Bass v. Smith

Marbury, C. J., delivered the opinion of the Court. This case was commenced by a bill of complaint filed in the Circuit Court for Prince George’s County to estab ⁴⁶⁴ lish a trust over certain real property, and to have an accounting of the rents and profits therefrom. The Chancellor decreed a constructive trust over a certain fund involved, but declined to follow this fund into the real properties mentioned in the bill of complaint, and declined to allow any accounting of profits or interest on this fund. From his decree, complainants appealed.

About 1920 Samuel Bass and his wife, Goldie, emigrated to. this country from Russia. They brought with them their four children. Subsequently another child was born in this country. The family lived in Prince George’s County,, adjacent to Washington, where the father engaged in business.

He purchased a number of pieces of real estate, all of which, however, were encumbered, and his equity in them, apparently always small, had practically vanished by the date of his death, which occurred on August 20, 1929. He left- a will giving all of his estate to his widow, but she received nothing under his will, because his net estate paid a dividend of a little less than 6% to his unsecured creditors. At the time of his death Mr. Bass was living in a house he owned at 3705 Rhode Island Avenue in Mount Rainier. The oldest child, a daughter, Lottie, one of the appellees, had married Edward Smith, another appellee.

They were operating a grocery store at 4009 Perry Street, Mount Rainier. This was a property in which Mr. Bass had an interest. Mrs. Smith and her husband were living at the home of Mr. Bass, 3705 Rhode Island Avenue. Mrs. Smith was then about 27 years old.

The oldest son, Solomon Bass, was about 24, was married and was living in Baltimore. The three younger sons, Jacob, Sidney - and Benjamin were living with their father and mother on Rhode Island Avenue. Sidney was about 22, Jacob was about 20, and Benjamin was about 14. Mr. Bass' had • two insurance policies on his life, in both of which Mrs. Bass .was named as beneficiary.

The net proceeds of these policies amounted to $5846.54. They were plaid' by two checks, both made to the order of Mrs. Báss-, and endorsed by her to her daughter, -Lottie Smith. ⁴⁶⁵ The latter deposited them in an account in her own name in the American Security and Trust Company in Washington. The first deposit was on October 7, 1929, and the second on October 16th. Mrs. Smith started checking on this account on October 17th and exhausted it by withdrawing the balance on May 21, 1930.

Judicial proceedings were instituted very shortly after the death of Mr. Bass to procure the sale of his real estate. Three of the properties, including the grocery store, were owned by Mr. Bass and an associate, a man named Iskow. The latter filed a partition suit, and as a result these properties were sold under a decree, and were purchased by Mr. and Mrs. Smith, subject to existing encumbrances. One-third of the purchase price was paid at the time of the final ratification of the sale, but before the final installments were paid, one of the three properties was sold by the Smiths.

The other two properties, which were the grocery store and a property in which was kept a tavern, were conveyed to the Smiths as tenants by the entireties. The tavern was subsequently sold by the Smiths, but the grocery store still remains in the name of Mr. and Mrs. Smith. In addition to these purchases, Mr. and Mrs. Smith bought a number of other improved properties formerly owned by Mr. Bass, on which mortgages were foreclosed. Title to these was taken by them as-tenants by the entireties.

One was the home on Rhode Island Avenue. The actual cash necessary to make these purchases was not very great, and the Smiths raised the balance of the purchase price in each case by executing mortgages. The net result apparently was that they purchased about $30,000 worth of real estate formerly owned by Mr. Bass, on which they paid approximately $6000 in cash and gave mortgages for the balance. Shortly after the death of Mr. Bass and the purchase of the grocery store property, Mr. and Mrs. Smith fixed up the apartment over it, and they and Mrs. Bass and the three younger boys all moved there.

Then, when they had purchased the home-place, they fixed this up and the ⁴⁶⁶ family all moved back there to live. Sidney was married shortly after his father’s death and went to live in Arlington, Virginia. Jacob was subsequently married, and went to live in Florida, although he came back once or twice. For a time he ran the tavern in a sort of partnership arrangement with his sister, Mrs. Smith.

Then the tavern was sold by the Smiths, and he came back and worked for the new owner for a time. The youngest boy, Benjamin, lived at home until he was inducted in the Army. All of the boys came back to the Mount Rainier home from time to time and lived with the Smiths. Mr. Smith testified none of them ever paid board, but some of them deny this.

In December, 1935, Mrs. Smith and her husband conveyed to Solomon Bass one of the houses situated in Kenilworth. He testified he paid nothing for it, but there were encumbrances amounting to $3300. Solomon had been living in Baltimore, but was then working in Mt. Rainier.

At about the same time, Mrs. Smith offered Jacob Bass a house on Eastern Avenue, Kenilworth, and then one on Perry Street. He was then living in Florida, and declined both offers. In 1937, Mrs. Smith told Sidney Bass she intended to give him a house in Kenilworth. He moved in, but only lived there three or four months, and then gave it up on account of his domestic difficulties.- No deed was ever executed for the property.

In 1940, Mrs. Smith conveyed to Benjamin Bass the property on Rhode Island Avenue, next door to the home-place. This was the first residence of the family and the house in which he was born. He paid her nothing for it, but assumed the mortgage, taxes and street assessments. Mrs. Bass died on the 20th day of September, 1940, intestate.

