McLaughlin v. Barnum

Miller, J., delivered the opinion of the Court. Counsel for the several parties to these appeals, whilst differing upon other points, agree that a decree for a sale must be passed, and the two principal questions necessary now to be decided are: 1st. What is to be sold, and what provisions in this respect shall the decree contain ? 2d. Upon what basis or general principles shall the accounts be stated.

First. To that part of the decree appealed from which designates the property to be sold, objection is taken on one side, because what is called Mrs. Barnum’s lot is excluded, and on the other because certain rooms or apartments in the basement story of the hotel are included. Mrs. Barnum acquired title in fee to her lot in 1838 ; and in 1849, after the death of her husband, the testator, she sold and conveyed it in fee to Andrew McLaughlin, for $5000. The position that title to this lot has passed, upon the doctrine of election, is wholly untenable.

The ⁴⁴² first clause of the will being void, and the second taking effect and being the only one that can be relied on, as making the requisite disposition to raise an election, no case of election is presented, unless it plainly appears the testator intended this second clause should affect this lot; for it is well settled the intention to raise an election must be clear and manifest from the will itself. There must appear on the face of the instrument a clear intention on the part of its author to dispose of that which is not his own. Jones vs. Jones, 8 Gill, 197 ; Smith vs. Townshend, 27 Md., 389 ; 1 Lead. Cases in Equity, White and Tudor, 259.

This lot is not designated or referred . to in the second clause, and the general words of description there used, “said City Hotel, buildings, and grounds,” in the absence of anything pointing to a more enlarged construetion, must be confined to. property which the testator himself owned, and could effectually dispose of by will. But the intent not to include his wife’s lot is apparent from the fact that,in the second clause no provision is made for her in lieu of it; whereas in the first clause an annuity of $300 is given to the wife in consideration of her ownership thereof, and the use of it for the hotel. , But the ground upon which the claim for its sale is chiefly rested is, that at the time of David Barnum’s death this lot constituted part of the hotel premises, and was used in connection therewith; that by improvements subsequently made by McLaüghlin, it is for the most part covered by structures, making up the Hotel buildings; water-closets and baths being in the buildings erected thereon, the drainage from which, and from other like parts of the premises, is carried off' by one common sewer; that, thus constituting a part of the establishment, supporting apartments devoted to purposes indispensable to the use of the Hotel as such, which were erected and improved by the purchaser himself, he'must be presumed to have bought for the common benefit of all parties jointly ⁴⁴³ interested with him in the Hotel buildings and grounds. In support of this position, reference is made to authorities announcing the well-established doctrine that if one of several devisees or tenants in common, holding under an imperfect title, buys in the outstanding title to the common property, the purchase will enure to their common benefit, upon contribution made to pay the purchase-money : to cases where a partner, without the knowledge of his co partners, had obtained a renewal in his own name, of the lease of the premises where the joint trade was carried on, and was decreed to hold the renewed lease in trust for the partnership: to cases of mortgagees, executors, tenants for life, trustees, and parties treated in law or equity as occupying the relation of trustees, executors, or guardians, as executors de son tort, or where one without lawful authority intrudes upon and assumes the management of an infant’s estate. In all such cases if the party occupying or to be treated as holding these relations, gains any advantage by his possession of, or dealing with the property, he must hold for those beneficially interested, and not for his own individual benefit.

But the purchase of this lot was no interference or dealing with the property in which the purchaser was jointly interested with others, or removing any incumbrance thereon. If it be conceded McLaughlin at the time of this purchase was tenant in common with any of the parties to this cause, and this is the most favorable light in which the complainants’ claim can be presented, he was so only of the property which David Barnum owned at the time of his death, and upon which the second clause of his will operated. Purchase of this lot did not impair or improve the title to that property, nor make the purchaser, in respect to such purchase, a trustee for his co-tenants, or place him in any of the relations to them above indicated. There is no proof ho purchased with rents and profits which he had collected and received from the common property.

