Hardgrove v. Hardgrove

Horney, J., delivered the opinion of the Court. In this equity proceeding for the construction of the last will and testament of Berta Hardgrove, deceased, the principal question presented is whether the legacies given and bequeathed by the testatrix to her grandson and granddaughter created a charge on real property, a trust of the property, or neither a charge nor a trust. ⁶³⁷ The testatrix executed the will on July 21, 1954. She died on March 9, 1955. The will was admitted to probate on March 24, 1955, by the Orphans’ Court of Baltimore City and the executor named therein qualified as such on the same day.

The testatrix was survived by two sons, William H. Hardgrove (William) and Lyle W. Hardgrove (Lyle), and two grandchildren, Bud Weldon Hardgrove (Bud) and Bertha Ann Hardgrove (Bertha Ann), the minor children of Lyle by a former wife from whom he was divorced. William and his wife Virginia were the plaintiffs below and Lyle and his wife Edna and his minor children Bud and Bertha Ann were the defendants. On appeal, Lyle, as guardian of his children, is the appellant, and William and his wife and Lyle and his wife are the appellees. Since the legal position taken by Lyle and his wife in regard to the construction of the will was different from that taken on behalf of Lyle as guardian for his children, the divergent interests of the parties were represented below as well as here by separate solicitors.

The real property, which is the subject of this controversy is situate in Baltimore City, is located' on the west side of Saint Paul Street between Pleasant and Mulberry Streets, is known as 330 Saint Paul Street and is presently improved by a large house, which has twenty-five rent-able rooms, five apartments and one store. Although the will was prepared by an attorney at law in the usual form, the lack of a correlated testamentary plan makes it desirable to reassemble the numerous items pertaining to the property in question. The remaining items will be stated in such order, numerical or otherwise, as may be appropriate. The first item of the will (concerning the sale of two lots in St. Petersburg, Florida) was followed by the residuary clause which, though it was not mentioned, concerns the Saint Paul Street property.

That clause, designated as the second item in the will, provides as follows: “All the rest, residue and remainder of my Estate and Property, Real, Personal, Mixed, of whatsoever kind and wheresoever situate, I give, devise and bequeath unto my two Sons, William H. Hardgrove and Lyle W. Hardgrove, in equal shares subject, however, to the directions and limitations herein set out and defined.” ⁶³⁸ The first “limitation” with respect to the property in question was stated in the third item, which reads: “It is. my desire that my said two Sons do not sell my Rooming House Property, 330 Saint Paul Street, Baltimore, Maryland, until at least Twenty Years after my death.” The testatrix reiterated her desire with respect to this property in a part of the seventeenth.item, when, in elaborating on this “limitation,” she said: “In the Third Item of this my last Will and Testament, I have directed that my property 330 Saint Paul Street, Baltimore, Maryland, be.not sold until at least twenty years after my death and I now direct that none of the contents of said property are to be sold until at least twenty years after my death, same to be used in the conduct of the rooming and apartment house business therein. * * The fourth item provided that William and Virginia (from and after the death of the testatrix) should have, free of rent, the right to occupy and" use the rooms and facilities formerly occupied and used b.y the testatrix in the Saint Paul Street property. But the right so given-wás revoked by the eighteenth item in the event that William • (after completion of administration of estate) should refuse, or for any reason should thereafter fail, .to'manage arid'continue the conduct of the rooming, and apartment house business. • - The fifth item (upon completion of administration of estate) bequeathed William one-half of the net income from the property. The sixth item directed that the remaining one-half of net income should be divided into three parts: one-third thereof was bequeathed to Lyle; one-third was to be deposited in a savings bank in the name of Bud “to be used as far as it may be necessary. to do so for his education”; and the remaining one-third was to-be deposited in-the name of Bertha Ann with an identical restriction as to its use for her- education. The last clause of the fourteenth item directed the executor to also distribute the unexpended balance of the rent money collected during ad ⁶³⁹ ministration'“to the persons and in the proportions named and designated in the fifth and sixth items” of the will.

As to all moneys deposited in the name of the grandson and granddaughter, the testatrix stated in the tenth and eleventh items that: “* * * it is my desire and I so direct that the same may be drawn to be used for his [her] education, but that the balance of principal standing to his [her] credit, any additions thereto and accruing interest thereupon cannot be withdrawn from Bank by the said Bud [Bertha Ann] until he [she] attains the age of twenty-five years.” The seventh item provided that no improvements should be made to the property without the approval of both William and Eyle and the last clause of the sixteenth item directed that such improvements as were made should be paid for out of the rent money. The sixteenth item named and designated William “to manage and look after” the rooming and apartment house business after the administration of the personal estate had been completed, and, besides specifying in detail how he was to manage the business and what was to be paid out of the receipts from rent and what was not to be deducted therefrom, stipulated that William, in addition to the rent free accommodations provided in the fourth item, should receive a commission of not more than two per cent of the gross rents as extra compensation for services rendered in operating the business. The last clause of the seventeenth item further provided that title to all articles which were replaced pursuant to directions in the sixteenth item, as well as the replacements of mattresses, furniture, et cetera, in the rented rooms should be taken in the name of William and Eyle. The eighth item provided that in the event William should predecease Virginia (and the property had not been sold), the interest therein of William, as set out in the second and fifth items, should be divided into two equal parts (both as to income and principal) : one part was bequeathed and devised to Virginia.

