Mercantile Trust Co. of Baltimore v. Schloss

• Decision Date: 25 May 1933
• Docket Number: 16,17.
• Citation: 166 A. 599,165 Md. 18
• Parties: MERCANTILE TRUST CO. OF BALTIMORE v. SCHLOSS ET AL. SCHLOSS v. SCHLOSS ET AL.
• Court: Maryland Court of Appeals

166 A. 599

MERCANTILE TRUST CO. OF BALTIMORE v. SCHLOSS ET AL.

SCHLOSS v. SCHLOSS ET AL.

165 Md. 18

Nos. 16, 17.

Court of Appeals of Maryland

May 25, 1933

Appeals from Circuit Court No. 2 of Baltimore City; H. Arthur Stump Judge.

Bill by the Mercantile Trust Company of Baltimore, as executor and trustee under the will of William Schloss, deceased, against Ida Schloss and others. From the decree, plaintiff, and defendant Ruth Schloss, infant, appeal.

Reversed and remanded, with directions.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

Fisher & Fisher and L. Wethered Barroll, all of Baltimore, for appellants.

Edwin T. Dickerson and John E. Magers, both of Baltimore, for appellees.

DIGGES Judge.

William Schloss, of Baltimore City, died on the 15th of May, 1931 leaving a last will and testament executed on April 30, 1930, which was duly probated in the orphans' court of Baltimore city on June 8, 1931, and letters testamentary were granted to the Mercantile Trust Company of Baltimore, which duly qualified as executor. By the first item of the will the testator directed that his debts and funeral expenses and all taxes of every kind be paid out of the estate. By item two he bequeathed to Ida Schloss, his wife, all his household goods, furniture, wearing apparel, articles of personal use, and any automobile or automobiles which he might own at the time of his death absolutely. By item 3 the executor was directed to pay Ida Schloss, accounting from the date of death of the testator, the sum of $200 per month until such time as she be actually receiving income from the trust estate created by the will. Items 4, 5, and 6 are as follows: "4. I give, devise and bequeath to Mary Jane White, daughter of James and Mary Ann Oswald, the property known as 402 West Saratoga Street in Baltimore City and the entire contents of said property, including all fixtures and furniture thereon. I also give and bequeath to the said Mary Jane White the sum of Six thousand dollars ($6,000.00), absolutely and forever. 5. I give, devise and bequeath all the rest, residue and remainder of my estate, real and personal, of every kind and description, wherever situated, of which I may die seized and possessed or of which I may be in any manner entitled to dispose by last will and testament, unto the Mercantile Trust Company of Baltimore, in special trust and confidence, nevertheless, for the following uses and purposes and subject to the following conditions and limitations, to wit: In trust to collect the income therefrom and after paying all expenses chargeable against said trust estate, to pay the net income unto my wife, Ida Schloss, as long as she shall live. 6. Upon the death of my said wife, Ida Schloss, if she survives me, or if my said wife does not survive me, then upon my death, the aforesaid trust shall terminate and end and the said trustee shall, as soon as possible, convert the principal of said trust estate into cash and said trustee shall thereupon divide, distribute and pay over the principal of said trust estate then in its hands, absolutely and free and clear of all trusts, as follows"--designating certain persons, corporations, or institutions, in certain designated amounts aggregating $265,000.

The will further provides that the trustee shall pay over the balance of said trust estate in his hands, after the payment of the above-mentioned legacies and bequests, unto the Sinai Hospital of Baltimore, Incorporated. The trustee is then given broad powers in the management and control of said trust estate, and every part thereof, and also the right to invest and reinvest, or change investments. By section 9 it is provided: "For the purpose of making division of said trust estate and for any other purpose in the administration or distribution thereof, said trustee is authorized and empowered to sell and dispose of any part of said trust estate, real or personal, and to execute such deed or deeds as may be necessary and appropriate to convey the same to the distributees or to the purchasers thereof, without the necessity of the order of any court whatsoever, and any such purchaser shall be relieved of the necessity of seeing to the application of the purchase money. The trustee is empowered, upon making any division of any of the trust estates, to divide the same in whole or in part in kind, and the judgment of said trustee shall be conclusive as to the value of any property or securities included in any division of said trust estates or in any payment or delivery of any part of the corpus thereof herein directed to be made and it shall not be necessary for said trustee to employ any appraisers or to apply to any court whatsoever for any order ratifying or approving any such division or payment or delivery of any part of said trust funds." By section 10 it is provided: "The aforegoing provisions for my said wife are intended to be and shall be in bar of her dower and all other interests of every kind and description in my real and personal estate." Finally in section 13 it is provided: "It is my intention and I do hereby declare that the mention of the above powers are not intended to be an inhibition upon the exercise of other powers by my executor, but that my executor shall have the same power over my estate as I would have if living." An inventory and appraisal was filed in the orphans' court on January 14, 1932 showing the whole amount of the estate to be $135,238.18.

