Adams v. Hearn

Mitchell, J., delivered the opinion of the Court. Walter A. Hearn was engaged in a window cleaning business for a number of years, which business he individually owned, operated, and exclusively controlled. In 1926 he incorporated this business under the name of the National Window & Office Cleaning Company, with a capitalization of $250,000, comprised of 2,500 shares of the par value of $100 each; taking in his own name 2,457 shares, and issuing the remaining forty-three shares to employees in his business. At the time of the formation of the corporation, by-laws were adopted, lodging the power to elect the president in the stockholders.

Said by-laws also provided that the board of directors should have power to fix thecompensation of all officers of the corporation, and might authorize any officer, upon whom the power of appointing subordinate officers may have been conferred, to fix the compensation of such subordinate officers. A resolution was unanimously passed by the board of directors appointing the president a committee of one, with authority, between meetings of the board, to exercise all of its powers in the management of the affairs of the company, and giving the president full control of its management and affairs, with the right to employ and discharge all employees. Mr. Hearn was duly elected president, and his salary fixed at the sum of $400 per week. Among those regularly paid by the company were William Ellis, a private chauffeur of Mr. Hearn, and Mrs. Harkins, the companion of Mrs. Woodland, who was the mother of Mrs. ⁵⁴⁶ Hearn.

These salaries were at the rate of twenty-eight and fifteen dollars per week, respectively. As the directing head and guiding spirit of the company, Mr. Hearn seems to have successfully conducted the business until December 20th, 1928, the date of his death. He left a will dated April 26th, 1916, by which he devised and bequeathed all property of which he was possessed at the time of his death to his wife, Effie J. Hearn, and his sister, Mary C. Hearn, the complainant in this cause, share and share alike. These two beneficiaries were named as executrices by the testator, and released from the obligation of giving bond.

Shortly after his death, the will was lodged with the register of wills of Baltimore City by a Masonic friend of the deceased, in whose custody it appeared to have been since the date of its execution. It was thereupon admitted to probate. On December 28th, 1928, Mary C. Hearn renounced her right as executrix, which renunciation was filed on the following day, and on the same date letters testamentary were granted to Effie J. Hearn, the widow and remaining executrix. Two days later a special meeting of the stockholders of the National Window & Office Cleaning Company was called, which meeting Mrs. Hearn, the executrix, attended, and she voted the 2,457 shares of stock then standing in the name of her husband.

All other outstanding shares were either represented in person or by proxy, and by unanimous vote Mrs. Hearn was elected president at the same salary, of $400 per week, which her husband had previously drawn. The salaries to the chauffeur and companion, as above stated, were continued and regularly paid by the company until the death of Mrs. Harkins, when payments as 'to her ceased. In addition to this the chauffeur was donated Christmas presents costing fifty-one dollars paid by the company, in line with the previous custom of Mr. Hearn. Mrs. Hearn continued to receive the above salary as president until February 18th, 1933, when it was reduced to the sum of $300 per week, and she continued to receive this latter sum until the date of her death, ⁵⁴⁷ which occurred on August 20th, 1933.

She left a will, which was probated in the Orphans’ Court of Baltimore City, and on August 31st, 1933, letters testamentary upon her estate were granted by said court to Richard B. Adams, the executor named in said will. It appears that Richard B. Adams was the attorney for Walter A. Hearn and his company at the time of the latter’s death. At that time he was consulted by Mrs. Hearn and employed by her as her adviser in closing the estate of her husband. The interval which elapsed between the deaths of Mr. and Mrs. Hearn was four years and eight months.

During that time no administration account was filed or passed by the executrix in her husband’s estate, and the certificate of stock in the company pertaining thereto remained in the name of her husband at the time of her death. Acting in his capacity as executor of Mrs. Hearn, Richard B. Adams attended a special meeting of the National Window & Office Cleaning Company on October 4th, 1933, and assumed to vote, on behalf of the estate of his testatrix, the 2,457 shares of stock in the company belonging to the estate of Mr. Hearn. At that meeting the other outstanding shares were represented and voted, resulting in the election of George W. Sparks as president and treasurer of the company, and the said Richard B. Adams as director.. Mr. Sparks was vice-president at the time of the death of Mr. Hearn, and continued in that position until his election as president.

