Evans v. McCoy

Rodowsky, J., delivered the opinion of the Court. This case involves whether adopted adults are "issue” under a will effective before the general adoption statute provided for adult adoptees. At stake is a farm devised to the testator’s children, none of whom had natural offspring. The devise is in fee, determinable "[i]n the event all of [the testator’s] children ... shall die without leaving issue living at the time of their death. . . .” The surviving child made the adoptions late in life, as a step in her sale of the farm.

Those who would take the gift over claim that the adoptions do not avoid the condition of defeasance and that the expressly retroactive statutory rule, under which "issue” includes any adopted person, absent a contrary intent plainly appearing from the will, is unconstitutional. Our opinion is that the statute is valid and controlling, and that the condition does not operate. The testator, Amos S. Evans, late of Cecil County, Maryland, died in 1899. Amos owned a farm of over 200 acres near Rising Sun.

He was survived by his widow, Agnes, by a daughter, Rebecca, born November 21,1896, by a posthumously born son, James Hugh, and by two brothers, James Hugh Evans and William S. Evans. William S. Evans, a practicing attorney in Elkton, prepared Amos’ longhand will of June 4, 1897. We are concerned here with the disposition of the residue under paragraphs 3 and 4 of the will which provide: 3—The rest and residue of my property and estate real, personal and mixed, I give devise and bequeath unto my daughter Rebecca S. Evans and ⁵⁶⁵ any other children who may be born to me hereafter, either before or after my death, and the survivor and survivors of them share and share alike. 4—In the event that all of my children (born in my lifetime or posthumous) shall die without leaving issue living at the time of their death, or in the event that I shall die leaving no children surviving me, whether born in my life time or posthumous, then I give devise and bequeath the said rest and remainder of my estate mentioned in paragraph three aforesaid hereof equally unto my brothers James H. Evans and William S. Evans and their heirs, it being my intention, and I so devise, give and bequeath that if either or both of my said brothers should be deceased at the time of the happening of said contingency, the share to which they (my said brothers) would each be entitled under the provisions hereof shall vest in their respective heirs at law. The testator’s son died in 1962 without issue but survived by a widow, Helen.

Rebecca married Earl R. Kirk who died in May 1977. Rebecca died on May 27, 1978 without having had any natural children but after she and her husband had adopted two adults. Amos’ brother, James Hugh, died without issue in the 1920’s. Amos’ brother, William, died in 1919.

He had eight children. The heirs of William are the plaintiffs-appellants in this case. Following the death of her brother in 1962, Rebecca leased the farm but she was not receiving sufficient income from it to suit her. Over the years she made repeated efforts to sell the property.

In about 1970 Rebecca, who resided in Wilmington, engaged Delaware counsel to assist in a sale of the property. On August 14, 1973 a contract of sale was signed. The contract covered 208 acres at a purchase price of $187,200, of which 71% was payable in four equal annual installments to be secured by a take-back purchase money mortgage. The ⁵⁶⁶ buyer was an agent for appellee Lowell W. McCoy (McCoy).

William B. Evans, one of the appellants, put counsel for McCoy on notice of the provisions of Amos’ will. On November 7, 1973 counsel for McCoy wrote to Rebecca’s attorney rejecting the title. The letter enclosed a memorandum from a legal research service which suggested that an adoption by Rebecca might solve the title problem. In a letter which Rebecca’s attorney wrote in 1979, in connection with his claim against Rebecca’s estate for legal services, he described the adoption procedure as having been worked out in consultation with, inter alia, McCoy’s attorney, and that it "was our thought that we may by pass the contingent remaindermen in the Amos S. Evans’ estate by seeking relief offered under” the section of the Maryland adoption statute dealing with construction of wills.

Under a decree entered November 16, 1973 by the Superior Court of New Castle County, Delaware, Rebecca and Earl Kirk adopted a married 21-year-old, Kathleen Lucille Husfelt. Rebecca was then 76 years of age. Delaware procedure for adult adoptions required no notice to any of the relatives of Rebecca nor any evidentiary hearing concerning the reasons for the adoption. On her deposition in these proceedings Mrs. Husfelt testified that the idea of the adoption originated with Rebecca and that the adoption made no practical difference in her relationship with Rebecca.

Mrs. Husfelt had known the Kirks as neighbors for 10 or 11 years. Mrs. Husfelt said she was at the Kirks’ home "every weekend, maybe during the week a couple of times” and that she and the Kirks went on trips together. The sale to McCoy closed on July 12,1974 under a written escrow agreement between McCoy and Rebecca and her sister-in-law, the widow of James, as "obligees” 1 which recited "the uncertainty recognized by all parties of whether or not the said Deed vests or will vest fee simple absolute title in ⁵⁶⁷ McCoy. . . .” In broad outline the escrow agreement provided that the cash deposit and the cash paid at closing would be held in escrow and that the deferred payments would be made into escrow. The condition of the escrow turned on the title, if any, to be obtained by McCoy at Rebecca’s death.

