Hohman v. Hohman

Adkins, J., delivered the opinion of the Court. In this case a bill was filed by the children of John J. Hohman, a deceased son of Henrietta Hohman, against the executors of her will, and all the beneficiaries thereunder other than the plaintiffs and a deceased daughter for whom her executor is substituted. ⁵⁹⁶ The said testatrix in the fourth clause of her will set out the real and personal property owned by her and valued each item “for the purpose of making division of my estate among my nine children as hereinafter provided.” In the fifth clause she authorized and directed her executors “to appraise the whole of my estate, real and personal, not herein specifically bequeathed, the values of the properties mentioned in the fourth clause hereof shall control as to those, all other properties shall be valued at the then market value. After they have appraised the same, I authorize and direct them to divide the same into nine equal parts, one of which, I give, devise and bequeath unto each of my nine children, John J., Charles G., George A., Conrad P., Henry J., Frederick William and Franklin O. Hohman, Elizabeth E. Orem and Clara V. Keller, absolutely. “In making the division of my estate I direct that the properties 2026, 2032, 2038 and 2040 E. Monument Street factory, plant and lot of ground northeast corner of Monument and Castle Streets, wood lot southeast corner of Monument and Castle Streets, four stalls in Belair Market and three stalls in Forth East Market, shall be allotted to my said sons, John J., Charles F., George A. and Conrad P. Hohman at the valuation of $100,000.00; if their combined four shares of my estate shall not amount to that amount after charging them with any debt, loan or advancement I may have made them, and with any sums of money my estate may have paid to them by reason of my endorsement or guarantee, I authorize and direct my executors to accept from my said four sons a mortgage on said properties devised and bequeathed them for the difference between said sum of $100,000.00, and the net value of their four shares; said mortgage to be for ten years and bear interest at the rate of five per cent, per annum. Any mortgage taken by my executors under the aforesaid power shall become part of the residue of my estate and divided as hereinbefore directed among my other children.” In the sixth clause she appoints her son John J. Hohman and her daughter Elizabeth E. Orem executors without bond, ⁵⁹⁷ and provides tliat: “For the purpose of carrying out the provisions of this my last will and testament, after said executors shall have valued and divided the residue of my estate and property as herein directed, I authorize and empower them to execute and deliver deeds to my said children of their respective shares so that each shall hold in severalty.

I also authorize and empower my said executors to make sales of such parts of my estate, real and personal, as in their judgment shall he necessary to fully carry out the provisions hereof, after such sales have been reported to and finally ratified by the court having jurisdiction over my estate, and on the payment of the purchase prices, to execute and deliver deeds of the properties sold under the power aforesaid.” The will was dated February 3rd, 1916. In the following June testatrix executed the first codicil to her will, wherein she gave the one-ninth part previously given to her daughter Clara Y. Keller, to her daughter Elizabeth E. Orem, trustee, and her successors, in trust to hold and manage, invest, and reinvest the same and to pay the income therefrom to the said Clara Y. Keller, until such time as said trustee or her successors should be satisfied that it would be for the interest of said Clara to have the absolute title to her part, when the trustee and her successors are directed to convey same to her clear of the trust. It is also provided that the said Clara shall have the right to dispose of her part by will, and that in event of her death intestate before the conveyance to her, her part shall be conveyed to her surviving children, or if no children surviving, then to her heirs at law. By a second codicil, dated February 3rd, 1921, she revoked the devise of Ko. 2032 East Monument Street to her said four first-mentioned sons, and devised the same, together with Ko. 2030 East Monument, to her daughter Clara V. Keller, for life, and after her death to said sons.

