Bishop v. Safe Deposit & Trust Co.

Parke, J., delivered the opinion of the Court. The appeal in this cause is from a decree to enforce ⁶¹⁷ the specific performance by the vendees of their contract to buy of the vendors a certain lot of land. The question is whether or not the vendors, who are trustees, can, without the joinder of the husband of a cestui que trust, convey to the vendees a good and merchantable title to the land sold and intended to be conveyed. A certain Douglas H. Gordon was married on June 20th, 1897, to Elizabeth Clarke Gordon.

He died on April 8th, 1918, leaving his wife surviving. By the eleventh paragraph of his will he devised and bequeathed to his wife, if she survived him, one-third of all the residue of his estate “for her sole and separate use, and free from the control of any husband which she may at any time have, provided, however, as a condition of this devise and bequest, that my (his) said wife shall consent that the provision made for her by the marriage settlement or antenuptial contract entered into between her and me (him) prior to our (their) marriage shall be reckoned to be and considered a part of the residuum of my (his) estate, and shall be added to the property otherwise constituting the same before the division thereof, herein provided for shall be made.” After the will was executed and before the death of its maker, the condition imposed was duly complied with by the execution by the husband and wife of a deed whereby the marriage settlement or antenuptial contract was rescinded and canceled. Upon the death of the testator, the property embraced in the annulled marriage settlement became a part of the residue of the testator’s estate, and thus formed a portion of the whole residue of which a third passed to the widow in accordance with the terms of the will. The widow later married, on April 26th, 1933, one Alexander Gordon, from whom she was on January 5th, 1935, granted a divorce a mensa et thoro, which, however, left the marital rights of the parties in each other’s real and personal property undisturbed.

Hokamp v. Hagaman, 36 Md. 511, 517 . On February 20th, 1936, Elizabeth Clarke Gordon began a proceedings in equity which set forth the devise and bequest to her by the will ⁶¹⁸ of her first husband, and presented a detailed statement of all the property which she 'had acquired, less certain gifts which she had bestowed upon her children; some other items of which she had made earlier disposition; and the land which was not within the State of Maryland. The object of these ex parte proceedings was to avail herself of the right to have the court assume jurisdiction of the trust; to appoint a trustee of her sole and separate estate; and, in this appointment, to have declared the uses and trusts upon which the trustee should hold her property. By these proceedings, the Circuit Court of Baltimore City, a court of equity, passed a decree on February 20th, 1986, in which trustees were appointed to hold the described sole and separate estate of Elizabeth Clarke Gordon, which she had so acquired under the devise and bequest of her first husband, for her benefit during the term of her natural life, and then over to such executors as she might by her last will appoint, or, if she should die intestate, to her administrators, wholly free and clear of the trust in the decree declared, and subject to her testamentary disposition, with full power to the trustees to sell, assign, convey, mortgage, lease, or otherwise dispose of such property and estate, or any of the same, and for such prices and on such terms as might, in their discretion, be deemed desirable or proper in the interest of Elizabeth Clarke Gordon, with full power of investment and reinvestment.

The trustees were authorized to execute and carry out all the powers conferred, without applying for or obtaining the authority of the court or its approval or ratification. The other terms and provisions of the trust do not require statement, as they do not affect the questions on this record. Among the items of property which were included in the trust declared for the use and benefit of the devisee and legatee, Elizabeth Clarke Gordon, were undivided one-third interests in certain parcels of land, whose remaining undivided two-thirds interests were held in trust by the trustees of the remaining two-thirds of the real and personal property of which the testator died ⁶¹⁹ seised and possessed. These trustees of the undivided one-third and of the two-thirds interests in one of the parcels of land united as vendors and, in pursuance of their respective powers of sale, sold to William H. Bishop and wife, at an agreed price, and, as an entirety, all their several interests in this parcel.

