Kelley v. Kelley

³⁹⁰ JOHNSON, J., delivered the opinion of the Court. This is an appeal from a decree passed by the Circuit Court for Allegany County, dismissing appellant’s amended bill of complaint, which, by leave, of the chancellor, was filed after testimony had been taken on behalf of the parties in open court. The amended bill sought a decree that Edith Genevieve Kelley, the appellee, reconvey unto Eugene A. Kelley, appellant and plaintiff below, a certain parcel of real estate located in Cumberland, Maryland, and improved by a double brick dwelling known as Nos. 211 and 213 Pennsylvania Avenue, upon the ground that appellant had caused title to said real estate to be placed in the name of appellee, and that the conveyance was made upon an oral understanding or condition that she reconvey the property to him on demand after he had secured a decree of divorce from his wife, between whom and the appellant serious domestic differences had previously arisen and were then pending. Appellee resisted the bill, contending that the property was by appellant given to her in consideration of the natural love and affection which appellant, who was her uncle, had for her, and in the further consideration that she was to pay off an existing mortgage against it in favor of Mary Clark Roman in excess of $3,500, executed by appellant and his wife; that she did assume that obligation and paid it 'off through another mortgage which she had obtained upon the property and bound herself to pay; further, that it was understood between her and appellant at the time she accepted the conveyance that he should have the right, so long as he desired, to live in one side of the double houses, provided he paid one-half the taxes and water rents upon the entire property.

The chancellor observed that the property was either a gift from appellant to appellee or was held by appellee in trust for appellant; that if it were a gift, the bill must be dismissed, and the same result must follow even if it were found to be held in trust, because appellant had ³⁹¹ made the deed of conveyance for the purpose of defrauding his wife of her rights in the property. It is impossible to ascertain, from a consideration of the opinion and the decree, whether the latter in fact rested upon the finding that it was a gift, or that the conveyance was made by appellant to defraud his wife of her rights in the property. Before considering those contentions in the order named, we will first state the undisputed facts and next proceed to discuss the testimony offered by the parties to support their respective contentions. Lillie E. Kelley is the second wife of appellant, and their marital differences had become so acute that on January 28th, 1937, they entered into an agreement to the effect that they intended in the future to live separate and apart.

Under that agreement the husband paid the wife $1750 in cash and gave her a confessed judgment for $250, with a stay of execution for two years. Mrs. Kelley, in turn, in consideration of those payments, renounced all rights of dower or otherwise that she had in any real estate that her husband then owned or might subsequently acquire. The agreement was duly recorded among the Land Records of Allegany County. Appellant then owned a double brick dwelling on Pennsylvania Avenue, and fearing, after consulting his counsel, that the wife might in some manner, despite her agreement with him, later claim an interest in the property, joined with her on the same date in executing a deed for it to one Mina Montgomery, trustee (Miss Montgomery being secretary to his counsel).' By the terms of that instrument the trustee was “To Have and To Hold the above granted property unto the said Mina Montgomery, Trustee, for the purpose of re-conveying the property aforesaid unto the said Eugene A. Kelley, to his sole and separate use as if he were an unmarried man with the right to him to hold and convey the property aforesaid without the joinder of his wife, Lillie E. Kelley in any deed of conveyance, or to convey direct the aforesaid property to any one the said Eugene A. Kelley may des ³⁹² ignate.” The property was then encumbered by a mortgage in favor of Mary Clark Roman for §3,500 in addition to certain accrued interest, a part of that money having been used by appellant to make settlement with his estranged wife.

Subsequently, on February 19th in the same year, at the direction of appellant, Miss Montgomery, the trustee, executed the deed conveying the property as an entirety unto appellee, the deed on its face being entirely regular and without any reservations, restrictions or conditions in favor of appellant. The grantee paid the costs incident to the transfer and had the deed recorded. She further, in accordance with the request of her uncle, borrowed from First Federal Savings & Loan Association of Cumberland the sum of $3,500, and secured the loan by a first mortgage upon the property described in the deed, using the proceeds of the loan to apply upon the amount due on the mortgage held by Mrs. Roman, and was required in addition to advance in excess of §140 to extenguish that loan. In addition, Miss Kelley paid one-half of city, state, and county taxes upon the property, paid the entire insurance premium, and at least one-half of the water rents in addition to some plumbing bills, painting and papering and various minor repairs to the property.

