Ball v. Townsend

Pattison, J., delivered the opinion of the Court. The bill in this case was filed by the executors and trustees under the will of John W. Grace, deceased, in the Circuit Court of Baltimore City, to have construed certain items of said will. John W. Grace, of Baltimore City, died after the death of his wife, on or about the 26th day of May, 1919, leaving no father or mother, children or descendants surviving him, but leaving surviving him one brother of the whole blood, and children of a brother and three sisters of the half blood, who are named in the bill as his next of kin. John W. Grace, as the bill alleges, died testate.

He, after bequeathing certain legacies and devising property to' those mentioned in the will, including some of his next of kin, business associates and others, gave, bequeathed and devised by item eleven of bis will “all the rest and residue” of his estate to the appellees, in trust, with full powers to change the investments and to invest and re-invest the same in securities thought by them to- be safe and proper; and to collect and receive the rents, issues and profits thereof, and after paying therefrom the taxes, insurance and expenses therein named, they were directed to apply the balance being “the net annual income” from the trust estate as follows: “(1) To pay unto my brother, Luther Grace, in half-yearly installments, so long as he shall live, the annual sum of twenty-five hundred dollars ($2,500), into his hands and into the hands of no olher person whomsoever. “(2) Unto Daisy Hughes, daughter of my brother, in half-yearly installments, so long as she may live, into her hands and into the hands of no other person whomsoever, the annual sum of twenty-five hundred dollars ($2,500), and at her death I direct my trustees to pay from the corpus of my trust estate unto the daughter of Daisy Hughes, if she be living at that ⁵⁹² time, the sum of twenty-five thousand dollars ($25,-000). “(3) Unto Mattie Grace Parlett, wife of Benjamin F. Parlett, in equal half-yearly installments, and so long as she may live, into her' hands and into the hands of no other person whomsoever, the annual sum of twenty-five hundred dollars ($2500). “(4) Unto Annie W. Pennington and Minnie E. Pennington, daughters of Andrew Pennington, in equal half-yearly installments, as long as they shall live, into their hands and into the hands of no other person whomsoever, each the annual sum of twenty-five hundred dollars ($2,500); upon the death of either of them the survivor shall be paid by my trustees the annual sum of five thousand dollars ($5,000) so long as the survivor shall live. “(5) Unto Benjamin F. Parlett, Junior, Neva Parlett, Mattie Parlett and Hazel Parlett, children of Benjamin F. Parlett, so long as they may live, into their hands and into the hands of no other person whomsoever, each the annual sum of five hundred dollars ($500).” Then immediately follow items twelve and thirteen of the will: “Item 12. In the event of the net annual income from my trust estate being more than sufficient to pay the above mentioned annuities, such excess of net income shall be by my trustees divided among the annuitants above mentioned ratably; but before any such division of income shall be made, my trustees, their survivors or survivor of them, or their successors or successor, shall be satisfied that the value of the corpus of my trust estate has not been depreciated in value, from any cause whatsoever. “Item 13. Upon the death of each and every annuitant above mentioned, a portion of the corpus of my trust estate, as the same may then be constituted, equal to the capitalization, on a basis of six per cent. (6%) of the annuity falling in by reason of the death of the annuitant, shall by my trustees, the survivor ⁵⁹³ or survivors of them, and their or his successor or successors, be paid, free, cleared and discharged from the trust heieby thereon imposed, or any trust whatsoever, unto the Johns Hopkins Hospital, a corporation of the State of Maryland, to be used by said hospital for its corporate purposes; the intention of this gift, however, being to enable said hospital, by means of the net income derived from this bequest to receive in its pay wards persons of moderate means, who in the judgment of the trustees of the hospital may be unable to pay the full and regular charges in such pay wards, and to give therein to such persons paying according to their means, the same hospital care and attention as pay patients paying the full and regular charges receive in such pay wards.” The bill in this case was filed to have the above' items, twelve and thirteen, construed by the court, and it was in respect to them, that the court was asked certain questions, the answers to which are .found in the decree of the court, from which the appeal in this case was taken.

