Johnson v. Catherine Gunther Stringer

Digges, J., delivered .the opinion of the Court. The question presented for decision on this appeal is whether or not the income from certain property held by the Safe Deposit & Trust Company of Baltimore as trustee under the will of George Gunther, deceased, now being paid under the provisions of said will to Catherine G. Stringer, the daughter of the testator, can be subjected, while in the hands of such trustee, by the creditors of Catherine G. Stringer, to the payment of her debts. The bill filed by the appellant in Circuit Court No. 2 of Baltimore City sought to accomplish this. The defendants under the bill are Mrs. Stringer and her husband; her sister, Mrs. Cooney, and her husband; Mrs. Catherine Gunther, the mother of Mrs. Stringer; the Safe Deposit & Trust Company, a body corporate, in its individual capacity; the same corporation, as trustee under the will ³¹⁷ ■of George Gunther; and the same corporation, as trustee under a declaration of trust made by Mrs. Catherine Gunther, the mother.

Each of these defendants filed demurrers to the bill of complaint, which were sustained by the chancellor, with leave to amend within a specified time. The complainant refused to amend; whereupon a decree was entered dismissing the bill; and this appeal followed. George Gunther, the father of Mrs. Stringer, died in September, 1912, leaving a last will and testament by which he ■disposed of a large estate. After making specific bequests in comparatively small sums, the rest and residue of his estate was devised and bequeathed to the Safe Deposit & Trust Company of Baltimore, as trustee, to manage, invest and collect the income therefrom, and after paying from said income to his widow, Catherine Gunther, $12,000 annually, and to each of his two daughters, Mrs. Stringer and Mrs. Cooney, the'sum of $2,600 annually, the trustee was directed to accumulate and invest the surplus income arising from the trust estate until the death of the widow, at which time the trustee was directed to divide the property held by it into four equal portions and to transfer and deliver to each of the two sons of the testator one of these equal portions, free and discharged from any trust, while at such time the other two equal portions were directed to be still held in trust, one of said portions for the benefit of each of his two daughters, and to pay to each of them the total of the income from their respective portions, so long as the daughter entitled to that income should live, and, upon the death of each of his daughters, the corpus of the trust estate from which the income had been paid to the daughter so dying, it was provided, should be equally divided between the children or descendants of said daughter per stirpes, free and clear of any trust.

It was specifically provided by the testator that the sum of $2,600, .annually to be paid to Mrs. Stringer until the death of her mother, should be paid by the trustee “into her hands and not into the hands of another, whether claimed by her authority or otherwise”; and it was likewise specifically set out in the will that the income from the one quarter of the estate, to ³¹⁸ which Mrs. Stringer was entitled after the death of her mother, should be paid into her hands and not into the hands of another, whether claimed by her authority or otherwise, for and during the term of her natural life. The. will was probated shortly after the death of the testator, and letters of administration granted to the two sons and the widow, they being named in the will as executors. On December 16th, 1912, Catherine Gunther, the widow, renounced the wall and elected to take the portion of her' deceased husband’s estate to which the law entitled her. It appears that the two- daughters were dissatisfied with the income provided for them under their father’s will, and were considering contesting the will or filing proceedings for the purpose of having their remainder interest declared accelerated by their mother’s renunciation.

On March 20th, 1913, a declaration of trust was made by the mother, Catherine Gunther, to which the two daughters and the Safe Deposit & Trust Company were parties, in the preamble to which it was declared that, whereas George Gunther, late of Baltimore City, deceased, departed this life: on the 5th of September, 1912, leaving a last will and testament dated May 23rd, 1911, which has been duly admitted to probate by the Orphans’ Court of Baltimore City, whereby there was devised and bequeathed a portion of the estate of said deceased to the Safe Deposit & Trust Company of Baltimore in trust to: pay unto the said Catherine Harvey (now Catherine Stringer) the sum of $2,600 per annum, in addition to other provisions made for-her therein, and that on or about the 16th day of December,. 1912, Catherine Gunther, the widow of said deceased, renounced all claim to bequests and devises made to her in said last will and testament, and elected to take in lieu thereof her dower and legal share of the estate of hex said husband, and that the said Catherine Harvey has expressed her dissatisfaction with the provision made for her in said will and has indicated her intention to contest said will; and whereas for the purpose of preventing any proceeding to contest the validity of said last ³¹⁹ will and testament or any of the dispositions made therein, and for the purpose of preventing any proceedings on the part of the daughters to enable them, under the doctrine of acceleration of remainders, to obtain -for themselves the present enjoyment of a larger income from said estate, and for the purpose of having said daughters accept the last will and testament and all the provisions therein, the declaration of trust was executed. It is recited that in consideration of the premises and the covenants and agreements therein made by the respective parties thereto, the assumption of the trust by the Safe Deposit & Trust Company of .Baltimore, and one dollar, the widow Catherine Gnntlier granted and assigned unto the Safe Deposit & Trust Company, subject to certain rights.reserved to lier, all her right, title and interest in and to the personal estate of her husband, George Gunther, in trust to hold the same, collect the income issuing thereout, and pay from the net income unto her daughter Catherine the sum of $9,400 per annum in equal monthly instalments, “into her hands and not into the hands of another, whether claimed by her authority or otherwise,” until the death of her (the mother), or until such time as there should he instituted by or oil behalf of her said daughter Catherine aLiy suit or proceeding to dispute or contest the validity of the will of her husband (George Gunther), or until such time as. there should be instituted by or on behalf of her said daughter Catherine proceedings to accelerate the remainder provided for the said daughter by the will of her father, and so obtain and enjoy a larger bicorne from the estate of her father, or until the passage of any final decree or order of a. court of equity accelerating the said remainder in favor of the said daughter Catherine, whichever of said events may first occur. This declaration of trust also provided that, should the daughter Catherine predecease her mother, leaving descendants surviving her, and at the time of her death being still entitled to receive said annual sum of $9,400, in that event the said sum should he continued for her descendants dur ³²⁰ ing the life of the said Catherine Gunther until any one of the contingencies set forth above for the discontinuance of the payment should happen. It further provided that, if the entire income from the trust estate thereby created should be insufficient to pay the sum of $9,400 per annum to each of her daughters or their descendants, the deficiency should be made out of the principal of the said trust estate.

