Horowitz v. Horowitz

Mitchell, J., delivered the opinion of the Court. The appeal in this case is from a decree entered in the Circuit Court of Baltimore City on the 20th day of December, 1937, adjudicating the title to one hundred shares of common stock of the Garrison Realty Holding Corporation as being in the estate of Isadore E. Horowitz, deceased, upon which estate Shirley Horowitz, his widow, the appellee herein, is the sole administratrix. Because of prior litigation, of which the shares of stock involved were in part the subject matter, and the reference to such prior litigation embraced in the decree appealed from, that decree is set out in this opinion, and is as follows: “The above cause coming on for hearing, and the Court having read the papers, heard the testimony produced, and considered arguments of counsel, it holds and decides that the title to the one hundred shares of the common stock of the Garrison Realty Holding Corporation, in question in this cause, is vested in the estate of Isadore E. Horowitz, deceased, for the reason, that the defendant herein affirmatively asserted in his answer title in himself to said stock in the case of Shirley Horowitz, et ah, against Jacob Horowitz, et al., heretofore pending in the Circuit Court No. 2 of Baltimore City, by virtue of ¹⁹ an alleged gift from Isadore E. Horowitz, a few days before his death, thus making said gift to and title in the defendant an issue in said cause; upon this issue the defendant offered testimony, which was adjudicated by the Court adversely to him. That said adjudication is implicit in its refusal to grant affirmative relief to the defendant upon said claim and issue thus tendered. “It is therefore this 20th day of December, 1937, by the Circuit Court of Baltimore City, Adjudged, and Decreed, that the title to said one hundred shares of common stock of the Garrison Realty Holding Corporation, referred to in the bill of complaint and evidence, is hereby declared to be vested in the Estate of Isadore E. Horowitz, deceased, and the defendant is hereby directed to deliver unto the plaintiff herein, as administratrix of said decedent’s estate, the certificate representing said stock properly endorsed by him, so that a certificate for said stock may be issued in the name of the plaintiff herein, as a part of the assets of said decedent’s estate; And it is further adjudged and decreed, that the costs in this proceeding be paid by the defendant.” As has been indicated, it will be noted, by reference to the foregoing decree, that the same is based upon the decree in the prior proceeding in the Circuit Court No. 2 of Baltimore City.

It therefore becomes necessary, to some extent, to review the former proceedings for the purpose of setting forth the basis upon which the decree now under consideration was reached; for the reason that it appears from the record that all the pleadings and testimony, as well as the opinion and decree, in the former case, over the appellant’s objection, were admitted by the chancellor in the instant case “only for the purpose of showing the defense made in the earlier case as bearing on the question of res adjudicaba.” A brief review of the pleadings and testimony reveals the following state of facts: That for some time prior to November 16th, 1933, the said deceased was owner of said stock, as evidenced by a single certificate, issued in his name; that the remaining outstanding stock in the ²⁰ above company was originally held by Jacob Horowitz, the appellant, and Joseph Schlessinger, to the extent of one hundred shares each, and that at the time of the death of Isadore E. Horowitz, the Schlessinger stock was vested in the Union Trust Company of Baltimore. That Isadore was a son of Jacob Horowitz, and that on November 15th, 19.33, the former entered the Maryland General Hospital, where two days later he was operated upon, and where, a week following the operation, he died. The day after Isadore entered the hospital he assigned his certificate of stock to his father, having, out of the presence of the father, and as far as the record goes, without the latter's knowledge, expressed his desire to transfer the stock to his father, in a conversation had with his brother, Louis Horowitz, and stated as his reason for such action that he wished to protect his father against the loss of money the latter had invested in the company, whereas, as an asset of his own estate, it would be of small value. To the end that the certificate might be procured by Louis, the latter was given the key to a safe deposit box in which it was contained and instructed to get the same and bring it to the hospital for the purpose of effecting the assignment.

These instructions were followed by Louis, who in the course of the transaction found that it was necessary to have the co-operation of Albert Moss, the attorney of the deceased, in order to gain entrance to the deposit box. Upon obtaining the certificate, Moss retained it in his possession and accompanied Louis to the hospital, where the deceased, in the presence of only Louis and Moss, in his own handwriting filled in the assignment to his father, designated Moss as the attorney to make the transfer, formally executed the same, and handed it to Louis, with instructions to deliver it to his father. After her qualification as administratrix of the estate of her husband, Mrs. Horowitz made demand upon the appellant for the return of the stock; and, upon his refusal to do so, a bill of complaint was thereafter filed by her, both individually and as administratrix, and by ²¹ Rose Lee Horowitz and Elwood Horowitz, infant children of the deceased, by their mother and guardian, Goldie Horowitz, the divorced wife of the deceased, against the said Jacob Horowitz, in which, among other things, it was alleged that the assignment of the certificate of stock was secured by undue influence practiced upon the deceased by his father, with intent to defraud, at a time when he was about to undergo a serious operation, the result of which was doubtful. In substance, the bill set forth that the deceased was induced to assign the stock because, in event of his death, the beneficiaries of his estate would mismanage and waste it; that through this mismanagement the remaining interests in the corporation would be seriously affected; and that the father secured the assignment of the same under the express understanding that he would hold the stock in trust for the use and benefit of the said widow and children, share and share alike.