And it would ⁴⁴⁴ be a doctrine both novel and strange to determine tbat a party cannot buy with his own money, and hold for his own • benefit, any real estate contiguous to that in which he has an interest in common with others. Nor is it perceived how the use of the lot, or the erection of buildings thereon, and their connection with the buildings and fixtures on the common property can work a divestiture of the purchaser’s title, so as to authorize the Court to decree its sale in this cause. It must be remembered that we are now dealing with title to real estate, it is that which is to be sold under the decree. The complainants have no title legal or equitable, derived under the will of their grandfather, to anything save the ground owned by the testator at the period of his death, constituting the site of the Hotel with the buildings then being thereon.

This is all in which any common interest is created by the will, and, with the buildings and improvements now erected on the same property, is all the Court can in this proceeding decree to be sold for the purpose of partition, unless title to other property has been so acquired by all those interested in this, as to prevent the true owner, if he were a stranger, from recovering it in ejectment. It is not pretended there has been such adverse user and occupation of this lot for twenty years, as would prevent a recovery by the holder of the legal title; and by what other recognized mode of transfer of real estate has that title passed from him ? Goods, money, and jewels, the title to which passes by delivery and possession, may sometimes be lost to the owner by confusing or commingling them with like property of others, but no authority has been cited, and it would be extraordinary if any could be found to show that the intermingling or connection of buildings or structures can effect a transfer of title to land. Real estate is not susceptible of confusion, and its title cannot be disposed of in that way.

An easement in lands may be acquired by the erection and use for a sufficient length of ⁴⁴⁵ time, of superincumbent structures, which will pass as appurtenant to the property entitled thereto; but no easement on this lot, or any part of it, is here claimed, and none in fact exists. The property it is said will not sell for as much if this lot is excluded, because of the difficulty of severing the structures as they are now placed on and over the two properties; that for the purposes of a hotel, this lot and the use to which it has been put are indispensable, and in the hands of another proprietor, might prove a source of annoyance, and hence depreciate the market value of the property to be sold. This may be true, but the difficulty of separating other buildings and structures on other contiguous property purchased by the same party, to which all claim of title has been abandoned by the complainants, also connected, used with, aud constituting part of the Hotel establishment as now carried on, is almost equally great, and deprivation of their use will certainly impair its value for hotel purposes; but how can this be remedied by the Courts? A Court of Equity ought not to allow property to be sold with a cloud upon the title which it can remove, and should see it is so offered in market as to pass a clear title to the purchaser, and realize its full value to the parties interested; but to accomplish this, legal rights cannot be infringed, nor parties be compelled to part with property in which the parties to the cause asking for a sale have no legal or equitable interest.

Such is the case here. The holders of the legal title are standing upon their rights, and resisting a sale of this lot. Those rights must be respected, and if loss results to others as well as themselves from a refusal to sell, it is a loss which the Courts have no power to prevent. The foundation of the Court’s jurisdiction to decree any sale in this cause, rests solely upon the fact that several parties have a common and undivided interest in certain property which can he separated and enjoyed in severalty, only through the medium of ,a sale.

To decree in this cause a sale of ⁴⁴⁶ other property in which no undivided interest exists would be usurpation of authority, and the exercise of mere arbitrary power. Counsel for the defendants, claiming under McLaughlin, have earnestly contended that the title to the rooms and offices in the basement story mentioned in .the decree, and ordered to be sold, was not authoritatively determined by this Court when the case was before it on the appeal reported in 26 Md., 119 . The argument is that the decree passed on that appeal is its own, and the only expositor of what this Court, then definitely decided, that the opinion was merely the reasoning of the Judge who delivered it, and not, on this point at all events, the bindirig and conclusive judgment of the Court. But if the decree is alone'to be looked at, to ascertain what was decided, then it may well be asked what construction has been given to the will on any point ?

