Ottaviano v. Lorenzo

Parke, J., delivered the opinion of the Court. The bill of complaint originally filed in the suit of Joseph J. Ottaviano against Nicholas Lorenzo, also known as Nicola Lorenzo and Nick Lorenzo, the Savings Bank of Baltimore, and the Mayor and City Council of Baltimore, was before this court on an appeal from a decree which had overruled a demurrer to the bill of complaint. The opinion accompanying the order which reversed this decree and remanded the cause, with leave to the plaintiff to apply for permission to amend the bill of complaint, provided the chancellor should find the amended bill of complaint did not depart from the cause as first presented, is reported as Lorenzo v. Ottaviano, in 167 Md. at p. 138, 173 A. at p. 17. In pursuance of this leave the plaintiff filed an amended bill of complaint, and a motion of ne recipiatur was made by the defendant Nicholas Lorenzo, and denied by the chancellor.

The defendant thereupon demurred to the amended bill of complaint, and the demurrer was sustained, with leave to the defendant to file a further amended bill of complaint. A second amended bill of complaint was then filed, and the defendants the Savings Bank of Baltimore and the Mayor and City Council of Baltimore appeared and answered. These two defendants disclaimed all knowledge of the material allegations, with the exception of those with which they were severally concerned. With respect to these matters, the bank admitted that on a savings account, which was begun on January 6th, 1915, in the name of Nicola Lorenzo in trust for self and Annie Lorenzo, joint owners, subject to the order of either, balance at the death of either to belong to the survivor, there was a credit to said account as of February 11th, 1935, of the sum of $19,554.47.

Similarly, the municipality admitted that ⁵⁴ all of the stalls in the market that were mentioned in the bill of complaint were licensed in the name of N. Lorenzo, with the exception of two which were licensed in the name of N. & A. Lorenzo. These two parties were made defendants in order to prevent any withdrawal or change in the deposit and any transfer of the municipal licenses for the stalls in market. After these answers, the defendant Nicholas Lorenzo again filed his motion of ne recipiatur, which was denied, and renewed his demurrer, which was sustained, and the plaintiff entered an appeal from the ruling on the demurrer to the second amended bill of complaint. The action of the chancellor on the motion of ne recipiatur was favorable to the plaintiff, so his appeal does not present the propriety of that ruling, and the single question is on the allowance of the demurrer.

Miller’s Equity Proc., sec 136; White v. Winchester, 124 Md. 518, 522 , 92 A. 1057 . A comparison of the allegations of the second amended bill of complaint with those which were before this tribunal on the other appeal will establish that the allegations of fact in the original bill of complaint have been much amplified, and additional facts have been added; and that the principal relief sought has been changed from specific performance to the creation of a resulting trust. These changes are material, and require that the legal sufficiency of the allegations of the second amended bill of complaint be considered as though freshly made. It follows that the decision in the first appeal may be looked to for the principles there applied, but that the result on this appeal will depend upon the well pleaded allegations of fact that have been admitted to be true by the demurrer to the second amended bill of complaint.

The substantial averments will now be stated. The plaintiff is the son of Frank Ottaviano and Annie Ottaviano, who conducted a fruit and vegetable business in Baltimore. The father died intestate in .1886 leaving surviving him his widow, who was then about nineteen years of age, and an only child, the plaintiff, who was about one ⁵⁵ year old. At the time of his death, the parents owned jointly money and other property.

While the allegations are not consistent, it is averred that the fruit and vegetable business was principally carried on in two stalls in Belair Market and one in Center Market; and that these were in the name of Frank Ottaviano at his death, and that his widow, who became the sole owner, continued in business. In 1889 she married the defendant Nicholas Lorenzo, who had, for five or six preceding years, been employed in the business as a laborer. No child has been bom of this marriage. When the plaintiff became old enough, he assisted his mother in the business and, after leaving school at the age of fourteen years, gave her all of his time.

It is charged that before he became twenty-one years of age, the business became a partnership of the plaintiff, the mother, and the stepfather. Every one of the partners gave all of his and her time and attention to the business, and none received any stated salary, but there was withdrawn out of the profits only what was necessary for their immediate needs for clothing, food, household, and similar and ordinary expenses. The residue of the proceeds of the business was a common fund which was divided into a savings account and a checking account. The savings account was deposited in bank, first, in the name of Annie Lorenzo, and, later, in the names of Annie Lorenzo and Nicholas Lorenzo; and the checking accounts were in the name of N. Lorenzo & Son, subject only to the order of the plaintiff.

The business and all of the property accumulated out of its profits were owned by the three partners in equal undivided parts. Lindley on Partnership, ⁷⁴-76. When the infant became of age, he received from his guardian approximately $1,200, which sum was his distributive share of the proceeds of sale of two of his father’s stalls. On attaining his majority the plaintiff also ratified his contract of partnership and put this sum in the business, and another stall was purchased, and the business was expanded to include wholesale transactions. ⁵⁶ The mother and stepfather largely confided the management of the business to the plaintiff, and when he became twenty-three years of age his mother and stepfather gave full control and management of the business to the plaintiff, who continued not to receive any fixed sum but to draw from the partnership profits only such sums as he needed, from time to time, to defray his personal expenses.

