Ensor v. Ensor

Smith, J., delivered the opinion of the Court. The questions presented in this case are whether there can be a resulting trust in favor of one spouse relative to real estate held as tenants by the entireties and, if so, whether sufficient evidence was presented in this proceeding to establish such a trust. We shall affirm the decision of the chancellor (Proctor, J.), who answered both questions in the affirmative. Appellee, Elizabeth A. Ensor, instituted an action in the Circuit Court for Baltimore County against her former husband, appellant John B. Ensor, for sale in lieu of partition of the home formerly owned by the parties as tenants by the entireties.

After sale was decreed, she filed a claim that “when said property was purchased in 1967 the said Elizabeth A. Ensor contributed from her personal funds the sum of Nine thousand ($9,000.00) Dollars toward the purchase price with the understanding and agreement of John B. Ensor that the aforesaid investment of his wife would be recognized as her sole and separate property that would be returned to her in the future as she might require.” The facts were succinctly summarized in the oral opinion of the chancellor: “The Court recognizes that Mrs. Mary B. Essich is the sister of the Plaintiff and is, therefore, inclined to be prejudiced in her sister’s favor. However, the Court was impressed with her testimony; when she said she didn’t know, she said she didn’t know. t 1 ] Her testimony was given in a forthright manner, and I believe she is telling the truth. Also the background of the testimony tends to lend support to what she said. ⁵⁵¹ “We have here a case of an injury to Mrs. Ensor, apparently of a rather serious nature in view of the fact that judgment in her favor was in the amount of $15,000.00, which required medical attention and hospitalization both before the judgment and after the judgment. [ 2 ] Her testimony that her sister had to return to the hospital for further treatment after the judgment is not denied in any way by Mr. Elnsor. Because of the nature of the injury and the possibility of the need for subsequent medical attention, there was some sound reason to make financial provision for such subsequent medical attention and hospitalization.

This was not a case where damages had been recovered, and the Plaintiff had fully recovered. “The testimony of Mrs. Essich was that she spent a month living with the Ensors while they were in Wheaton, Maryland; that there were discussions about the proceeds of the judgment; that the discussion was how to invest the money; and that Mr. Ensor said that the money was Betty’s. She further testified — and this was borne out by Defendant’s testimony — that he had purchased a new car with his own money. The net proceeds of his judgment was $2,000.00; he purchased a car for $1,800.00 and paid for it in cash very shortly after the judgments were paid off. “The sister further testified that Mr. Ensor said he wanted his wife to invest the money in the best possible way to protect herself in the event she would require further medical care, and it was finally decided on an investment in real estate. The testimony is also clear that the down payment made on the Sweet Air home was $9,000.00, Mrs. Ensor’s net proceeds of her judgment being somewhat more than that.

The Plaintiff also ⁵⁵² testified on this subject that it was the definite understanding this money was to be hers, and to be retained for her possible future needs for medical care and attention. She also testified to the fact that her husband purchased this automobile out of his share of the proceeds. She testified that Mr. Ensor agreed the money put into the house was hers. She further testified that on the night of October 7, 1971 when they split up and Mr. Ensor moved out, there was a discussion about the financial affairs, and that she said she wanted her $9,000.00 . . . , that he gave her a $50.00 check and said, ‘You can have everything, I’ll make the payments on the home.’ “The Court either as attorney or in the eight years I’ve been on the bench has seen hundreds of moments of stress such as there obviously was on that occasion, and is confident what was said by Mrs. Ensor about what took place is what took place. “The Court finds as a matter of fact there was an agreement between the parties at the time of the purchase of the Sunburst Avenue home in Sweet Air, that the investment of $9,000.00 from Mrs. Ensor’s funds was an investment in trust for her ultimate use and benefit.

