Atkinson v. McCulloh

Offtjtt, J., delivered the opinion of the Court. James H. Atkinson, late of Baltimore City, for many years owned and operated the “Atkinson Quarry Property,” located on Hampden Avenue and 28th Street in that city, where he engaged in the business of stone quarrying. In the later years of his life he fell into financial difficulties and from time to time placed three mortgages on the property, one to Louis D1. George for '$4,000, one to the Commonwealth Bank for $3,600, and one to Richard N. McOulloh, with whom he had intimate personal and business relations for many years, for $2,000.

Notwithstanding these loans, his affairs appear to have gone from bad to worse, and in 1921 he was not only old and feeble, and helpless from disease and the disabilities incident to his age, but the taxes on his property, and the .interest on the loans, had accumulated until they reached a sum which he was unable to pay from any funds in his possession. In that situation, .application was made to McCulloh by or on behalf of Atkinson for a further loan to take care of these arrearages, and that application was by him referred to his attorney. In ■consequence of his advice as to the form of the transaction, McCulloh advanced $1,586, and Atkinson is alleged to have •conveyed to him by a fee simple deed his quarry property. Immediately prior to the execution of that deed, an agreement was signed by James H. Atkinson and wife and MoCulloh, and acknowledged by them, which contained this provision: “That in consideration of the advancement by the said party of the second part of sufficient money to pay off the taxes and mortgage interest due on said property in accordance with the attached list of debts due and owing by said parties of the first part, the ⁶⁶⁵ said parties of the first part do agree to execute and deliver unconditionally to the said party of the second' part a good and sufficient deed in fee simple of the said property (being the property conveyed to Mm by deed dated December 22nd, 1890, and recorded among tbe Land records of Baltimore city in Liber J. B. No. 1323, folio 476 &c.) with full power and authority in the said party of the second part to sell and convey the said property when and at such price as he may deem advantageous.

And the said party of the second part hereby agrees that he will turn over to the said parties of the first part the net proceeds of any sale he may make of said property, less all expenses of any sale, the principal and interest of all mortgages on said property, and also less the amount advanced in accordance herewith, as shown by tbe attached list hereinbefore referred to, as well as any other or further sums advanced by said party of the second part to the said parties of the first part by him on their account to the date of such payment of proceeds, also all taxes and other charges on said property.” These instruments were dated January 20th, 1920, and on February 11th, 1921, James H. Atkinson died. On May 28th, 1924, ¡Richard H. McCulloh and Pearl L. McCulloh, his wife, entered into an agreement with William H. Callahan, Jr., to sell him tbe “Atkinson Quarry Property” for $16,000, and on August 1st, 1924, before the property bad been granted to Callahan, Laura V. Atkinson, widow of dames H. Atkinson, Frances A..Brown, Rosa M. Barnes, Ida D. Pyle and Laura Y. Barnes, bis surviving children, filed in the Circuit Court of Baltimore City their bill of complaint against Mr. and Mrs. McCulloh and Callahan, alleging, in substance, that tbe deed and agreement from the Atkinsons to McCulloh were executed at a time when James II. Atkinson was mentally incapable of executing a: valid deed or contract, and that the signature of Laura Y. Atkinson thereto had been procured by artifice and undue influence; that the property was held as trustee by McCulloh; that they ⁶⁶⁶ had vainly sought an accounting’ from him of the disbursements made by him for the account of the Atkinsons, and of the monies collected by him as income from said property; and that the sale was not fairly made and was for a wholly inadequate price; and praying the court to annul the deed and agreement of January 20th, 1920, as well as the contract of sale with Callahan, and to require MeOulloh to account. The defendants answered that bill severally.

