Johnson v. Long

Offutt, J., delivered the opinion of the Court. Thomas M. Purnell and Mary E. Purnell, his wife, lived in Snow Hill, Maryland, where Thomas M. Purnell owned and managed the Hotel Purnell, located at Washington and Green Streets in that town. Washington Street, running in a northerly direction, intersects Green Street, which runs from southwest to northeast, and intersects Pearl Street, running parallel with Washington Street, and about 131 feet southwesterly therefrom. The hotel fronts on Washington Street, and between the rear of the hotel property and Pearl Street there is a lot fronting 65 feet and 10 inches on Green Street, and binding for 90 feet and 3 inches on the east side of Pearl Street, which was at one time owned by Levi Purnell, who died intestate, leaving as heirs a daughter, Mary E., the wife of Thomas M. Purnell, and two sons, Matthew and L. Wallace.

Wallace also died intestate and his share became vested in Mary and Matthew. Matthew mortgaged his interest, the mortgage was foreclosed, and Thomas M. Purnell bought Matthew’s share at the foreclosure sale. So that Thomas M. Purnell and Mary E. Purnell, his wife, owned the Levi Purnell lot as tenants in common, each owning an undivided one-half interest therein. Mary E. Purnell died April '20th, 1924, leaving a last will duly executed and probated in ordinary course, in which, after certain bequests not material here, she left to Thomas M. Purnell a life estate in the whole residuum of her estate, and at his death the remainder over in trust to John W. Staton, to hold $10,0,00 for the use of Matthew during his life, and at his death to distribute it to his children, and failing children or descendants then to hold and distribute it as a part of the general residuum, and to hold that residuum for the use of Grace Purnell Long (now Tromley) during her life, and at her death for the use of her children and the children of any ⁴⁸¹ deceased child until the “youngest of such children or child or children of any deceased child or children of the said Grace Purnell Long shall reach the age of twenty-one years,” then to distribute the same to the child or children of Grace Purnell Long, and the child or children of any deceased child of hers, per stirpes, and in that will she named Thomas M. Purnell executor and trustee.

So that from her death Thomas M. Purnell held in his own right an undivided one-half interest in the Levi Purnell lot, and, as life tenant and trustee of his wife’s estate, the other undivided one-half interest. In her devise and bequest to her husband, Mrs. Purnell used this language: “I give, devise and bequeath to my beloved husband, Thomas M. Purnell, if he should be living at the time of my death, for and during the term of his natural life, all the rest and residue of my estate, real, personal and mixed, and wheresoever situated, to have, use and enjoy the rents, incomes and profits therefrom so long as he shall live, in such manner and by such means as he shall see fit, with full power to my said husband to change the form of my investments as from time to time he may see fit, including the full power to sell without application or report to any court any part or all of my real estate and to convey the same to the purchaser or purchasers, without obligation on the purchaser or purchasers to see to the application of the purchase money, and from time to time in his discretion and as he may see fit, to invest and reinvest the proceeds of any such sale or sales, and to have, use and enjoy the income therefrom in such manner and by such means as he shall see fit; and having absolute faith and confidence in my said husband, I expressly declare that it is my intention by this item to give to him so long as he shall live the full and complete use, enjoyment and benefit of all said rest and residue of my estate, without any obligation or duty on him to account therefor to any person or persons, court or courts whatsoever, knowing that he will keep such personal accounts and records relating thereto that the trust hereinafter created to take effect at the death ⁴⁸² of my said husband may become effective and my wishes as expressed herein may be carried out, knowing also that the same will meet with his approval; hereby creating my said husband Trustee of the said residue of my estate for his own use and benefit for and during his natural life, free from control or jurisdiction of any court or courts, person or persons, and without bond.” Thomas M. Purnell died February 8th, 1934, also testate. By his will he devised to Grace Purnell Tromley, his adopted daughter, for life, the Hotel Purnell property and the land used in connection therewith extending to the “American Stores Building,” and at her death to her daughter Margaret Purnell Long. In 1927 Thomas M. Purnell built a three-story brick annex to his hotel which extended some ten or twelve feet into the easterly part of the Levi Purnell lot, and in 1932 he erected on the westerly part of the lot a brick store and office building approximately thirty by ninety feet, and from that building to his hotel property he extended a brick wall along Green Street.

