Safe Deposit & Trust Co. of Baltimore v. Robertson

• Decision Date: 31 March 1949
• Docket Number: 123.
• Parties: SAFE DEPOSIT & TRUST CO. OF BALTIMORE v. ROBERTSON.
• Court: Maryland Court of Appeals

65 A.2d 292

192 Md. 653

SAFE DEPOSIT & TRUST CO. OF BALTIMORE v. ROBERTSON.

No. 123.

Court of Appeals of Maryland

March 31, 1949

Appeals from Circuit Court of Baltimore City; W. Conwell, Smith Chief Judge.

Attachment proceeding by Mary Anna Robertson against Safe Deposit & Trust Company of Baltimore, trustee and garnishee of John L Robertson, to satisfy judgment which plaintiff had obtained from John L. Robertson for arrears in alimony payments. From order overruling garnishee's motion to quash and directing garnishee to bring into court all funds due judgment debtor, the garnishee appeals.

Order affirmed in part and reversed and case remanded.

George M. White, of Baltimore (White & Page, of Baltimore, on the brief), for appellants.

William F. McDonald, of Baltimore (John W. Marcuse, of Baltimore, on the brief), for appellee.

Before DELAPLAINE, COLLINS, GRASON, and HENDERSON, JJ.

HENDERSON Judge.

Mary Anna Robertson obtained a divorce a vinculo from her husband John L. Robertson, Jr., in the Circuit Court of Baltimore City, on April 6, 1938. The decree ordered the defendant to pay the complainant $53 per month as 'permanent alimony * * *, subject to the further order of this court in the premises.' Subsequently, he took up his residence in New York and allowed the alimony payments to fall in arrears. On June 17, 1948, she filed a petition for judgment on the award and obtained an order to show cause, which appears from the docket entries to have been served on the defendant. Upon petition of the defendant, the time for showing cause was extended, but the defendant did not do so, and thereafter his solicitor struck out his appearance. On August 6, 1948, she obtained an order reducing the arrears to judgment in the amount of $4,229, and an attachment which was laid in the hands of the appellant on October 8, 1948. The garnishee filed a motion to quash, reciting that the only assets in its hands consisted of accrued income payable to John L. Robertson, Jr., under valid spendthrift trusts created by the will of his father, John L. Robertson, Sr., and the will and a deed of trust of his mother, Lily D. Robertson.

The provision in the will of John L. Robertson, Sr., who died in 1937, was that 'all payments are to be made into the hands of the beneficiaries direct and not into the hands of others, whether claiming by their authority or otherwise, this provision, however, not to prevent payments to any guardian or committee of any beneficiary, nor to limit any discretionary powers lodged in said trustee under this my will, nor to prevent the deposit of funds payable to beneficiaries to their credit in any bank or other financial institution, nor to prevent the application by the trustee of the net income of any minor or incapacitated beneficiary to his or her support, maintenance and education,--the authority to so apply the income of any such beneficiary being hereby conferred upon said trustee.'

The provision in the deed of trust, executed by Lily D. Robertson in 1941, was that: 'All payments hereunder (whether of income or principal) are to be made into the hands of the respective beneficiaries direct and not into the hands of others, whether claiming by their authority or otherwise, without power of anticipation and without being subject to execution or attachment; this provision, however, not to prevent payments to any guardian or committee of any beneficiary, nor to limit any discretionary powers lodged in said trustee in regard to expenditures out of principal or otherwise under this instrument nor to prevent the deposit of funds payable to beneficiaries to their credit in any bank or other financial institution, nor to prevent the discretionary application by the trustee of any funds due to or authorized in respect to any ill, minor or otherwise incapacitated beneficiary, to his or her support, maintenance, education and care, nor in any otherwise to limit or restrict any discretionary powers lodged in said trustee under the provisions of this instrument.' An identical provision was incorporated in the will of Mrs. Robertson, executed in 1939, which became effective upon her death in 1947. In none of these instruments was there any direct reference to Mary Anna Robertson, as a beneficiary or otherwise.