One of the houses was rented for thirty-five dollars per month, and this exact sum she had agreed to pay monthly in reduction of interest and principal upon the mortgage held by the Federal Savings & Loan Association, and this amount was paid by her monthly, even when the property was unoccupied. The deed from Miss Montgomery, Trustee, was executed in the office of appellant’s counsel, and there is some dispute as to who were present at that time. It was prepared by the attorney for appellant and executed by the trustee at appellant’s direction. His counsel testified that appellant told him that he had every confidence in his niece and wanted it deeded to her, and the niece replied that she did not want any part of the property, and expected the uncle to live in one side and collect the ³⁹³ rents on the other, and we are satisfied from a consideration of the record that, after its execution, appellant delivered the deed to appellee.

As might naturally be expected, when his testimony depended solely upon his ability to remember details for a period of almost three years, appellant’s counsel was not clear in relating the circumstances under which the deed was executed, for he was not even sure that he had dictated it. He was asked if appellant requested him to insert in the deed a provision that the property was to be reconveyed as soon as his client secured a divorce from his wife, and replied that nothing was said in that regard. This circumstance of itself tends to cast doubt upon the correctness of his understanding as detailed three years later to the effect that the property was to be reconveyed, since it is inconceivable that an attorney of his standing and years of experience would, had such an understanding existed, have permitted his client to execute the deed without incorporating therein such a provision, nor would he in all probability have under the circumstances prepared such an instrument. During his testimony, his counsel was interrogated as to who was present when the deed to Miss Kelley was executed, and he replied, “I think Ethel Walker” (meaning the notary), “and Miss Montgomery” (referring to his secretary).

Being further interrogated as to the presence of anyone else, he said: “I don’t remember. Maybe Mr. Kelley was” (meaning appellant). It is further admitted that, after the deed had been executed and delivered to Miss Kelley, appellant, in «the presence of his counsel and the latter’s secretary, Miss Kelley, and any others who were there, directed the attorney to prepare his last will and testament, by which he devised and bequeathed all his estate to appellee. Joseph Kelley, a brother of appellee, gave testimony to the effect that the witness, appellant, and appellee visited the law office at appellant’s request; that after appellant had acquainted counsel with his desire to execute a deed for the property to appellee, the attorney there ³⁹⁴ upon went to the court house to secure data to enable him to prepare the deed and the witness accompanied him in an automobile belonging, as he thought, to the attorney, his sister and uncle waiting in the law office until they returned together, after which they all remained until the deed and will had been prepared and executed; that later he took his uncle home in his own car, and his sister returned to her work.

The counsel failed to deny any of the circumstances as detailed by the witness, and the conclusion seems inescapable that Joseph Kelley was in fact present on that occasion, and this conclusion is not weakened because Miss Montgomery, who admittedly was not at all times in the room of her employer, attempted to deny that the attorney went over to the court house to check the land records and undertook to state that only her employer, appellant, and appellee were present when the deed and will were executed. Eugene A. Kelley testified to the effect that he directed the trustee to execute the deed to his niece upon the understanding with the latter that she would reconvey it to him when he secured an absolute divorce from his wife. But when asked what Miss Kelley had to say about it, he replied, “I don’t know.” Later he corrected himself, stating that she had agreed to accept the deed upon those terms; that in June, 1939, he got his divorce, but his niece had not reconveyed the property in spite of demands made by him upon her to do so. On cross-examination he was asked if he had not written his niece a number of times and expressed himself in each of those letters as having had the utmost confidence in her, and replied, “I don’t know whether I wrote that or not.” However, he later replied that it was in fact true.

He further testified that he had full confidence in Genevieve down to 1939, felt very close to her and did not want his second wife to get any more of his property. He further admitted that while he was in the Memorial Hospital for observation in January, 1937, he was visited frequently by his nephew, Joseph Kelley, with whom the witness ³⁹⁵ was still friendly, but denied having told Joseph he desired to convey the property to his (Joseph’s) sister, Edith Genevieve. He was asked if he did not remember making arrangements for Genevieve to meet him in his attorney’s office on the