The bill prayed that the stock be impressed with a trust for the use and benefit of the widow and children; that the defendant be required to deliver up and transfer the certificate representing said stock; and that meanwhile the company be restrained from permitting any transfer of said shares of stock, and the defendant enjoined from disposing of the same. The answer of the defendant denied the allegations of fraud and undue influence, and set forth the circumstances under which the stock was assigned to him, as hereinbefore detailed, as effecting a free and voluntary gift of the said stock to him by the deceased. After the filing of the answer, upon the petition of Mrs. Horowitz, she was dismissed as a party to the proceedings in the capacity of administratrix of her husband. To the bill, as thereby amended, a demurrer was interposed, upon the ground (a) that the administratrix was a necessary party to the suit, and (b) that, because the bill alleged that the stock was obtained by the defendant through undue influence, with intent to defraud the plaintiffs, it followed that if the allegations of the bill were substantiated, and the assignment of the stock declared null ²² and void, then the same would necessarily be deliverable only to the administratrix as such.

The demurrer being sustained, with leave to amend, the original plaintiffs, other than the administratrix, filed an amended bill in which, omitting the charge of fraud and undue influence in the procurement of the stock, they set forth that the deceased had endorsed the stock certificate and caused the same to be transferred to his father in trust, for the benefit of his widow and two infant children, to be delivered to them in event of his death from the contemplated operation. The said amended bill alleges the demand upon the defendant for the delivery of the stock, his refusal to deliver the same, with the fraudulent purpose of appropriating it to his own use; and prays that the stock represented by the certificate be impressed with the trust, and that the defendant be directed to transfer the same to the widow and infant children. The answer of the defendant to the amended bill is substantially similar to that filed to the original bill, and reaffirms the unqualified gift of the stock to the defendant. At the conclusion of the testimony in the former case, which followed the next above state of the pleadings, the chancellor passed the following decree, which, as will be seen by reference thereto, resulted in a dismissal of the bill in the former suit: “The above cause coming on for hearing, and the Court having read the papers, heard the testimony offered by the respective parties and considered the arguments of counsel, and being of the opinion, ‘that Isadore E. Horowitz did not make any valid declaration in trust in favor of the plaintiffs, or any valid gift to Jacob Horowitz, defendant, of the stock in this cause, and that the title and ownership of said stock remains in Isadore E. Horowitz, and his estate,’ but as the administratrix of the estate of Isadore E. Horowitz, deceased, is not a party hereto; “It is this 30th day of October, 1935, by the Circuit Court No. 2 of Baltimore City, Adjudged and Decreed, that the bill of complaint herein, be and the same is ²³ hereby dismissed; provided that nothing in this decree shall prejudice or affect the right of the estate of the said Isadore E. Horowitz, deceased, or the administratrix and distributees of said estate, to proceed as they may be advised is proper to enforce any rights of said estate and the distributees thereof in, to and respecting said stock; and it is further adjudged and decreed that each side shall pay its own costs.” The bill of complaint in the instant case, which was thereafter filed by the administratrix as the sole party plaintiff against Jacob Horowitz, in substance alleges the ownership of the stock by the deceased; his death, and the qualification of the administratrix as such; and that while suffering from a serious ailment, for which he was about to be operated upon with doubtful results, the deceased attempted to assign the stock to his father without consideration; that the same, neither before nor after his death, was transfei’red on the books of the company; and that the said attempted transfer of the stock being invalid, the title and ownership thereof was vested in the plaintiff.

Finally the bill avers that the said stock was the property of the deceased at the time of his death, and as such had passed to the plaintiff as his administratrix, as had been determined by the Circuit Court No. 2 in the proceedings to which reference has hereinbefore been made, and as will be observed by reference to the decree in this proceeding; and prays the court to decree the plaintiff, as administratrix of the estate, to be the true owner of said stock, and that meanwhile the defendant be restrained from assigning or transferring the same; and for general relief. While in addition to the record of the proceedings, including the testimony, in the former case, which, as hereinbefore stated, the chancellor admitted for the purpose of deciding the sole question of res adjudicóla, it appears that testimony in the instant case, over objection, was adduced by the plaintiff tending to show the insolvency of the estate of Isadore E. Horowitz at the time of the alleged gift of the stock, and further tend ²⁴ ing to show that the stock was not actually transferred on the books of the company to Jacob Horowitz until the 30th day of October, 1935, or a short while prior to the date of the filing of the bill of complaint in the instant case, and after the decree passed in the first proceeding; it is nevertheless apparent from the decree, from which this appeal is taken, that the sole question decided by the learned chancellor below was that of res adjudicate, and therefore that question is likewise the sole one presented by this appeal. The rule is well settled that if a question has once been tried and decided by a court having jurisdiction of the parties to a controversy and the subject matter involved therein, it can not be again litigated between the same parties, or their privies, in the same or in any other tribunal, so long as the