By a third codicil, dated, June 23rd, 1922, John J. Hohman, one of the children mentioned in the fifth paragraph of the will, having died, she directs her executors to divide all of the properties referred to in said paragraph into eight parts instead of nine, seven of which she devises and be ⁵⁹⁸ queaths to her surviving children other than Clara, and the remaining eighth part to Elizabeth E. Orem, trustee, and her successors in trust for her daughter Clara “for the uses and trust purposes as set forth in the first codicil * * *. All of said undivided one-eighth interests, however, to- be held subject to the charge of a sum of money equal to the distributive share of my said estate which my son, John J. Hohman, would have received under the terms of my last will and testament if living at the time of my death, which I give, devise and bequeath unto John, Grace and Elizabeth Hohman, children of my deceased son, John J. Hohman, per stirpes and not per capita, said sum to be paid equally by all of the said undivided one^eighth interests within a period of five years from the date of my death, and on such payments as may be deferred from time to time during the said period, interest at the rate of six per cent, shall be paid thereon to said children in half yearly installments until full payment of their respective shares shall have been made.” She also directs that if any of her children then living shall predecease her leaving children, the distributive share of the one so dying as devised and bequeathed in her will and codicils shall be void,- but in lieu thereof places a charge upon the distributive share of the children living at the time of her death of a sum of money equal to the value of the distributive share in her estate which the child' so- dying would have been entitled to receive if living, “which I give, devise and bequeath unto the children of my said child so dying, per stirpes and not per capita, to be paid under the same conditions and provisions as 'herein provided as to the distributive interests of my son, John J. Hohman, deceased.” Charles C. Hohman is substituted for her deceased son as one of the executors. The bill of complaint was filed on March 28th, 1932. It alleges that the testatrix died on March 16th, 1926; that letters testamentary were granted to the executors on March 22nd, 1926; that the estate consisted of a large number of ground rents as well as improved lots of land, together with stalls in' markets in Baltimore, together with other property; ⁵⁹⁹ that the inventory filed in the orphans’ court does not include any of said property, excepting certain alleged stock named therein amounting to $3,120, and cash amounting to $593.21; that plaintiffs have no knowledge of the extent of the estate and they desire discovery in relation thereto.

It recites the listing and valuation of property in the will, and alleges that said properties have yielded large rents since the death of the testatrix, of which no account has heen rendered to- plaintiffs, and that it is necessary for the court to assume jurisdiction of said properties and appoint a receiver; that Clara V. Keller, a daughter of testatrix, died testate- on April 16th, 1931, leaving neither husband nor child or children, having appointed Elizabeth E. Orem executrix of her will. It recites the provisions of the will directing appraisement and distribution and alleges that Charles G., George A., and Conrad P. Eohman have taken their distributive shares and enjoyed it ever since the time of the death of the testatrix, but that plaintiffs have received no part of their distributive shares; that by an agreement between the parties the said three sons agreed to pay the sum of $149,421.81 for the property allotted to them by the will, subject to the terms and conditions in said agreement set forth; it recites the provisions of the third codicil in regard to the charge of plaintiffs’ legacies upon the other eight shares and the direction that plaintiffs be paid within a period of five years with interest, and alleges that, more than five years having elapsed, plaintiffs “are entitled to distribution in the premises, and to receive their respective shares of said estate; that they have frequently requested of said executors, discovery of the properties in said estate, as well as of the rents, profits and income thereof, as herein prayed; accounting of both the estate and the rents, income and profits thereof, and distribution of said estate; but said executors and each of them, have unlawfully failed to comply with said requests or any part thereof”; that plaintiffs “are ready, willing and able to do whatever equities may be of them required in the premises”; and that they desire the court to- take jurisdiction of the estate that it may conserve the same and prevent the waste ⁶⁰⁰ •or dissipation thereof; “that said executors having failed'in the performance of their duties as executors, in not distributing said estate as by said plaintiffs’ Exhibit ISTo. 1 required, .and in wrongfully withholding distribution thereof, and in refusing information in relation thereto, as aforesaid, and in unduly retaining the property of said estate,” plaintiffs fear that unless the coui't assumes jurisdiction they will suffer irreparable loss. The prayer of the bill is: (1) That the court assume jurisdiction. (2) For discovery.

(3) For the appointment of a receiver pendente lite. (4) For the appointment of trustees to make sale, partition, and distribution. (5) For general relief. On the filing of the bill the court passed an order appointing a receiver and directing the executors to turn over to him the assets of the estate.

