Lambdin v. Dantzebecker

Ruth S. Dyott died at the home of her brother-in-law, Maurice Dyott, at St. Michaels in Talbot County, Maryland, on Tuesday, June 27th, 1933, as the result of a painful and protracted illness. She left to survive her three brothers, Joseph A. Lambdin, since deceased, Charles H. Lambdin, and George H. Lambdin, and a sister, Harriet H. Robinson Dantzebecker. On the 26th day of the January preceding her death, she and Harriet H. Robinson Dantzebecker, herein called "Harriet Robinson," executed a trust agreement, herein called "Declaration No. 1," under which she delivered certain stocks, bonds, mortgages, and other securities to Harriet Robinson, to hold in trust to pay the net income therefrom to Ruth S. Dyott during her life and at her death to distribute them to certain named beneficiaries, among whom were Charles H. Lambdin, Joseph A. Lambdin, and Harriet Robinson. That instrument was in two parts.

One part, called herein part "A," consisted of a declaration of trust signed and sealed by Harriet Robinson in which she declared that she had received the property and securities scheduled therein in trust for the uses and purposes set forth in the instrument, and each page of that part of the instrument was signed on the margin by Ruth S. Dyott. The second part, called herein part "B," which was attached to the first, and executed by Ruth S. Dyott, was in the following form: *Page 243 "I, the undersigned, do hereby declare that I have delivered the above mentioned securities to the said Harriet H. Robinson for the purposes in said Declaration of Trust set forth, and I hereby authorize and empower her to do every act above named by me to transfer unto her all said securities above mentioned in the same manner as if I were present to execute the same, and this is her authority to do so, until otherwise directed. "As Witness my hand and seal this 26th day of January, 1933. "Ruth S. Dyott [Seal] "Witness to Signature: "C. Wilbur Stewart, M.D." Following the execution of that instrument, Mrs. Dyott requested the trustee to sell two bonds scheduled in the agreement, which was done.

On May 11th of the same year, she addressed a letter to the trustee, in which she stated that in that transaction the trustee had carried out the donor's wishes, and relieved her of the duty of disposing of those bonds, saying in the concluding part of the letter: "The proceeds of sale are to be invested by you and by subsequent agreement we will arrange how this item is to be held and disposed of." On June 26th, 1933, Harriet Robinson executed a second deed or declaration of trust, herein called "declaration No. 2," the effect of which was to largely increase the gifts provided for her in the first trust agreement, and to diminish those provided for her brothers. The second trust instrument was identical in form with part A of the first agreement, but it contained no counterpart of the second or concluding part, but Mrs. Dyott signed her name at the end of it under the word "Test." She signed it at about 9 o'clock on the morning of Monday, June 26th, 1933, and she died between 2 and 3 o'clock on the following morning. On June 11th, 1934, Harriet H. Robinson Dantzebecker filed in the Circuit Court of Baltimore City an ex parte petition in which she set out in substance these facts, and *Page 244 further stated that certain beneficiaries named in declaration No. 1 objected to the distribution of the estate under declaration No. 2, claiming that distribution should be made in accordance with the provisions of the first trust agreement. She prayed the court to assume jurisdiction of the trust estate, and to direct its distribution in "accordance with the `Declaration of Trust' dated the 26th day of June, 1933." Clara Lambdin, administratrix of Joseph A. Lambdin, and Charles H. Lambdin intervened in that proceeding and filed answers in which they set up these defenses: (1) That declaration No. 1 contained no power of revocation; (2) that Ruth Dyott did not direct any changes in that agreement; (3) that at the time trust agreement No. 2 was executed Ruth Dyott was mentally incapable of executing a valid deed or contract; and (4) that Harriet Robinson wrongfully without legal authority executed declaration No. 2.

After testimony and a hearing on these issues, the court decreed: (1) That agreement No. 1 did contain a power of revocation; (2) that declaration No. 2 was the free and voluntary act of Ruth S. Dyott, done when she was mentally capable of executing a valid deed or contract with her knowledge and consent and not induced by any undue influence exercised upon her; (3) that the interest of Ruth S. Dyott in the trust estate terminated at her death except as to its distribution; and (4) that distribution should be made in accordance with the provisions of declaration No. 2. From that decree Charles H. Lambdin and Clara Lambdin, administratrix of Joseph A. Lambdin, have appealed to this court. In natural sequence the first question presented by the appeal is whether declaration No. 1 was revocable. In part B of declaration No. 1, the settlor did three things: (1) She expressly recognized the trusts created by part A; (2) she granted the trustee power to transfer "unto her" the securities mentioned in part A; and (3) she *Page 245 reserved some power of direction over the trust estate by concluding part B with the formula "until otherwise directed." That phrase follows immediately the grant of power, and the appellants contend that it qualifies and limits that power, but has no other effect, and certainly does not amount to a reservation of a power of revocation.

