McGill v. Nichols

Pattisow, L, delivered the opinion of the Court. Michael B. Nichols of Easton, Md., died on October 23rd,, 1923, leaving an estate consisting of real and personal property worth from sixty to seventy thousand dollars, and leaving as his only heirs-at-law his widow, Kate F. Nichols,, and two brothers, Henry A. and Thomas C. Nichols, surviving- him. Michael B. Nichols for some time prior to his death had been in poor health and was confined to his home. In October, 1923, only a few weeks before his death, he had a will prepared, but died before he executed it.

This unexecuted will .‘contained a number of legacies and specific bequests and devices, all of which we need not mention, but among them are found: (1) the devise to Thomas C. Nichols of a home and lot on Glenwood Avenue, Easton, Md.; (2) a devise to Henry A. Nichols in trust for Amelia, the-daughter of Henry A. Nichols, of a house and lot adjoining-the one devised to Thomas C. Nichols; also a lot or parcel of wood land containing forty acres, more or less, in Easton. District, Talbot County, Md., which was conveyed to Michael B. Nichols by Perry S. Messick and wife; (3) a devise to> his widow, Kate F. Nichols, for and during her natural life,, of his home or residence on Goldsborough Street, Easton,, Md., with the furniture and equipment therein, which, upon her death, was to go to M. Tilghman Johnson and Henry A. Nichols, in trust, to be sold by them, and one-half of the-net proceeds therefrom was to be paid by them to the Trustees of Sts. Peter and Paul Church, Easton, Md. and the-other one-half of such proceeds was, by said unexecuted will,, to become a part of the residue of his estate. The rest and residue of his estate, both real and personal, is then disposed of as follows: “I give, devise and bequeath to M. Tilghman Johnson and Henry A. Nichols in trust to collect the rents, issues and profits therefrom and apply the same first to the ²⁸⁹ payment of all taxes and qther expenses incident to the management of said property and afterward to pay the net rental or income therefrom to my wife, during the term of her natural life.

At my wife’s death said trust shall cease, and my trustees or their successors in the trust shall pay over said residue of my estate to my brothers Henry A. Nichols and Thomas C. Nichols, absolutely, to be equally divided between them.” A few days after the death of Michael B. Nichols, upon the invitation of Kate L. Nichols, his widow, Henry A. and Thomas O. Nichols met at her home, and with them were other members of the Nichols family. At that time the will was read and it was then and there agreed by them, that the wishes of Michael B. Nichols, as disclosed by the provisions of the will, should be carried out. Whereupon a written agreement was executed by Kate K. Nichols and Henry A. and Thomas C. Nichols, dated the -- day of October, 1923. It will be found that this agreement differs in parts from the provisions of the will.

By the will the Messiek wood lot was devised to Henry A. Nichols, in trust for Amelia, his daughter, when, by the agreement mentioned, it was to be conveyed to him absolutely. This, however, was corrected by a subsequent agreement made on the ---day of November, 1923; and in the will, both M. Tilghman Johnson and Henry A. Nichols were made trustees, while, in the agreement, Henry A. Nichols alone was made trustee. The second agreement, of the — day of November following, which we have already referred to, was made, as stated by Henry A. Nichols, at his instance and request, for the purpose of curtailing or restricting the power conferred upon him by the first agreement, by making it necessary for him, as trustee, to get the consent and approval of the heirs of Michael B. Nichols before making any sale of any part of the corpus of the estate, and also- requiring him to give bond for the faithful performance of his duties as such trustee; and it contained the further provision that the specific legacies named in the will were not to be paid until after the ²⁹⁰ death, of Kate E. Nichols, without her consent and the consent of the heirs of Michael B. Nichols, and the execution of the second agreement was attested, while the first was not. This second agreement when executed took the place of the first agreement and was in lieu thereof.