On April 19th, 1932, the executors filed a motion to strike •out the order appointing the receiver, on which the court passed an order striking out its previous order of March 28th, 1932, unless cause to the contrary be shown on or before May 5th, 1932; and on May 3rd, 1932, the executors filed an answer to the bill of complaint in which they admit that Charles G., George A., and Conrad P. Hohman have taken their respective shares of the estate, and aver that this was done with the knowledge and consent of the plaintiffs, .and that the plaintiipis will be entitled to their distributive portions of the estate, which distribution they agreed should be deferred because a liquidation of the estate at forced sale would have resulted in a loss to the complainants and other beneficiaries of the estate; that full accounts of moneys collected have been kept; and that at all times the said accounts were available to the complainants, upon any intimations from the complainants that they desired to inspect the same, .•and that no request or demand at any time has been made for said inspection, and that the complainants have, until the filing of the bill of complaint, acquiesced in and co-operated with the respondents in the management of the estate. An .answer was also filed by all the other defendants in which ⁶⁰¹ they adopt the answer of the executors. The receiver answered the order nisi striking out the order of appointment. In his answer he denies that the complainants had full knowledge of the property of the estate and of its management or that they had been able to obtain satisfactory information in regard to the estate; that they fear that the assets of the estate have been seriously diminished by the delay, and that a considerable portion of the estate has been wasted and lost; and that the executors’ bond is only $500.

On May 28th, 1932, Charles G. Hohman, individually and as one of the executors, filed a petition in which he stated that all of the defendants have taken an appeal from the order of March 28th, 1931, and asking the court to pass an order superseding the order appointing a receiver, and thereupon the court superseded said order pending the decision on appeal. Subsequently the appellants dismissed the appeal, and the proceedings before the chancellor were resumed, and testimony was taken in open court. It appears from the testimony that on the death of the testatrix the other beneficiaries were dissatified with the valuation which she had placed on the factory property which she had allotted to three of the sons, thinking it too low, and all of them, including the three plaintiffs, agreed that all the assets of the estate should be valued as of the date of her death. This resulted in a written agreement dated March 22nd, 1926, which was filed as Defendants’ Exhibit Mo. 1, which was signed and sealed by all the beneficiaries.

It recites the provisions of the will and codicils; that it is the desire of all the parties that the intentions of the testatrix shall be fully carried out-,, and they agree that the provisions in the will fixing the valuation of the property shall be waived and that all the said property shall be taken and distributed according to its present market value, whether more or less, and that the children of the testatrix shall each have an equal one-eighth proportion of the said estate, all of said undivided one-eighth proportions, however, to be held subject to the charge of a sum of money equal to the distributive share of said estate which the deceased son, John J. Hohman, would have received if ⁶⁰² living at the time of the death of the testatrix under her will, to he paid to his three children, said sum to be paid equally by all of the said one-eighth interests within a period of five years from March 16th, 1926, with interest on deferred payments in half yearly installments until full payment of their respective shares shall have been made. The parties in their individual capacities, and Elizabeth E. Orem as trustee for Clara V. Keller, further agree to assist the corporation of C. Hohman & Sons by pledging their credit in such form as may be necessary to obtain a loan not to exceed $15,000; the business of the three sons having been incorporated under that name. Mr. R. Contee Rose testified that after the death of the testatrix he was called in by the executors, and thereafter he considered that he represented all the interests; that the estate consisted largely of real estate, there being very little personalty; that he had many conferences with John Hohman, one of the plaintiffs, and several with all of them, and when he dealt with John it was his understanding, from the meetings previously held with all three of them, that John represented the interests of the deceased father of the plaintiffs; that he saw John about the affairs of the estate twenty-five times; that John was in the employ of C. Hohman & Sons, and worked there until the time of the bankruptcy and witness would see him frequently; after that he came to the office of witness a number of times, and witness saw him at conferences about the estate called at the home of the testatrix after her death; that there were'two or three conferences at the home of testatrix almost immediately after her death, and subsequent conferences when pieces of property were being disposed of; plaintiffs were consulted about it and in many instances asked to agree, which they did at conferences at witness’ office of which there were quite a number; that witness was given instruction by those present at these conferences, including plaintiffs, with regard to appraising and disposing of the property; that he had an appraisal made by Harry E. Gilbert, chief assessor of the Appeal Tax Court of Baltimore City, and Martien & Co., real estate brokers, on ⁶⁰³ or about tbe 16th day of November, 1926; that at a meeting of all the beneficiaries except Oharles, Conrad, and George Hohman, those present expressed the view that the provision of the will which fixed the valuation of the property to be taken by the absent brothers created an inequality in their favor, and those present thought that all ought to- share equally in the estate; and they agreed that they should be treated alike, and delegated witness to present this question to the absent brothers; that witness did this, and they concurred in the view of the others, whereupon witness prepared an agreement which was signed by all the parties in interest, said agreement being Defendants’ Exhibit No. 1. Witness was then asked whether this agreement was carried out, and he answered: “Yes, it was.

