Lucas v. Mercantile-Safe Deposit & Trust Co.

Lowe, J., delivered the opinion of the Court. The appeal before us raises the question of when a controversy exists that is sufficiently justiciable to compel declaratory relief. Patuxent Co. v. Commissioners, 212 Md. 543, 548-549 ; and see Pr. George’s Co. v. Bd. of Trustees, 269 Md. 9, 12 .

Appellant Edgar M. Lucas is the income beneficiary of two trusts valued well in excess of $2,000,000, created by his father and uncle in 1932. These trusts provide that upon Lucas’s death, the trust income will be payable to his “child, children and issue of deceased children” for twenty-one years. At the end of that period, or if there should be no living descendant of Lucas prior to the end of the twenty-one years, the trusts terminate and the principal is distributable to and among Lucas’s descendants living at that time. Should there be no living descendants of Lucas, either at his death or at the termination of the trusts, the trusts provide for the distribution of the principal among Lucas’s “heirs and next of kin.” The original petition for declaratory relief was filed by Lucas in August of 1970 under the Maryland Uniform Declaratory Judgment Act then found in Md. Code, Art. 31A. 1 After reciting the fact that he was unmarried and ⁶³⁵ without child, Lucas asked the court to determine whether or not an adopted child would fall within the term “child” as used in the trust instruments entitling such adopted child to the income therefrom after Lucas’s death.

Lucas had become attached to his golf caddy whom he desired succeed him as income beneficiary and ultimately inherit the corpus of the two trusts. He explained: “If by its decree this Honorable Court determines that the terms ‘child’, ‘children’, etc., as used in the two trust indentures do include any lawfully adopted child or children of your petitioner, your petitioner intends promptly upon the entry of such a decree to file a petition for the adoption of Mr. Dale K. Stammer, a resident of Baltimore City, born May 26,1950.” The following December, Dale K. Stammer petitioned to be made a party plaintiff, reciting the fact that Lucas had instituted adoption proceedings to which he had filed a consent. His petition was granted seven days before the chancellor heard testimony from Mr. Lucas and argument of counsel. On October 21st of the following year, 1971, the chancellor rendered a lengthy opinion.

After reciting the factual context of the case, he noted that Dale K. Stammer had been adopted by Lucas and, together with Lucas, was before the court asking for an interpretation of the trusts. Before deciding the initial question raised in answer to the petition by some of the potential heirs, ie., whether there was a justiciable issue or controversy suitable for declaratory relief, the chancellor pointed out that: “No issue has been raised or threatened with respect to the right of Edgar M. Lucas to continue to receive the income of both trusts during his lifetime.” However, he then went on to hold that: “. . . this Court is persuaded to exercise its ⁶³⁶ discretion by granting a declaration of the rights under the 1932 trusts.” For reasons which he explained at length, the chancellor declared: “. . . that the terms ‘child,’ ‘children,’ ‘issue’ or ‘descendants’ of Edgar M. Lucas as used in the two irrevocable trust instruments now before the Court, do not include any person or persons adopted by Edgar M. Lucas, or the child or descendant of such adopted person. In the event that there is no natural child or descendant of Edgar M. Lucas living at the time of his death, the heirs and next of kin of Edgar M. Lucas as determined under the intestate laws of Maryland in effect on March 23, 1932 shall take the remainders of the trust.” On September 18, 1972, the petitioners (Edgar M. Lucas and his adopted son Dale) filed a “Petition for Leave to Re-Open Argument and for Additional Declaratory Relief.” Pointing out that no final decree had been signed, the petitioners set forth the alternate claim that even if Dale was not child, issue or descendant as opined by the court, he was within the class of alternate remainderman described as “heirs and next-of-kin.” On April 19, 1973, the court granted the petition to reargue and on December 21, 1973 issued an order denying any declaratory relief stating: “That the relief sought by the plaintiffs, Dale Kirk Lucas and Edgar M. Lucas be and the same is hereby denied, as this Court is of the opinion that a decree at this time will not serve a useful purpose or terminate controversy. The presentation of new arguments at the time of the re-argument of this case convinces this Court that this entire matter is merely an attempt to use the Court for purposes of giving legal advice.

It occurs to this Court that each time a novel legal theory occurs to counsel that they will again ask the advice of the Court and will ⁶³⁷ attempt to ask the Court to determine future rights prior to the time of the death of Edgar M. Lucas. This Court has carefully considered the problem and has made a determination as set forth in its Memorandum Opinion; however, this Court does not consider it to be binding as the problem should be presented to a court of competent jurisdiction at the time of the happening of the contingencies if, in fact, they ever occur. Perhaps in the future a Court will agree with the conclusions expressed by this Court in its Memorandum Opinion, or it could well be that some Court will at that time reach a contrary conclusion. In any event this Court believes the action to be premature and for this reason it shall be dismissed.