That decree simply reverses the decree below, and remands the case for further proceedings. Confined to this, it is impossible to discover on what grounds the reversal proceeded, whether the complainants were entitled to relief under the first clause, as in one aspect is claimed in the original bill, or against it as being void, and under the second clause. The decree is silent upon the subject, but counsel concede it has been adjudged that the first clause of the will is void, and that the second became operative. This concession necessarily comes from the judgment of the Court contained in its opinion.

That opinion settles the rights of the complainants, so far as title to the property depends upon the construction of the will, and in all its definitive conclusions upon that subject, must be regarded as inseparable from the decree. Because title was thus established, the Court determined the complainants were entitled to relief, leaving the extent of that relief to be settled upon» further proof, and in the further progress of the cause. That decision, upon every point to which it ⁴⁴⁷ appears the judicial mind was applied, and -which was considered, adjudged and reached as a conclusion of the Court, is not only of the same authority as any other decision of the appellate Court, but on this appeal in the same cause between the same, or those claiming under the same parties, where the same relief is sought upon the same subject-matter, and where the case is in no respect variant from that presented on the first appeal, has become the law of the case in its further progress, binding upon this Court as well as the Court below. Mitchell vs. Mitchell, 6 Md., 224 ; Mong vs. Bell, 7 Gill, 244 .

The wdiole will was before the Court for construction, and looking to the opiidon delivered, we find the Court carefully considered all its provisions bearing upon the questions they were to decide, and not by way of argument or illustration, not using general expressions, not stepping beyond the case before them upon the record, but in direct and positive terms, all the Judges concurring, declared and adjudged that those clauses of the will which disposed of the rents of these basement rooms and other parts particularly specified, with the entire codicil, shared the fate of the first clause and fell with it. By that adjudication we are bound. It cannot be reversed in this case no matter how it may be treated in other like eases between other parties. ¥e are not, however, to be understood as intimating we should have arrived at different conclusions, nor as questioning its force as an authority. The main points were elaborately argued, and we have not examined them with a view to determine whether, in our opinion, they wore correctly disposed of in this very able judgment of our predecessors.

But in deference to the earnest argument pressed upon our attention, we have considered the particular point now presented, and assuming as correct the decision that the devise in trust and the leasing power blended with it, contained in the first clause of the will, were void, because transgressing the rule against perpetuities,. ⁴⁴⁸ and that the second clause took effect, we are entirely-satisfied the Court was right in declaring the other specified clauses to be void also. The devise in trust in the first clause is of “ all the buildings of said City Hotel, and all the grounds thereof ” comprehending these rooms as clearly as any part of the premises. Erom the leasing ■. power given in this clause these apartments are excepted, and that power is there confined to what the testator calls the “ Hotel part of said buildings and grounds.” In the third and the last paragraph of the fourth clause (which, by its terms, is to be read as part of the third) he disposes of the rents of these rooms in such terms as, doubtless, if standing alone, would, except as to one of them, pass an absolute interest; but by the third clause there is conferred upon the same trustees, to whom the legal estate in the entire premises had passed under the first clause, the power to lease, or to allow the devisees of the rents to lease these rooms also and for the same period, so far as it offends the perpetuity rule, being, from time to time, without any limitation. It was essential to the execution of his favorite project of having the Hotel permanently kept up, that the trustees should have entire control of the leasing of these rooms, so that no business should be there conducted which would prevent or interfere with the carrying on of the Hotel. .

Rut his plan of keeping up a permanent Hotel might be disappointed, and he, accordingly, by the second clause, provides for this contingency. The descriptive terms as to the property on which this clause, when effective, was to operate, are not the “Hotel part” of the buildings and grounds to which the leasing power in the first clause was confined, but “said City Hotel buildings and grounds,” which plainly embrace all the buildings and all the grounds, the legal estate in which was, by the first clause, devised to trustees. Reading, as we must, the whole will together, the intent appears plain, that if his views as to the permanent ⁴⁴⁹ conducting of the Hotel should be disappointed, then all the buildings and all the grounds on which they stood were to come under the operation of the second clause, and the proceeds of the whole be disposed of and distributed as there directed. We cannot suppose he intended, in case the second clause took effect, the interests of his widow and grandchildren should be impaired by having the title to one part of the buildings in one set of proprietors, and to the Hotel part, directly above, in another, thereby, to a great extent, diminishing the value of the latter.