Gallaban disclaimed any knowledge of the relations between MeOulloh and the Atkinsons, alleged that he was an innocent purchaser for value, and that he had placed valuable improvements on the property. Mrs. MeOulloh disclaimed any knowledge of the matters alleged in the bill, while MeOulloh in his answer alleged that the deed and agreement of January 20th, 1921, were executed in good faith, when the parties thereto were fully capable of executing a valid deed or contract, that it was not procured by undue influence or artifice, that he had sold the property in good faith for the highest obtainable price after diligent efforts to sell it at a higher price, that he did not hold the property as trustee, and that the agreement of January 20th “was merely an expression in writing by your respondent of the thought which he always had in mind in connection with this transaction, and that this was never a condition made by the said James H. Atkinson or any of the complainants in this cause.” Further answering, he asserted that “he was under no obligation to furnish a statement, by way of accounting until a sale of the property was made and the proceeds received by him, at which time he promised to the said complainants and their solicitors, as full and complete statements, so far as he was able to give it, of all the details of said transaction.” He admitted that he did not inform Mrs. Atkinson or any of the complainants that he was about to sell the property andi that he did not consult them about the sale, because, he said, he did not think it was “necessary.” Evidence was taken in connection with the issues pre ⁶⁶⁷ seated by these pleadings, and at its conclusion the court ratified the sale to Callahan, appointed B. Legare Webbt trustee to convey the property and receive the purchase money, directed him to pay therefrom the George mortgage and all public dues, taxes aud charges, and all judgment liens against the property, and to bring the balance into court for distribution, and directed MeOulloh to account for' all disbursements and collections made in connection with said property by him. From that decree the complainants appealed. The issues presented by tbe appeal are these: (1) Whether James H. Atkinson was, at the time he signed the deed and agreement of January 20th, 1921, capable of executing a valid deed or contract; (2) whether Laura V. Atkinson was at that time mentally capable of executing a, valid deed or contract, and whether her signature was procured by undue influence or fraud; (3) whether Biehard 1ST.

MeOulloh as a result of the execution of these instruments held the property as a mortgagee; (4) whether the deed and the agreement of January 20th, 1921, constituted a contract fair to the grantors; (S) whether Callahan, the purchaser, can be charged with notice of any infirmity in the deed to MeCulloh; (6) whether the property was fairly sold for an adequate price: (Y) whether' the complainants have by their laches estopped themselves from attacking the deed and agreement of January, 1921, and, (8) assuming those instruments to have been valid, can the purchaser be affected by any dereliction of duty on the part of MeOulloh in selling the property ? The first, second, third and sixth of those issues may be briefly disposed of. The record contains no evidence which is sufficient to warrant the inference that when the deed and contract of 1920 were made Mrs. Atkinson was not mentally competent, or that she did not understand the contents thereof, or that she was induced to execute them by fraud, undue influence, artifice, or deception. It is equally clear from the record that at that time James IT. 'Atkinson was not. ⁶⁶⁸ capable of executing a valid deed or contract.

Dr. Yernon D. Kelly, who was his attending physician, in describing his condition during the last thirty days of his life, said: “The old man did not go to bed until he was so stupid and falling around it was impossible to keep him up, and from that time on he grew gradually worse, and more stupid, and some comatose — you would have to arouse him and wash his face to get any sense in him. I would listen to his heart 'and pinch his face, open his eyes, and he would stare, and possibly after two or three- minutes I would get him so he would smile, and many times I know he smiled -and did not recognize who I was. I don’t know how long that went on, but I am sure, from the time he went to bed until he died, he was in such a condition he just could not be up any more. (The Court) : Did that condition you describe last during the thirty days immediately preceding his death?

(The Witness) : At least thirty; from the time he went to bed, that was. I don’t remember' — I imagine he was in bed about two months. It was before 'Christmas. When did you say he died ?

Q. February 11th. A. It was before Christmas, I recall, he went to bed. I don’t know how long.” Millard F. Barnes, his son-in-law, who was present when the papers were signed, gave the following description of his condition at that time: “When did you observe, how did he look? A. He was just like he was stupid and kind of semi-conscious, and we had to arouse him, and after we would arouse him then he would fall off and we just had to keep a move on him all the time to get him to look up, and it would be some time after he opened his eyes before you could bring him to any kind of sensibility at that time. * * * What, if anything, took place between Mr. Webb and the others there?