As a result of those changes the easterly half of the lot was inclosed by the brick wall, the store building, and the hotel, part of it was occupied by the hotel annex, and all of it was used as part of the hotel property, while the westerly part was occupied by the store and office building. In that situation, Margaret Purnell Long, by her mother and next friend, Grace Purnell Tromley, and Grace Purnell Tromley in her own right, filed the bill in this case, in the Circuit Court for Worcester County against Edmond H. Johnson, trustee under the will of Thomas M. Purnell, and William F. Johnson, executor of that will, to restrain the defendants from prosecuting a proceeding for the sale of the Levi Purnell lot as an entirety in lieu of partition. The theory of the bill is that Thomas M. Purnell, acting both as an individual and as trustee of the estate of Mary E. Purnell, effected an actual partition of the whole lot, under which that part of it occupied by the store and office building was allotted to the estate of Mary E. Purnell, and the remainder, which adjoins the ⁴⁸³ hotel property, which he owned in severalty, was allotted to him. After the usual pleadings, testimony, and a hearing, the trial court adopted, that theory, ratified the supposed partition, decreed the specific performance of a supposed contract to make the partition, and appointed a trustee to convey to the trustee of the estate of Mary E. Purnell the part of the lot allotted to that estate.

This appeal is from that decree. There are two questions in the case: One, had Thomas M. Purnell, as trustee under the will of Mary E. Purnell and as an individual, the power to divide in kind the Levi Purnell lot which he as an individual held as a tenant in common with himself as such trustee, so that as a result of the division he would hold as trustee for Mary E. Purnell’s estate the part occupied by the store and office building, in severalty, and as an individual would hold that part adjacent to the hotel property in severalty; the other, did he in fact make such a division of the whole lot? There is little real conflict in the evidence. Such as there is arises rather from the failure of the trustee to keep a clear separate account of his administration of the trust estate, than from any direct contradiction in the testimony of the witnesses.

Nevertheless it is possible to have from all the evidence a reasonably complete understanding of his acts as trustee and their significance. Purnell and his wife appear to have lived on terms of mutual confidence and trust. He was the head of the family. They had no children of their own, but they both were sincerely attached to an adopted daughter, Grace Purnell Tromley, and to her daughter Margaret Purnell Long.

Purnell was the stronger character, his wife left the management of her property largely in his hands, and the confidence which in life she had shown in his judgment and integrity is manifested by the broad and irresponsible power which in her will she gave him to deal with her estate after her death. He ⁴⁸⁴ owned and managed the Hotel Purnell, and in that proprietorship he took a very real pride. Its management seems to have been his principal occupation; he was interested in its permanence, desired that it be maintained after his death, and was anxious to add to it such land and improvements as would in his judgment make it a complete and adequate hotel property. The hotel building and a restaurant connected with it occupied so much of the lot on which it was located that not enough land was left for storage, service access, and ventilation.

The only land available for the expansion of the property was the Levi Purnell lot which lay adjacent to it on the west. But while Purnell owned the hotel property in severalty, he owned only an undivided one-half interest in the Levi Purnell lot. He did not need the whole lot but only so much of it as was needed to complete the hotel property. Obviously therefore it was to his advantage to divide the property, alloting to each tenant in common approximately one-half of it in severalty.