A like provision was made for the daughter Mrs. Cooney. The two daughters each covenanted for themselves and their heirs that they would accept and abide by the last will and testament of George Gunther and all provisions thereof; that they would not contest its validity or the validity of any of the dispositions made therein;" that they would not take any proceedings to have determined the question o,f the acceleration of the remainders created by that will that had arisen by reason of the renunciation of said Catherine Gunther. At the time of the distribution by the executors of George-Gunther, the portion of the personal estate to which the ' widow Catherine Gunther was entitled after her renunciation was turned over and accepted by the trust company under the provisions of the declaration of trust just recited. After the receipt by the trustee of the personal estate turned over to it under the declaration of trust made by Catherine Gunther, payment was made by the trustee under the provisions, of that trust to Mrs. Stringer; and no change took place in the situation until some time in 1922, when the two sons of George Gunther instituted proceedings to have the remainders created by the will of their father declared to have been accelerated by the renunciation of the widow.

On August 21st, 1922, the two daughters and the mother entered into an agreement, in- which, after reciting the execution of the declaration of trust of March, 1913, it was agreed that it was not the intention of the parties to said declaration of trust that, should the acceleration of the remainders be declared in proceedings taken by parties other than the daughters, the income arising out of the mother’s declaration of trust should be paid in addition to the -income from the full portion of ³²¹ the father’s estate to which each daughter would be entitled by reason of such acceleration. It was, therefore, by that instrument agreed, for a valuable consideration, that upon the passage of a final decree by a competent court determining that the remainders under George Gunther’s will had been accelerated by the renunciation of the widow, the payments to the daughters under the declaration of trust of 1933 should cease; and that, out of the income added to their portion under their father’s will, the mother should be reimbursed to the amount theretofore paid the daughters under the mother’s declaration of trust, provided the reimbursement to the mother should not exceed the amount of their accumulated income under the provisions of the father’s will. The daughters further agreed to give such directions or to do such other things as might be necessary to insure to their mother such reimbursement and repayment out of their shares of income in the hands of the trustee, and by the agreement did direct that the trustee under their father’s will make such payment out of said income as soon as the decree declaring acceleration had been passed. On February 2nd, 1923, a final decree by this court was passed declaring that the renunciation of the widow had accelerated the remainders under the will of George Gunther.

Safe Deposit & Tr. Co. v. Gunther, 142 Md. 644 . The effect of this decree was to declare that Catherine Stringer was entitled to the total net income from one-fourth of her father’s estate, after deducting from the whole of his estate the widow’s proportion, and that she was entitled to such total income from the date of the renunciation by the widow, which renunciation, in so far as affecting the payment of the income to the remaindermen under the provisions of George G anther’s will, was equivalent to the widow’s death. In accordance with the provisions of the decree of Circuit Court No. 2 of Baltimore City, affirmed by this court in Safe Deposit & Tr.

Co. v. Gunther, supra, the trustee stated an account of its administration of the trust under George Gunther’s will, showing separately the corpus of said trust fund ³²² and the accumulated income therefrom, from the time the fund came into its hands to the date on which the decree of the Circuit Court No. 2 was affirmed. This account also showed the portion of the accumulated income to which Mrs. Stringer was entitled, and after deducting the amount already-paid her of $2,600 a year since the beginning of the trust, and the further sum which was shown to have been paid to her during that time under the provisions of her mother’s declaration of trust, the balance of said accumulated income was paid over to Mrs. Stringer, and a sum sufficient to reimburse the mother was paid to her. Since