At the time of the meeting on October 4th, 1933, no letters of administration. d. b. n. e. t. a. had been granted upon the estate of Walter Hearn. Under the presidency of Mrs. Hearn a dividend of ten dollars per share on the stock of the company was declared on February 4th, 1929, and a second dividend of two dollars per share was declared on March 2nd, 1931. The former dividend was applied by the executrix towards the payment of an indebtedness of thirty-eight or nine thousand dollars, due by Mr. Hearn to the company at the time of his death; the executrix making up the dif ⁵⁴⁸ ference between the dividend and the amount due the company by her decedent, and cancelling the entire debt. One half of the second dividend, or $2,457, was paid to Mary C. Hearn and the other half retained by the executrix, the co-beneficiary, under the will of Walter A. Hearn.

According to the testimony of J. Leon Bozman, a public accountant who audited the books of the company, salaries were paid to those mentioned above during the period covering from January 1st, 1929, to August 20th, 1938, as follows: To Mrs. Hearn, President....................................................$94,000.00 To William Ellis, Chauffeur (including cost of Christmas gifts) ..................................................................... 6,035.00 To Mrs. Harkins, Companion and Nurse............... 3,210.00 Total .....-...................................................................................$103,245.00 As an offset against the above sum, the chancellor has allowed the estate of Mrs. Hearn the sum of $2,089.80, shown to have been paid by her, out of her personal resources, to the Internal Revenue Department as additional income taxes assessed against the company. It is shown that Mr. Hearn was married many years ago and formerly lived on West North Avenue in Baltimore City, at the home of his mother, where also Mary C. Hearn, his sister, resided. Later the mother died and Mr. Hearn purchased a home at 3615 Forest Park Avenue, to which he moved. He had no children, and the family consisted of himself, his wife, and sister, to whom he was devoted.

In 1918, the family circle was augumented by the addition of Mrs. Woodland, the mother of Mrs. Hearn, and Lucy Margaret Woodland, a niece. They lived in comparative luxury as one happy family upon resources furnished entirely by Mr. Hearn up to the time of his death, and after his death the same standard of living was maintained by Mrs. Hearn for the four remaining occupants of the home out of the salary which she received from the company, the same servants and service being retained. Mrs. Woodland died, and, upon ⁵⁴⁹ the death of Mrs. Hearn, the complainant and Lucy Margaret Woodland were left alone. The complainant was about seventy-nine years of age when her brother died, and since then has failed in health.

Her condition has gradually grown worse. At one time her case was diagnosed as cancer, but this appears to have been an erroneous diagnosis. She is now in the eighty-sixth year of her age and her testimony, as revealed by the record, leads to the conclusion that her mental faculties, and especially her memory, are appreciably impaired. This is obvious from the variance between the allegations set forth in the bill of complaint, which she swore to, and the gist of her testimony.

The maid, employed as a companion to Mrs. Woodland, upon the death of the latter was retained as a companion to Miss Hearn until her condition required a more experienced nurse, and, when this requirement developed, successive nurses were specially employed. The complainant was confined to her rooms most of the year previous to the death of Mrs. Hearn. During all the period of her disability she was regularly attended by her cousin and family physician, Dr. Hearn, who saw her almost daily. Like most family physicians he had her confidence, and the following excerpts from his testimony are pertinent. “Q. After Walter died, did Miss Mary complain for the first year or two?

A. Well, not the first year or so, I don’t think there was much complaint, but things seemed to get worse as time went on. Q. What did she complain about? A. Well, of this nervous condition, she always was afraid to go out or to see anybody. Q. You knew that Mrs. Hearn was president, didn’t you?

A. Yes, she told me she was made president after Walter’s death. Q. Did you suggest to her, (Miss Mary), that she would go out in the car some time and get a power of attorney signed and put it into some one’s hands to look after her affairs for her? A. I told her she ought to have some one looking after her affairs, that there wasn’t anyone representing her in the business at all, that I had seen cousin Walter’s will and she was left half owner of his estate, and she had not received any benefit from it, as far as I ⁵⁵⁰ knew, and she said she hadn’t. Q. When had you seen the will of Walter?

A. I went down to the Court House Q,. When did you go down? A. That was after Effie’s death.” It will be seen from the above that the complainant was in a nervous state the year preceding the death of Mrs. Hearn, that she was, however, always in touch with her cousin and doctor, and that Dr. Hearn knew Mrs. Hearn was president of the company, but as her confidant did not view the situation in Walter Hearn’s estate with apparent alarm until after the death of Mrs. Hearn. There is a mass of conflicting testimony in the record bearing on the treatment which the complainant received from Mrs. Hearn after Walter’s death, but a careful analysis of the same leads to the conclusion that there was no difference in the environment which surrounded the complainant between the date of his death and that of his wife, except in so far as that environment was naturally affected by the loss of a loving and faithful brother.

