Curley v. Wolf

Bond, C. J., delivered the opinion of the Court. On the two appeals, from the same decree, the question ar.gued is whether mortgage participation certificates purchased by a decedent in her lifetime and issued to herself as life tenant with power to sell, mortgage, lease, or consume, and with remainders over; belong after her death to her estate, to be administered by her executor, or belong to the remaindermen by virtue of a completed gift of the remainders. The executor filed a bill praying that the court, as a court of equity, assume jurisdiction to determine the question and give directions. The chancellor concluded that there had been no completed gift, and that the executor must take and administer the property.

And from a decree passed accordingly, one of the remaindermen and the mortgagee, seller of the certificates, appeal. Catherine Kemp acquired from the Mortgage Guarantee Company at different times before her death five certificates of rights of participation in mortgages previously executed to the company on properties in' Atlantic City, New Jersey. They were acquired,by exchange of certificates previously held by her. The new certificates, all made up on the same form, certified that the company had received an amount of money specified from: “Catherine Kemp.for her life, with full power to sell, mortgage or release all interest and estate in the interest in the mortgage hereinafter referred to and hereby assigned, with the additional power to use and consume the proceeds, with remainder to” the named remainderman.

The purchaser was assigned an undivided share in each mortgage, respectively, up to the amount paid in, and the certificate contained stipulations that the company should ³⁹⁶ continue to hold the mortgage for the benefit of the purchaser and others interested, and should as their agent collect the interest and principal when due, distributing among certificate holders pro rata, after retaining a portion of the interest for the company’s services. It was stipulated also that the company should have the power to enforce or release the mortgage, holding the proceeds subject to the order of the certificate owners. The company reserved a right to be itself a holder or pledgee of similar shares in the mortgage. By the terms of the certificates the company did not undertake or guarantee the payment of principal or interest; it merely assigned a share of the rights under the mortgage.

One mortgage for a share in which Mrs. Kemp held a certificate matured after her death, and was paid; and the proper part of the proceeds was by oversight paid over by the company to the executor, and he holds it subject to the ascertainment of rights in this proceeding. Evidence taken showed that Mrs. Kemp herself directed the naming of the remaindermen, and desired the provision for disposition or use by herself, and accepted the form regularly used by the company to be inserted in certificates for the accomplishment of that purpose. Whether she understood all the words in the form is a question of no importance. There is no evidence that she did not, and no reason for regarding the words as not in accordance with her intention despite her acceptance of the certificate containing them.

It is to be presumed that they were in accordance. Mutual Ins. Co. v. Miller Lodge, 58 Md. 463, 471 ; Western Md. Ry. Co. v. Stocksdale, 83 Md. 245, 253 , 34 A. 880 .

The remaindermen were not notified that they were named until after the purchaser’s death. The executor found the certificates in his decedent’s safe deposit box. They were not mentioned in a will left by her. The court understands it to be agreed by the parties that the¡ taking of the certificates in the two names as stated did not amount to a testamentary disposition of the interests in remainder.

The arguments have been ³⁹⁷ concerned only with the question whether valid gifts inter vivos to the remaindermen could be considered as made, with the essential delivery, when the power to dispose of or consume had been reserved to the donor in the words quoted. A gift is not, of course, effected if the attempting donor retains dominion over the property, making, in effect, nothing more than a future or conditional gift in remainder. Moore v. Layton, 147 Md. 244 , 127 A. 756 ; Brooks v. Mitchell, 163 Md. 1, 11 , 161 A. 261 . Delivery may be made to a third party for the donee, rendering the third party an agent or trustee for the donee during the continuance of the life interest.

See, generally, Brantly’s note on gifts inter vivos, Pennington v. Gittings, 2 G. & J. 208 , Brantly’s Edition. And here there was a third party intermediary holding the mortgages, the interests in which Mrs. Kemp undertook to give. The complete surrender to the company of the certificates previously held, and substitution of the certificates in the two names, would constitute a complete