Farmer v. Associated Professors of Loyola College

⁴⁵⁷ Adkins, J., delivered the opinion of the Court. The original bill of complaint, and the first and second amended bills, were filed by Mary A. Farmer to set aside alleged gifts by her to the defendant, the Associated Professors of Loyola College in the City of Baltimore, a corporation, the present appellee, through Rev. Father Peter J. O’Carroll, “former Treasurer and now Assistant Treasurer, of the corporate defendant.” Before the suit came to' trial the original plaintiff died, and on proper motion the administrator c. t. a. of her estate, the appellant, was substituted as plaintiff; and Father O’Carroll also died, leaving the appellee as the only defendant. On the first trial demurrers to the bill and the first amended bill were sustained, and on appeal from the ruling on the second demurrer the. order was affirmed and the case remanded. The case is reported in 162 Md. 431 , 160 A. 12, 18 .

Whereupon the plaintiff filed his second amended bill, omitting the claim included in the first bill for the gift of $20,000, alleged to have been in Liberty bonds, which was not included in the paper writing sought to bo set aside, the claim for which wo held was not cognizable in equity. In other respects the second amended bill does not differ materially from the bill which was before us in the former appeal. The allegations in the second amended bill, filed on June 21st, 1932, so far as it is important to summarize them, are substantially as follows: That plaintiff, Mary A. Farmer, was possessed of a large estate, consisting almost entirely of bonds, securities, cash money, and other personal property, her real and leasehold property being a comparatively small part of her estate; that she was unmarried and sixty-three years of ag’e; that her entire source of income was from her said estate, amounting to approximately $180,000; that the Rev. Father Peter J. O’Carroll, former treasurer and now assistant treasurer of the corporate defendant, is a priest of the Catholic faith, a member of the Society of Jesus, and one of the officiating priests of St. Ignatius Church in Baltimore City, having been treasurer of the corporate defendant ⁴⁵⁸ from 1908 to- 1924, and since then the assistant treasurer; that the Associated Professors etc. is a body corporate, duly incorporated, and although described in its charter as an educational institution, is entirely composed of and conducted by priests of the Roman Catholic Church, and has always been engaged in the management and control of St. Ignatius Church; that the greater part, if not all, of the estate of which the plaintiff was heretofore possessed was derived by plaintiff directly and indirectly from her uncle, Patrick-Quinn; that said Quinn died in 1886, leaving his estate in trust for the benefit of his three sisters, Sarah Craig, Margaret Quinn and Bridget Quinn, during their lives and the lives of the survivors and survivor, with remainder to the six children of another sister, Ann Farmer, of whom Bridget Quinn was the survivor; that four of the six children of Ann Farmer predeceased Bridget Quinn, none of them except James F. Farmer leaving any children; that James F. Farmer left five children, four of whom are still living; that- the plaintiff and her sister Margaret, now deceased, were the remaining and surviving children of Ann Farmer, and after the death of Margaret the plaintiff received the estates of her uncle Patrick Quinn, and also .the estates of her brothers 0 ohn F. Farmer and Patrick J. Farmer; that the four living children of plaintiff’s brother James F. Farmer are the only persons who would inherit and take as distributees the plaintiff’s property and estate, which upon the decease o-f the plaintiff ought naturally and properly' to go to the survivors of the Quinn and Farmer blood; that it was the definite and settled desire, intent, and expectation of plaintiff that her said estate- should go to her said nieces and nephews; that the said Father O’Carroll, formerly treasurer and now assistant treasurer of said corporation, has for many years been an officiating priest of St. Ignatius Church, of which plaintiff for thirty-three years has been a devout member and communicant; that he has also- been the father confessor and spiritual adviser of plaintiff for the past twelve years or more; that on or about the ⁴⁵⁹ 22nd day of September, 1920, Margaret Farmer, plaintiff’s sister, died, and after her death Father O’Carroll, by constant and assiduous clerical and spiritual attentions to the plaintiff, his parishioner and penitent, gained and acquired her confidence, faith, and trust, became and established himself as her business as well as her spiritual adviser, and acquired a controlling influence and dominion over her mind; that plaintiff, by reason of her age, lonely and grieved condition, and being debilitated in mind and body and greatly depressed and nervous as the'result of the death of her sister, became easily subject to the dominating influence and ascendency of Father O’Carroll, who represented himself as acting solely for her benefit; that- acting as the representative and agent of said corporation he on April 20th, 1921, influenced and prevailed upon her to deliver to him for said corporation $135,350 in United States Liberty Loan Bonds, 4% per cent., which transaction he falsely informed and led plaintiff to believe was merely a loan, and that said bonds were returnable and would be returned to her upon her request, the interest maturing upon said bonds to be paid to her as long as the plaintiff should allow said loan to' continue, and the said bonds to remain the property of the plaintiff; that he induced plaintiff to sign a, paper writing dated April 20th, 1921, by taking unfair advantage of her trust and confidence in him as her spiritual and business adviser, and fraudulently misrepresenting the meaning of said paper writing as aforesaid, and that plaintiff signed said paper writing relying on said false representations, without deeming it proper or appropriate to read it, and without any other or independent advice; that she never received a copy of said paper and only recently learned that said paper writing purports to evidence an absolute gift of said bonds, the interest thereon to be paid her for life; that at all times since the delivery of said bonds and the signing of said paper writing plaintiff considered said bonds to be, and treated them as, her own property, paid income taxes thereon, and always claimed and was allowed her full exemptions by reason of such own ⁴⁶⁰ ership. The bill goes on at great length dealing with subsequent occurrences, allegations as to which are well summarized in the opinion filed in the previous case, and need not be repeated here.

