Pope v. Safe Deposit & Trust Co.

• Decision Date: 22 June 1932
• Docket Number: 63.
• Parties: POPE v. SAFE DEPOSIT & TRUST CO. ET AL.
• Court: Maryland Court of Appeals

161 A. 404

163 Md. 239

POPE v. SAFE DEPOSIT & TRUST CO. ET AL.

No. 63.

Court of Appeals of Maryland

June 22, 1932

Appeal from Circuit Court No. 2 of Baltimore City; Charles F. Stein Judge.

Suit by Hugh L. Pope, trustee under certain deeds of Henry May Gittings, deceased, and executor under his last will and testament, against the Safe Deposit & Trust Company, trustee under the last will and testament of Henry May Gittings deceased, and others. From the decree, plaintiff appeals.

Affirmed and remanded.

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

William Cabell Bruce and Joseph S. Goldsmith, both of Baltimore, for appellant.

George Weems Williams and Jesse Slingluff, Jr., both of Baltimore (Marbury, Gosnell & Williams, of Baltimore, on the brief), for appellee.

PARKE J.

Henry May Gittings was the owner of certain property which he granted by two successive deeds of trust to Hugh L. Pope as trustee. The first conveyance is dated June 8, 1923, and the second May 21, 1924. The trustee accepted the trust, and the real and personal property which was conveyed has changed from time to time by the sale of the realty and by investment and reinvestment pursuant to the provisions of the deeds of trust, and the whole trust estate is now in the possession of the trustee. The portion of the first deed of trust which requires quotation consists of these two paragraphs:

"In the event the said grantor survives his said father, then this trust shall continue for a period of three years from and after the death of his father, the said John S. Gittings, and upon the termination of this trust said trustee, or his successors in the trust, shall forthwith transfer and deliver to said grantor the entire corpus or principal of the trust estate as it may then exist, together with any income in the hands of the trustee, free, clear and discharged of any and all trusts created hereunder and hereby.

Upon the death of the said grantor, after that of his said father and before the trusts hereby created shall terminate, then in that event the property then comprising the trust estate shall vest in, be granted, assigned, paid over, transferred and delivered to such persons as the said grantor may designate in his last will and testament duly executed according to the laws of the State of Maryland, to take the same, but should the said grantor die intestate and/or without exercising the power of disposing by will as herein set forth, then the said trust estate, or such part thereof as may not be affected by the grantor's last will and testament, shall vest in and be granted, assigned, paid over, transferred and delivered to such persons as would under the present laws of the State of Maryland be entitled to take the estate of the said grantor as heirs at law."

The second deed of trust confirms and ratifies the first in direct and positive language, and extends the duration and enlarges the scope of the trust created by the first conveyance by this supplemental declaration of trust:

"And in further trust, in the event that the said Henry May Gittings shall die after the death of his father, John S. Gittings, and after the expiration of three years from and after that event, to continue to hold and manage said trust property, and to collect the income therefrom, and after paying thereout all necessary or proper expenses arising out of the administration of the trust, to pay over the net income unto the said Henry May Gittings, for and during the term of his natural life and, from and after the death of the said Henry May Gittings, to hold said trust property, free and discharged from the trusts hereby created to the use of such person or persons, as the said Henry May Gittings shall by his last will and testament, duly executed in accordance with the laws of the State of Maryland, have appointed to take the same, and in default of such appointment, to hold said trust property, free and discharged from the trusts hereby created, to the use of such person or persons as would, under the laws of the State of Maryland, in force at the time of the execution and delivery of said original trust deed of June 8, 1923, be entitled to take the same as the heirs at law of the said Henry May Gittings."

John S. Gittings, the father, died on January 23, 1926, and the son and grantor, Henry May Gittings, died on January 22, 1931, so the last-quoted declaration of trust is effective. The grantor was survived by his widow, Frederica H. Gittings, and one child, Rosalie May Gittings; and he died testate and appointed the said Hugh L. Pope his executor.

