Ballenger v. McMillan

Collins, J., delivered the opinion of the Court. This is an appeal from a decree distributing the corpus of a trust estate. On July 26, 1912, William H. Gorman, the grantor, executed a deed to the Safe Deposit & Trust Company of Baltimore, assigning to it 302 shares of capital stock of the Cumberland Coal Company of Baltimore City to ⁹⁷ be held in trust, certain payments to be made to the grantor during his' life. Mr. Gorman died on July 7, 1915.

The pertinent parts of the deed with respect to the trust estate after the death of William H. Gorman follow. (1) After the death of the Settlor, one-third of the income was to be paid to Ada Rogers Gorman, wife of the Settlor; the remaining income (and all of the income after the death of Ada Rogers Gorman) was to be paid to the children of William H. Gorman from time to time surviving, the share of any deceased child “to be paid to the children and descendants of such deceased child per stirpes”; (2) With respect to corpus the Deed provided that “the trust is to continue during the lives of all the children of the said William H. Gorman, and upon the death of the last surviving child of the said William H. Gorman the trust shall terminate and the principal of the trust estate shall go to all the descendants of the said William H. Gorman then living, to be divided among them per stirpes and not per capita * * *.” (Italics supplied). The facts as stated in the brief of the appellants are adopted by the appellees and are substantially as follows. The grantor was survived by his second wife, Ada Rogers Gorman, who died on June 21, 1949.

The grantor’s last surviving child, Elizabeth Gorman McMillan, died on March 17, 1953, upon which event the principal of the trust estate became distributable “to all the descendants of the said William H. Gorman then living, to be divided among them per stirpes and not per capita * * The grantor had four children, Douglas Gorman, Albert Gorman, Nora Clark Gorman Ballenger, and Elizabeth Gorman McMillan. At the death of the last surviving child, Elizabeth Gorman McMillan, the following were the living descendants (exclusive of great-grandchildren with living parents) : (a) Douglas Gorman’s children (hereinafter called “Clan Douglas”) : Douglas Gorman, Jr., Edmund N. Gorman, Ogden C. Gorman, Kenneth A. Gorman, and Gwendolen Nash Gorman, II, infant, the sole surviving child of Arthur P. Gorman, ⁹⁸ II, who was killed in World War II in 1944; (b) Elizabeth Gorman McMillan’s children (hereinafter called “Clan McMillan”) : Carolee McMillan Allen, Anne Goddard McMillan Findlay, William Gorman McMillan, Gaines McMillan; (c) Albert Gorman’s children (hereinafter called “Clan Albert”) : Sallie Gorman Smith, William H. Gorman, II, Albert Gorman, Jr.; (d) Nora Clark Gorman Ballenger’s child and grandchildren (hereinafter called “Clan Ballenger”) : Edgar G. Ballenger (child), Marshall G. Foster, Edgar G. B. Foster (the latter two being children of Mary Clark Ballenger Foster, a deceased daughter of Nora Ballenger). As each of the children of the grantor died, the share of the income of such deceased child, in accordance with the stirpital direction in the deed, was paid to the clans. As a result, at the death of the grantor’s last surviving child, Elizabeth Gorman McMillan, the income was being distributed to the grandchildren on the basis of one-fourth to each of the clans and within the respective clans as follows: Clan Douglas, % of % — yz0; Clan McMillan, % of ⁴ — %eClan Albert, % of % — Vi2", Clan, Ballenger, y% of ^4 — Vs as to each grandchild and y?, of i/s — y16 as to each great-grandchild.

Upon the death of Elizabeth Gorman McMillan, the Trustee, Safe Deposit & Trust Company of Baltimore, one of the appellees, filed a bill of complaint asking for direction from the chancellor as to the proper method of distribution of the income and principal of the trust estate. The appellants, the members Of Clan Ballenger and the members of Clan Albert, by answer contended that the grantor contemplated a stirpital distribution in which the children of the grantor would comprise the “stock” or stirpes and, therefore, the proper construction of the limitation in remainder required the corpus to be divided into four parts, one- part of which would pass to the children and descendants of each of the four children of William H. Gorman. On the other hand, Clan Douglas by answer contended that the grandchildren of the grantor constituted the stirpes or. stock and that division ⁹⁹ of the corpus should be into fourteen equal parts. Clan McMillan answered in proper person and took no position with respect to the distribution, although it would have been to their financial advantage to have taken the same position as taken by Clan Douglas.

The chancellor by decree decided with the contention of the appellees, that the grandchildren of the grantor constituted the stock or stirpes and that the division of the corpus should be into fourteen equal parts. From that decree the appellants appeal. The question, therefore, before this Court is whether the phrase “shall go to all the descendants of the said William H. Gorman then living, to be divided among them per stirpes and not per capita, * * *” means that the children of the grantor are the stocks or stirpes, or whether it means that the grandchildren of the grantor are the stocks or stirpes. The chancellor based his decision on the case of Patchell v. Groom, 185 Md. 10 , 43 A. 2d 32 .