If a "court of final jurisdiction” decreed that McCoy had good fee simple absolute title to the property, then the escrowed funds, less a legal fee not to exceed $50,000, were to be paid equally to the obligees, their representatives and assigns. If McCoy did not obtain title, the escrowed funds, and accrued interest thereon, were payable to McCoy. In addition, and outside of the escrow, interest at the rate of 7% per annum was payable on the unpaid balance of the deferred portion of the purchase price to the obligees during Rebecca’s life, and thereafter into escrow. During Rebecca’s life, and beginning with the fifth year from the date of closing, McCoy was to pay to the obligees $2,212 annually which was agreed to represent the then present annual net income from the farm.

In August 1975 McCoy’s counsel, in a letter to Rebecca’s counsel, pointed out the possibility that the adoptee, Mrs. Husfelt, might predecease Rebecca and suggested that Rebecca "consider adopting at least one more person so that the odds will be increased that [Rebecca] will leave adopted issue surviving.” On March 26, 1976 in the New Castle County, Delaware court, Rebecca and Earl Kirk adopted Janet Ann Facciolo, who was married and age 53. Rebecca was then age 79. Mrs. Facciolo was a first cousin of Rebecca on Rebecca’s mother’s side. Rebecca and Mrs. Facciolo would visit occasionally.

Rebecca told Mrs. Facciolo that she wanted to adopt her "on account of this land in Maryland.” Neither of the adoptees was promised any money or other advantage in return for her consent to be adopted. Rebecca executed her Last Will and Testament July 29, 1976. It appointed Mrs. Husfelt and Mrs. Facciolo as co-executrices, without bond, and gave them her estate in equal shares in the event, as was the case, that Rebecca’s husband predeceased her. Both adoptees survived Rebecca. ⁵⁶⁸ In October 1978 the appellants brought this action of ejectment.

The trial court entered summary judgment in favor of the appellees. 2 We granted certiorari prior to consideration of the case by the intermediate appellate court. I The ultimate question is whether the adoptees are "issue” of Rebecca under her father’s will. In order better to understand the arguments advanced, it is desirable to review the general legal background out of which the case arises. The first adoption statute in Maryland was Chapter 244 of the Acts of 1892.

It applied only to minor children. Md. Code (1888,1898-1900 Supp.), Art. 16, § 62A. Under that Act the effect of a decree of adoption was "to entitle the child so adopted to the same rights of inheritance and distribution as to the petitioner’s estate ... as if born to such petitioner in lawful wedlock. . . .” Id., § 62C. (Emphasis added).

Section 62E provided that the "term 'child’ or its equivalent in a deed, grant, will or other written instrument shall be held to include any child adopted by the person executing the same, unless the contrary plainly appears by the term [sic] thereof, whether such instrument be executed before or after the adoption.” (Emphasis added). These provisions were in effect at the time of Amos’ 1897 will. Special laws had occasionally been passed by the General Assembly providing that a certain named adult person should thereafter be the adopted child of another named person, 3 but the general adoption statute was not amended ⁵⁶⁹ to include the adoption of adults until the enactment of Chapter 172 of the Acts of 1937. The rule embraced in the 1892 general adoption statute, by which the presumed inclusion of an adopted child within the term "child,” or its equivalent, was limited to instruments executed by the adoptive parent, is known as the "stranger to the adoption rule.” See Halbach, The Rights of Adopted Children Under Class Gifts, 50 Iowa L. Rev. 971 , 978-998 (1965).

Thus, it was held in Eureka Life Insurance Co. v. Geis, 121 Md. 196, 199 , 88 A. 158, 159 (1913) that an adopted child did not take under the will of the mother of the adoptive father where the gift was to the adoptive father for life and then to his children equally. A substantial revision of the adoption laws became effective June 1,1947, under Chapter 599 of the Acts of that year. Included was the elimination of the stranger to the adoption rule from the statute. "Child” in a will meant "any adopted person,” unless the contrary plainly appeared by its terms. 4 At the same time the laws of intestate distribution were amended to provide that "[an] adopted child shall take from, through and as a representative of its adopting parent or parents” and their "lineal or collateral kindred ... in the same manner as a child by birth. . . .” Code (1939, 1947 Cum.

