Lipp v. Lipp

Oeeutt, J., delivered the opinion of the Court. The parties to this appeal are mother and son. On September 15th, 1919, Louisa P. Lipp, the appellee, conveyed to William M. Lipp, the appellant, a leasehold property known as 544 East Clement- Street in Baltimore City, which had been conveyed to her and her husband, John C. Lipp, as tenants by the entireties, on August 8th, 1899, and which they occupied until his death, which occurred in or about 1917. After his death Mrs. Lipp continued to reside there with her son, the appellant, until she conveyed it to him in 1919, and thereafter until January 24th, 1927, when she was “moved out” of it by him.

Following that action on his part, on the 18th of July, 1928, she filed in the Circuit Court of Baltimore City a bill of complaint against him and Margaret B. Lipp, his wife, in which she asked (1) that the defendants be enjoined from selling or encumbering the property which she had conveyed to him, (2) that her deed conveying it to him be set aside, and (3) that she be granted ²⁰⁹ genera] relief. A demurrer to that bill was sustained, as was a demurrer to an amended bill of complaint which she filed •on [November 20th, 1928, and on March 19th, 1929, she filed a third bill entitled “Second Amended Bill of Complaint”, praying process against William M. Lipp alone, in which, in addition to the relief prayed in her original bill, she asked that “a money decree for the reasonable value of die furniture and other household effects retained by the defendant, William M. Lipp, in said property, 544 East Clement Street, or that said defendant by decree of this honorable court be directed to surrender up and deliver unto your oratrix said furniture and household effects.” The defendant demurred severally to each paragraph of that bill, and to the whole bill, on the grounds (1) that the court was without jurisdiction, (2) that the “plaintiff” was “without equity,” (3) that the “statements of facts” mentioned in the bill were “vague, uncertain and indefinite,” (4) that the complainant had a full adequate and complete remedy at law, (5) that she had not stated such a case as entitled “him” to relief in equity, and (6) that it was “bad in substance, defective in law, insufficient in facts, and defective in equity to constitute a valid cause of action in equity.” The court by its decree of May 2nd, 1929, overruled the demurrer, and from that decree this appeal was taken by the defendant. In addition to the facts thus stated, it is alleged in .the bill that Mrs. Lipp for a long period of time suffered from cancer, and was informed by her physician that she could not live for six months unless she submitted to an operation; that the operation might cause her “immediate death,” but on the other hand if successful might prolong her life for two or three years; that she-did undergo the operation, and in consequence partially regained her health, and returned to live with her son, William M. Lipp, at her home; that, to quote from the bill, “for a long period of time prior to the said transfer, and during the time of your oratrix’s illness, the said defendant, William M. Lipp, constantly requested, insisted, importuned and in every way urged your oratrix to ²¹⁰ transfer her property, 544 East Clement Street, to him. That your oratrix finally yielded to the constant and urgent importunities of the defendant, William M. Lipp, to convey to him the leasehold property hereinbefore referred to, and accordingly your oratrix did on the 15th day of September, 1919, convey her leasehold interest in said property, to the defendant, William M. Lipp, with the distinct understanding, however, with said defendant, that your oratrix should have the right to live in said property as her home for the residue of her natural life, and the defendant, William M. Lipp, agreed with your oratrix that she should have a home with him in said property as long as she lived, and that he would continue to treat her with the same filial love and affection as he had theretofore manifested toward her, and that he would maintain and support her, for the rest of her life, at his own cost and expense; that thereafter your oratrix continued to live with her said son, William hi.

Lipp, in her said home, 544 East Clement Street, until the early part of February, 1927.” It is further stated that she “maintained and supported” the appellant from the time of his birth until February, 1927, and that up to that time she paid all taxes and public dues assessed against the property which she had conveyed to him. That for a number of years prior to the conveyance to appellant, she had conducted a store in the property and that from the profits of that business she had “raised” a family of six children, of which “the defendant” was the youngest, and that she continued to conduct that business for some seven or eight years after she had conveyed the leasehold to the defendant, and that during that period she employed him on a salary, and gave him “room and board without charge or payment.” That for a long time prior to the conveyance to him, and for eight years thereafter, she and the appellant lived together in their home happily and peacefully, she “furnishing the table and paying all of the other expenses incidental to running” it. That in December, 1926, she sold the business to William for $2,000 and on January 24th, 1927, he married, and, to further quote from the bill, “in ²¹¹ February of that year brought his wife and his mother-in-law to the home of yonr oratrix, 544 East Clement Street, to live, whereupon the defendant, William M. Lipp, gave yonr oratrix's bedroom to his mother-in-law, and moved your oratrix out of the property, taking her to the home of one of her married daughters and leaving her there with the statement: Wou have done enough for your other children; now let them take care of you.’ That your oratrix avers that since she was moved out of her said home, 544 East Clement Street, by the defendant, William M. Lipp, she has been compelled to make her home with her married daughters, living on their charity, affection and kindness, and but for this fact she would be without home and means of support. That the defendant, William M. Lipp, has refused and continues to refuse to permit your oratrix to make her home with him in violation and repudiation of the distinct understanding had between your oratrix and the defendant, William W. Lipp, that your oratrix should have a home with him in said property, 544 East Clement Street, and that he would maintain and support her and provide her with a comfortable, quiet and peaceful home.” That since “ejecting” complainant from her home, appellant has appropriated to his own use certain “household effects” and furniture belonging to her, and refuses to permit her to “have or use” them.