It is also apparent that such a division, if fairly made, would also be to the advantage of his cotenant, since a single owner could probably either sell or improve a vacant lot to better advantage than one owned in- common with another. There was no judicial partition of the property, however, nor was there any formal partition of it in any way; nevertheless, after his wife’s death, Purnell by various acts in pais indicated an intention and a purpose of effecting a partition of the lot, in such a way that he would take in severalty that part adjacent to the hotel property, and he as trustee of his wife’s estate would take the remainder. In 1927 he built a three-story brick addition to the rear of the hotel, which extended some ten or twelve feet into the Levi Purnell lot. That addition was clearly valueless except when used as a part of the hotel, and yet unless Purnell owned it in severalty, it was possible that in the event of a sale of the whole lot in lieu of partition he would be deprived of it.

As long as he lived ⁴⁸⁵ no such sale was likely to be made, but in his will he expressed the desire that the hotel be maintained after his death. The reasonable inference, then, is that when he thus encroached on the Levi Purnell land he believed that he had effected a division of it, and that he owned in severalty the eastern part of it. In 1932 an opportunity occurred of utilizing the western part of the lot, binding on Pearl Street, if it could be improved by the erection thereon of a store and office building. The American Stores Company agreed that if such a store building were erected it would lease it for a term of five years.

Mrs. Tromley urged Mr. Purnell to make the improvement. He replied that he himself had no money, but he did eventually build it, and it is sufficiently clear that he built it with money obtained from his wife’s estate. Whether he did build it with money so obtained is the principal controverted issue in the case, but the evidence permits no reasonable conclusion other than he did. Mrs. Purnell left an estate valued at $36,332.78.

In 1927, Mr. Purnell as executor of his wife’s estate stated a distribution account which charged him with a distributive balance of $36,692.63. That estate included among other securities certain bonds of the Town of Snow Hill, and there is testimony that Thomas M. Purnell, as such executor, held also other bonds of Snow Hill which were not included in the inventory. It also included three bonds of the Southern Transportation Company having a par value of $1,000 each. None of those securities were in his possession at the time of his death, and there is testimony which is not contradicted that some of them were sold to pay the cost of constructing the American Stores building.

S. Earl Tromley gave in part this testimony: “Did you hear him say about borrowing any money from any source whatever for the construction of the American Stores building and the adjoining office building? A. I heard him say he would have to sell some of Mrs. Purnell’s bonds. * * * You know how he borrowed that? ⁴⁸⁶ A. Yes, sir, he put up some collateral—some Onancock bonds and Snow Hill bonds. You know whose bonds they were? A. From the records they were the bonds of Mrs. Mary E. Purnell.

That was in 198.3? A. Yes, sir. You know what became of those bonds? A. They were sold afterwards in order to pay the loan.” Mrs. Grace Purnell Tromley testified in part as follows : “You said a moment ago you were trying to persuade him to build it; he said he did not have the money —that probably isn’t evidence—that he did not have the money.

Do you know of your own knowledge, now—do you know with whose money that American Store was built? A. I know part of it. * * * Yes, sir, I do know. * * * Tell your knowledge? A. Well, I know that he sold some bonds of my mother’s. * * * You have read into the record an inventory of bonds, so forth, belonging to your mother’s estate in 1931; do you know which, if any, of those bonds were sold by your father? * * * A. Yes, sir. * * * How do you get that knowledge? A. She had some Snow Hill thousand dollar bonds—she had eight of them, and I know that he sold some of those.

About when? A. Around that time. And they had some smaller’ denomination of Snow Hill bonds. What denomination?

A. Oh, one hundred dollars or five hundred dollars.” The same witness later testified: “Mrs. Tromley, I believe that you have previously testified that after your mother’s death you went to Baltimore on several occasions and clipped coupons? A. Yes, sir. Have you anything from which you can tell us, after your mother’s death, how many $1000.00 Snow Hill bonds she had? * * * A. Yes, sir. I hand you these two papers, Mrs. Tromley, will you tell us what the one is that is written in lead pencil?

A. This list was made after my mother’s death, the first year that I was given power of attorney to ,go to the Fidelity' Trust Company