Peninsula Methodist Homes & Hospitals, Inc. v. Cropper, 219

• Decision Date: 10 February 1970
• Docket Number: No. 219,219
• Citation: 261 A.2d 787,256 Md. 728
• Parties: PENINSULA METHODIST HOMES AND HOSPITALS, INC. v. Reese F. CROPPER, Individually and as Executor u/w of Adele H. Truitt, et al.
• Court: Maryland Court of Appeals

Page 728

256 Md. 728

261 A.2d 787

PENINSULA METHODIST HOMES AND HOSPITALS, INC. v. Reese F. CROPPER, Individually and as Executor u/w of Adele H. Truitt, et al.

No. 219.

Court of Appeals of Maryland.

Feb. 10, 1970.

Hamilton P. Fox, Jr., Salisbury (Hearne, Fox & Bailey, Salisbury, on the brief), for appellant.

Lee W. Bolte, Berlin (Sanford & Bolte and Edward P. Hammond, Jr., Berlin, on the brief), for appellees.

Before HAMMOND, C. J., and BARNES, FINAN, SMITH, and DIGGES, JJ.

FINAN, Judge.

The Peninsula Methodist Homes and Hospitals, Incorporated (Manor House), appellant, filed two equity suits in the Circuit Court for Worcester County. One suit named Reese F. Cropper, individually, as well as in his capacity as executor under the will of Adele H. Truitt, together with the Calvin B. Taylor Banking Company of Berlin, Maryland (Banking Company), as party defendants. This suit sought to have the court impose a constructive trust upon certain funds on deposit in the Banking Company in the name of Adele H. Truitt, recently deceased, on the theory that prior to her death she had by letter requested that the funds on deposit be transferred to the appellant and her request had not been carried out. Cropper was joined individually in this action because he had a general power of attorney from Adele H. Truitt and allegedly failed to carry out her directions to transfer the funds prior to her death. The second equity suit was in the nature of a bill for injunction which sought to enjoin Cropper as executor under the will of Adele H. Truitt from disbursing the funds on deposit with the Banking Company as part of the estate of Adele H. Truitt. The lower court sustained Cropper's demurrer, as an individual, to the bill seeking to impose the trust on the funds without leave to amend and also dismissed as to the other defendants the bill seeking to impose the trust. The lower court further dismissed a temporary restraining order and the bill for injunction which sought to prevent the distribution of the funds by Cropper as executor. It is from these orders of the court below sitting in equity that the appeal has been taken.

The events which give rise to this controversy began on April 27, 1967, when Cropper, executive vice-president of the Banking Company, went with B. G. Smith, the assistant cashier and John H. Williams, as to the other defendants the bill seeking Truitt who was then living in Salisbury, Maryland. On that occasion Mrs. Truitt executed a will which Cropper testified he copied out of a form book that was once owned by Mr. Calvin B. Taylor. On the same date of April 27, Mrs. Truitt also executed a power of attorney to Cropper which was also witnessed by the same two gentlemen from Berlin, Maryland, Messrs. Smith and Williams. Cropper was both the executor and the residuary legatee named in the will.

On June 3, 1967, Mrs. Truitt, who was then 81 years of age, entered the Methodist Manor House at Seaford, Delaware to live. Shortly thereafter she communicated both by letter and verbally with Mr. Milton H. Keene, the administrator of the Manor House, in which she stated her desire that her funds on deposit with the Calvin B. Taylor Banking Company be withdrawn and a certified check made to the favor of the Methodist Manor House, Seaford, Delaware. It should be noted that when she was admitted to the Manor House she stated on her application that she was able to fund a Founder's Fee of $6500, but could only make a part payment of a monthly fee of $250.00. She listed her savings account in the Banking Company as $36,418. Shortly after her admission she made a payment to the Manor House in the amount of $500.00 which was a partial payment on the Founder's Fee. She did this by way of a check which she had in her possession and which was signed by her and drawn on the Banking Company. Shortly after receiving the communications from Mrs. Truitt, Mr. Keene met with her and as a result of this he wrote the following letter at her request:

'June 7, 1967

Calvin B. Taylor Banking Co.

Berlin, Maryland

Gentlemen:

I, Adele H. Truitt, hereby request that any and all of my account with the Calvin B. Taylor Banking Company of Berlin, Maryland be closed out, and that a Cashier's Check be drawn in the amount of the balance or balances in favor of The Methodist Manor House, Seaford, Delaware.