Such a construction is possible, but it would be both illogical and unreasonable. So long as the trust continued, the power of dealing with the trust property would be necessary to its proper administration by the trustee, and there is no apparent reason why the settlor should desire to reserve the right to revoke the power unless she reserved at the same time the right to revoke the trust. And as stated in Perry on Trusts and Trustees, (7th Ed.) sec. 104, n. 77: "It must be observed, however, that the absence of a power to revoke a voluntary settlement or trust is viewed by courts of equity as a circumstance of suspicion, and very slight evidence of mistake, misapprehension, or misunderstanding on the part of the settlor will be laid hold of to set aside the deed. Garnsey v. Mundy, 24 N.J. Eq, 243, reprinted in 13 Am.

Law Reg. (N.S.) 345 , with a learned note by Mr. Bispham, gives a very clear view of the law applicable to voluntary settlements without a power of revocation made under circumstances which may lead to the conclusion that the settlor did not intend to put the property entirely beyond his control, or that he acted unadvisedly or improvidently. See, also, Rhodes v. Bates, L.R. 1 Ch. 252; Leach v. Farr, 13 Am. Law Reg. 350 (N.S.); Villers v. Beaumont, 1 Vern, 99; Bridgman v. Green, 2 Ves. 627; Petre v. Espinasse, 2 M. K. 496; Bill v. Cureton, 2 M. K. 511; Hastings v. Ord, 11 Sim. 205; Coutts v. Acworth, L.R. 8 Eq. 538; Phillips v. Mullings, L.R. 7 Ch. 244; Hall v. Hall, L.R. 8 Ch. 430; Toker v. Toker, 3 De G., J. S. 487; Evans v. Russell, 31 Leg.

Int. 125 ." In view of the equivocal character of the language, it was proper to receive parol evidence, not to vary the instrument, but, by showing the circumstances attending *Page 246 its execution and the position of the settlor at that time, to ascertain the sense in which the words were used, for, as said in Fryer v. Patrick, 42 Md. 51 , 54: "If a written instrument is certain and definite in its contents it is the best evidence of the intention and meaning of the parties, but where it is not so it cannot be questioned that extrinsic evidence may be resorted to in aid of its terms and provisions — not to contradict it, but to explain it." Stockham v. Stockham, 32 Md. 196 , 207; McCreary v. McCreary, 5 G. J. 147, 157. Much time, ingenuity, and labor have been expended in applying Lord Bacon's rule, that latent ambiguities may be explained by parol evidence but that patent ambiguities may not. The basis of the rule is thought to be that where the doubt does not appear on the face of the instrument the introduction of parol evidence merely completes the instrument by identifying its object or its subject-matter, while where the doubt is patent and too uncertain for settled construction, to permit its meaning to be fixed by parol evidence would be not to construe the instrument under consideration but to create a new one. But while the inflexible and binding authority of that rule is generally recognized, there has been much confusion and some conflict as to the meaning to be given to the words "latent," "patent," and "ambiguity" in applying it to varying facts. 3 Jones on Evidence, sec. 474.

For, as was said by that author: "There are comparatively few cases in which a bare inspection of the instrument will show that no proper extrinsic evidence will afford any light on the construction of the writing. Hence the court cannot generally determine whether there is a patent ambiguity until extrinsic evidence of the surrounding circumstances has been received." Id., sec. 455. And "where any doubt arises as to the true sense and meaning of the words themselves, or any difficulty as to their application under the surrounding circumstances, the sense and meaning of the language may be investigated and *Page 247 ascertained by evidence dehors the instrument, for both reason and common sense agree that by no other means can the language of the instrument be made to speak the real mind of the party. In such a case parol evidence is admissible ex necessitate." 22 C.J . 1199.

