Kensett v. Safe Deposit & Trust Co.

Pattison, J., delivered the opinion of the Court. On the tenth day of June, A. D. 1910, the appellants, Thomas BE. Kensett, Jr., and Zillah A. Kensett, his wife, by an instrument of writing dated as of that date, “did grant and convey, assign and set over unto (the appellee) the Safe Deposit and Trust Company of Baltimore, its successors and assigns” certain stocks and bonds therein named which were delivered to said Trust-Company, and also “all the estate, right, title and interest of every kind whatsoever of the said Thomas BE. Kensett, Jr., and Zillah A. Kensett, his wife, in and to a lot of ground1” situated in Baltimore City, “together with the yearly rent of two thousand dollars issuing there-out” * * * “and which said rent has been decreed to be sold in the case of said Trust Company v. Kensett, in the Circuit Court for Baltimore City,” the deed stating the “intention hereby being to include the interest of the said grantors in the proceeds of sale together with the rights and appurtenances thereunto belonging or in anywise appertaining.

To have and to hold the said property hereby granted and conveyed unto the said Safe Deposit and Trust Company of Baltimore, trustee, its successors and assigns, in trust and confidence nevertheless, upon the trusts and with the powers and limitations following, that is to say: to collect the rents, interest, income, dividends and profits thereof, and after paying thereout all expenses, including a commission of five per cent, to said trustee, to pay over the net income unto the ⁵²⁹ said Thomas H. Kensett, Jr., and the said Zillah A. Ken-sett, his wife during their respective lives or unto either of them in the discretion of said trustee, in quarterly payments or of tener, and from and after the death of the survivor of the said Thomas IT. Kensett, Jr., and Zillah A. Kensett, his wife, the corpus of said trust estate shall vest in and become the property of such persons living at the time of the death of said survivor as would by the now existing laws of the State of Maryland he the next of kin of the said Thomas II. Kensett, Jr., with power to the said Thomas II. Kensett, Jr., at any time after the tenth day of June, A. D. 1914, to revoke the trust as to all or any parts of said trust property hereby created, and to require a reconveyance thereof to him by tbe said trustee, or its successors, or to make any modification or variation of tbe terms of said trust, by an instrument of writing to be executed under his band; and seal and delivered to tbe said trustee or its successors in office; with power to tbe said trustee and its successors in office at any time without application to any Court and as often as necessary during tbe continuance of the trust for the purpose of changing investments, or upon the temination of the trust for the purpose of making division and distribution of the principal of the trust estate, should such division be necessary, to sell, exchange and transfer all or any portion or portions of the trust estate, and to make division in kind, if such division is necessary for the purpose of distribution,” etc. On October 3rd, 1910, Thomas II.

Kensett, Jr., filed his bill in the Circuit Court of Baltimore City against the appellee company and his wife, Zillah A. Kensett, asking that the aforesaid deed be declared null and void, and that the defendant be directed to deliver tbe property transferred to it (by said instrument) to the possession of the plaintiff. The bill alleges that he executed tbe deed at tbe request and solicitation of his parent and friends and officers of the appellee company and1 that at the time of its execution ho was inexperienced “in matters of that kind” and was ⁵³⁰ influenced to execute it without comprehending its legal effect, and did not realize that he thereby placed in the hands of said appellee company, as trustee, the exclusive right to control the disposition of the income from his property, nor did he comprehend that under the deed the trustee could without his acquiescence deprive him of the use and enjoyment of all or any part of the income whatsoever. The bill also alleges that by a proper construction of the deed or instrument or writing the trust created thereby was revocable at the option of the appellant and his wife, because, as it alleges, the language therein employed reserved the entire equitable estate in said property in the appellant and his wife, the trust company, trustee, retaining the hare legal right thereto. The defendant company filed its answer denying that the trust created by the deed aforesaid was revocable at the option of the plaintiff and his wife, but averred that the trust is to continue under the terms set forth in said deed.

The answer also denies that the appellant awas influenced to execute said deed without comprehending the legal effect thereof, and it avers and charges that both he and his wife did .comprehend the legal effect of said deed and did realize and know the full effect of the same and' the control that he gave these respondents over the disposition of the income.” The other defendant, Zillah A. Kensett, the wife, filed an answer and cross-bill. She admits the execution of the deed with her husband, but alleges that she, being ignorant of business and unacquainted with legal forms, was induced to sign said deed by the importunities of her husband and the representations made to her by him that he was giving to her thereby an absolute one-half interest in said fund and in case he should predecease her the entire amount of said fund would be hers. And furthermore, that the irrevocability of said deed was never mentioned or explained to her by the officers of the defendant company. She further alleges that she is in a destitute- condition and has been compelled to earn a precarious and inadequate living on the stage. ⁵³¹ That she is willing that the deed of trust he revoked and that the Court assume jurisdiction of said fund now held by the defendant company, and' that it be distributed between herself and husband as it may seem to the Court right and proper.

The Court below upon hearing testimony upon the issues joined, dismissed both the bill of Thomas IT. Kensett, Jr., the husband, and the cross-bill of Zillab A. Kensett, the wife. It is from the order dismissing the bill and cross-bill that these appeals are taken. As stated in Whitridge v. Whitridge, 16 Md. 13 : “The rule in cases of this description is this — Where those relations exist by means of which a person is able to exercise a dominion over another, the Court will annul a transaction under which a person possessed of that power takes a benefit unless he can show that the transaction was a righteous one.