The decree will provide that she will receive $9,000.00 off the top before the balance is split off.” The chancellor in his opinion referred to McCally v. McCally, 250 Md. 541 , 243 A. 2d 538 (1968), about which we shall have more to say later, and, to a large degree, based his holding upon the statement of our predecessors in Reed v. Reed, 109 Md. 690 , 72 A. 414 (1909). In Reed a woman claimed that she had paid the entire purchase price for land conveyed to her and her husband as tenants by the entireties and that they had been subsequently divorced a vinculo matrimonii. She prayed that the land might be decreed to be her property, clear of any interest of her former husband. Judge Thomas noted for the Court that the bill did not ⁵⁵³ charge that the land was purchased by the husband and paid for with money of the wife or that the conveyance of the property to her and her husband was procured by fraud or undue influence on the part of the husband.

As the Court put it: “[T]he theory on which the bill was filed is that the appellant having been divorced from the appellee, the mere fact that the property was paid for out of money belonging to the appellant is sufficient to authorize a Court of equity, either under the authority of Art. 16, sec. 37 of the Code, or independently of that section, to restore the property to her.” Id. at 692 . The Court then went on to say: “[I]t is clear from the decisions in this State that where a wife during coverture voluntarily and without any fraud or undue influence on the part of the husband, conveys her property to him, the effect of a decree for divorce is not to vest in her an equitable title to such property. It has been repeatedly held by this Court that if a wife gives to her husband property belonging to her separate estate, or permits him to apply it to his own use, or he does so with her knowledge and consent, in the absence of proof that it was given to him to be held in tru,st for her use, or of a promise by the husband at the time to repay it, it will be presumed that it was intended as an absolute gift to him, and she has no claim therefor against him or his estate. Edelen v. Edelen, 11 Md. 415 ; Kuhn v. Stansfield, 28 Md. 210 ; Farm. & Mer.

Nat. Bank v. Jenkins, 65 Md. 245 ; Jenkins v. Middleton, 68 Md. 540 ; Taylor v. Brown, 65 Md. 366 .” Id. at 692-93. (Emphasis added.) The Court concurred in the conclusion reached by the chancellor below that the parties then held the property as tenants in common, but it remanded the case to provide the ⁵⁵⁴ former wife an opportunity to amend her bill in order that she might allege that her former husband had obtained his interest in the land by coercion or undue influence brought to bear by him upon his wife. Mr. Ensor points out that in none of the prior decisions of this Court cited in Reed was there a factual situation in which funds of either spouse had been used to acquire real estate held as tenants by the entireties.

He is correct in that position, but that does not change the underlying validity of the premise there set forth. At the beginning of his opinion the chancellor in this case referred to McCally v. McCally, 250 Md. 541 . At page 545 of that opinion the Court quoted from Anderson v. Anderson, 215 Md. 483 , 138 A. 2d 880 (1958), where Judge Henderson said for the Court: “The controlling fact in the instant case is that the whole property was acquired as tenants by the entireties. In legal effect, and in the absence of proof that it was not her voluntary act, this transaction on its face amounted to an absolute gift.

Reed v. Reed, 109 Md. 690 ; Whitelock v. Whitelock, 156 Md. 115, 120 . Cf. Columbian Carbon Co. v. Kight, 207 Md. 203 . The authorities generally are in accord.

See Note 43 A.L.R.2d 917 . The case of Schwarz v. United States, 191 F. 2d 618 (C.A. 4th), is not to the contrary. There the conveyance failed because the husband was in fact married to another woman, unknown to the wife. There is nothing in the provisions of the partnership act that prevents partners from agreeing as to the title to any specific assets.

Subject to the rights of creditors, and unless fraudulent, partners may agree to a different distribution of the property on dissolution from that which obtains under section 18, in the absence of agreement. Cf. Williams v. Dovell, 202 Md. 351, 357 ; Collier v. Benjes, 195 Md. 168, 176 , and Noel v. Noel, 173 Md. 152 .” Id. at 488-89. In McCally a suit for sale in lieu of partition concerning ⁵⁵⁵ land in Montgomery County was filed by a woman against her former husband.

