Mercantile-Safe Deposit & Trust Co. v. Purifoy

• Decision Date: 04 April 1977
• Docket Number: Docket No. 3,MERCANTILE-SAFE
• Citation: 280 Md. 46,371 A.2d 650
• Parties: DEPOSIT AND TRUST COMPANY, Trustee, etc., et al. v. Carolyn Bauernschmidt PURIFOY, etc., et. al. Misc.
• Court: Maryland Court of Appeals

Page 46

280 Md. 46

371 A.2d 650

MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, Trustee, etc., et al. v. Carolyn Bauernschmidt PURIFOY, etc., et. al.

Misc. Docket No. 3.

Court of Appeals of Maryland.

April. 4, 1977.

Daniel H. Honemann, Baltimore (Walter E. Black, Jr. and Robert Sloan, Baltimore, on the brief), for George W. Bauernschmidt et al.

Allan H. Fisher, Jr., Baltimore (David M. Tralins, Baltimore, on the brief), for Mercantile-Safe Deposit & Trust Co., Trustee et al.

William A. Snyder, Jr., Baltimore (Donald C. Greenman and Ober, Grimes & Shriver, Baltimore, on the brief), for appellees.

Argued before MURPHY, C. J., and SMITH, DIGGES, LEVINE, ELDRIDGE, and ORTH, JJ., and RIDGELY P. MELVIN, Jr., Special Judge.

MURPHY, Chief Judge.

This case reaches us from the United States Court of Appeals for the Fourth Circuit, pursuant to the Uniform Certification of Questions of Law Act, Maryland Code (1974) Courts and Judicial Proceedings Article, § 12-601 et seq.; that Act authorizes us to answer questions of state law certified by a United States Court of Appeals 'which may be determinative of the cause then pending in the certifying court and as to which it appears . . . there is no controlling precedent in the Court of Appeals of this state.'

The essential facts are as follows. On October 10, 1972, appellees Carolyn Bauernschmidt Purifoy (Carolyn) and her mother Grace M. Bauernschmidt (Grace) filed a complaint in the United States District Court for the District of Maryland, seeking a declaratory judgment that under the provisions of Code (1957, 1976 Repl.Vol.), Art. 16, § 78(c) the terms 'child,' 'children,' 'descendants' and similar terms used in trust instruments made by various members of the Bauernschmidt family included Carolyn, an adopted child of William Bauernschmidt, Jr. (William), and her descendants. In each trust instrument, a trust was established for the benefit of William. The trustees were directed to pay the income to William for life, with limitation over upon his death, to, or for the benefit of, his 'child,' 'children,' 'descendants,' or words of similar import, with alternative limitations over to various contingent remaindermen (the appellants) should William die without leaving any person answering that description surviving him. ¹ At the time each trust instrument was executed, William was unmarried and had no natural children.

William died on July 24, 1972 without ever having had a natural child. He had married Grace on January 26, 1940, and her daughter by a prior marriage, Carolyn, who was born on May 31, 1931, resided with them. William adopted Carolyn on January 13, 1948.

Each of the trust instruments-three wills and a deed of trust-was executed and became effective prior to June 1, 1947. ² At the time the instruments were executed, between 1911 and 1940, adoption of children was authorized by statute which provided that the term 'child' or its equivalent in a deed, grant, will or other written instrument 'shall be held to include any child adopted by the person executing the same, unless the contrary plainly appears by the term thereof, whether such instrument be executed before or after the adoption.' (emphasis supplied) ³ In Eureka Life Ins. Co. v. Geis, 121 Md. 196, 88 A. 158, 159 decided in 1913, it was held that an adopted child could not, 'by the provisions of the (quoted) statute,' take a remainder interest under a will left to a 'child' of an adoptive parent by the parent's lineal or collateral kindred.

By Chapter 599 of the Acts of 1947, Maryland's adoption law underwent a major revision, the purpose of which was to accord adopted children all of the legal rights of natural children. The statute declared that 'there shall be no distinction between a legally adopted child and a child by birth, to the end that such adopted child shall take from, through and as a representative of its adopting parent or parents and the lineal or collateral kindred of such adopting parent or parents in the same manner as a child by birth . . ..' The statute also provided, in a section later codified as Code (1957 ed.), Art. 16, § 78(c), that the term 'child,' or its equivalent in a deed, grant, will or other written instrument:

'shall be held to include any adopted person, unless the contrary plainly appears by the terms thereof, whether such instrument was executed before or after the entry of the . . . decree of adoption.'

The Act took effect on June 1, 1947, with the proviso that it 'not affect any adoption for which a final decree was entered before June 1, 1947 . . ..'