These questions., we think, are sufficiently indicated by the answers given thereto, and we need not lengthen this opinion by inserting them herein. The court’s construction of the will is in its decree above referred to. which is as follows: “(1) That by the proper construction of the will of John W. Grace, filed as an exhibit in this case, the said John W. Grace did not die intestate as to any part of his estate. “(2) That by Item twelfth of said will, the question whether or not the value of the trust estate created by said will and now in the hands of the trustees appointed thereby has been depreciated in value from any cause whatever, is committed to the judgment ■of the trustees. “(3) That the moaning of the word ‘depreciation’ as used in the said twelfth paragraph of said will, is .something more than a fall in market value, unless such fall is enough to amount, in the opinion of the ■trustees, to a real and permanent loss of corpus, and ⁵⁹⁴ does not refer to a temporary decrease in market value of said securities. “(4) That there being in this case no allegation or proof of any default on the corpus of any of the bonds included in said corpus of said estate, or of passing of the usual dividends on any of the stocks included in said estate to such extent that in the opinion of the said trustees there has been a permanent depreciation in the said securities according to the proper meaning of the word ‘depreciation’ as above herein given, the income derived from the securities included in the said trust estate should be paid out in its entirety to the persons designated in said clause as ‘annuitants.’ “(5) That if, in the opinion of the said trustees, depreciation as above defined in the value of said trust estate should occur, the trustees shall reserve a sufficient amount of income to make good, in their judgment, the said depreciation, and if at a later date some change should occur in the value of the estate which would make it, in the judgment of the trustees, equitable that the amount so' taken from income should be paid out to the annuitants, the said trustees may then apply to this court for direction, but until the condition as above described arises, what action should be taken by the trustees in such case is a matter not ripe for the court’s decision. “(6) That the general intent of the testator in said will can be gratified only by paying over to the Johns Hopkins Hospital at the death of each annuitant a proportion of the whole corpus of the trust estate equal to the proportion of income from said trust estate received by the said annuitant at the time of his or her death. “It is, therefore, this 28th day of June, nineteen hundred and twenty-three, by the Circuit Court of Baltimore City, adjudged, ordered and decreed: “First: That the standard or par on which ‘depreciation’ shall be calculated shall be the market value as of November 3, 1919. “Second: That such depreciation, however, shall not be calculated in reference to market value unless, ⁵⁹⁵ in the judgment of the said trustees, such difference in market value amounts to a real and permanent loss of corpus. “Third: That the calculation shall be made by the trustees at the end of each fiscal year. “Fourth: That all the net income received by the estate up to the date of the end of the last fiscal year shall be distributed to the annuitants, and all of said net income shall be so distributed at the end of every fiscal year hereafter unless the trustees are satisfied that the corpus of the trust estate is really and permanently less in value than it was on November 3, 1919. “Fifth: At the-death of each of the said annuitants, except Minnie E. Pennington, Annie W. Pennington and Daisy Hughes, the said trustees shall pay to the Johns Hopkins Hospital that part of the residuary estate which bears the same proportion to the whole of the said residuum as the amount of income payable to the annuitant so dying, at the time of his or her death, shall have borne- to the whole amount of income payable to all of the annuitants at such time and at the death of the one first dying of Minnie E. Pennington and Annie W. Pennington, the total amount which would have been received by both of them had they continued living shall be paid to the survivor of them during her life, the said two annuities to be treated as a joint annuity, and at the death of the said survivor, the said trustees shall pay to the Johns Hopkins Hospital that part of the residuary estate bearing the same proportion to the whole of the said residuum as the amount of income payable to the survivor of the said Annie .W. Pennington and Minnie E. Pennington at the time of her death shall have borne to the whole amount of income payable to all of the annuitants at such time; and upon the death of Daisy Hughes, the said trustees shall pay to the Johns Hopkins Hospital that part of the residuary estate which bears the same proportion to the whole residuum as the amount of income payable to the said Daisy Hughes at the time of her death shall have ⁵⁹⁶ borne to tbe whole amount of income payable to all the annuitants at siich time provided that Miriam G-. Hughes, the daughter of said Daisy Hughes, do not survive her said mother, but should said Daisy Hughes die leaving said dafighter surviving her, then from the said amount otherwise payable to the Johns Hopkins Hospital as above stated, the trustees shall pay the said Miriam G-. Hughes the sum of twenty-five thousand dollars ($25,000.00) and pay the balance of said amount so as above ascertained to the Johns Hopkins Hospital. “And it is further adjudged, ordered and decreed that in case any contingency may arise which is not provided for by this decree, and where after taking advice from competent counsel the trustees are uncertáin as to what action it is proper for them to take, the said trustees may apply to this court for further direction.’' The main question presented 'by this appeal is, did John W. Grace die intestate as to any part of his estate.

The other questions relate chiefly to the administration of the trust and in them the appellant is not, as stated by her counsel in their brief, greatly concerned, especially if the above question be answered in the negative. The testator died about two years after executing his will,, leaving an estate of over seven hundred thousand dollars. He bequeathed certain legacies to certain friends and relatives, amounting in all to seventy thousand dollars. Among the legacies mentioned are ten thousand dollars