Coudon v. Updegraf

Bruke, J., delivered the opinion of the Court. George P. Whitaker, a resident of Cecil county, died on the 30th day of December, 1890, leaving surviving him a widow and five children. Tie had made and executed a last will and testament, which was duly admitted to probate by the Orphans’’ Court of Cecil County on the 5th day of January, 1891, and by which he appointed Joseph R. Whitaker, Nelson E. Whitaker and Joseph Condon, executors, and to whom letters testamentary were granted on January 6th, 1891. Nelson E. Whitaker has since died, and Joseph R. Whitaker resigned his office as executor, so that Joseph Coudon is now the sole surviving executor of the will.

George P. Whitaker died seized and possessed of a large and valuable estate which has been, since the grant of letters thereon, administered exclusively in the Orphans’ Court of Cecil County. It appears by the 16th account of the surviving executor, filed in that Court in March, 1910, that the estate in his hands then amounted to $279,595.62. The bill in this case asks first, that the Court assume jurisdiction of the trust created by the will of George P. Whitaker, interpret the will and direct the trustee in the ⁷⁴ execution of the trust; secondly, that the trustee be required to give bond for the faithful discharge of his duties; thirdly, that the widow of the deceased, Mary L. Whitaker, one of the defendants, be required to malte discovery of an • ante-nupital agreement made between herself and George P. Whitaker, and that Joseph Condon, the surviving executor be ■ required to make discovery as to the investments and extent of the estate; and fourth, that a division and distribution of the residue of the estate be made among those entitled. The defendants demurred to the whole bill, and also to certain parts thereof.

The Court overruled the demurrer to the whole bill and to' all the parts, except the demurrer to such part of the bill which asked that Mary L. Whitaker, the widow, be required to make discovery of the ante-nuptial contract. The demurrer to this portion of the bill was sustained. This appeal was taken -by the defendants from the ruling on the demurrer. The substantial and controlling questions presented by the appeal are: First.

Has the Court of equity under the facts appearing in the record jurisdiction to assume the administration of the estate and to require the executor as trustee to give bond? Secondly. Can a division and distribution of the residuary estate now be made? A number of the parties to the suit and whu are interested in the residuary estate are non-residents of the State of Maryland.

There is a trust created by the will and the property embraced by the trust is granted to the executors as trustees, and there is imposed upon them certain active and specific duties with respect to the trust. - It is alleged in the bill and admitted by the demurrer that the surviving executor and trustee has loaned to the Whitaker Iron Company, a non-resident corporation, the sum of $79,-595.62-the money of the estate “on call and without security.” The property constituting the trust estate must be treated as being in the hands of the surviving executor in his capacity as trustee. It is well settled that where the same party is both executor and trustee, a trust fund by operation of law ⁷⁵ will be considered in bis bands in bis capacity as trustee after tbe time limited by law for tbe settlement of the estate, and that the probate of tbe will and the taking out of letters testamentary will be considered as sufficient evidence of the acceptance by him of tbe trust. This doctrine of transfer by operation of law has found expression in many adjudged cases in this Court. Seegar v. State, 6 H. & J. 162 ; Watkins v. State, 2 G. & J. 220 ; Hanson v. Worthington, 12 Md. 418 .

It is equally well settled in this State that the Orphans’ Court has no jurisdiction of the administration of a trust created by a will. Conner v. Ogle, 4 Md. Ch. 425 ; Taylor v. Bruscup, 27 Md. 219 ; State, use of Gable, v. Cheston, 51 Md. 352 . There being a trust created by the will a Court of equity was the appropriate tribunal in which it should be administered, and any party interested in the trust estate had a' right to apply to that Court to require the executor as trustee to give bond. The provision of the will creating the trust falls within section 219, Article 16 of the Code which provides that: “In all cases where a trustee has been appointed by a will or deed to execute any trust, and any person interested in such trust shall make it appear to the Court that it is necessary for the safety of those interested in the execution of the trust, that the trustee should give bond and security for the due execution of the trust, the Court may order that such bond be given, on or before such day as the Court shall name; and if the bond, with such security as the Court shall approve, be not given by such trustee, then the Court may remove such trustee and appoint one in his stead, who shall give such bond and security as the Court may require.” This section was intended to afford full protection to all persons interested in the trust property, and we are of opinion that the allegations of the bill are quite sufficient to authorize the Court to exercise its power vested in it by the act.

It has long been settled that legatees have a right to file a bill in equity against an executor for the recovery of their ⁷⁶ legacies and where it appears, as it does in this ease, that many of the parties are non-residents we can have no doubt that under the principles announced in Alexander v. Leakin, 72 Md. 199 , and Hyatt, Trustee, v. MacGill, 80 Md. 253 , this case is one which demands “the larger powers of an equity Court properly and satisfactorily to deal with the subject-matter or the parties.” The question as to whether a division and distribution of the rest and residue of the estate can be made prior to the death or remarriage of the widow of George P. Whitaker involves a construction of his will. By the second item of the will the testator referred to an ante-nuptial contract between himself and wife which he expressly affirmed, and he directed his executors to see that the money payments provided for in the contract were regularly made. The amount to which she was entitled under the contract is not stated in the will, nor does it appear in the record. Pie then devised and bequeathed an estate for life, or during her widowhood to her in certain- real and personal property.

He then provided as follows: “I also give and bequeath to my said executors two hundred and fifty shares of the capital stock of the Whitaker Iron Company at Wheeling, in West Virginia, in trust, the dividends from which are to be applied in the order and to the extent as follows: First, that there shall be regularly paid to my said wife, Mary L., so much thereof as may be necessary to fully comply with all the terms of said ante-nuptial contract; second, so much thereof as may be necessary to provide for the repairs, insurance, taxes and maintenance of the dwelling as heretofore provided for; third, that four hundred dollars be paid to my said wife annually in addition to the sum provided for and stipulated to be paid to her in said ante-nuptial contract, and the residue, if any, be held in trust and so invested as may seem best in the judgment of said executors, that the objects of said bequest may be regularly and promptly complied with during the life or ⁷⁷ widowhood of my said wife, and' at and upon her death or the termination of her widowhood, whichever may sooner occur, I will that said two hundred and fifty shares of stock together with any residue of dividends of the same not then expended for the purposes