In our opinion he carefully provided against such consequences, by so framing the second clause as to embrace in its scope and extent all the property in the buildings and grounds that had passed by the previous devise in trust, and purposely extended to the same trustees a leasing power of equal duration over the whole, so that if the trust should fail it should fail as to all, and the second clause beeome operative as to all. It follows that, in its designation of the property to be sold, the decree is correct. But it directs the sale to be made subject to the operation of two deeds of trust executed in September, 1825, and May, 1826, respectively, creating what is called City Hotel stock, to the amount, as appears on the face of the deeds, of $65,000. By the terms of the stock certificates set out in these conveyances, the holders or their assigns are bound to accept the principal at any time, by the one deed, after the 1st of June, 1835, and by the other after the 1st of June, 1840, when tendered by the grantors or their assigns, or any of them, as proprietors for the time being of the said City Hotel.

Only so-much of this stock as remains unextinguished is now an incumbrance on the property. If this amount were ascertained, or agreed upon, there would be no objection to decreeing the sale subject thereto. The record furnishes no proof on this point, and the length of time since the deeds were executed and since the principal of the debt became pay ⁴⁵⁰ able, is followed by the positive assertion in argument, that a considerable amount was paid off by David Barnum in his lifetime. Any such payment, if made, undoubtedly enures to the benefit of all the parties, including the complainants.

But there is enough in the record to warrant the inference that the defendants claiming under McLaughlin have means not equally accessible to others, of knowing the precise amount of this incumbrance, and they would therefore stand on vantage-ground as bidders. This is obviously unfair, might occasion loss to the complainants and others having the same rights, and should not be permitted if it can be avoided. The property should, if possible,-be so placed in market as to invite a fair and free competition among bidders having equal knowledge or means of knowing precisely what they are buying, and what purchase-money they will have to pay. In our opinion it is within the Court’s power to reach this result.

It is true, neither the trustees nor the stockholders are parties to this cause, but all those who, as proprietors of the property pledged, have the right under the deeds to redeem and pay off the debt, are parties, and the stockholders, by the terms of their contract, are bound now to receive their money, if tendered by these parties. We therefore see no jurisdictional or other difficulty, growing out of the want of proper parties, in ordering the sale to be made, free of this incumbrance, and declaring the stockholders will be required to receive payment of their claims out of the proceeds of sale, or a sufficient part thereof to be set aside for that purpose, and directing an .account, upon notice given, to be taken of the amount of this debt now remaining unextinguished. By pursuing this course no injury can possibly result to any one, and in •our judgment the justice of the case demands its adoption. The decree must therefore be modified as here indicated.

Secondly. — More difficulty is felt in settling the general ¡principles upon which the accounts are to be stated. On ⁴⁵¹ this branch of the case we shall confine our opinion strictly to the questions which appear to have been decided by the decree appealed from, both because it may be doubtful whether upon these appeals this Court has authority to go further, (Goodburn and wife vs. Stevens, 5 Gill, 1 ,) and because the decree itself has expressly reserved for further consideration and disposition all matters in controversy between the parties not thereby adjudicated. The main questions which this part of the decree presents for review relate to the mode of ascertaining rents and profits, the time when the accounting therefor is to commence, and whether any and what allowance shall be made for permanent improvements. These we proceed to dispose of in their order. 1st.

There is no satisfactory foundation' for the claim to an account of the profits realized by McLaughlin and the other occupants from the business of hotel keeping, which they carried on in the premises. In cases of express trusts, or where a party voluntarily assumes the management of a trust estate, and converts the property, and uses the proceeds, or the trust funds, consisting of money in hand, or collected from the rents of the trust property if realty, for his own purposes in trade or speculation, or invests them in lands or otherwise, so as to derive profit therefrom, the