The land had previously been conveyed to them as tenants by the entireties. The case primarily concerned contentions by the former husband “that the gift of an undivided one-half interest in the home property to the wife was conditioned on her remaining ‘a faithful, chaste and dutiful wife and that the marriage of the parties would continue,’ ” and “that public policy and the principle of unjust enrichment should preclude the adulterous wife from retaining title to an undivided one-half interest in property, to the acquisition of which she ha[d] made no monetary contribution.” In rejecting those contentions, Judge Finan said for the Court: “The lower court relied on Gunter v. Gunter, supra, as clearly establishing that in the absence of fraud or undue influence, the courts of Maryland will not inquire into the contribution by parties to a tenancy by the entireties prior to the joint acquisition. When we couple the decision of Gunter, with the language of Anderson, v. Anderson, supra, whereby an absolute gift is presumed when the non-contributing spouse is given an equal interest in the property as one of the tenants by the entireties, we conclude that the lower court in rejecting the doctrine of Moore [v. Moore, 51 App. D.C. 304 , 278 F. 1017 (1922)], correctly interpreted the law of this State.” Id. at 548. In Anderson , the former wife contended, on the theory of partnership, that from the proceeds of a foreclosure sale of land conveyed to spouses as tenants by the entireties, she was entitled to a distribution of sums she contributed to the acquisition of the land.

It is already seen from what we have quoted from that opinion that the Court rejected that contention. The Court said, “We cannot find that the Chancellor was clearly wrong in finding no intention to change the legal title to the premises from a tenancy by the entireties to some other form of ownership.” Implicit in that ⁵⁵⁶ statement is that on a proper state of facts such a finding could be made. In Gunter v. Gunter, 187 Md. 228 , 49 A. 2d 454 (1946), a former husband sought sale of a leasehold estate previously-owned by him and his wife as tenants by the entireties. The chancellor dismissed the bill because the former husband was in default in the payments specified in the divorce decree.

He did not, as was done in Skirven v. Skirven, 154 Md. 267 , 140 A. 205 , 56 A.L.R. 697 (1928), merely require the complainant to purge his contempt as a condition to granting him the relief he sought. In Gunter , in the process of reversing the decree dismissing the bill of complaint, Judge Henderson said for the Court: “It is virtually conceded that the effect of the decree of divorce a vinculo was to convert the tenancy by the entireties into a tenancy in common. Reed v. Reed, 109 Md. 690 , 72 A. 414 , 130 Am. St. Rep. 552 ; Meyers v. East End Loan & Savings Ass'n, 139 Md. 607 , 116 A. 453 .

In the absence of fraud or undue influence the Courts will not inquire into the contributions of the parties prior to the joint acquisition, or attempt an apportionment. Brell v. Brell, 143 Md. 443 , 122 A. 635 ; Reed v. Reed, supra. The general rule is also recognized that ‘by express provision of our chancery statute, any tenant in common has the right to secure separate enjoyment of his interest either by partition or by sale and division of the proceeds. Code 1939, Art. 16 Sec. 159.’ Cook v. Hollyday, 186 Md. 42 , 45 A. 2d 768, 771 .

See also Birckner v. Tilch, 179 Md. 314, 325 , 18 A. 2d 222 . Unless there was something in the decree of divorce that operated to confer a vested right of continued occupancy upon the wife, it would seem that the relief sought should have been granted.” Id. at 231. Ensor contends that “this ‘given to him to be held in trust for her use’ exception to the presumption of gift is not the law of this State and should not bé the law of this State.” ⁵⁵⁷ The Maryland cases other than Reed seem to have concerned themselves primarily with the statement that where one spouse furnishes the consideration but title to land is placed in the names of husband and wife as tenants by the entireties there is a presumption of gift and that in the absence of proof of fraud or undue influence this presumption cannot be overcome. However, we do not understand those cases as having