Gent v. Kelbaugh

Mitchell, J., delivered the opinion of the Court. Two appeals are embraced in the record in this case, both of which arise because of opposing contentions as to the construction of the ninth item of the last will and testament of Kate A. Mallonee, who died on the 29th day of December, 1930. The will was duly admitted to probate in the Orphans’ Court of Baltimore City, where letters testamentary upon the estate of the testatrix were granted to the Mercantile Trust Company of Baltimore, sole executor named therein. The ninth item is as follows: “I give, devise and bequeath the sum of fifteen thousand (315,000) unto the Mercantile Trust Company of Baltimore, a corporate of the State of Maryland, in trust and confidence, nevertheless, to hold the same with full power to sell all or any part thereof, to execute deeds, release mortgages in whole or in part, without the necessity of the order of any Court whatsoever, and any purchaser shall be relieved of the necessity of seeing to the application of the purchase money, and with full power to collect or receive the income therefrom and to invest or reinvest said trust estate with the following limitations : That I direct my said Trustee to invest the amount of this trust in first mortgages on real property or in ground rents, to yield not less than five per cent (5%) per annum upon the trust and for the uses following, to-wit: ³⁴⁵ “(a) If my sister, Mrs. Laura V. Baptiste, be living at the time of my death, then I direct my said Trustee to pay the income from the trust estate herein created, equally, share and share alike, in quarterly annual installments, to my sisters who may then be living, to-wit: Mrs. Ruth E. Merryman, Mrs. Mary Ida Drach, Mrs. Barbara E. Gent, Mrs. Maggie May Gill and Mrs. Laura V. Baptiste, as long as my sister Mrs. Laura V. Baptiste, shall live. “(b) Upon the death of my sister, Mrs. Laura V. Baptiste, I direct that the income paid to my sisters from said trust estate as directed in paragraph “a” shall immediately cease, and thereafter I direct my Trustee to pay the entire income from said trust fund of fifteen thousand dollars ($15,000) to my niece, Mary Gertrude Fowler, the only issue of my sister, Mrs. Laura V. Baptiste, in quarterly annual installments as long as she may live. “(c) Upon the death of my niece, Mary Gertrude Fowler, I direct my Trustee to pay the entire income from said trust fund in equal, quarterly, annual installments, to any sister or sisters of mine that may be living at the time of the death of the said Mary Gertrude Fowler, as long as any of them shall live. “(d) Upon the death of my niece, Mary Gertrude Fowler, and the last of my sisters, I direct my Trustee to divide equally among the children and decedents, if any, of my sisters, Mrs, Ruth E. Merryman, Mrs. Mary Ida Drach, Mrs. Barbara E. Gent, Mrs. Maggie May Gill and Mrs. Laura V. Baptiste, the corpus of said trust estate, per stirpes and not per capita, clear and free of this trust.” The testatrix was survived by all of the above named sisters, and pursuant to the provisions of Item 9, the executor distributed to itself, as trustee, the sum of $15,-000, and paid the net income therefrom, in equal shares to the five sisters named, until the death of Mary Ida Drach, which occurred in the month of February, 1934.

After the death of Mrs. Drach, the four surviving sisters ³⁴⁶ claimed her share of the income, which claim was resisted by John Homer Drach, her administrator. Ruth E. Merryman, another of the sisters of the testatrix, died in December, 1937, and the same contention arose as between the three surviving sisters and J. William Kelbaugh, executor named in the will of Mrs. Merryman. Due to these conflicting claims, the trustee was unwilling to make distribution of, and has refused to distribute, the respective shares of the income accruing from the trust created by said item, which Mrs. Drach and Mrs. Merryman, if living, would have received. Accordingly, the trustee filed in the Circuit Court of Baltimore City a bill of complaint in which, after setting forth the substantial facts above detailed, and supplementing them with the names of the then heirs at law of the two deceased sisters, it submitted that it could not safely continue the administration of the trust created by the above item of said will and distribute the income, unless the court assumed jurisdiction over the administration of the trust, and determined the rights of the parties to the cause respecting said income.