The chancellor overruled the motion to quash, and signed an order directing the garnishee to bring into court all the funds due the judgment debtor and pay the same to him in open court, on December 6, 1948, on which date John L. Robertson, Jr., was notified by registered mail to appear. He declined to do so. It was further ordered that, if he did not appear, the garnishee should pay over the funds to the clerk of the court 'until all of the arrears of alimony due by him * * * be fully paid and satisfied.' From that order both parties have appealed. No question is raised as to the validity of the judgment or attachment, from a procedural point of view. Cf. Langville v. Langville, Md., 60 A.2d 206, 209; Keen v. Keen, Md., 60 A.2d 200; Leberstein v. Leberstein, 186 Md. 25, 45 A.2d 753; Marshall v. Marshall, 164 Md. 107, 163 A. 874. It is likewise conceded that the decree of April 6, 1938, was for alimony in a strict sense, and not based upon any agreement of the parties.

The chief question presented is to what extent, if any, the rule prohibiting attachment in the case of spendthrift trusts is relaxed when the claim is for alimony. A subsidiary question relates to the form of the relief granted by the chancellor's decree.

The appellant relies strongly upon the case of Bauernschmidt v. Safe Deposit and Trust Company, 176 Md. 351, 354, 4 A.2d 712. In that case Mrs. Bauernschmidt obtained a divorce from her husband in California, and a decree for separate maintenance pursuant to an agreement between the parties. She brought a non-resident attachment proceeding here to recover arrears out of the income due him under two spendthrift trusts. The plaintiff, invoking the rule of comity, argued that in California an award based on an agreement was nevertheless considered to be alimony, citing Miller v. Superior Court, 9 Cal.2d 733, 72 P.2d 868, Canfield v. Security First National Bank, 8 Cal.App.2d 277, 48 P.2d 133, and earlier cases, it was held that the income from a spendthrift trust was not attachable on such a claim, apart from statute. Judge Sloan, speaking for this court, said [176 Md. 351, 4 A. 713]: 'The plaintiff comes into Maryland and asks this court to do two things, one, to recognize the decree of the California court as alimony; two, to adopt the rule in this State, that being alimony, the income from a spendthrift trust, may be attached to satisfy such a decree.' It was held that, whatever it might be termed in California, a decree based upon an agreement is not alimony in Maryland, citing Dickey v. Dickey, 154 Md. 675, 141 A. 387, 58 A.L.R. 634 and Bushman v. Bushman, 157 Md. 166, 145 A. 488. 'The second contention, that the rule respecting the attachability of spendthrift trusts should be relaxed when the claim is for alimony, cannot be entertained here unless we overrule the decisions in the Dickey and Bushman cases, supra, which give to money decrees founded on agreements for support the same dignity, force and status as other debts of record. As we are not ready to overrule those decisions there is no need to discuss the decisions elsewhere, of the rights of the wife of a spendthrift cestui que trust. If the court of this State had jurisdiction of such a one charged with alimony, by indirection in contempt proceedings the same end might be accomplished as might be done if the funds were attachable, but then only by the punative force of such procedure.'

Since the court found it unnecessary to discuss the rights of the wife of a spendthrift cestui que trust, the determination of that question was left open. We think the court did not mean to indicate, in the sentence last quoted, that attachment for contempt would be the only remedy, but merely that it would be an equally efficacious one, if the court had jurisdiction of the person charged with payment of alimony. In any event, the statement could not be regarded as more than a dictum. The holding of the court was that a wife's claim based upon an agreement stands upon no higher footing than that of any other creditor.

The validity of spendthrift trusts was established in this state in Smith v. Towers, 69 Md. 77, 14 A. 497, 15 A. 92 9 Am.St.Rep. 398, over the vigorous dissent of Chief Judge Alvey. It was conceded that the Engligh authorities took the other view, and that the English rule was followed in a majority of the states where the question had arisen up to that time. The court relied upon Nichols v. Eaton, 91 U.S. 716, 23 L.Ed. 254, and decisions in Massachusetts, Pennsylvania, Vermont, Connecticut and Kentucky. It was held that the income from a spendthrift trust was beyond the reach of creditors of the cestui que trust by any process at law or in equity. The court laid great stress on the fact that deeds and wills are instruments of record, and that if creditors choose to give credit [69 Md. 77, 14 A. 499], 'they do so with their eyes open. * * * The hardship to them is one that will surely bring about its own remedy, for the dishonest beneficiary, it is plain, would soon be without credit.' In Jackson Square Loan and Savings Association v. Bartlett, 95 Md. 661, 663, 53 A. 426, 427, 93 Am.St.Rep. 416, it was said: 'it is not against the policy of the law to give by will to a beneficiary an equitable right to the income of trust property for his life, without the power of anticipation on his part, and to the entire exclusion of his alienee or creditor.' This rule has been followed in other cases, and even extended to cover principal...