowling's will, and the other sum of $1,500 belonged to the Elizabeth Bowling trust fund. Two single bills, each for the sum of $1,500, and each payable in five years, were given by Jemima Bowling to the trustees. To secure the payment of these two single bills, she executed a mortgage upon real estate owned by her, and previously acquired in the partition of her deceased father's estate. These two single bills confessedly and incontrovertibly represented investments of trust funds. Mrs. Jemima Bowling had no interest whatever in the Contee trust funds. No part of those funds was payable to her in any contingency, or under any circumstances. As legatee of her deceased husband, she had a one-sixth interest in the Elizabeth Bowling trust funds. In October, 1893, Mrs. Elizabeth Bowling died. Under John D. Bowling's will, the trust fund out of which the annuity issued was then distributable. In August, 1894, Mrs. Contee died, without having executed her power of appointment; and the fund held by Clagett in trust during her life under the sixth clause of the will, as well as one-sixth of the Elizabeth Bowling trust fund, ought then to have been distributed to Mrs. Contee's children. Clagett (then being the sole trustee) was dilatory in making a settlement. Mrs. Jemima Bowling had married again, her second husband being Harry E. Quinn. Mrs. Jemima Bowling (then Mrs. Quinn), being indebted to both the Contee and to the Elizabeth Bowling trusts, and at the same time being entitled to a part of the latter trust fund, under the will of her former husband, and Clagett failing to make a settlement, caused a petition to be prepared, addressed to the judges of the circuit court for Prince George county. In that petition she set forth that there was due to her, as the widow and legatee of John Bowling, a portion of the funds belonging to the Elizabeth Bowling trust, which portion was largely in excess of the amount due by her under the mortgage to the Contee and the Elizabeth Bowling trusts combined; and she prayed that Clagett might be empowered to release the $3,000 mortgage, and charge the amount thereof against the funds in his hands payable to her out of the Elizabeth Bowling trust funds. In other words, she asked that the mortgage securing the $1,500 due to the Contee trust estate be released, and that Clagett reimburse that estate out of the funds in his hands payable to Mrs. Quinn out of the totally independent Elizabeth Bowling trust estate. This petition was sworn to by Mrs. Quinn. Clagett subscribed his assent to the passage of the order prayed for, and on the 5th of May, 1894, Judge Crane signed an order authorizing Clagett to release the entire mortgage, and "to charge the amount secured by said mortgage against the portion or share coming to Jemima C. Quinn from said Henry W. Clagett, surviving trustee of Elizabeth Bowling, now deceased." This petition, the affidavit thereto, the assent by Clagett, and the court's order thereon, were filed on May 8, 1894, in equity cause No. 1,031 in the circuit court for Prince George county. This order was simply an ex parte order. The papers upon which it was founded were not filed before the order was obtained, and none of the beneficiaries of the Contee trust fund were notified, or given an opportunity to be heard. The day following the date the order was filed, Clagett executed a release of the $3,000 mortgage. The effect of this proceeding and the release, if sustained, is to destroy the $1,500 mortgage security held by Clagett for the benefit of the Contee trust, and to substitute in its stead the personal liability of Clagett, who at that time was hopelessly insolvent, and besides was an actual defaulter to both trust estates. If the release stands, Mrs. Quinn escapes paying back to the Contee trust fund the money she actually borrowed from it, though she has the means with which to pay; and the Contee trust estate will be forced to seek reimbursement from an utterly insolvent trustee, while Mrs. Quinn will realize, in the final distribution of the Elizabeth Bowling trust funds, a much larger share than any of the legatees under the residuary clause of John D. Bowling's will. When the next of kin of Mrs. Contee discovered what had been done, they filed, on September 20, 1895, in the same equity cause (No. 1,031), a petition alleging that the order of May 5, 1894, directing Clagett to release the $3,000 mortgage, had been improvidently passed, and praying that it be rescinded and set aside. On February 28, 1896, an amended petition was filed, seeking...
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