Lamkin v. Safe Deposit & Trust Co.

Marbury, C. J., delivered the opinion of the Court. On April 3, 1909, Ernest Gill, a resident of Baltimore County, Maryland, died, leaving a last will and testament by the terms of which he left separate trust estates to each of his two sons, Ernest A. Gill and Arthur Lanning Gill, left his stock in Martin Gillett & Co. to his wife, Matilda R. Gill absolutely, and left the rest and residue of his estate to the Safe Deposit & Trust Co., in trust to pay the income to his wife, Matilda R. Gill, during her life. The will then provided that * * from and after the death of my said wife, I authorize or direct said Trustee to transfer and deliver the rest and residue to my estate to such person or persons as she may limit, nominate, and appoint by her last will and testament.” There was a further provision that in the event of the death of Mrs. Gill without leaving a will, the trustee was to deliver the rest and residue of the estate to his children in equal shares and the descendants of any deceased child or children living at that time, such descendants to take the share the parent would have been entitled to receive if living. If there were no such children or descendants, the rest and residue went to four named remaindermen.

On May 20, 1919, Matilda R. Gill, widow of Ernest Gill, died, leaving a last will and testament. In her will she recited the authority to appoint given her in her husband’s will, and then stated that in the exercise of that power of appointment or disposition, she gave all of the trust property to her trustees to be held by them as part of the rest, residue and remainder of her estate, upon the same terms and conditions as provided for the said rest, residue and remainder of her estate. She then gave the rest and residue of her estate to trustees in trust to ⁴⁷⁶ pay fixed annuities to her two sisters Eleanora Robb Horsey and Margaret Robb, her two brothers John Robb and Wallace Robb, and then, after the death of one brother, John Robb, her niece, Katherine Leslie Robb, daughter of John Robb, is given the sum of $400 per annum during the remainder of her life. The balance of the income is given to the son of the testatrix, Arthur Lanning Gill, for his life, and, in the event that he should die without leaving issue, the trustee is directed to pay the income in equal shares to her two sisters, Eleanora Robb Horsey and Margaret Robb, and her brother, John Robb, “or such of said three as may then survive” for their lives.

The will then further provides: “Upon the death of my sister, Eleanora Robb Horsey, and my brother, John Robb, if they survive and become entitled to receive any income under this section of my will, they shall have the right by their respective wills to dispose absolutely of such proportion of the corpus of my estate as may correspond with the proportion of the income of said estate which they are respectively receiving at the time of their respective deaths. And in the event that they, or either of them, should die without leaving a will exercising the power above given, then I direct that such portion of the corpus of my estate as they were authorized to will hereunder shall pass to my niece, Katherine Leslie Robb, and my friend Sarah B. Campbell, in equal shares. In the event that neither my sister Eleanora Robb Horsey, nor my brother, John Robb, shall survive my son, Arthur Lanning Gill, then on the death of my sister Margaret Robb, the entire corpus of my estate shall pass to my niece Katherine Leslie Robb, and my friend Sarah B. Campbell, in equal shares.” Arthur Lanning Gill, the son of Matilda R. Gill, predeceased her, dying on January 19, 1919, leaving a widow but no surviving issue. Her brother, John Robb, also predeceased her, dying on the same same day she did, May 20, 1919, but before her death.

By the second clause of Mrs. Gill’s will, she had given her son two tracts of land in Baltimore County, and after his death, she re ⁴⁷⁷ voked this clause by codicil, and directed that this property be sold, and, from the proceeds of the sale, she provided for a number of pecuniary legacies, including one of $2000 to Sarah B. Campbell, and then provided that the balance of said proceeds should become part of her estate. At the request of the trustees, the Circuit Court of Baltimore City took jurisdiction over the estates of Ernest Gill and Matilda R. Gill, and, by a decree dated May 28, 1920, the net income of the trust funds was directed to be paid $2000 a year to Eleanora Robb Horsey, $500 a year to Margaret Robb, $500 a year to Wallace Robb, and $400 a year to Katherine Leslie Robb, these being the annuities provided in Mrs. Gill’s will. The court further directed that the whole of the remaining income should be divided into two equal parts, one of which should be paid to Eleanora Robb Horsey, and the other to Margaret Robb. It was further stated in the court’s decree that, on the death of any of these parties, further orders would be passed directing what should become of the income.

Margaret Robb died on October 12, 1922, Wallace Robb died February 1, 1925. After their deaths, the income of the estate was distributed $400 per annum to Leslie R. Simpson, who was the Katherine Leslie Robb named in Mrs. Gill’s will, and the balance to Eleanora Robb Horsey. None of the parties dispute the correctness of this division. On May 3, 1946, Eleanora R. Horsey died leaving a will and four codicils by which she attempted to exercise the power conferred upon her by her sister, Matilda R. Gill.