On the 19th day of January, 1924, the house and lot, which under the will and agreement was to go, or be conveyed, to Thomas C. Nichols, was conveyed to him, though in the description thereof it is not described as being on Glenwood Avenue, though we assume this was the lot intended. And on the said 19th day of January, 1924, the house and lot, which in the will and agreement was to go, or be conveyed, to Henry A. Nichols, trustee, for his daughter Amelia, was so conveyed to him as trustee, and with it was conveyed a wood lot, though not the wood lot described in the will or agreement which was to go, or be conveyed, to her father in trust for her. It was also agreed between the parties that letters of administration upon the personal estate of Michael B. Nichols should be issued to both Kate E. Nichols and Henry A. Nichols, and not to Kate E. Nichols alone, as provided for by the will. . On the 16th day of September, 1924, a distribution was made in the orphans’ court of the personal property of Michael B. Nichols, deceased, in which the sum of $9,597.59 was distributed to Kate E. Nichols, and one-half of said sum to Henry A. and Thomas O. Nichols each, less the collateral tax upon each of their shares.

Thereafter, on the 20th day of November, 1924, a deed of trust was executed by Kate F. Nichols, Henry A. Nichols, Florence Nichols, his wife, and Thomas O. Nichols and Katherine B. Nichols, his wife, in which it is said the grantors “are desirous of disposing of the property and estate of said decedent in accordance with his wishes, and for the purpose of carrying said wishes into effect, these presents are executed.” By this deed, the grantors granted and conveyed unto Henry A. Nichols in trust “for the uses and purposes hereinafter provided, all that real estate and personal property, situate, lying and being in Talbot County, ²⁹¹ State of Maryland,” described therein; which, it would seem, included all the land of which Michael B. Nichols died seized and possessed, except the lands conveyed unto Thomas C. Nichols absolutely, and to Henry A. Nichols, in trust for his daughter, and in the grant the personal property is included, and is alluded to as “being the same property distributed to Kate E. Nichols, widow; Henry A. Nichols and Thomas O. Nichols, brothers of Michael B. Nichols, deceased, in the distribution account passed in the estate of Michael B. Nichols in the Orphans’ Court for Talbot County.” In the habendum clause it is said: “To Have and To Hold the above granted property unto the said Henry A. Nichols and to his successors forever, in fee simple; in trust and confidence, nevertheless, for the following uses and purposes, that is to say: “To collect the rents, profits and income issuing from or arising out of the above granted property, and after paying all taxes, charges and expenses upon said property, together with the expenses of this trust, including a commission to himself of ten (10) per cent, upon said rents, profits and income; to pay over the net balance therefrom or so much thereof as she may desire to Kate F. Nichols, for and during the term of her natural life and to permit the said Kate F. Nichols during her lifetime to occupy the residence on the corner of Goldsborough and Aurora Streets, Easton, Maryland, and to use the furniture and household effects therein contained, free of any rent or charge whatsoever.” It then directs the trustee, after the death of Kate F. Nichols, to sell the home property on Goldsborough Street and to pay over one-half of the net proceeds therefrom to the Trustees of Sts. Peter and Paid Church, Easton, Md., and of the remaining one-half they were to pay legacies and specific bequests found in the will; and “the balance of the one-half of such proceeds of such sale then remaining, together with all other cash, securities, real and personal property constituting the said trust, to be paid over, deliv ²⁹² exed, transferred, granted and conveyed” by the said trustee or his successors to Henry A. Nichols and Thomas C. Nichols, absolutely, share and share alike, or to their heirs per stirpes, free and discharged from said trust. Henry A. Nichols qualified as trustee under the deed, and took over the management of the trust estate, when, on August 26th, 1927, Kate N. Nichols filed her bill against Henry A. Nichols and the other beneficiaries under the deed of trust, in which she alleged in substance: That “she had led a sheltered and protected life,” and was not familiar with business methods and with the management of property. Her husband, so long as he was able, looked after his business affairs, but when he became sick and unable to do so, this duty fell upon her, and in the performance of that duty, she “was dominated by the advice, counsel and direction of her brother-in-law,” Henry A. Nichols, upon whose judgment and advice “she felt she had a right to rely and did entirely rely upon such advice and counsel.” After the death of her husband, Henry A. Nichols “professed the greatest affection, concern and solicitude for her and her welfare,” and “began to persuade and influence her to execute a deed of trust to him, alleging that it was her husband’s will or wish” that the property should be disposed of as shown by the deed of trust thereafter executed, and that in so doing it would be to her advantage, as she would thereby be provided with a comfortable livelihood and maintenance so long as she lived.