Prior to her death in addition to the conveyances to the boys above mentioned, other conveyances, affecting the real property had been executed. There is on record a deed dated June 16, 1931 from the Smiths to “Sydney” Bass of Lot 43 in “Cedar Croft” and a deed for the same lot dated June 17,1931 from “Sydney” Bass ⁴⁶⁷ and wife to the Smiths as tenants by the entireties. According to the Land Records a deed was executed by the Smiths on October 27, 1933 to Jacob Bass of the lots which had formerly belonged to Samuel Bass, including lot 43 in “Cedar Croft,” but excepting the grocery store lot and several previously sold to a man named Bell. On the same day the record shows a reconveyance of the same lots by Jacob Bass to Mrs. Smith.

On September 27, 1933, Edward Smith had executed a deed to his wife releasing all his rights in all of these properties. The testimony shows that the Smiths had a disagreement about keeping these properties. Mr. Smith claimed he was using up his profits from the store in maintaining them, and he wanted to get rid of them. The result was that he turned over his interest in all of them to his wife, with the exception of the grocery store which remained in both names.

The conveyances from “Sydney” Bass and from Jacob Bass are attacked at great length in the testimony, and the grantors deny absolutely having executed them. A handwriting expert testified that the signatures on the deeds were not those of Sidney and Jacob and an attempt was made to show that no acknolwedgments were taken before the notary who signed the certificates. The purpose of these attacks was not to affect the title to the properties, but to attack the credibility of Mrs. Smith. However, her testimony on the general issues is meagre and is pertinent in only one matter.

This has to do with an alleged conference between two of the boys and their mother and Mrs. Smith and Mr. Stephen, counsel for the family, at which it is claimed that a demand was made on Mrs. Smith for an accounting. Mrs. Smith denied that such a conference ever took place. Mr. Stephen, who was the family lawyer, denied any knowledge of such a conference, and said that he would have remembered it, had it taken place. Under these circumstances, we think the testimony as to the validity of these deeds may be disregarded because it has no ⁴⁶⁸ particular bearing on the issues in this case, and the credibility of Mrs. Smith is not important.

The complainants in the court below were the three older boys, Solomon, Sidney and Jacob. Benjamin was made a defendant, but he subsequently testified for the plaintiffs and appealed from the decree. So that to all practical intent and purposes the four boys stand before us on the same footing. Their contention is that the proceeds of the insurance policies were used to purchase the various properties for the use and benefit of their mother during her lifetime, and for the children after the death of the mother.

For this reason they contend that the properties should be impressed with a trust for all the children. They also ask for an accounting of the rents and profits. Solomon Bass stated that he was ready to reconvey the property given him by Mrs. Smith, and Benjamin Bass in his testimony stated the same thing with respect to his property. The answer of the Smiths states that the insurance money was deposited by Mrs. Smith in the bank in Washington after she had been advised by her mother that the latter could not place the money to her account without it being subject to a levy to satisfy a judgment against her.

The answer also states that Mrs. Bass requested Mrs. Smith to provide a home and take care of her and her children as far as she was able, and gave her the right to use any of the fund received from the insurance policies in consideration of this support. The answer also states that appellees expended large sums of money in the care and support of Mrs. Bass, as well as the minor children, far in excess of the insurance money. It is also stated that there was never any understanding or agreement with Mrs. Bass or any of the boys that the insurance money was to be invested in real estate to be held for the benefit of Mrs. Bass and the children. That, on the contrary, Mrs. Bass, during the 11 year period she lived with the appellees, expressed complete satisfaction with the method in which the appellees provided a home for her and her childrén.' ⁴⁶⁹ The Chancellor found that a confidential relationship existed between Mrs. Bass and her daughter, and that the insurance fund was impressed with a constructive trust in favor of the mother.

Trustees were appointed to receive this fund, and a special auditor was appointed to determine the value of the equities of Mrs. Smith in the properties conveyed by her to Solomon and Benjamin. The value of these equities was to be deducted from any funds otherwise payable to Solomon and Benjamin and added to the share payable to Mrs. Smith, after notice to creditors had been given and after claims, if any, inheritance taxes and costs were paid. The Smiths did not appeal, the boys did. In their very careful and thorough brief the appellants argue that since a confidential relationship has been established, the fund should be followed to the investment in the real property and the latter should be declared to be held in trust for the benefit of all the children of Mrs. Bass.

The doctrine of confidential relations has been discussed in this Court in numerous cases, and it would serve no good purpose to repeat the various expressions with respect to it, or the authority upon which they are based. In general, it may be said that it exists where one party is under the domination of another, or where, under the circumstances, such party is justified in assuming that the other will not act in a manner inconsistent with his or her welfare. Owings v. Currier, 186 Md. 590 , 47 A. 2d 743 . One of the relationships to which this doctrine is particularly applicable is that of parent and child.

Under ordinary circumstances anything given by a parent to a child inter vivos is presumed to be a gift. This is because the parent is usually the dominant party. This rule, however, is reversed where, by reason of circumstances and conditions, the child is the dominant party. That is true where the parent relies heavily upon the child for care and protection, or for guidance in business affairs.

Grimes v. Grimes, 184 Md. 59 , 40 A. 2d 58 . ⁴⁷⁰ The evidence in the case before us was that Mrs. Bass had been reared in Russia. She could not read or write, at least not in English, and she apparently had no business experience whatever. She was left a widow with two minor children and another unmarried son, just above the age of 21. All of them lived with her.

None of them was apparently likely to be able to support the family at