The vendors tendered their duly executed deed conveying the parcel to the vendees, who declined to pay the purchase price and to accept the deed, on the single ground that the title was bad because the second husband of Elizabeth Clarke Gordon had not united in the deed as a grantor. The refusal is based upon the contention that the devisee had acquired a statutory separate legal estate under the will of the first husband, and that in this legal estate, upon her later marriage, there vested in the second husband the inchoate marital rights of a husband as the potential survivor of his wife. If this be true, the title would not be good and merchantable without the release by deed of the interest of the husband. Code, art. 45, sec. 12.

The vendees rely upon the statutory provision in force at the time of the second marriage. In many instances the rigor of common law principles afforded the wife no protection nor remedy against the improvidence or misfortune of the husband, so the courts of equity early devised remedies by which all or some portion of the property of the wife might be withdrawn from the operation of the rules of the common law and preserved for her benefit. The means adopted were either a general trust for a woman, such as might be created for any other individual, or a special trust for a woman, whose features would be particular provisions as to the ownership and enjoyment of the property or its income, and as to the rights over it of any existing or future husband. Perry on Trusts (7th Ed.), sec. 625.

It is the second form of a trust for women that was created by the will of Douglas H. Gordon. It devised and bequeathed to his surviving wife certain real and personal property whose ownership and enjoyment was limited to her sole and separate use, and so as to be free ⁶²⁰ from the control of any husband which she might at any time have. Here the gift did not become effective until the then husband’s death, when the surviving wife would become a widow, so it was a devise and bequest to a single woman for her sole and separate use; and, before marriage, the widow had the same control over the property given as if it had been devised and bequeathed to her absolutely. Sections 646, 646a, 648.

The limitation to her sole and separate use and free from the control of any husband which she might have only took effect upon her marriage. Cooney v. Woodburn (1870), 33 Md. 320, 326, 327 . As to a later husband, the testator was a stranger who had made a gift of property to an unmarried woman upon certain limitations in the event of her marriage. Such conditions or limitations of property are sanctioned in equity; and, whether the woman be married or single, the trust does not fail if made without a trustee.

The husband would become her trustee if the woman be married, and when she married if she be single when the trust was created. Perry on Trusts (7th Ed.), sees. 647, 652, 653, 654; Waters v. Tazewell, 9 Md. 291, 308 ; Winchester v. Machen, 75 Md. 538, 543 , 23 A. 956 ; Lewin on Trusts, ⁷⁵⁶. Equity would not permit a trust to fail because a trustee was not specifically named. Furthermore, on application a court of equity may assume jurisdiction of the trust and appoint a trustee.

For various reasons, some one other than the husband might become preferable or necessary in the care, custody, and management of the corpus of the trust, and the use and disbursement of its income and receipts. Knight v. Knight, 11 Jur. (N. S.) 618; Perry on Trusts (7th Ed.), sec. 677; Richardson v. Stodder, 100 Mass. 528 . When acting with respect to property so settled to her sole and separate use, a married woman is competent to act in all respects as if she were a feme sole.

So, unless restricted by the instrument under which she holds, she may sell and convey and devise and give her equitable sole and separate estate in real and personal property as if she were ⁶²¹ single. Perry on Trusts (7th Ed.), sec. 655. If this were not true, the intention of the maker of the instrument under which she held would be defeated in large part with respect to her real estate, since the power of the husband to abridge or defeat in part her conveyance or will would be an exercise of control of property, which to the extent of this control would cease to be a sole and separate equitable estate. As was said arguendo in Cooke v. Husbands (1857), 11 Md. 492 , at page 505: “We think that there is a principle underlying this branch of jurisprudence which should not be disregarded, and that is, that the right to dispose accompanies the ownership of property, which cannot be fettered by intendment, however this may be done by express words; and as these settlements are creatures of equity, designed to confer rights on married women not enjoyed at law, and may be made to express what the parties intended, the feme covert should be considered as having the power of disposal, unless a different intent be manifested by the instrument”; and it was so expressly decided. 11 Md. 492 , at page 506.