The prayer of the bill is: (1) That the transfer and delivery of said bonds and said paper writing be vacated and declared null and void, and that defendants be required to return said bonds with all unpaid interest. (2) Eor an account. (3) For discovery. (4) For general relief.

On the former appeal it was held that the bill of complaint stated a good cause of action as to the bonds now claimed, but it was held to' be multifarious and therefore demurrable. The answer denies that there was any misrepresentation or deception, and avers that plaintiff read and understood the paper which she signed, and intended the transfer of the bonds as a gift, and did not at any time consider said transfer as a loan; that she was in full possession of her faculties and of strong will; that prior to the year 1921 James Q. Farmer, one of the nephews of the plaintiff, endeavored to secure a considerable portion of the estate of the plaintiff through various means, as will more fully appear by reference to the case of Farmer v. Farmer, 137 Md. 69 , 111 A. 464 , and ever since the litigation referred to in that' case the nieces and nephews of plaintiff have been very unfriendly with the plaintiff; that it had always been the long-cherished desire of the plaintiff to erect a suitable memorial in memory of the Farmer and Quinn families, and after much thought and deliberation she decided, of her own free will, without any influence from any one; to make an absolute disposition and gift of said bonds in such manner that she would be entitled to receive certain definite income during her lifetime; after which the income would cease; and that the thought uppermost in her mind at that time was to work out an arrangement whereby vexatious litigation similar to that she had been through would be avoided, and after her death nothing would have to be done to- carry out her intentions, and in order to accomplish this she entered into said ⁴⁶¹ agreement with, the corporate defendant; that she has always been thoroughly satisfied with the arrangement made, by her and as the result of which said bonds were sold soon after their receipt and the proceeds used to help pay for “Evergreen,” the new home of the corporation, with her knowledge and approval; and that the original building thereon has always been known as the “Quinn-Farmer Memorial Building.” The chancellor dismissed the bill, and from that decree this appeal was taken. He held that there was a confidential relation between the plaintiff and Father O’Carroll; but in view of the documentary evidence in the shape of receipts over a period of ten years, in which the payments receipted for were expressly stated to be for interest on “gifts,” plaintiff could not be heard to say that she never so intended or understood, “to- say nothing of the formal paper prepared by Mr. Wbelan and left with her three! days for her consideration and signature, and later signed by her, and an executed duplicate copy tendered her to ke-e-p.” He found other-cogent facts which convinced him that she understood and intended what she- did, and that in view of her life and disposition there was nothing unreasonable in what she did, but. that it was the result of a definite purpose. The plaintiff entirely fails to make out a case; of actual fraud or misrepresentation.

Of course, the bill of complaint, although sworn to, is not evidence of the facts therein alleged in favor of" the plaintiff. And testimony that the allegations therein were in accordance with statements made by plaintiff to her counsel was improperly admitted over objection. It is a close- question whether confidential relations could be presumed from the facts of this ease. The weight of the testimony seems to disprove the allegation of the bill that Father O’Carroll was plaintiff’s father confessor and spiritual adviser; aud it is not satisfactorily established that he was- her business agent, as alleged.

But unquestionably their relations as priest and parishioner were very close and intimate, and, without deciding that there- were confidential ⁴⁶² relations in the legal sense, we shall consider the case on that basis; it being the one most favorable to the appellant. And in the view we take it will not be necessary to consider the questions of ratification and estoppel. The subsequent acts of the plaintiff will be considered only in so far as they reflecf on the original transaction. We are indebted to the appellant’s attorney for 'a comprehensive survey of the whole field of judicial decision on this subject, both British and American.

However, the law is so well established in this state by our own decisions, it will not be necessary to refer to English cases, or to those decided in other states. And at the outset we refer to. Zimmerman v. Frushour, 108 Md. 115 , 69 A. 796 , where this.court definitely repudiated the supposed English doctrine that independent advice is a prerequisite to the validity of every gift where confidential relations, exist between the donor and donee. That was the case of a gift from a servant to her employer.