Again it has been said: "It is certainly not true that an ambiguity appearing on the face of the paper, if that alone is looked to, cannot be explained by parol, and the rule laid down by Lord Bacon that extrinsic evidence is not admissible to explain a patent ambiguity has never been acted upon in its widest extent, for there are to be found in the reports many cases where, although the ambiguity was such as should undoubtedly be designated as patent, if that term is taken in its broad sense, the courts have admitted evidence to explain it, or to show the circumstances surrounding the transaction and the situation of the parties." 22 C.J . 1197. And cases authorizing parol evidence to show to what object or subject the language of written instruments was intended to apply, that the intent of the parties may prevail, are too numerous for convenient citation, McCreary v. McCreary, supra . For "when a question arises as to the general intention of the parties concerning which the instrument is not decisive, it has been held that proof of independent facts, collateral to the instrument, may be properly admitted," ( Stockham v. Stockham, supra . See, also, Warfield v. Booth, 33 Md. 63 , 70; Myers v. Myers, 153 Md. 44 , 48, 137 A. 501 ; Kleiman v. Orion Knitting Mills, 139 Md. 550 , 115 A. 857 ; Ess-Arr Knitting Mills v. Fischer, 132 Md. 1 , 8, 103 A. 91 ; Phoenix Pad Mfg.

Co. v. Roth, 127 Md. 540 , 544, 96 A. 762 ), as well as contemporaneous statements indicating the understanding of the parties as to the meaning of the equivocal words, for in such a case statements so made are facts and part of the surrounding circumstances. 22 C.J . 1179, 1180; Wigmore on Evidence, 2471, 2472; 10 R.C.L. 1076. When resort is had to the evidence as to the circumstances attending the transaction and the situation of the *Page 248 settlor at that time, any doubt as to her belief that she had reserved the power at once disappears. She was a woman of more than ordinary intelligence. At the time she instructed her lawyer as to the preparation of declaration No. 1, she was on her way to a hospital for a serious operation, she was uncertain whether she would survive it, she did not want to make a will, but she did want to arrange her affairs so that she would enjoy the use of her property while she lived, and that it would then go to the persons she wished to have it.

The phrase "otherwise directed" was not in the paper as first drawn, but was added by the draftsman after the first draft was read to Mrs. Robinson, and she had said: "Now is it all worked out so that my sister can change it at any time?" There was evidence that Mrs. Dyott went to the office of her lawyer to have some instrument drawn "that would be secret * * * and still have the same right to change it as you would a codicil in a will," and she talked over with him "what right she would have or control over it if she would let this deed go to Hattie," and her instructions to the lawyer were that she was "to have the right to change it at any time that she saw fit." The only reasonable inference permissible in these circumstances is that the phrase "until otherwise directed" was intended to apply to the whole instrument, and that it reserved to her an express power of revocation. The second question is whether she did in fact revoke declaration No. 1. She did not revoke it in express terms, but if declaration No. 2 is valid, it is so far inconsistent with declaration No. 1 as to amount to an implied revocation pro tanto . Declaration No. 1 was silent as to the manner of revocation, but "if the settlor reserves a power to revoke the trust but does not specify any mode of revocation, the power can be exercised in any manner which sufficiently manifests the intention of the settlor to revoke the trust." Am.

L. Inst. Restatement, Trusts, sec. 330, p. 992. And "if the settlor reserves a power to revoke the trust but does not specify any mode of revocation, the power may be exercised by the execution and *Page 249 delivery to the trustee of a new trust instrument declaring a trust different from that declared in the original trust instrument. If the settlor having such a power of revocation wishes to create a different trust, it is unnecessary formally to revoke the trust and to have the trust property reconveyed to him before creating the new trust; but he can revoke the old trust and create the new one in a single transaction." Id., p. 993; 65 C.J . 347.

There is no doubt that declaration No. 2 contains important provisions inconsistent with those contained in declaration No. 1, and to that extent, if it is valid, it revoked the earlier instrument. The controlling question then is: Was declaration No. 2 a valid instrument? It may be observed that on its face and literally it does not purport to be the act of Ruth S. Dyott, but the act of Harriet H. Robinson. It begins with this statement: "This Declaration of Trust made by me, the undersigned, Harriet H. Robinson of St. Michaels, Talbot County, Maryland." It ends with this sentence: "In Witness Whereof I have signed my name and affixed my seal at St. Michaels, Talbot County, Maryland, this 26th day of June, 1933," and the signature and seal of Harriet H. Robinson.

The fact that Mrs. Ruth S. Dyott was a party to it is nowhere stated in the instrument, and must be inferred, if at all, from the fact that she signed it under the signature of Anna J. Dyott, who signed it under the word "Test," obviously as a witness. No point was made of that circumstance, however, either in