Supp.), Art. 93, § 139A. Gutman v. Safe Deposit and Trust Co., 198 Md. 39 , 81 A.2d 207 (1951) held that the 1947 amendment did not apply to wills executed and effective before its enactment. However, the General Assembly rejected prospective application, as applied in Gutman , for the 1947 rule. By Chapter 287 of the ⁵⁷⁰ Acts of 1961 it added the language italicized below.

At the time of Rebecca’s death on May 27, 1978, Md. Code (1957, 1973 Repl. Vol.), Art. 16, § 78 (c) provided: The term "child,” "heir,” "issue,” "descendant?’ or an equivalent in a deed, grant, will or other written instrument shall be held to include any adopted person, unless the contrary plainly appears by the terms thereof, whether such instrument was executed before or after the entry of the interlocutory decree of adoption, if any, and if none, before or after the entry of the final decree of adoption; in the event such instrument was executed prior to June 1,1947, the provisions of this subsection shall apply to those adopted persons as to whom the interlocutory decree of adoption, if any, and if none, the final decree of adoption was entered on or after June 1, 1947. [Italics supplied.] The effect of the 1961 amendment was involved in the five Purifoy cases discussed below. The ultimate question in that litigation was whether a child who had been adopted into the Bauemschmidt family on January 13, 1948 took a gift to "children” or "descendants” of her adoptive father under wills and a deed of trust which were executed by various members of the adoptive father’s family in the period between 1911 and 1935 and all of which were effective prior to June 1, 1947. In Purifoy I (Purifoy v. Mercantile-Safe Deposit and Trust Co., 398 F. Supp. 1075 (D. Md. 1974) it was held that since the instruments and surrounding circumstances failed to reveal that the contingency of adoption was ever considered, no actual intention of the makers concerning adopted children was present.

Questions of interpretation and of prospective or retroactive application of the 1961 amendment were certified to this Court. In Purifoy II (Purifoy v. Mercantile-Safe Deposit and Trust Co., 273 Md. 58, 67 , 327 A.2d 483, 488 (1974)) we held that the 1961 amendment rendered the 1947 amendment "retrospective, so that the terms 'child,’ 'children,’ 'descendants,’ and the ⁵⁷¹ equivalent in instruments executed and effective prior to June 1, 1947, include adopted children where the adoption occurred after June 1,1947.” We expressed no opinion on the constitutionality of the retrospective application. On return to the United States District Court in Purifoy III, it was held that § 78 (c) of Article 16 provides a rule of evidence and not a rule of substantive law and that it could constitutionally be applied to instruments executed and effective before June 1, 1947. Purifoy v. Mercantile-Safe Deposit and Trust Co., 398 F. Supp. 1082 (D. Md. 1975).

On appeal to the United States Court of Appeals for the Fourth Circuit that Court again certified a series of questions to this Court which we answered in Purifoy IV (Mercantile-Safe Deposit and Trust Co. v. Purifoy, 280 Md. 46 , 371 A.2d 650 (1977)). Within the framework of the finding by the District Court that the makers of the instruments had no actual intention with respect to adopted children, this Court held that the District Court had properly applied Maryland rules relating to construction. We said that "[b]y force of the statutory language contained in § 78 (c) a determination respecting membership in a class of 'children’ to be ascertained in the future is governed by the law in effect at the time membership in the class is determined, i.e., by reference to the provisions of § 78 (c), unless the maker expressed an actual intention that the future class determination be governed by the law in effect at a different time.” Id. at 57, 371 A.2d at 657 . In answer to the fifth certified question we said that the adoptee’s interest in the remainders "vested in 1961 when the 1961 amendment to § 78 (c) afforded retroactive application to pre-1947 instruments, and that interest vested absolutely in 1972” on the death of the life tenant-adoptive father.

Id. at 59, 371 A.2d at 658 . There was no opinion of this Court on the statute’s constitutionality. Judge Smith, joined by Judge Digges, dissented. On one level of analysis the dissenters argued against a retrospective construction of § 78 (c) because of the well established principle in Maryland that a will is to be construed according to the law in force at the time it takes effect.

They considered it improper to define intention by ⁵⁷² using a statute which did not come into existence until many years after the effective date of the instrument, in the absence of a clear indication in the instrument that law of a later date should be used. The dissenters were also of the view that § 78 (c) could not be retrospectively applied because the interests of those who would take remainders by gift over, on the death of the adoptive father without surviving children, were sufficient to be protected under present Article 24 of the Maryland Declaration of Rights. 5 Purifoy V is the per curiam opinion of the Fourth Circuit. Purifoy v. Mercantile-Safe Deposit and Trust Co., 567 F.2d 268 (4th Cir. 1977). That Court said the views of the dissenters in Purifoy IV "sharpen the implications of the majority opinion” and held that, under the Fourteenth Amendment’s due process clause, there was no "unconstitutional retroactive divestiture of interests already vested” because "under Maryland law, as enunciated by its Court of Appeals, those interests did not absolutely vest until the death of the life tenant....” Id. at 269.