The bill is filed by the trustee as such under the ninth item of the will, against the administrator of Mrs. Drach, the executor of Mrs. Merryman, and the three surviving beneficiaries of the income, namely, Mrs. Gill, Mrs. Baptiste and Mrs. Gent. It is conceded that Mary Gertrude Fowler died on June 5th, 1935. Concretely the two questions raised, and with respect to which the trustee seeks the instructions of the court, are as follows: (1) Is the gift to the five named sisters of the testatrix in clause 9(a) of her said will, one to them for the life of their, sister, Mrs. Baptiste, with the result that shares of income theretofore payable to Mrs. Drach and Mrs. Merryman, are now assets in the hands of their respective personal representatives? Or (2) was it the intention of the testatrix that the income from such gift, during the life of Mrs. Baptiste, should be equally divided among living sisters only, with the result that the shares of income formerly paid to Mrs. ³⁴⁷ Drach and Mrs. Merryman, are not now assets in the hands of their respective personal representatives?

Separate answers on behalf of all defendants appear in the record, and by them no factual controversy is raised. The answers of the respective administrators of the two deceased sisters submit that under the true construction of the quoted paragraph of the will, the gift was in effect one to each of the five sisters, all of whom were living at the time of the death of the testatrix, for and during the period of the life of Mrs. Baptiste; and that therefore the one-fifth of the income formerly payable to Mrs. Drach and Mrs. Merryman, upon their respective deaths, became payable to their respective personal representatives, and is payable to them so long as Mrs. Baptiste lives. In conflict with the above contention, it is submitted by the answers of the three surviving sisters that by the true construction of said paragraph, it was the intention of the testatrix that none of the personal representatives or heirs of her said sisters should take or receive anything whatsoever by virtue of the quoted clause of the will, until after the death of Mary Gertrude Fowler and after the death of all five of said sisters. Accordingly, it is claimed by the latter respondents that the accrued, as well as future income accruing during the life of any of said sisters (Mary Gertrude Fowler being now deceased), should be divided equally between the sisters living at the time the income in question acxued in the past, or accrues in the future; the above process of income distribution continuing until the death of all of the sisters mentioned in said ninth item of the will; it following, of course, that the survivor among the sisters would receive the entire income during the period of her survivorship.

The chancellor decreed that the trustee pay to the respective personal representatives of the two deceased sisters one-fifth of the accrued net income from the trust estate created by said Item 9, accounting from the date of the respective deaths of said deceased sisters; and ³⁴⁸ further, that said trustee continue to pay to the respective personal representatives, or their successors, one-fifth of such net income as shall hereafter accrue and become payable from said trust fund, as long as Mrs. Baptiste shall live. From these decrees the appeals are taken. Reverting to the quoted item of the will, it will be observed that under its provisions, Mrs. Baptiste being alive at the time of the death of the testatrix, only such other of the named sisters as survived the testatrix became beneficiaries of the income from the special trust fund; and that having qualified as such beneficiaries, no direction is found in said item as to the disposition of the income payable to any of such other sisters, in event of their respective deaths during the life of Mrs. Baptiste. It will be also be observed that had the death of Mrs. Baptiste occurred prior to that of the testatrix, none of the other sisters would have immediately succeeded to any income from the trust estate; because the apparent intent of the testatrix was to establish a special trust to the end that the entire income therefrom would inure to the sole use and benefit of her niece, Mary Gertrude Fowler, for life, in event her mother was not living at the time of the death of the testatrix.

Moreover, it is also apparent that had Mrs. Fowler immediately succeeded to the use and benefit of the income upon the death of the testatrix, only those sisters who survived Mrs. Fowler would have at any time become beneficiaries of the income; and with respect to such of said sisters as may have qualified as beneficiaries of the income in either event, no direction as to the distribution of such income to their personal representatives is found in the will, in event of their death pending the trust. Under the clearly expressed terms of the ninth item of the will, it was possible for Mrs Baptiste, as the sole survivor of the five named sisters, to have likewise been the sole beneficiary of the indicated income for the term of her life, her daughter, Mrs. Fowler, succeeding her as like beneficiary during the period of the latter’s ³⁴⁹ life; and in that event no sister, heir or personal representative of a deceased sister, would have been the beneficiary of the income from the special trust fund, except Mrs. Baptiste and her daughter, Mrs. Fowler. While there is no contention before us as to the construction of the residuary clause embraced in Item 10 of the will, we deem it necessary to refer to it because of its bearing upon the final distribution of the corpus of the special trust fund, and because its directions are helpful in reaching a conclusion as to the intent of the testatrix, in solving the question now under consideration. By the 10th Item of the will the residuary estate of the testatrix is devised and bequeathed to said Mercantile Trust Company, in trust nevertheless to be held and distributed, both as to income and corpus, under the following directions: (a) First to divide the corpus or principal of said residuary estate into five equal funds or shares, and to separately hold each of said funds or shares, respectively, for the use and benefit of the same sisters named in the 9th Item of the will; (b) to invest each of said funds and pay the net income