Q. In carrying it out, what did you do ? A. In carrying it out we conveyed the property — .” The witness was here interrupted by an objection, before completing the sentence, and the chancellor said: “I will leave it in subject to exception.” The witness further testified that the purpose of the appraisal was to determine the value of the shares of Conrad, George, and Charles Hohman, since the will provided that the property should be paid for by crediting their shares on the purchase price, and that the estate should take a mortgage for the difference; that he had the entire real estate of the estate also appraised in order to ascertain the credit that was to be given the three brothers on the purchase price, and they got the property allotted to them by the will. At this point the witness produced a settlement sheet of the sale of a piece of property known as the wood lot, which is one of the properties allotted to the three brothers, and which was sold by the executors for their account. Witness said plaintiffs saw that paper.

This paper was offered in evidence as Defendants’ Exhibit No. 2. It is dated May 27th, 1926, and purports to be an account of settlement between the executors and one Walter D. Pacey of lot at S. E. comer of Monument and Castle Streets. The plaintiff objected to the offer of this exhibit, and reserved an exception to its admission. De ⁶⁰⁴ fendants also offered another paper referred to by the witness, which was filed as Defendants’ Exhibit No. 3.

The witness said this paper explained the settlement with the three brothers at the time the properties were conveyed, and ■shows the amount of mortgage which the Hohman estate was to take back, amounting to $61,443.30. It purports to give the appraised value of each of the items of the estate, shows .a balance for distribution of $263,935.11, and then proceeds: “Estate distributed as follows: One-eighth to Charles G. Hohman........$ 32,991.96 One-eighth to George A. Hohman........ 32,991.96 One-eighth to Conrad P. Hohman........ 32,991.96 One-eighth to Henry J. Hohman......... 32,991.96 One-eighth to Frederick W. Hohman...... 32,991.96 One-eighth to Franklin C. Hohman....... 32,991.96 One-eighth to Elizabeth E. Orem......... 32,991.96 One-eighth to Elizabeth E. Orem......... 32,991.96 Trustee of Clara V. Keller 263,936.11 “(Each of the above shares being subject to a charge of one-ninth of the balance for distribution, or $29,-326.19, payable to the children of John J. Hohman, i. e., John J. Hohman, Grace Hohman and Elizabeth E. Hohman Acworth.) Three shares of George A. Hohman, Charles G. Hohman and -Conrad P. Hohman.....................,.....$■ 98,975.88 less 3/8 of the 1/9 charge for the children of John J. Hohman........,.......... 10,997.31 $ 87,978.57 “Allotment to George A. Hohman, Charles G. Hohman and Conrad P. Hohman, as follows: N. W. Corner of Chester and Monument Streets. $ 30,000.00 N. E. Corner of Castle and Monument Streets............................ 77,500.00 "Wood lot S. E. Corner of Monument and Castle Streets....................... 31,400.00 ⁶⁰⁵ Stalls, Nos. 300, 302, 304 and 306 Belair Market............................ 8,000.00 Stalls, Nos. 1, 3 and 5 Northeast Market. 6,000.00 $152,900.00 Less life interest of Clara Y. Keller in 2030-32 E. Monument Street.......... 3,478.13 $149,421.87 Deduct aggregate of three shares of George A., Charles G. and Conrad P. Holman (less charge for John’s children)...... 87,978.57 $ 61,443.30” And then defendants offered a paper marked Defendants’ Exhibit No. 4, to which plaintiff's objected and, objection being overruled, noted an exception. The paper is dated October 13th, 1930', and is signed and sealed by all the children of the testatrix except Charles, Conrad, and George and Clara (her trustee signed for her), and by three grandchildren, the plaintiffs herein, as parties of the first part, and by the executors as parties of the second part. It recites an offer to Chas.