Two additional statutory provisions in effect at Rebecca’s death bear on the construction of "issue” in Amos’ will. With respect to foreign adoption decrees, Code (1957, 1973 Repl. Vol.), Art. 16, § 80 in part provides: The status of adoptive relationship created by a valid final decree of adoption in another jurisdiction shall be given full faith and credit by the courts of this State. When the question is properly presented to a court in this State and if the party against whom judgment would be rendered is subject to the jurisdictional processes of the courts of this State, the courts shall apply the legal effects of a final decree of adoption made in this State to such ⁵⁷³ adoptive relationship created by a final decree of adoption in another jurisdiction.

As to the adoption of adults, Code (1957, 1973 Repl. Vol., 1977 Cum. Supp.), Art. 16, § 82 states that the "legal effect of an adoption of a person over 18 years of age shall be the same as that of the adoption of a minor, except as to guardianship.” Amos’ will, stripped to the essentials relevant here, devised a determinable fee in the farm to Rebecca and an executory interest in it to the heirs of William. Devecmon v. Shaw, 70 Md. 219 , 16 A. 645 (1889).

The fee would shift to William’s heirs on Rebecca’s death without leaving issue surviving her. Certain themes run throughout appellants’ arguments as to why the adoptees are not "issue.” They correctly assert that at the time Amos made his will and at his death the general adoption statute did not then encompass the adoption of adults. They emphasize that Rebecca sought to use adult adoption to "remove” a restriction on the estate devised to her. Central to the controversy is the retroactive rule of § 78 (c) which would include the adoptees as "issue.” Appellants frame three arguments designed to avoid, or void, that statute.

They are that: 1. It plainly appears by the terms of Amos’ will that "issue” does not include any adopted person; 2. The reference to "any adopted person” in § 78 (c) should be construed to exclude a person adopted under the circumstances presented here; and 3. Application of § 78 (c) in this case would be unconstitutional.

II As to whether the terms of the will plainly show an intent to exclude adoptees, appellants argue that Amos "could not have conceived that 'issue’ could include an adopted adult,” that it would have been "absurd” to have defined "issue” in the will to exclude adopted adults who could not possibly have been included, and that there was no basis for reason ⁵⁷⁴ able contemplation that some day "issue” might include adopted adults. In essence the argument is that "issue,” standing alone, not only includes direct, lineal, blood descendants but also makes plain an intent to exclude adopted persons. This is contrary to Purifoy IV where we said that "[b]y its enactment of § 78 (c) the Legislature plainly recognized that the bare use of terms such as 'child,’ 'issue,’ 'heir’ and their equivalent in trust instruments sheds no real light on the maker’s actual intent with respect to adopted children.” 280 Md. at 56-57 , 371 A.2d at 656-57 . As Judge Northrop pointed out in Purifoy I, the words construed in § 78 (c) "by themselves do not indicate the actual intention of the testator towards adopted children.

Otherwise the Legislature would not have assumed the task of assigning a meaning to the words.” 398 F. Supp. at 1079 (emphasis in original). Secondly, the appellants point to the inclusion in the will of a condition of defeasance with a gift over. This they say demonstrates an intent not to permit the condition to be rendered ineffective at Rebecca’s option by her adoption of adults. If valid, this argument would not be limited to adult adoptions, since it turns not on who is adopted but on the presence of the condition.

Appellants’ contention, based on the presence in Amos’ will of this particular condition, cuts too broadly. Here the gift is to Rebecca, but if Rebecca dies without leaving issue surviving her, then to the heirs of William. Amos’ intent as to adoptees in selecting "issue” for use in the condition of defeasance is not plain from the instrument. The term is not even used to insure that his children’s "issue” would take under his scheme of disposition.

If Rebecca had had a natural child, the farm was not restricted to that child on Rebecca’s death. She could have devised it out of the bloodline. Had Amos meant for the farm to stay in the family for his grandchildren, if any, he did not say so. The condition used does not demonstrate so clear an intent to restrict exclusively to the blood as to overcome the statutory presumption.