Judge Pearce, speaking for this court, analyzed the English decisions and showed that even there the cases did not support the- doctrine as applicable generally. See, also, Taylor v. Pivec, 149 Md. 526 , 131 A. 757 , where Zimmerman v. Frushour is cited with approval. Also, cited in Farmer v. Carroll, supra. The only case in Maryland where it was held on the facts That absence of independent advice was fatal is Coburn v. Shilling, 138 Md. 177 , 113 A. 761 , where it was held such advice was necessary under the conditions stated, where a 'very ill and old man was presented by his. nurse with a paper in the form of a deposit in trust, in order to comply with the forms of the bank, as a substitute for an order he had given, which was confessedly intended to enable the nurse to draw out money for his convenience.

In the substituted paper the purse was made a beneficiary. Nor is the reservation of power of revocation necessary. Brown v. Mercantile Trust & Deposit Co., 87 Md. 377 , 40 A. 256 . Such a reservation would seem anomalous in the case of an absolute gift. ⁴⁶³ Nor is the reservation of an income for life from the thing given, or a requirement that the donee pay interest to the donor for life, sufficient to defeat a gift.

Howard v. Hobbs, 125 Md. 636 , 94 A. 318 . What was said in Simpson, v. League, 110 Md. 286 , 72 A. 1109 , may be quoted as a good starting point for the consideration of this case. There a woman over eighty years of age, without relations closer than a sister of the half blood, in pursuance of a purpose, entertained by her for a long time, to give her property to the defendant, in September, 1907, executed a deed to- him of all her real estate. She had previously devised this property to him by will, but was persuaded and led to' believe by the defendant, who was an acquaintance but not related, that in all probability any will made by her at that time of life would be contested and set aside- by reason of her infirm condition, and was also- influenced and persuaded by him that it would be better for her to place her property under his control and management during her lifetime.

For the purpose of putting him in control of her property, she, on September 16th, 1907, withdrew all of the money to her credit in the savings banks and redeposited it in the same banks in her own name, in trust for herself and the defendant, joint owners, subject to- the older of either, the balance at the death of either to belong to the survivor, and also directed her counsel to prepare the above mentioned deed of said real estate conveying it to the defendant absolutely. The defendant withdrew $28,876.66-from one of the banks and redeposited it as a trust for himself and wife, and withdrew $5,000 from said bank and applied it to his- own use. He testified that these changes in the bank were- made by her direction. The court sustained the deed, but found upon the evidence that plaintiff did not fully understand the bank transactions, and directed certain changes to- be made therein to correspond with what appeared from the evidence to- have been her intention in regard thereto, so that she would get the benefit of the- deposits during her life. ⁴⁶⁴ The court said: “When the aid of a court of equity is invoked to pass upon the validity of a mere gift, without substantial consideration, made by an aged and ignorant person, of what constitutes almost his or her entire estate, the transaction will be closely scrutinized; and, unless it be clearly shown that the donor possessed the requisite legal capacity, and acted freely and without undue influence or constraint in making the gift, it will not be upheld.

The court in such cases will consider not only the condition of the donor ‘at the time of the execution of the instrument, and the circumstances of the execution itself, * * * but also his previous life, habits, and relation to others, so as to ascertain the natural or probable objects of his bounty, and especially to discover his settled purpose, if he had any, in regard to the disposal of his estate.’ Where fiduciary relations existed between the parties to the transaction, the burden has uniformly been placed upon the donee to establish to the satisfaction of the court the facts necessary to uphold the gift. (Citing a number of Maryland cases.) On the other hand, it is equally clear that the law concedes to a person of sound mind the right to dispose of his property in any manner he may deem proper, not inconsistent with its policies, and with such a person, where there is an absence of fraud or imposition, there is no such thing as an equitable incapacity, .and a gift voluntarily made and completed by him will not be set aside because he subsequently changes, his mind, and regrets the transaction, or because the court regards his act as absurd or improvident. Kennedy v. McCann, 101 Md. 651 , 61 A. 625 ; Bauer v. Bauer, 82 Md. 241 , 33 A. 643 ; Reed v. Reed ( 101 Md. 38 , 60 A. 621 ), supra; Gunther v. Gunther, 69 Md. 560 , 16 A. 219 ; Goodwin v. White, 59 Md. 509 ; Vitters v. Beaumont, 1 Vern. 100; Wilson v. Farquharson, 5 Md. 139 .” See, also, Eakle v. Reynolds, 54 Md. 305 ; Brush v. Green, 86 Md. 494 , 39 A. 863 ; Henry v. Leech, 123 Md. 436 , 91 A. 694 . The testimony shows that the only relatives of Mary A. Farmer, the original plaintiff, were her nephews and nieces, ⁴⁶⁵ ■on whose behalf this suit was prosecuted after her death; that by reason of a suit on behalf of these nephews and nieces,