In that case the will provided: “At the death of the last survivor of my children . . . the trust . . . shall cease and determine, and thereupon I do hereby devise and direct that all my estate . . . shall be divided equally among all of my descendants then living per stirpes and not per capita ...” The majority opinion, written by Chief Judge Marbury, in which three other judges concurred, held that the grandchildren of the testator constituted the stocks or stirpes and that the division of the corpus should be in equal parts among the grandchildren. It was admitted therein that it made no practical difference in that case, on account of the provisions in the will, whether the Court there determined that the grandchildren were the stocks or stirpes rather than the children. In a separate opinion in that case, written by Judge Henderson, concurring in the result and in which two other judges concurred, it was held that the children.were the stocks or stirpes and agreed that the contrary statement in the majority opinion was not necessary to the decision of the case. The majority opinion discussed in ¹⁰⁰ detail the English cases of Robinson v. Shepherd, 32 Bevans 665 (1863) (Sir John Romilly, Master of the Rolls), reversed on appeal to the chancellor (4 D. J. & S. 129) ; Gibson v. Fisher, L. R. 5 Eq. 51 (1867); In re Wilson, L. R. 24 Chan.

Div. 664, (1883); In re Dering, 105 L. T. 404 (1911); In re Alexander, L. R. 1919, 1 C. D. 371. Patchell v. Groom, supra, was decided on June 13, 1945, and at that time, apparently due to the war, this Court did not have before it the case of Sidey v. Perpetual Trustees Estate & Agency Co. of New Zealand, Ltd., (1944), AC 194. In that case a testator died leaving four surviving children, one of whom died without leaving issue. The testator had provided by his will, inter alia, (Clause 27), that: “And from and after the death of the last survivor of my said four children as aforesaid I give devise and bequeath the whole of my residuary estate real and personal to and amongst my then surviving descendants in such manner that the same shall be divisible per stirpes among the children grandchildren and remoter issue of such of my children as shall have left issue.” Thé Court of Appeals of New Zealand held that the grandchildren of the testator were to be taken as .the stirpes or stocks for the purposes of division.

Northcroft, J., dissented from this view. On appeal to the Privy Council, in an opinion delivered by Lord Simonds, the view of Northcroft, J., was taken and it was there said: “It is, however, primarily on the language of cl. 27 itself that the question must be determined. Its opening words cannot be wholly disregarded. The event for which the testator now provides is the death of the last survivor of his four children for whom and their issue he had previously made separate provision out of income.

On this event happening he gives the whole of his residuary estate ‘to and amongst my then surviving descendants in such manner that the same shall be divisible per stirpes amongst the children grandchildren and remoter issue of such of my children as shall have left issue.’ As this clause opens with a ¹⁰¹ reference to the testator’s four children, so it ends with a reference to such of his children as shall have left issue. This framework suggests that for the testator each child established the stirps for which he was making provision. The class of beneficiaries is ‘my then living descendants,’ and some assistance again may be derived from the use of the word ‘my.’ There seems no reason why a testator, providing for his own descendants living at a certain time, but intending them to take not per capita, but per stirpes, should pass over the generation of his own chlidren and direct, not that each of their families should take an equal share of his estate between them, but that each of his grandchildren or their families should take an equal share. * * * The argument in favour of the latter view which appears to have been decisive in the Court of Appeal and has been urged with much force before their Lordships, is that the natural construction of a gift to persons per stirpes is that the stocks of descent shall be found among the takers and not among their ancestors. It has been contended that this has been accepted as a principle of construction since the decision of Lord Westbury in Robinson v. Shepherd (1), and this consideration has largely influenced the decision of the learned Chief Justice and the other judges forming the majority of the Court of Appeal.

It is the fact that in the case cited the Lord Chancellor, on the language of the will under consideration, came to the conclusion that legatees who themselves participated were to be regarded as forming the stirpes, and that this line of reasoning commended itself to North J. in In re Wilson (2), and to Warrington J. in In re Dering (3), on the construction of wills which appeared to those learned judges to be similar to that under review in Robinson v. Shepherd (1). And in In re Alexander (4), Sargant J. felt himself constrained to follow the same line of reasoning and to reach a similar result, though his inclination and preference were for the view expressed by Lord Romilly in Gibson v. Fisher (5). Their Lordships do not think it necessary ¹⁰² to question the correctness of any of the decisions to which reference has been made, but they cannot elevate the reasoning which led to such decisions into a rule of construction. There appears to them on principle to be no reason why, in the construction of a gift per stirpes the stocks should be found among the takers and not