G., George A., and Conrad P. Hohman for the purchase of property northeast corner of Castle and Monument Streets (being part of the property allotted to them by the will) at the price of $67,500, subject to the balance of $45,875 upon a first mortgage to the Mutual Life Insurance Company and a second mortgage to the Heal Estate Trustee, Inc.; that the estate holds a third mortgage of $61,443.30 upon said property; that said parties of the first part are beneficiaries of said estate and indorsers of paper in the amount of $25,000, upon which the Union Trust Company of Maryland has obtained judgment; that it is believed to be to the advantage of all the parties concerned that said property be sold, and that the parties of the second part be authorized to accept in payment of said third mortgage to the estate the difference between the pui’chase price aforesaid ⁶⁰⁶ and the balance dne on said prior mortgages, to execute a release of said mortgage to the estate, and to apply any money that may be so received by them to the reduction of the said judgments. And in consideration of $5 and other good and valuable considerations, the said parties of the first part “do hereby give their consent to the sale hereinbefore referred to and do hereby authorize the said Charles Gr. Hohman and Elizabeth E. Orem, Executors of the Estate of Henrietta Hohman, to accept in payment of the third mortgage of $61,443.30 * * * the difference between the purchase price of $67,500 of said property and the balance of $45,875 upon the first and second mortgage to the Mutual Life Insurance Company and the Real Estate Trustee, Inc., ¿respectively, and to execute and deliver a release of said third mortgage,” and they further authorize the executors to apply any money so received for said third mortgage to the reduction proportionately of the said judgments against the parties to the agreement. The witness Rose further testified that Defendants’ Exhibit Ho. 3 was a compilation of the various interests of the estate; and that at the time this was prepared there was prepared Defendants’ Exhibit Ho. 4; that Defendants’ Exhibit Ho. 3 bears date October 13th, 1930, and was prepared on or about that date.

At this point witness was asked whether in the meantime “any lots have been sold or if any ground rents have been redeemed,” and his answer was, “Yes.” Upon which plaintiffs objected and asked that the answer be stricken out. The motion was overruled, and exception reserved. The witness, continuing, said there were four ground rents redeemed and one piece of property sold. The four ground rents redeemed were 2217, 2219, and 2221 East Monument Street, which show a profit of $225 over the appraised value in 1926, and in Exhibit 3 the estate is credited with the gain; another ground rent, 2047 East Monument Street, was sold for $25 more than the appraisement, the estate being credited also with this gain in Exhibit Ho. 3.

The fee-simple property Hos. 2040, 2042, and 2044 McElderry Street was sold for $1,000 less than the appraisement. This loss was ⁶⁰⁷ charged against the estate in Exhibit 3. These gains and loss were included in the computation in Exhibit 3 in arriving at the difference due by the three brothers of $61,443, for which they gave a mortgage to the estate. With the exception of the properties allotted to the three brothers, and the said four ground rents and the said McElderry Street property, no real estate had been sold; the remaining property being still held by the executors.

The witness said that Defendants’ Exhibit Ho. 3 was explained to the plaintiffs at the time they executed Defendants’ Exhibit Ho. 4. The defendants offered a paper marked Defendants’ Exhibit Ho. 5, to which plaintiffs objected. The court overruled the objection and plaintiffs excepted. This paper is an agreement between the C. Hohman & Sons, Inc., the Hnion Trust Company of Maryland, the children and grandchildren of testatrix joining as guarantors.

It is dated March 24th, 1926, and provides for the guaranty by the said guarantors of any loans the said bank may make to the Hohman Company to an amount not exceeding $15,000. The defendants next offered a paper marked Defendants’ Exhibit Ho. 6. It is an agreement between the plaintiffs and all the children of the testatrix, other than Charles, George, and Conrad, parties of the first part, and Charles, George, and Conrad, parties of the second part, dated April 25th, 1929. It recites the will and codicils of the testatrix and the agreement of March 22nd, 1926 (Defendants’ Exhibit Ho. 1) ; that said Charles, George, and Conrad desire to take the property allotted to them in the fifth clause of said will at the appraised value thereof, $149,421.87, provided the estate will take a mortgage from them for the difference between said appraised value and the value of their shares in the estate, subject to a mortgage or mortgages aggregating $50,000, provided all the heirs, devisees, and distributees of the said estate assent thereto; that the said Charles, George, and Conrad have paid all the taxes and public charges on said property since the death of the testatrix.

In consideration of one dollar and other good and valuable consideration, it is agreed between the parties of the first and second part that ⁶⁰⁸ the estate shall take from the said Charles G,, George A. and Conrad P. Hohman a mortgage for the difference between the market valuation of the property referred to and the shares of the said Charles, George, and Conrad in said estate, and that said mortgage shall be subordinate to a mortgage or mortgages aggregating $50,000, and that the payment of the taxes and public charges upon said property since the death of