By his last will, Henry May Gittings exercised the power retained by him under the deed of trust, and appointed the entire trust estate to the Safe Deposit & Trust Company of Baltimore, a body corporate of the state of Maryland, its successors and assigns, trustee, upon the trust and confidence to hold and manage and collect the income therefrom, and to divide the net income thereof as prescribed, and to use the principal if necessary to assure his widow an annual income or annuity of at least $3,600 until her death or marriage, and then to pay the net income to his living children and their descendants as specified, and, upon the youngest living child reaching the age of 21 years, the trust estate shall cease and determine and vest absolutely in all of the testator's children then living, and the descendants then living of such children as may have died, share and share alike, per stirpes and not per capita. It is not necessary to state with greater detail the terms of the execution of this power, because no controversy is presented as to its form, and it is agreed that, if the will operates as an execution of the power of appointment, the trustee should deliver the trust estate to the Safe Deposit & Trust Company as trustee under the will of the donor, and that, if the will is not an execution of the power but operates as a testamentary disposition of a reversionary interest in Henry May Gittings, then the trustee should deliver the trust estate to the executor of the grantor for administration in the orphans' court of Baltimore city.

The property which was conveyed by the two deeds of trust was a vested remainder which was owned by the grantor, Henry May Gittings, and would vest in possession in fee simple and in severalty upon the death of his father, who held the precedent particular life estate; and the contention was made before the chancellor that a mere equitable life estate in Henry May Gittings was granted by the deeds of trust and the reversion remained in the grantor, so that, after the expiration of the grantor's equitable life estate, the reversion passed under the will of Henry May Gittings. The learned and experienced chancellor who heard the cause rejected this contention, and from his decree Hugh L. Pope as trustee under the deeds of trust and executor under the will of Henry May Gittings has brought this appeal.

The grantor in both deeds of trust conveyed his estate in remainder in fee to the trustee, his heirs, successors, and assigns, so that the whole legal estate vested in the trustee, who, with the consent and approval of the grantor, was empowered to mortgage, lease, sell, pledge, or partition all or any part of the property held in trust, and to invest, change, or vary the investment of the corpus of the trust. The trust, as ultimately created, was for the use and benefit of the grantor for and during his life, and then to the use of such persons as the grantor should by his last will appoint, and, in default of such appointment, to the use of such persons as would, under the laws of the state of Maryland, in force on June 8, 1923, be entitled to take as heirs at law of the grantor. The apt language of art employed and the legal and equitable status created clearly demonstrate that the grantor designed and intended the two deeds to be the instruments under which the complete title to the subject-matter of the conveyance was to devolve and vest. Upon the delivery of the second deed, there was no estate whatsoever remaining to the grantor, save only his equitable life estate, which, expiring with his death, was, ex necessitate rei, neither transmissible nor descendible. It is true he retained a power of appointment of the corpus of the trust in whole or in part, but the exercise of the power was limited to a will, and therefore could not be by deed. A power retained is, however, not an estate in the subject-matter of the power. As was said in Maryland Mutual Benev. Society v. Clendinen, 44 Md. 429, 433, 22 Am. Rep. 52: "A power is defined to be a liberty or authority reserved by, or limited to, a party to dispose of real or personal property for his own benefit, or for the benefit of others, and operating upon an estate or interest, vested either in himself or in some other person; the liberty or authority, however, not being derived out of such estate or interest, but overreaching or superseding it, either wholly or partially." Butler, note 1 to Co. Lit. 342b; 1 Chance on Powers, § 1. Again: "That a person having a power over property has not, in strictness, any interest in or right to, the property to which the power relates, appears in early authorities." Albany's Case, 1 Co. 110b; Lampt's Case, 10 Co. 48b; Co. Lit. 265b. "Though when the power is for his own benefit he has the means of acquiring such interest, right or title; and in all cases, by the execution of the power the possession, right, title or interest is altered or devested." Id. § 2; Mandrell v. Mandrell, 10 Ves. 246b, 255; 1 Sugden on Powers, 121 (*); 4 Kent, Commentaries, 319(*).

The power in the instant case was limited in exercise to the life of the...