Riggs v. Loweree

Decision Date17 December 1947
Docket Number50.
Citation56 A.2d 152,189 Md. 437
PartiesRIGGS v. LOWEREE et al.
CourtMaryland Court of Appeals

Appeal from Circuit Court of Baltimore City; Emory H. Niles, Judge.

Suit by Laurie H. Riggs, trustee, against F. Harold Loweree and another, executors of the estate of Paul M. Burnett deceased, to recover income alleged to have been improperly withheld by Paul M. Burnett, trustee, deceased, from Sara J Parker, cestui que trust, deceased. From decree dismissing bill of complaint, the complainant appeals.


James Morfit Mullen, of Baltimore (Herbert E. Witz, of Baltimore on the brief), for appellant.

Hilary W. Gans, of Baltimore, for appellees.



In this suit for discovery and accounting, Laurie H. Riggs, trustee, seeks recovery of income which he claims Paul M. Burnett, trustee, deceased, improperly withheld from Sara J. Parker, cestui que trust, deceased.

The trust was created by the will of Mary Donaldson, deceased, which bequeathed the sum of $10,000 to her niece, Sara J. Parker, for life with the power of appointment. The will was probated by the Orphans' Court of Baltimore City in May, 1920, and Burnett qualified as administrator d. b. n. c. t. a. of the estate. On account of a deficiency of assets, the amount he distributed to Miss Parker as life tenant was only $7,739.69. He retained this sum to invest it for her. In 1922 he purchased stock of the United States Fidelity and Guaranty Company, and he regularly turned over to her the income therefrom until 1928. Of a total of 80 shares he sold 75 shares between May 4, 1928, and September 18, 1928, for $34,677.23, and deposited that amount in his checking account in the Real Estate Trust Company. On September 29, 1928, without any court authority, he took $1,733.86 as a commission of five per cent on sales, and he deposited the rest, $32,947, in a trust account. In March, 1929, he withdrew $1,372.32 to pay the income tax on the profit from the sales. In the summer of 1929 he withdrew $25,000 for loan as call money in New York, and he also invested about $6,000 in bonds. On October 31, 1929, seven days after the crash in the New York Stock Market, he recalled the $25,000 and put it back in the trust account. On November 18, 1929, he invested the $25,000 in 300 shares of stock of the Anaconda Copper Company. He claimed that afterwards, when the price of the stock was falling, Miss Parker expressed anxiety about the investment, and he gave her the assurance that the would pay her 5 per cent interest on $25,000 for the rest of her life. In 1932 he sold the stock at $3 a share. It also appeared that, without conferring with Miss Parker, he put $7,800 in currency in a safe deposit box, which he rented as trustee.

Miss Parker died on November 12, 1940. By her will she appointed her brothers, Robert, of Vermont, and LeRoy, of Virginia, and her sister, Mary D. Winder, to take equal shares in the trust fund. Robert predeceased his sister. LeRoy died in February, 1941. At first Burnett took the position that the amount of the corpus was only $7,800. LeRoy's administrator, Malcolm H. MacBryde, Jr., thereupon filed suit against him in the United States District Court for the District of Maryland. Robert's personal representatives and Mrs. Winder were subsequently made parties. Although Burnett claimed that he was not responsible for the loss on Anaconda Copper, he later abandoned that position upon the advice of counsel, and declared his willingness to restore the $25,000 to the fund. He also agreed to pay back the sum of $1,733.86 which he had taken as commission, and to turn over the remaining securities in the corpus. Among these were 35 shares of U.S. F. & G. stock and one share of Fidelity and Guaranty Fire Corporation stock, which were given for the 5 shares of U.S. F. & G. stock which were not sold in 1928. It was undisputed that he had paid regularly all the income therefrom to the life tenant. All of the bonds purchased in the summer of 1929, except a $1,000 Washington and Vandermere bond, were sold or redeemed between 1929 and 1934. He was ordered to deliver the Washington and Vandermere bond. Further, the Court found that Burnett on September 9, 1930, bought 200 shares of Standard Oil Company of New York for $6,155. Although this stock had a good financial reputation at the time, it declined in market value to $1,400. The Court held that he should account for the $6,155, with interest at 6 per cent from the date of the death of the life tenant. The Court further held that he should account for $1,148.60 in cash, with interest at 6 per cent from the date of the death of the life tenant. MacBryde v. Burnett, D.C., 44 F.Supp. 833.