That relying upon these representations, by which she was misled, and not knowing the legal consequences of her act in executing said deed of trust, she signed the same. That because of its execution she was prevented from “applying the principal of the estate, to which she was entitled, to her absolute needs and requirements,” and as a result thereof she “has suffered great hardship and now finds herself in a state of abject poverty,” resulting from the costs and expenses incident to a severe illness suffered by her. She further alleged that she was induced to sign the deed of trust because of the undue influence exerted upon her by Henry A. Nichols, “depriving her ²⁹³ of her free will, judgment and discretion.” The bill further alleged “that in pursuance of said deed or declaration of trust, the said Henry A. Nichols entered upon the administration of the trust therein provided, and took possession of the aforesaid properties of said Michael B. Nichols, and has undertaken to manage and administer the same, and that large sums of money have gone into his hands and have been expended by him, the correctness of such receipts and expenditures of the administration of said trust your petitioner has not full and complete information.” That Henry A. Nichols, trustee, since assuming the trust reposed in him, has delivered to the plaintiff but two accounts of the receipts and expenditures by him, and that she is “advised and charges that there are numerous items and charges in said account that were improperly made,” and she insists that a further accounting shall be had. The bill then concludes with the following prayer: “That the said pretended Deed or Declaration of Trust may be annulled and set aside by decree of this court.” “That a full and complete accounting be had of all receipts and expenditures while the said Henry A. Nichols has been in control and management of the said properties of which the said Michael B. Nichols died seized and possessed.” Answers were filed to the bill by all the defendants thereto except William Temple and the Trustees of Sts.

Peter and Paul Church of Easton, Md. In the answer of Henry A. Nichols and Thomas O. Nichols, and their respective wives, the substantial or material charges of the bill are denied by them. Kate E. Nichols, after testifying in the case, died during the pendency of the suit, and Bertha J. McGill, her executrix, sole legatee and devisee, was made party plaintiff thereto. A large volume of evidence was taken before the court, and, after argument thereon, the court passed its decree in which it refused to annul and set aside the deed of trust as prayed for in the first prayer of the bill, but held that the plaintiff, Bertha J. McGill, was “entitled to an accounting ²⁹⁴ in said cause between herself as executrix of Kate E. Nichols, her deceased testatrix, and said Henry A. Nichols individually and as trustee under said deed of trust,” and it directed that such accounting- should be had and made as therein stated, and for such purpose the bill was retained. In the imposition of costs the court decreed that the plaintiff should pay one-third of the costs and the other two-thirds should be paid by Henry A. and Thomas O. Nichols.

The plaintiff, Bertha J. McGill, appealed from that part of the decree in which the court refused to set aside and annul the deed of trust, and the defendants, Henry A. Nichols and Thomas C. Nichols, appealed from that part of the decree which directed an accounting’ to be made by Henry A. Nichols, trustee. There is, therefore, in this case, two appeals in one record. In cases where there is a confidential relation, within the legal meaning of that term, existing between the donor and donee, or grantor and grantee, there is a presumption that the gift or grant is void, and the well settled rule is that, in such cases, the burden of proof is upon the donee or grantee to prove to the satisfaction of the court that the conveyance was the free, deliberate, and voluntary act of the donor or grantor, and made by him with full knowledge as to its effect and operation; in other words, that he knew that the conveyance itself operated to divest him of all title to the property and to vest it in the donee or grantee. Todd v. Grove, 33 Md. 195 ; Pairo v. Vickery, 37 Md. 467 ; Williams v. Williams, 63 Md. 405 ; Whitridge v. Whitridge, 76 Md. 54 ; Bauer v. Bauer, 82 Md. 242 ; Reed v. Reed, 101 Md. 146 ; Henry v. Leech, 123 Md. 440 .

And, as was said in Zimmerman v. Bitner, 79 Md. 115 , “a good deal has been said as to what constitutes a confidential relation within the operation of the principle, but courts have always been careful not to fetter the operation of the principle by undertaking to define its precise limits. The cases of parent and child, guardian and ward, trustee and cestui que trust, principal and agent, are familiar instances to which the principle applies in its strictest sense. But its operation is not confined ²⁹⁵ to the dealings and transactions between parties standing in these relations, but extends to all relations in which confidence is reposed and in