In Buchanan v. Turner (1866), 26 Md. 1 , at page 5, the court said that in Cooke v. Husbands, supra, “it was for the first time definitively declared to be law in Maryland ‘that where property is given to a feme covert to her separate use simply, without restricting her power of disposing of it, or prescribing the mode in which that power is to be exercised, she may act in reference to the disposition of it as a feme sole.’ This decision was followed in Michael v. Baker, 12 Md. 158 , Chew’s Admrs. v. Beall, 13 Md. 348 , and in other cases, and must be considered as the settled law of the State.” Schull v. Murray (1870), 32 Md. 9, 16 ; Cooney v. Woodburn (1870), 33 Md. 320, 326 . The vendee is agreed that this is a correct statement of the prevailing law until the adoption of the Code of 1860 (article 45) which created what may be conveniently called a statutory separate estate in a married woman. By this change, with some later amendments, ⁶²² and with the omission of the provisions with respect to the creditors of a husband who has transferred property to his wife, all the property, real and personal, belonging to a woman at the time of her marriage, and all the property which she may acquire or receive after her marriage by purchase, gift, grant, devise, bequest, descent, or in course of distribution, by her own skill, labor, or personal exertion or in any other manner, shall be protected from the debts of her husband, and not in any way liable for the payment thereof, and she shall hold to her separate use, with power of devising the same as fully as if she were a feme sole, or she may convey the same by a joint deed with her husband, provided that, if she die intestate and leaving children, her husband shall have a life estate in her property, real and personal, but if she die intestate, leaving no children, her husband shall have a life estate in her real property, and her personal property shall,vest in him absolutely. Code of 1860, art 45, secs. 1 and 2; Acts 1874, ch. 57; Acts 1890, ch. 394; Acts 1892, ch. 267; Acts 1892, ch. 586.

It was further provided that it should not be necessary for a married woman to have a trustee to secure to her the sole and separate use of her property, but, if she desires it, she may make a trustee by deed, her husband joining in the deed, or she may apply to a court of equity and have a trustee appointed, in which appointment the uses and trusts for which the trustee holds the property shall be declared. Ibid, sec. 3. The language used in sections 1 and 2 of article 45 of the Code of 1860 was general, and came before the court for consideration in Hall v. Eccleston (1873), 37 Md. 510 . In that case a husband and wife had entered into a contract in writing to pay money, and for its performance had specifically bound themselves and their separate and individual estates.

The husband had no property out of which the debt could be made, but his wife was the owner of real estate on which she and her husband had placed mortgage liens for their other debts. A decree of foreclosure was obtained under one of the mortgage ⁶²³ deeds, and the unsecured creditor brought suit to enforce the debt as an equitable charge or lien on the wife’s separate legal estate. The defendants demurred, and the question raised was whether the land of the wife, which she held under the statute as her separate estate, could be made subject to a lien in any other mode than by a deed in which the husband must unite. The contention was that, as by section 2 of article 45 of the Code of 1860 there had been prescribed this “particular mode of alienation or disposition of the wife’s separate estate acquired and held under this provision of the statute, no other mode exists, and that, to allow the estate thus held to be charged and made liable to sale for the payment of debts * * * would contravene the policy and clear intention of the law.” 37 Md. 510 , at pages 518, 519.

The court rejected this interpretation of the statutory law, and held that the court would enforce the contract on the part of the wife by treating it as constituting an equitable lien or charge on her statutory separate estate, and, upon a failure to pay the debt, decree a sale of the land of the wife for its satisfaction. 37 Md. 510 , at pages 521, 522. See Brundige v. Poor, 2 G. & J. 1 ; Frostburg Perpetual Building Assn. v. Hamill, 55 Md. 313, 315 ; Norris v. Lantz, 18 Md. 260 ; Klecka v. Ziegler, 81 Md. 482, 485 , 32 A. 241 . In the beginning of its discussion, the court first stated what had been the position of a married woman before the enactment of the Code of 1860, for the purpose of ascertaining the subject-matter and effect of the legislation. The court said that before the legislation of 1860 it was well settled law that a married woman, in the