Chapter 599 of the Acts of 1947 was declared 'on its face . . . clearly prospective and not retrospective' in Gutman v. Safe Deposit & Trust Co., 198 Md. 39, 81 A.2d 207, decided in 1951. That case involved a will probated in 1923 in which the testatrix had left a life income trust to her son, with a remainder to his child or descendant. The son died in 1948 and a child adopted by him in 1928 was held not entitled to take the remainder interest. The Court said that the only way the adopted son could share in the estate of his adoptive grandmother was if it decided that the Act of 1947 was retrospective; it declined to do so, noting that 'The Legislature did not intend to disturb her will, and rights which had become vested under it, for it enacted that the Act should not go into effect before June 1, 1947.' 198 Md. at 44, 81 A.2d at 209. stBy chapter 287 of the Acts of 1961, the Legislature amended Art. 16, § 78(c) 'to clarify,' according to the Act's title, 'the legal effect of the use of the terms 'child', 'heir', 'issue' and 'descendant' or an equivalent in an instrument executed prior to June 1, 1947.' As reenacted, § 78(c) provided as follows (the new matter added to the section by the 1961 amendment being italicized):

'The term 'child', 'heir', 'issue', 'descendant' or an equivalent in a deed, grant, will or other written instrument shall be held to include any adopted person, unless the contrary plainly appears by the terms thereof, whether such instrument was executed before or after the entry of the . . . decree of adoption; In the event such instrument was executed prior to June 1, 1947, the provisions of this sub-section (c) shall apply to those adopted persons as to whom the . . . decree of adoption was entered on or after June 1, 1947.'

In determining whether Carolyn was included as a 'child' or 'descendant' of William under the trust instruments in question, the District Court said that the 'threshold issue' in the case was 'whether Article 16 § 78(c), as amended in 1961, renders the Act of 1947 retrospective.' Purifoy v. Mercantile-Safe Deposit and Trust Co., 398 F.Supp. 1075, 1081 (D.Md. 1974). After noting that this question involved only the construction of a state statute, and did not entail consideration of rights guaranteed by the federal constitution, it said:

'if the statute is held prospective, no constitutional issue is raised. It is only if a retroactive construction is placed on the statute that a second and separate issue emerges-whether the retroactive statute divests vested property rights in violation of the due process clause of the fourteenth amendment.'

'. . . (T)he construction of the Maryland adoption statute is by no means clear. There is merit to the arguments of both parties. The plaintiffs (appellees) contend (1) that the plain meaning of the 1961 amendment makes the 1947 statute retroactive to all instruments executed prior to 1947 when the 'child' in question was adopted after June 1, 1947, and (2) that the Gutman decision does not control this case, because in Gutman the adoption took place before June 1, 1947 and the 1961 amendment was not before the Court. The defendants (appellants) reply claiming (1) that the 1961 amendment covers only those wills executed prior to June 1, 1947, but effective after June 1, 1947; (2) that Gutman expressly held the 1947 adoption statute prospective; and (3) that the Legislature had no intention of rendering the statute retroactive by the 1961 amendment as evidenced by the lack of any debate or legislative history. . . .'

398 F.Supp. at 1081.

The District Court certified the 'Threshold issue' of statutory interpretation for our consideration under the Uniform Certification of Questions of Law Act. We answered the question, stating that the 1961 amendment to § 78(c) 'renders the Act of 1947, chapter 599, retrospective, so that the terms 'child,' 'children,' 'descendants,' and the equivalent in instruments executed and effective prior to June 1, 1947, include adopted children where the adoption occurred after June 1, 1947.' Purifoy v. Merc.-Safe Dep. & Trust, 273 Md. 58, 67, 327 A.2d 483, 488 (1974). We were not asked in Purifoy and did not consider the actual intent of the makers of the trust instruments with respect to adopted children or whether the provisions of § 78(c) were applicable. Nor did we express any opinion on the federal constitutional question of whether the 1961 amendment to § 78(c) violated the Fourteenth Amendment, that issue not being one of 'state law' properly certifiable under the Act.

The District Court thereafter disposed of the case on its merits. Purifoy v. Mercantile-Safe Deposit and Trust Co., 398 F.Supp. 1082 (D.Md.1975). It held, following an evidentiary hearing, that it was impossible to determine from the face of the instruments and the surrounding circumstances whether the testators and settlor actually intended to include or exclude adopted children. It said that it could not determine whether the contingency of adoption was ever considered because no actual intention concerning adopted children was present. It concluded, in view of our opinion in Purifoy establishing the retroactive operation of § 78(c), that the only remaining issue was whether applying that section retrospectively to the facts of the case constituted a violation of the federal constitutional rights of the alternative...