On October 7, 1931, the widow, Ida Schloss, renounced the will and elected to take in lieu of all bequests or devises her legal share of her deceased husband's estate, both real and personal. On the 12th day of January, 1932, the widow executed and filed the following assignment: "In consideration of the sum of Five ($5.00) Dollars, and other good and valuable considerations, I do hereby assign, transfer and set over unto Schloss Bros. & Co., Inc., and Michael Schloss, all my right, title and interest of every kind, nature and description, in and to the estate of my late husband, William Schloss. I hereby confer upon Michael Schloss full power and authority in my behalf, and as fully as I personally could do, to select such portion or portions of the estate of the said William Schloss as and for my interest therein, as the said Michael Schloss, in his discretion, may deem desirable and advisable."

On August 12, 1932, the appellant, as executor and trustee under the will of William Schloss, filed its bill of complaint in circuit court No. 2 of Baltimore city, wherein all the parties entitled under any of the provisions of the will were made defendants, and wherein it was prayed: "1. That this Honorable Court may take jurisdiction in the premises and may advise and direct your orator as executor in the further administration of said estate. 2. That this Honorable Court may instruct your orator as to the effect, if any, of the aforesaid renunciation of the testator's widow upon the bequest to the said Mary Jane White of said leasehold property known as 402 W. Saratoga Street and said pecuniary bequest of $6,000.00 in the fourth item of said will. 3. That this Honorable Court may instruct your orator as to the effect, if any, of the aforesaid renunciation of the testator's widow upon the provisions of item sixth of said will. 4. That this Honorable Court may assume jurisdiction of the trust created by the fifth and sixth items of said will to determine to what extent, if any, the benefit intended for the widow should be sequestered to compensate said Mary Jane White for the loss of an undivided one-half interest in 402 W. Saratoga Street." And, fifth, for other and further relief.

Among the beneficiaries of the trust estate were a certain Ruth Schloss and Nathan Schloss, infants, for whom, upon petition, guardians ad litem were appointed.

All of the defendants answered, consenting and submitting to any decree that might be passed therein, with the exception of Mary Jane White, who alleged in her answer that the renunciation of the widow should have no effect upon the pecuniary legacy made to her in the fourth item of the will; that the trustee should pay to her, in addition to the $6,000 and one-half undivided interest in the property, No. 402 West Saratoga street, an amount equal to one-half of the appraised value of $7,000, to wit, $3,500, from the residue of said estate, and that said transfer of said one-half interest and said payments of $6,000 and $3,500 should be made at once, and should not be contingent upon the accumulation of income or the death of the said Ida Schloss; and with the further exception of the two infants, who by their guardians neither admitted nor denied the allegations of the bill of complaint, but submitted their rights to the protection of the court; and with the further exception of a number of institutional beneficiaries which in their answers neither admit nor deny but consent to the passage of such decree as may be right and proper. The record further shows that on the petition of Charles A. McNabb, guardian ad litem for Ruth Schloss, infant, L. Wethered Barroll, Esq., was appointed counsel to said guardian ad litem. Testimony was taken in open court on October 3, 1932, at which time the plaintiff and defendants were represented; after which, on December 6, 1932, the chancellor passed his decree. It is from that decree the two appeals here were taken; the appellant in No. 16 being the Mercantile Trust Company of Baltimore, a corporation, as executor and trustee under the will of William Schloss, deceased, and the appellant in No. 17 being Ruth Schloss, infant. The two appeals are in one record and present the same questions.

There was a motion made by the appellees in this court to...