_ _

s/ Adele H. Truitt

_ _

s/ Notary Public'

Keene hand delivered this letter to Cropper, as an officer of the bank, on the following day June 8, 1967. At that time Cropper informed Keene that he had a power of attorney from Mrs. Truitt and that he would not comply with the request contained in the letter of June 7. At the hearing in the lower court Cropper raised some questions about the manner in which Mrs. Truitt had signed the letter because she had signed it Adele H. Truitt instead of Adele Hunley Truitt, the manner in which she usually signed papers and checks. However, he stated under oath that he supposed it was Mrs. Truitt's signature. Keene returned to the Manor House and explained to Mrs. Truitt that he was unable to obtain her funds. He thereupon prepared and had Mrs. Truitt execute the following notarized statement which was in effect a revocation of the power of attorney:

'June 9, 1967

I, Adele Truitt, being of sound mind and in full possession of my reasoning faculties, hereby rescind any power of attorney for the management of my affairs which may have at any time in the past been granted to Mr. Reese Cropper of Berlin, Maryland, or to any other person, corporation, or agency named by him for this purpose.

I hereby further direct that any funds in my name presently on the books, or in the care of the Calvin B. Taylor Banking Company are to be made available to me, or to those named by me.

S/ _ _

Adele H. Truitt

S/ _ _

Notary Public'

This revocation was forwarded to Cropper; however, he did not regard it as having the effect of revoking the power of attorney. Cropper requested 'a personal, private interview' with Mrs. Truitt. On July 13, 1967, Cropper went to the Methodist Manor House and interviewed Mrs. Truitt in the presence of Keene who remained in the room during the interview. By letter of July 14, 1967, Cropper informed Keene that he would not honor the revocation of his power of attorney or comply with Mrs. Truitt's request until he had received a certification from at least two qualified 'Doctors and Psychiatrists' that she was mentally able and capable of 'executing a valid contract and managing her affairs.' He further stated that if such evidence was forthcoming he would expect to be reimbursed for expenses and services which he had incurred. In the same letter he enclosed a Cashier's check for $6500 payable to the Manor House, ¹ 'as a guarantee fund, for the admission and care of Mrs. Truitt as of this time.' It should be noted that Cropper had no misgivings about his authority to make this payment out of Mrs. Truitt's account by virtue of his power of attorney. He also testified that at the time Mrs. Truitt had executed the power of attorney in his favor she had delivered to him her bank account passbook for safekeeping.

Mrs. Truitt also made a check to the Manor House in the amount of $526.34 on July 3, 1967, so that during the two months that she was in the Manor House prior to her death, the Manor House received the Founder's Fee of $6500 and in addition a total of $1026.34. Apparently, this latter amount was towards her care and maintenance.

Keene testified, that if a person was in a position to pay the $6500 Founder's Fee and a $250.00 a month residential charge then there was no further question about such a person's finances. However, Mrs. Truitt had some question about her ability to continue indefinitely to make the $250.00 monthly payments and, shortly after her admission, Keene testified that he discussed with her, in the presence of a Father Hart, the feasibility of her entering into a gift annuity agreement with the Manor House. The form of such an agreement was never proffered in evidence but there was testimony that this would have required a deposit of $28,000 on the part of Mrs. Truitt. This would have relieved her of any further monthly payments. Keene also stated that 'it is a gift in the sense that whatever remains in that account remains with the Manor House at the time of the decease of the individual.' However, he elsewhere stated in his testimony that if she ultimately decided not to sign a gift annuity agreement or decided she wanted to go elsewhere, then the Manor House would have had to have made some adjustment with her. The testimony further shows that such a gift annuity agreement would have to be approved by a finance committee, located in Wilmington, Delaware, which would determine for the Manor House and the resident, what in their opinion was an equitable contract. Keene further stated that the reason the contract was not signed prior to the withdrawal of the funds from the Banking Company, was that they did not know the status or full extent of Mrs. Truitt's accounts with the Bank.

On August 2, 1967, Cropper was notified by a letter from counsel that Mrs. Truitt was represented by an attorney and enclosed in the same communication was a photostatic copy of a certification as to her mental competency signed by two medical doctors and a psychiatrist. Mrs. Truitt died in the Manor House infirmary the following day, August 3, 1967. Following her death, Cropper qualified and was appointed executor of her last will and testament and the proceeds of her savings account with the Calvin B. Taylor Banking Company are now in his possession. These proceedings were instituted by the Peninsula Methodist Homes and Hospitals, Incorporated, in June of 1969.

The substance of the appellees' argument, which was adopted by the lower court, was that the bill of complaint failed to establish a case against Cropper as an individual, in that the request of Mrs. Truitt for the...