And “that your oratrix is now seventy-one years of age, in feeble health, unable to maintain and support herself or to provide herself with a home, and your oratrix charges that she would be homeless but for the kindness and generosity of her married daughters.” The truth of these allegations is conceded by the demurrer, and the question presented by the appeal is whether they are sufficient to entitle the appellee to the relief prayed. Appellee's theory in respect to the primary relief prayed appears to be that the circumstances under which the appellant acquired the leasehold property were such that a court of equity will raise and enforce a constructive trust in favor of the grantor for the uses and benefits inuring to her under ²¹² ' the agreement between her and appellant, which induced her to convey the property to him. Appellant’s contention is that the agreement was collateral to, and independent of, the conveyance, that the doctrine of constructive trusts has no application to the facts stated in the bill, that consequently a court of equity is without jurisdiction to grant the relief prayed, and that for any breach of the contract appellee must seek her remedy in a court of law, which can afford full, adequate and complete relief. The controlling issue in the case, therefore, is whether the facts stated are sufficient to establish a prima facie presumption that appellant holds the property involved under, a constructive trust for the uses and benefits accruing to the appellee under the alleged oral agreement which she contends -.induced her to convey it to’ him.

The doctrine of constructive trusts has, in recent years, been considered by this court in several cases involving facts not wholly unlike those involved here. In Flanagan v. Flanagan, 133 Md. 332 , one of the earlier cases, Rachel Flanagan had granted her life interest in certain leasehold property to her son, who supported and maintained her at his home until his death. At his death his widow administered on his estate and sold the property at public sale. Mrs. Rachel Flanagan then filed a bill to restrain the administratrix from conveying the property to the purchaser, and also to set aside the deed conveying it to Charles Lee Flanagan, who had been the son of the complainant, and the husband of the administratrix, on the ground that the real consideration for the conveyance was the son’s promise to support her and furnish her with a home for the remainder of her life.

In that case the court, after announcing the conventional and settled legal principles which exclude evidence of antecedent and contemporaneous parol agreements to vary, contradict, or impeach a deed or the consideration stated therein, in the absence of fraud, incapacity, or undue influence, added this: “There are cases where it is held that, where a grantor conveys property and the consideration is an agreement by ²¹³ the grantee to support, maintain and care for the grantor during his or her natural life, and the grantee neglects or refuses to- comply with the contract, a court of equity will rescind the contract, strike down the deed and decree a reconveyance of the property. The decisions will be found upon examination to be based upon the theory that the neglect, failure or refusal of the grantee to comply with the contract, raises a presumption that the contract was fraudulent in its-inception, and he will not be permitted to enjoy the possession of property so obtained.” And it decided the case and. affirmed the decree dismissing the bill for the expressed reason that, as the son had supported the grantor and furnished her with a home during his life, he had so far complied with his contract as to preclude any inference that in procuring the deed he had acted fraudulently. While, therefore, in that case the court did not expressly adopt the principles to which we have referred, there is nothing either in its conclusion or its language to indicate that it disapproved them. The question came up again in Springer v. Springer, 144 Md. 465 .

The essential facts of that case were these: The-Reverend Thomas L. Springer, a Presbyterian minister, being at the time in somewhat straitened circumstances, to-secure a home for himself and family bought a leasehold property in the City of Baltimore, and practically all of the-family resources were exhausted in making the initial cash payment. He later bought the reversion and in both instances he had the title placed in the name of his son, James L. Springer. At the time he purchased the leasehold, Thomas L. Springer feared he would have to undergo an operation for cataract, and that he might become incapacitated, and felt that the title to the property should be in some one who would be better able to deal with any questions that might arise in connection with it than he or Mrs. Springer, his -wife, and for that reason he had the title put in the name of James L. Springer, his son, but upon the understanding that he would convey it to his father if his health improved so that he could manage it. Subsequently James repudiated that ²¹⁴ understanding and asserted an absolute title to the property, whereupon Thomas L. Springer filed a bill against him to compel him to convey the property to him, Thomas L. Springer.

Upon those facts the court held that James held as constructive trustee for his father, and announced and accepted this statement of the law of constructive trusts applicable to such facts: “A satisfactory general definition of such trusts is to be found in 26 R. C. L., page 1232, where it is said: ‘Constructive trusts are such as are raised by equity in respect of property which has been acquired by fraud, or where, though acquired originally without fraud, it is against equity that it should be retained by him who1 holds it.’ * * * And to the same effect is the following statement in Coyne v. Supreme Conclave, 106 Md. 54 . ‘There is also' a class of trusts which arise ex maleficio, and equity in order to reach the possessor of what in conscience belongs to‘ another turns him into a trustee.’ The ‘fraud’ referred to in these definitions need not be actual, but may be constructive, and one ‘who acquires land or other property by fraud, misrepresentation,