The real change in the home circle came to a climax when Mrs. Hearn died. Hie ruthless hand of death had then claimed all of the family membership except the complainant and Lucy Margaret Woodland, a woman many years her junior. Miss Hearn was in bad health. She was under the constant care of Martha L. Favorite from the latter part of January, 1933, seven months, before the death of Mrs. Hearn, and she has continued to be her nurse.

It was this nurse, in our opinion, who caused a breach between the complainant and Lucy Margaret Woodland, resulting in the latter’s removal from the house on March 1st, 1934. Prior to the last mentioned date, there is every evidence of existing friendship and love between the complainant and Miss Woodland. And even on the night of March 1st, 1934, when Miss Woodland, piqued by criticisms coming from Miss Favorite, decided to leave her once happy home and go to live with her uncle and aunt, she was thoughtful enough to kiss Miss Hearn goodbye, and to get her uncle ⁵⁵¹ to spend the night at the house she had left, so as to lend protection to the complainant. Again there is much testimony in the record directed to the end that there was a deep-seated conspiracy formulated between Mrs. Hearn and Richard B. Adams, her attorney, for the purpose of defrauding the complainant and extracting from her that part of her brother’s estate which was justly due her.

This testimony, however, is more than offset, we think, by testimony to the contrary, which indicates that Mrs. Hearn died with naught but a deep interest in the complainant in her heart, and this thought is strengthened by a perusal of her will, in which she directs that a space in the family burial lot be reserved for the remains of Miss Hearn; “it being the intention that the lot shall be the resting place of my said husband and his sister and myself alone.” The will further requests that Lucy Margaret Woodland continue to maintain the home at 3615 Forest Park avenue for herself, Lucy I. Woodland, the mother of the testatrix, who was then living, and Mary C. Hearn, as long as they, or the survivor, might live. It was executed October 30th, 1930, nearly two years after the death of Walter Hearn, and, in spite of all the testimony found in the record tending to prove hatred, malice, conspiracy, and fraud toward her sister-in-law, the complainant, it was not changed during the period of nearly three years after its execution and before the death of testatrix. It stands out, therefore, as a silent, unimpeachable witness in behalf of the testatrix, at an hour when her memory is assailed and her own lips are sealed. After the death of Mrs. Hearn, Lucy Margaret Woodland was paid the sum of $100 per week for the maintenance of the Forest Park house until March 1st, 1934, and Miss Hearn was paid for two weeks the sum of $50 and later the sum of $55 per week; these sums being paid by the company upon the order of Richard B. Adams.

From Miss Hearn’s allotment, she voluntarily paid to Miss Woodland the sum of $20 per week for board of herself and nurse. ⁵⁵² The testimony shows that Miss Hearn executed a will shortly after her brother’s death, devising all property belonging to her to Mrs. Hearn; later she executed a codicil to this will making Lucy Margaret Woodland the contingent beneficiary in event of the death of Mrs. Hearn before the death of the testatrix. Both the will and the codicil were drawn by Richard B. Adams; he states they were drafted at her request and under her direction. In her testimony she now repudiates the will and codicil and states that they were executed by her as a result of a conspiracy to defraud her on the part of Mrs. Hearn and Adams. She also denies any knowledge of signing a renunciation as executrix of the will of her brother, and alleges that if such paper was executed by her it was a result of the alleged conspiracy above noted.

Such is the status of her testimony, Miss Hearn being at this time, as hereinbefore stated, nearly eighty-six years of age and having been under the constant care of Miss Favorite since January, 1983. It was Miss Favorite who introduced Dr. Hearn to her own personal attorney, and it was through the activity of the doctor and the nurse that a new will was made by Miss Hearn and the bill of complaint in this cause filed. That there was unreasonable and inexcusable delay in passing an administration account in the estate of Walter A. Hearn is self-evident; and in this respect, Mrs. Hearn, if she were living, would be subject to criticism. At the same time, however, it should be noted that, as far as the record goes, there is no evidence whatever that either Mrs. Hearn or Mr. Adams profited by the above delay, or that Mr. Adams has received any compensation for such professional service as he may have rendered.

The only two dividends declared by the company during the presidency of Mrs. Hearn were properly applied. The attorney