What did Mr. Webb have or what did he say? A. Mr. Webb brought out 'a paper, some kind of an agreement, and this agreement he presented to all of them and he read it, and he asked Mr. Atkinson to sign it, sign this agreement, and when we tried to get him to sign it he ⁶⁶⁹ could not do it. Wo roused him up and he was limp, and as it went on I took the pen and signed it.” Rosa M. Barnes, his daughter, when asked as to her father’s physical condition when the papers were signed sáid: “On this particular day you say your father was very ill A. Yes, my brother-in-law told me that Mr. Webb and Mr. MeOulloh were coming out, and of course I could not rouse father, not even to give him breakfast, and then I took some cold water1 and bathed his face and managed to get his eyes open, and my brother-in-láw and T carried him over to the Morris chair and he could hardly sit there. * * * You say you did, with the aid of your brother-in-law, Mr. Barnes, put voux father in the Morris chair A. Yes. Q. What was his condition then?

A. Well, father did not know anything, but just simply sat there. He was limp. He could not use his hands or arms. We put his hands on the Morris chair.

He could not even hold his hand" up.” And Mrs. Atkinson said that on that day “he was very bad off. He did not know anything at all, because I talked to him and he just looked at me like he was blind. He could not understand it was me.” The testimony of Armistead Webb and E. Legare Webb is relied upon by tbe appellees to overcome that evidence. Admistead Webb, the notary, said that mentally Mr. Atkison was perfectly all right, “that he seemed to thoroughly understand all the business that was about to be transacted,” but be later under cross-examination said: “I don’t know just how sick he was, hut he was sitting in this chair and the only way I could determine the amount of strength, he had was by seeing him handle the pen.

Even in taking the acknowledgment of people who have been perfectly well, they sort of lose their nerve when they do it and get shaky and say they cannot write. That was as far as I could see was his condition, and Mr. Barnes then volunteered to support his hand while the paper was being signed. Did he talk distinctly or indistinctly ? * * * I had, no conversation with him. * * * Did you hear what he said? * * * I don’t remember now. * * * Did Mr. Atkinson make any comment ? ⁶⁷⁰ * * * I did not hear him say a word. * * * Did you hear any conversation at all, then, between Mr. Atkinson and anybody else? * * * No. * * * Then the only thing, you had to judge-was the appearance of him, as you observed him sitting there ? A. Yes, he was sitting in a, Morris chair, as far as I can remember.” F. Legare Webb, attorney for Mr. MeCulloh, in describing the transaction, said in part: “Mr. Atkinson was sitting in a chair, and he greeted me as usual.

I had seen him at least twice. I said three times before. It may have been only twice prior to this actual execution of the deed, and each time he had greeted me and this time he did as usual. He spoke to me and I asked him how he - was feeling, and he said, ‘Not so good,’ or ‘Not so chipper,’' or ‘Not so much.’ He did not look so much.

He looked like he was pretty feeble and weak. * * * I don’t remember-whether the agreement or the deed was signed first, but whatever paper was first put on Mr. Atkinson’s lap', as he had, as ■ I recall it, some kind of blanket or cover over his lap, and we got something stiff like a book or magazine or box top to • rest the paper on. Mr. Atkinson got the pen and started to sign, but his hand shook so that he could not sign the paper, and he said, ‘I cannot write very well,’ or something • to that effect, when Mr. Millard Barnes gpt up and said, ‘Here, D'ad,’ or ‘Here, Pop-,’ or as he said since it may have • been ‘Wait a minute, Boss, I will help- you,’ and then Mr. Barnes put his hand on Mr. Atkinson’s wrist or arm, like-this (indicating) and Mr. Atkinson was sitting like this, just like T am, and there was something raised on the paper and Mr. Atkinson wrote his name and he signed it, both papers,. and Mrs. Atkinson was then handed the papers and she ■ signed both papers. Mr. Webb, the notary, asked her if they acknowledged that deed to be their act and deed and the-agreement to 'be their act, and they both replied that they did. * * * I discussed the matter two or three times with.