By her will executed June 3, 1919, she gave all of her property, including that over which she had been given power of disposition by Matilda R. Gill, to her husband, John P. Horsey. On January 27, 1920, which was the day after a decree was passed by the court approving a family agreement, Mrs. Horsey executed her first codicil, in which she recites that, in the exercise of the power of disposition conferred upon her by the will of her sister, and in confirmation of the provisions of the decree, she gives Ernest A. Gill absolutely, one-half of all ⁴⁷⁸ of the shares of stock- in Martin Gillett & Co. which she may have the power to dispose of by will at the time of her death, or one-half of the proceeds of any reinvestment of said shares. The second codicil made by Mrs. Horsey, February 19, 1940, by Item First, directs that her debts and funeral expenses be paid out of the trust funds from the Gill estate, and especially a debt of $2000.00 due by her to John J. Nelligan. She then makes several specific pecuniary bequests, releases a debt of $2100, and gives the rest and residue of her property and estate to trustees to pay the net income to Katherine Leslie Simpson for life, and, after her death, to transfer the corpus to Norman Simpson, son of Katherine Leslie Simpson, to be his absolutely.

The third and ‘ fourth codicils executed respectively July 8, 1942, and July 10, 1942, change certain specific bequests, and have no especial significance in this case. Each specifically ratifies, in other respects, the will and the former codicils. On August 6, 1946, the Safe Deposit & Trust Co., trustee under the will of Ernest Gill, trustee under the will of Matilda R. Gill, executor of the will of Eleanora Robb Horsey, co-trustee under the will of Eleanora Robb -Horsey, and Executor of the will of John J. Nelligan, asked, by their petition in the Circuit Court of Baltimore City, instruction as to the proper disposition of certain assets, held by it as trustee under the will of Matilda R. Gill. All persons having an interest were made parties, and, after appropriate proceedings, and the taking of testimony, the court filed its decree from which an appeal has been taken by Sarah B. Lamkin, formerly Sarah B. Campbell, one of the residuary legatees named in the will of Matilda R. Gill.

The disputed decisions of the chancellor which control all of the questions raised in this appeal are (1) that the creation of a life estate, with a power of appointment in Eleanora Robb Horsey, by the will of Matilda R. Gill, was a valid exercise of the power of appointment given to Matilda R. Gill by the will of Ernest Gill, (2) that Mrs. Horsey’s disposition of the property was not void ⁴⁷⁹ in its entirety because certain of her bequests were void, and (3) that there was an intestacy as to the remainder interest in the corpus necessary to support the annuity of $400.00 a year payable to Katherine Leslie Simpson under the will of Matilda R. Gill. A power of appointment is said to be general when there is no limitation as to its exercise (except as to the manner), nor as to the persons in whose favor it is to be exercised, nor as to the amounts to be given to such persons. O’Hara v. O’Hara, 185 Md. 321 , 44 A. 2d 813 , 163 A. L. R. 1144. Under the decisions of this court, the power must be exercised in the manner directed, that is, if the grantor says it shall be exercised by will, it cannot be exercised by deed.

Hutchinson v. Farmer, 190 Md. 411 , 58 A. 2d 638 , and cases cited. The property passing under the power is the property of the donor and not of the donee, and therefore the property cannot be appointed by the donee for the payment of his debts or to his estate. Connor v. O’Hara, 188 Md. 527 , 53 A. 2d 33 , and cases there cited. If these are no other restrictions placed upon its exercise, then it is what is called a general power of appointment, under which, with the exceptions mentioned, the donee can dispose of it in the same manner as he can dispose of his own property.

The power given in this case by the will of Ernest Gill to Matilda R. Gill is in the form of an authorization to his trustee to transfer and deliver the residue of his estate “to such person or persons as she may limit, nominate and appoint by her last will and testament.” It is earnestly contended by the appellant that the exercise of this power in the manner contained in the will of Mrs. Gill is an attempted delegation of the power itself, inasmuch as she gives a life estate to Mrs. Horsey, coupled with a power of appointment to be made by Mrs. Horsey in her will. She relies largely upon the case of De Charette v. De Charette, 264 Ky. 525 , 94 S. W. 2d 1018 , 104 A. L. R. 1455. In that case, the donor of the power devised a farm to her daughter in trust for life, with a general testamentary power of appointment. The daughter, ⁴⁸⁰ Mrs. Henning, by her will, appointed the estate to her daughter, Susanne, the Marquise De Charette, in trust for life, with remainder to her issue in such proportion as she might, by her will, devise.

The Kentucky Court of Appeals held that the exercise of the power by Mrs. Henning was a delegation of the expression of trust and confidence personal to her and void for that reason. It held that, if this could be done, Mrs. Henning’s daughter could also delegate the power to some of her issue, and this could be carried on ad infinitum. The case is in point, but it seems to be the only case in which such a holding is definitely made. In the case of Hood v. Haden, 82 Va. 588 , also cited by appellant, a wife who had a life estate and a special power of appointment under her husband’s will, “At her death to leave to our children such sums or portions as the circumstances then existing may in her estimation think it best to do”, left a will by which she gave one son half of the “Home Tract” for life, and after his death, if he had no issue, to such of the children or grandchildren of the testatrix as this son might appoint.

The court said that “A power of appointment, where a trust and confidence is reposed in the donee, is personal to the donee and cannot be delegated. Nor will a power to appoint to children authorize an appointment to grandchildren or other persons * * This special appointment was held void, but the circumstances are clearly distinguishable from those in the case before us. It is said in Simes, Law of Future Interest, Section 264, where that author is discussing powers of appointment generally, that “The exercise of the power cannot be delegated”. Further, in the same section is the statement “It is also held that the donee of a general power may exercise his power by appointing a partial estate, and creating another power” and also “* * * the creation of the second power is explainable, not as a delegation of the first power, but as an appointment of the property, to shift on an event, namely, the exercise of the second power.” (Emphasis