The mother and the stepfather, however, continued to assist in the operation of the business and the property remained unchanged so far as the ostensible titles disclosed. During or about the year 1915, it is averred, the plaintiff contemplated severing his connection with the partnership and starting in business on his own account, and he informed his partners of his purpose. His two partners were convinced that this withdrawal would be to their disadvantage, and they and the plaintiff, it is alleged, entered into a new oral agreement, which is thus stated: “That although it had always been understood and agreed by and between the plaintiff’s mother, the defendant, the said Nicholas Lorenzo, and the plaintiff, that upon the death of both his mother and step-father, he, the plaintiff, would acquire and become the owner of all the property so accumulated and acquired by the joint efforts of the three of them, nevertheless they definitely, in or about the year 1915, agreed that if the plaintiff would continue to manage, conduct and control the business and manage and control the properties as he had for a number of years past and continue to allow the accumulation of profits, income and property to be held as in the past, that upon the death of the survivor of them, he the plaintiff, would become entitled to and acquire all the accumulated property.” At the time of this agreement, a leasehold interest, which Annie Lorenzo had acquired in a lot of land in 1907 and had then caused its title to be assigned to Nicholas Lorenzo, remained in his name. The partnership had a number of stalls in Belair Market, its stock in trade; and deposits in the Provident Savings Bank in the ⁵⁷ name of Annie Lorenzo; in the Savings Bank of Baltimore in the joint names of Annie Lorenzo and Nicholas Lorenzo, and its business account in the Old Town Bank in the name of N. Lorenzo and Son, subject to the order of the plaintiff.

It is charged that, in consequence of this agreement, the partnership was continued as before, and that the plaintiff had charge and care of not only the business but also of all the properties in which its profits had become invested, and collected the rents from the properties and stalls, and paid the taxes, insurance, and incidental expenses, and had made all repairs and improvements. The three partners only withdrew from the partnership profits and income their living expenses, and the residue was accumulated in savings deposits in bank or invested in stalls in market or property. The plaintiff further avers that the three parties, in order to assure the performance of their existing contract, agreed, about the time of its formation, that the property, business, and assets so accumulated should be given by will to the plaintiff, and that Nicholas Lorenzo should make a will to that effect. Accordingly, it is indefinitely stated that “in or about the year 1915” Nicholas Lorenzo did make such a will making the plaintiff his beneficiary, but provided that if the plaintiff die without issue the property should be divided between the brother of Nicholas Lorenzo and the son of the brother.

The will was executed in the presence of the plaintiff, and placed in an iron box to which the three parties had access. It is alleged that this will “was intended to carry out the fixed, settled and agreed understanding between the said Annie Lorenzo, the mother of the plaintiff, and the defendant, Nicholas Lorenzo, and the plaintiff”; but, as was pointed out in the decision of this court, it was not. in conformity with the agreement as set forth in the bill of complaint. The will did not, upon the death of the survivor of the mother and stepfather, devise and bequeath the property in question absolutely to the plaintiff, as was contemplated by the oral agreement set up ⁵⁸ by the bill of complaint, and, so, cannot be accepted as a memorandum of the agreement of the parties within the meaning of the statute of frauds. See Lorenzo v. Ottaviano, supra.

Furthermore, the specific allegations of the bill of complaint make it clear that the plaintiff does not rely upon this will as being in conformity with the oral agreement of the parties under which the parties acted until the death of the mother intestate on September 16th, 1982, leaving surviving her the husband and her son, who are her only distributees and heirs at law. The property, which is represented by the bill of complaint to be within the terms of the oral agreement of 1915, is, in addition to the mentioned leasehold interest, stalls and personalty owned at the time of this agreement, the following property: (1) A fee simple estate in a lot acquired in 1917 and in another bought in 1922, with the legal title in the mother and stepfather as tenants by the entirety; (2) seven market stalls with legal title in Nicholas Lorenzo and two stalls in the names of Nicholas Lorenzo and Annie Lorenzo, and all so held under license of the Mayor' and City Council of Baltimore; (3) a deposit in the Savings Bank of Baltimore of about $20,000 in the names of Annie Lorenzo and Nicholas Lorenzo, joint owners, subject to the order of either, balance, at the death of either, to belong to the survivor. All these estates in land, stalls in market, and moneys on deposit are averred to represent the accumulated profits of the business and are the investment of its net proceeds, no matter in what name deposited or how the title may have been put. The bill further discloses that the mother had on deposit in her own name in the Provident Savings Bank the sum of $6,000, which had accumulated from the profits of the business.

Shortly before her death, she signed an order authorizing the plaintiff to withdraw this money, which he did, and divided it equally between himself and Nicholas Lorenzo. After his mother’s death, the plaintiff, upon the request of his stepfather, went to