Burnett died in October, 1944. Upon the petition of Mary D. Winder, the Circuit Court of Baltimore City appointed Laurie H. Riggs trustee to bring suit for any income that may have been withheld improperly from Miss Parker. On December 19, 1945, he entered this suit against F. Harold Loweree and First National Bank of Baltimore, executors of Burnett's estate. On March 28, 1947, the Court passed a decree dismissing the bill of complaint on the ground that the decree of the District Court is a bar to the suit. From that decree Riggs has appealed to this Court.

It is a well established doctrine that an existing final judgment or decree rendered upon the merits, without fraud or collusion, by a court of competent jurisdiction is conclusive of the rights of the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction as to the matters in issue in the first suit. Where a reasonable opportunity has been afforded to the parties to litigate a claim before a court which has jurisdiction over the parties and the cause of action, and the court has finally decided the controversy, the interests of the State and of the parties require that the validity of the claim and any issue actually litigated in the action shall not be litigated again in a subsequent action between the same parties or their privies, regardless of whether the second action is upon the same or a different claim or demand as the earlier action. Harryman v. Roberts, 52 Md. 64, 77; Christopher v. Sisk, 133 Md. 48, 51, 104 A. 355, 356; Ugast v. La Fontaine, Md., 55 A.2d 705. In the District Court the accounting was sought by beneficiaries in remainder of the trust fund created by the will of Mary Donaldson. In the instant case the accounting is sought by a trustee on behalf of the three legatees of the life tenant. Both suits were brought on behalf of the same parties or their privies. The fact that the two suits were brought by virtue of different wills does not prevent the application of the rule of res judicata. The former suit is res judicata as to the amount of the corpus of the trust. The instant suit is for income alleged to have been withheld from the life tenant during the period of about 12 years from 1928 until her death in 1940. It is clear, of course, that after the decision of the District Court that none of the Monumental Life Insurance stock belonged to the corpus of the trust, no other Court can award to the life tenant any profits or income on such stock.

The chief argument on this appeal is that Burnett may have used some of the trust fund to pay the loans contracted for the purchase of the Monumental Life Insurance stock, and as a result of the commingling of funds the life tenant was entitled to income on the stock. That issue was raised and decided in the District Court. It was shown that when the Mutual Life Insurance Company was coverted into the Monumental Life Insurance Company, a stock company, in February, 1928, Burnett, who became president of the company, subscribed to 1,060 shares, for which he paid $116,550. It was claimed that he used $25,000 of the trust fund to purchase 230 shares of this stock, which after stock split-ups, stock dividends and enhancement in value, were worth about $250,000, making a profit of about 1000 per cent. But the Court definitely stated that there was no evidence to show that Burnett had used any of the trust fund to carry the investment in any way or to retire any loans he had contracted in connection with the purchase of the stock. The United States Circuit Court of Appeals, which affirmed the decree of the District Court, iterated that there was no evidence to show that any of the trust fund went into the purchase of the Mounmental Life Insurance stock, or was used to carry the investment or to pay off loans contracted in connection with purchase of the stock. Judge Parker said emphatically in the opinion: 'Not only is this true, but the...

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1 cases
  • Goertz v. Backman
    • United States
    • Maryland Court of Appeals
    • June 7, 1950
    ... ... defense of res judicata will not be available. Ugast v ... La Fontaine, 189 Md. 227, 232, 55 A.2d 705; Riggs v ... Loweree, 189 Md. 437, 442, 56 A.2d 152; Snodgrass v ... Stubbs, Md., 64 A.2d 130. Thus, while a decree ... dismissing a bill of complaint, ... ...

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