Nor do we see, for purposes of avoiding § 78 (c), why the use of "issue” in a condition which does not further clarify ⁵⁷⁵ the term supplies the plain meaning as to adoptees which the Legislature has said is lacking from the word alone. For example, if the gift were "to A for life and, upon the death of A leaving issue surviving A, then to the issue of A [construed as words of purchase], but if there be no issue of A surviving A, then to the heirs of B,” appellant’s argument would deem the use of "issue” in these conditions sufficient to avoid § 78 (c) and to exclude adoptees. Whether the class terminology is used solely to set forth a condition, or whether it is used to describe both the condition and the takers upon occurrence or failure of the condition, is not material under § 78 (c). What is material to avoiding the operation of § 78 (c) is whether it plainly appears from the terms used, other than the generic one, that the intent is to exclude adoptees.

Appellants also rely on item 3 of the will which leaves the residue to Rebecca "and any other children who may be born to me hereafter. ...” Turning then to item 4 which refers to the contingency that "all of my children ... shall die without leaving issue,” appellants say that "children” as used in item 4 necessarily refers to children born to the testator, in the same sense as expressly set out in item 3. From this appellants conclude that the parallel structure of "issue” with "children” in item 4 indicates that "issue” is also to be understood in the sense of persons born to Rebecca and not adopted. We intimate no opinion as to whether a rule of parallel construction would even be applicable here, absent § 78 (c). However, reliance on that rule of construction, which necessarily means the intent is not clear on the face of the words used, does not satisfy the requirement of § 78 (c) that the intent contrary to the inclusion of adoptees plainly appear from the terms of the instrument.

Ill Appellants also argue that § 78 (c) should be construed to be inapplicable to the facts here. They say: The term "issue” as used in Amos Evans’ will does not include the adults adopted by [Rebecca] when ⁵⁷⁶ she was [nearly] 77 and 80 years old because "adopted person” within the meaning of the presumption established by the statute means a person whose adoption is bona fide and consistent with the underlying policy of the adoption statutes and not for the fraudulent or improper purpose of "bypassing” a gift over to remaindermen and nullifying the condition testator explicitly imposed on the estate granted to the adopting party. On this phase of the case the trial court summarized the record by stating that § 78 (c) "provided a method by which the contingent interests could be defeated,” that "the advantage of that statute was sought by [Rebecca]” and that "her use of the statute had an ulterior motive, [namely] to permit the sale of the real estate and defeat the contingent interests. .. .” The trial court concluded that this use of the statute was not prohibited and was legally effective to prevent the occurrence of the condition of defeasance. There are at least three steps in appellants’ argument.

The first element requires that there be enunciated a policy of the law which refuses to recognize under certain circumstances one or more of the effects of an adoption. Next, the circumstances of the instant case would have to fall within that policy. Thirdly, this Court, as a matter of statutory construction, would have to be able to read the policy into § 78 (c). At the threshold the parties cite Ex parte Libertini, 244 Md. 542 , 224 A.2d 443 (1966), which was an appeal from the dismissal of an adoption petition.

A 56-year-old unmarried sergeant in the Women’s Army Corps sought to adopt an unmarried 35-year-old captain in that Corps. The trial court dismissed the petition without hearing and we reversed on the ground that nothing in the statute required the adopting person to be married. McCoy finds comfort in our statement that "the Maryland statutory provisions permit the adoption of an adult by an adult for purposes of inheritance. . . .” Id. at 544 , 224 A.2d at 444 . Appellants see significance in our reference to the ⁵⁷⁷ Chancellor, on remand, "making his determination as to whether there are any compelling reasons why the petition for adoption should not be granted. . . .” Id. at 544 , 224 A.2d at 445 .

We see very little assistance in Libertini for resolution of the problem at hand. Here we deal with completed adoptions which are facially valid under Delaware law. Here we are asked to look behind the decrees to the motives underlying the adoptions, for the purpose of determining whether the law will refuse to consider the adoptees as the issue of Rebecca in the face of § 78 (c)’s literal application. There are a number of cases in which the question of whether an adult adoptee takes under the wording of an instrument has been raised.

At the level of the reasoning expressly articulated by the court, these cases generally are decided on the "intent” of the testator without reference to statutory aids designed to assist in resolving the problem. They have gone both ways. See Annot., 21 A.L.R.3d 1012 , 1038-1044 (1968). 6 From the standpoint of the motive of the one adopting, the decisions of other courts do not reflect any consistent approach. The argument that the adoption of an adult and of the adult’s two minor children was not made in good faith, but merely for the purpose of bringing the adopted persons under a will to the exclusion of the taker of a gift over, was made to the Supreme Court of California.

That court, in dicta, observed that "it is doubtful if [the adopter’s motive] would be significant... unless it showed the invalidity of the ⁵⁷⁸ adoption which it does