The remaining part was further divided into three ⁶⁴⁰ parts: one-third was bequeathed and devised to Lyle; one-third was devised to Bud with the income therefrom to be deposited in bank subject to the same restrictions as to withdrawal set forth in the sixth and tenth items; and the remaining one-third was devised to Bertha Ann with the income therefrom to be deposited in bank subject to the same restrictions as to withdrawal set forth in the sixth and eleventh items. It was further provided that if the property were sold prior to the death of William the eighth item was to be null and void and of no effect; and that if Virginia should predecease William the item was to be null and void as to her. The ninth item provided that upon the death of Lyle, provided the property had not been sold, then, and in that event, the interest therein of Lyle as set out in the second and sixth items, should be divided into three equal parts (both as to income and principal) : one-third was bequeathed and devised to his widow; one-third was devised to Bud with the income therefrom to be deposited in bank subject to the same restrictions as to withdrawal set forth in the sixth and tenth items; and the remaining one-third was devised' to Bertha Ann with the income therefrom to be deposited in bank subject to the same restrictions as to withdrawal set forth in the sixth and eleventh items. It was further provided that if the property had been sold prior to the death of Lyle the ninth item was to be null and void and of no effect.

Of the remaining items, none of which have any bearing on the questions presented by this appeal, the first item directed the sale of the Florida lots (at a price of not less than $4500 as directed by the first clause of the fourteenth item), and the payment of $1000 to each of two named brothers. The twelfth item expressed the desire of the testatrix that Lyle give her stepdaughter (daughter of Lyle’s first wife) a business course or send her to some school of higher learning. The fifteenth item appointed the attorney who prepared the will as her executor. And the thirteenth item revoked all prior wills and codicils.

The bill for construction of the will sought the opinion of the court as to whether the third and seventeenth items created restrictions on the alienation of the fee simple estate in the property which were void as restraints on alienation; as to ⁶⁴¹ whether such items (the third and seventeenth) created a trust of the property for twenty years after the death of the testatrix ; as to whether William was required to deposit portions of the net income from the property for the education of Bud and Bertha Ann until they respectively reached twenty-five years of age; and as to such other matters as might come before the court at the hearing. Both William and Lyle contended that the provisions of the will restricting a sale of the property for at least twenty years was a restraint on alienation and contrary to public policy and was also repugnant to the absolute estate devised 1 to them by the second item of the will. Lyle and his wife Edna contended that a trust of the property was not created, that William should not be required to deposit further moneys to the credit of Lyle’s children and that the property should be sold and the net proceeds divided between William and Lyle. And Bud and Bertha Ann, by their guardian, contended that the restraint on alienation was not void, that a valid trust in their favor was created for twenty years and that the deposits to their credit should be continued until they reach twenty-five years of age when the balance in the respective accounts should be distributed to them.

The testimony taken at the hearing of the case by the chancellor 1 showed that William, with the assistance of his wife Virginia, has managed the property and operated the business and distributed the net income in accordance with the directions and desires expressed in the will of his mother. Apart from these managerial and operational duties William is employed as a civil engineer. His wife is not well and he was not certain how long he would be able to continue looking after the property and business. He expressed a belief that if a good offer were made for the property it would be to the advantage of himself and his brother to sell it.

There was testimony that the divorced wife of Lyle (who is the mother of Bud and Bertha Ann) and her daughter by another marriage would be able to manage the property and operate the business if William was ⁶⁴² unable to do so or wanted to stop. There was other testimony that Lyle had taken little interest in his children and that the testatrix was concerned about their welfare. There was also other testimony that the shares of net income belonging to Bud and Bertha Ann were deposited in bank regularly. The amount to the credit of Bud was more than that in the account of Bertha Ann because some of it had been spent for her education.

Neither of them finished high school. Bertha Ann completed the seventh grade, had taken music lessons and was interested in taking a course in beauty salon management. The record is silent as to the desires of Bud with respect to further education. He is now in the United States Army.

Bertha Ann, who was married in her middle teens, has one child and is now separated from her husband. There was also testimony that twenty years after the death of their grandmother Bud and Bertha Ann would be thirty and twenty-eight years of age respectively. ■ ■ As to whether the third and seventeenth items created restrictions on the alienation of the Saint Paul Street property which were void or otherwise repugnant to the devise of the property by the second item, the chancellor, who was of the opinion that the restraints imposed on. the sale of the property did not contravene any positive rule of law, concluded that this contention was not tenable because the intention of the testatrix, as expressed in her will, was to the contrary. As to whether the third and seventeenth items created a trust of the property in favor of the grandchildren of the testatrix for twenty years, the chancellor, after noting at the outset that the words “trust” or “trustee” were not used in the will, concluded that the testatrix did not intend to create a trust. Instead, the chancellor, having decided that the use of the words “it is my desire” (in the third item) in connection with the direction that the property be not sold for at least twenty years were precatory and that the use of the words “I have directed” (in the seventeenth item) that the property be not sold within the time specified had not changed the meaning of the words used in the third item, was of the opinion that the testatrix did not intend to mandatorily restrain a sale of the property during the twenty year period.

The holding of the chancellor is based ⁶⁴³ on his finding that while the testatrix intended that the property should ultimately be for the benefit of William and Lyle in possession, she wanted to project her rooming and apartment house business for a time into the future — a period of twenty years having been estimated as a practical period of time within which the projection should reasonably continue — in order to provide a home for William, income for him and for Lyle, and funds for the education of Bud and Bertha Ann; and that as a means to such ends, the testatrix created a home charge (by the fourth item) in favor of William (and his wife) until he died or ceased to operate the business or until the property was sold and also created executory devises (by the seventh and ninth items) in the event William or Lyle should die prior to a sale of the property before the expiration of twenty years. As a result of his conclusions, the chancellor