It is very difficult to lay down with precision what is meant by the expression ‘relation in which dominion may be exercised by one person over another.’ That relation exists in the cases of parent, of guardian, of solicitor, of spiritual adviser and of medical attendant, and may be said to’ apply to every case in which two persons are so situated that one may obtain considerable influence over the other. The rule of the Court, however, is not confined to such cases. Lord Oottenham considered that it extended to every case in which a person obtains by donation a benefit from another to the prejudice of that other person and to his own advantage, and that it is essential in every such case, if the transaction should be afterwards questioned, that he should prove that the donor voluntarily and deliberately performed the act, knowing its nature and effect. It is not possible to draw the rule tighter or to make it more stringent, and I believe it extends to every such case.” Judge McSheery, in speaking for the Court in that case, further started: “It is the firmly settled law of Maryland that a gift or voluntary conveyance between living parties standing in the confidential relation of parent and child is prima facie void, and when ⁵³² assailed by the donor or grantor, can only be upheld if satisfactorily proved to have been, the free, voluntary, and unbiased act of the person who made it.” Those, in this case, who were charged with the exercise of dominion over the appellants in the execution of the deed of trust, are the officers of the appellee company and Kensett’s mother.

It will be seen that the advantage to be acquired under this deed of trust by the appellee company consists only of the commissions they are to receive, as provided for in the deed, and the benefits or advantages accruing therefrom to the mother, as one of the next of kin, are indeed remote, considering her age in connection with that of the appellant, her son; his right to revoke the trust at the end of four years; and the possibility of issue born to him, with other facts that may well be weighed in considering the improbability of his mother being benefited by the execution of this deed. Thus it will be seen that the rule is tightly drawn when applied in this case, but, nevertheless, we will consider it in the light of this rule. It is not shown nor is it alleged that any fraud or deception was practiced or attempted to be practiced by anyone upon either Mr. or Mrs. Kensett in the execution by them of the deed of trust in this case. It is alleged by Kensett that he being “inexperienced in matters of this kind” was influenced to execute the deed without comprehending its legal effect, and did not realize that he had placed in the hands of the defendant company, as trustee, the exclusive right to control the disposition of the income of said property, and did not comprehend that under this instrument the trustee could,, without his acquiescence, deprive him of the use and enjoyment of all or any part of the income therefrom.” The appellant, Thomas H. Kensett, Jr., was married in 1908 at the age of nineteen years.

Two years thereafter, on the tenth day of Jtune, 1910, he reached the age of twenty-one years, at which time the appellee company, as trustee under the will of Thomas Kensett, his grandfather, held for him certain property, including the property mentioned ⁵³³ in the deed of trust in this ease, and also held for him as guardian about one thousand dollars in cash. The amounts so held by it as trustee and guardian amounting in the aggregate to about fifteen thousand dollars, to the possession of which he was then ejntitled. Early in the morning of that day he called upon his trustee and guardian, the trust company, for the purpose of receiving his estate. It was while at the office of the company and on that occasion that he with his wife executed the deed of trust involved in these proceedings.

It is shown by the testimony of Mr. Marshall, vice-presi-' dent of the defendant company, that when on the occasion of Kensett’s visit to the office of the appellee company, he suggested to him, by reason of his extravagant habits, that he make a deed of trust, Kensett replied at once “Yes, I do want to malee a deed of trust, it is a matter I had thought of myself. My mother and other members of the family have told me it would be wise for me to execute a deed of trust,” and that he had made up his mind that he would create some trust whereby a portion of his estate would be retained for him until he arrived at the age of twenty-five years. It seems from his testimony that his mother had suggested that he make a trust lasting for ten years. This suggestion, however, he rejected, for in his testimony he was emphatic in saying that he would not make a trust for longer than four years, or until he reached the age of twenty-five years, nor would he put his entire estate in the trust.

Whatever Mr. Marshall may have suggested, he persistently adhered to his own determination, formed, as it appears, prior to his going to the office of the defendant company, that he would make the trust for four years and no longer, and would put in trust only a part of his property. It is shown from the testimony of Mr. Burger, of the law firm of Hinkley, Spamer and Husky, who prepared the deed, by Mr. Marshall and Mr. Gibson, assistant secretary of the ⁵³⁴ appellee company, as well as by tbe testimony of tbe plaintiff, that be (Kensett) knew and understood tbe provisions and terms of the deed. Messrs. Burger, Marshall and Gibson all testified that it was read over to him several times, item by item, and the details thereof fully explained to him as well as to his wife, and that they said they understood them.

Mr. Burger states that Kensett told him that the trust was to last for four years, until 1914, at which time he would be twenty-five years of age. He also told him how the income and profits from the estate should be disposed of, and What disposition should be made of the corpus or principal after the death of the survivor of them and states that from the detailed directions so given to him by the appellant he prepared the deed, and after the deed was written as directed by the appellant, he explained to both Mr. and Mrs. Ken-sett that the trust would last for four years and it could be revoked after that time, and that during its continuance the trustee