All Court costs are to be paid by the plaintiffs. This Court does hereby expressly reserve consideration of the questions pertaining to the entitlement to and payment of counsel fees and expenses of the respective attorneys out of the income and/or principal of said trusts.” Appellants now ask that we reverse that order, permit them declaratory relief, and decide the substantive question in their favor. Appellees would have us affirm the court’s refusal to declare or, in the alternative, reinstitute the declaration made but not signed by the chancellor below. These appellees consist of prospective alternative remaindermen who did not choose to permit a decree pro confesso to be entered against them (as have some), and a representative for unborn children within that class.

Such of the known alternative remaindermen who elected to fight, did so at every turn and with every legal weapon at their disposal. It should be noted, however, that in the face of allegations that possible unknown and unnotified heirs existed, no assurance could be made to the contrary. The Statute At the time this suit was instituted, Md. Code, Art. 31A, § ⁶³⁸ 2 permitted any party of interest to obtain a declaration of his rights, status or other legal relations “under a deed, will, written contract or other writings constituting a contract. ...” 2 Having provided in § 1 of that Article the jurisdiction of the court to entertain such cases, the statute then provided that the exercise of that jurisdiction was within the court’s discretion and placed limitations on the type of case appropriate for such relief. § 6. Because the Court of Appeals had held that declaratory relief was not appropriate under the Act when an immediate cause of. action existed between the parties for which a legal or equitable remedy was available, in 1945 the legislature clarified the language of the Act to assure that relief would not be denied solely because another remedy might be available.

In short, the, 1945 Act of the General Assembly legislatively reversed decisions holding declaratory relief unavailable in such situations, Baltimore v. Seabolt, 210 Md. 199, 205 ; however, some discretion to refuse such relief was left to the courts even after the 1945 Act (Chap. 724). Seabolt, 210 Md. at 210 . By process of accession, beginning with an apparent concession of counsel in Staley v. Safe Deposit & Trust Co., 189 Md. 447, 456-457 , the proposition “that courts have some judicial discretion to refuse a declaratory judgment when it does not serve a useful purpose or terminate controversy,” grew to acceptance as a rule of law. Cambridge v. Eastern, Etc., Co., 192 Md. 333, 341 ; and see Grimm v. Co. Comm’rs of Wash.

Co., 252 Md. 626, 632 . In light of the statutory caption ⁶³⁹ of § 6 of former Art. 31A, (as well as the recodified version in Cts. Art., § 3-409) of “Discretionary Relief” and the permissive language in that section, the slow process of judicial accretion was hardly necessary. While recognizing the relief to be of a discretionary nature, the current version of the Act limits that exercise of discretion by providing in Cts.

Art., § 3-409, certain qualifying prerequisites to a court’s grant of declaratory relief: “§ 3-409. Discretionary relief. (a) In general. — Except as provided in subsection (d), a court may grant a declaratory judgment or decree in a civil case, if it will serve to terminate the uncertainty or controversy giving rise to the proceeding, and if: (1) An actual controversy exists between contending parties; (2) Antagonistic claims are present between the parties involved which indicate imminent and inevitable litigation; or (3) A party asserts a legal relation, status, right, or privilege and this is challenged or denied by an adversary party, who also has or asserts a concrete interest in it.” The Case Law Appellants rely on Ryan v. Herbert, 186 Md. 453 which was the precursor of a number of controversies arising over the trust created by Arthur Nattans, the founder of Read Drug and Chemical Company. That case, which is “. . . concerned entirely with income and has nothing to do with the final disposition of the corpus of the trust estate. . . .” Id. at 456 , does not appear to be apposite to the issue at bar.

The Court in Ryan framed the issue as “whether the petitioners have a ⁶⁴⁰ right now to a declaratory decree.” (Emphasis added) Id. at 458 . In that case, as in this one, “[t]he trustees are not now confronted with any of these questions and it is possible, although not probable, that they may never be.” (Emphasis added) Id. at 458 . We note the significant difference in the preliminary question met there and that which is presented here. The question on appeal was whether the petitioners had provided the minimum requirements giving them a “right” to declaratory relief.

The “right” to which the Court alluded was the right of the petitioners to have the chancellor hear their case under the Act. Appellants would