Peter v. Peter

¹⁵⁹ Adkins, J., delivered the opinion of the Court. On the 23rd day of August, 1902, appellant made and executed the following deed of trust: “This Indenture made this twenty-third day of August, A. I). 1902, between Beverly Kennon Peter (unmarried), party of the first part, and Walter Gibson Peter and Armistead Peter, parties of the second, all of the District of Columbia : “Witnesseth, that the said party of the first part for and in consideration of the sum of ten dollars current money to him in hand paid by the said parties of the second part at and before the sealing and delivery of these presents, the receipt whereof is hereby acknowledged, has granted, bargained, sold, aliened, enfeoffed, released and conveyed, and does by these presents grant, bargain, sell, alien, enfeoff, release and convey unto the said parties of the second part, their heirs and assigns, all the right, title, interest and estate of every kind whatsoever of him, the said party of the first part, and all his right, title, interest and estate in and to any and all pieces or parcels of ground whether situate in the District of Columbia or in the State of Maryland in which he has any interest either in possession, or in remainder or reversion. “To have and to hold the same unto and to the use of the said parties of the second part, their heirs and assigns forever, in and upon the following trust — that is to say: “In Trust for the benefit of the said party of the first part for and during his natural life, without power in said party of the first part to alienate the same, or to direct the alienation thereof, by conveyance in fee or by way of mortgage or deed of trust and to collect the rents, issues, income and profits arising therefrom, or that arise from the investment of the proceeds of the sale thereof, and the same, or so much thereof, as to the said parties of the second part may be thought needful, pay over to the said party of the first part, but in such way and manner that the same shall not be liable for his debts, contracts or engage ¹⁶⁰ ments, and without power on his part of alienating or anticipating the same or any part thereof, with power in said parties of the second paid to sell or encumber the same or any part thereof at their discretion, and the same convey in fee or lesser estate by good and sufficient deed free from liability on the part of the purchaser or mortgagee to see to the application of the purchase money or money loaned, the proceeds of any sale to be reinvested and held upon the same trusts as are herein provided for the original trust estate. “And on the death of the said party of the first part to hold said principal estate or the reinvestments thereof in trust for such person or persons and upon such estate or estates as to the said party of the first part may by last will and testament executed according to law direct and appoint; and in the event of death of the said party of the first part intestate, then to hold said principal estate or the reinvestment thereof in trust for his heirs at law. “And further with power in said parties of the second part in their discretion (but without authority in the said party of the first part to direct the execution of such discretion) to reconvey said principal estate or the reinvestments thereof unto the said party of the first part, his heirs and assigns, free and released from the trusts herein declared. “In evidence whereof the said party of the first part has hereunto set his hand and seal on the day and year first hereinbefore written. “Beverley Kennon Peter. (Seal). “G. Freeland Peter. “Levin S. Frey.” "District of Columbia, to wit— “I, L. S. Frey, a Notary Public in and for said District, do hereby certify that Beverley Kennon Peter, party to a certain deed bearing date on the twenty-third day of August, A. D. 1902, and hereto annexed, personally appeared before me in said District, the said Beverley Kennon Peter being personally well known to ¹⁶¹ me to be the person who executed the said deed and acknowledged the same to be his act and deed. “Given under my hand and Notarial Seal this twenty-third day oí August, A. D. 1902. “L. S. Frey, (Notarial Seal) “Notary Public.” On October 28th, 1918, appellant filed in the Circuit Court-for Montgomery County a bill of complaint in which the execution of said deed is recited, and the following1 allegations are made: That said deed was without any valuable consideration, and solely for the purpose of placing, at the time, beyond his personal control and disposition the property and estates transferred by said deed, but that the reasons actuating plaintiff in so doing no longer exist and. he desires to be revested as of his former estate of the property and estates- aforesaid, and to have the same reconveyed to him, by the defendants; that by the terms of the deed said property and estates are to be held by defendants as a spendthrift trust, as to which plaintiff is advised said deed is in law and equity null and void; that while plaintiff is deprived of the power1 of disposition or control of said property defendants are given the right in their discretion to renounce and relinquish the said trust by reconveyance to plaintiff, and plaintiff is advised that by reason of this provision of said deed, defendants are not entitled against the will of plaintiff to continue to hold said property and estates solely at their pleasure, and without regard to the situation or condition of plaintiff in respect to either person or estate; that at the time of the execution of said deed plaintiff was unsettled in respect of his domicile and his1 vocation and purpose in life, and was so situated as to make it of doubtful prudence for him, in view of the possible vicissitudes of his immediate future:, to remain in personal care and control of his estates and interests, and it was by reason of his then situation and prospects that he was ¹⁶² principally induced, in part of his own motion, and in part by the representations and suggestions, of others, including defendants themselves, who are elder brothers, to ’execute said deed; that he wasi without the benefit of counsel, and was unaware that the provision as to the spendthrift trust was null and void, and that if he had been so advised he would not have executed the deed; "that at the time of executing said deed he believed that it would be regarded by defendants, as it was intended by him, to serve only the purpose of'divesting him temporarily of the control and management of his estates, and that upon his future request defendants would without question revest him with said estates and interests by a reconveyance, otherwise he would not have executed same; that he has never been married and is wholly without dependents upon him or his estates, and thereforei, no other person than himself can be injured by his control or disposition of said estates and interests; that the income of plaintiff from said trust property is inconsiderable and inadequate even to his personal support or any substantial contribution thereto; and he is wholly without, means1 to improve the dwelling house, part of the trust estate, so as to malee it a source of revenue; that by reason of the circumstances plaintiff derives practically nothing from his said estates, and cannot dispose of same, save the practically valueless interest for his lifetime, except in the discretion of defendants; that he has requested defendants to reeonvey to him said estates and interests but they have refused to do so. There are other allegations not necessary to be recited.

The prayer of the hill is that defendants he directed and ordered to reconvey; that the deed he declared to he null and void; and for further l’dief. . The answer filed January 10th, 1919, avers that Jong before the execution of said deed plaintiff had been addicted to the use of intoxicating liquors and narcotic drugs to such an extent as to render him incapable of caring for himself or his property, and had become a distressing burden upon the care of his brothers and sister; that he incurred while under ¹⁶³ the influence of these intoxicants considerable debts and obligations, and was in danger of dissipating all of the property which he then had or might afterwards acquire; that his habits were such as to deeply distress his family, and to render it probable that in a very short time his inheritance would be dissipated; that in order to provide against his own improvidence, and to protect himself against the results of his own intemperate habits, the said deed was voluntarily, of his own accord and of his own volition entered into as a means of preserving to himself as the years went by, that which came to him as an inheritance; that his two brothers, the defendants, were selected as trustees because of his confidence in them and the deep affection existing between them; that the conveyance was made for the conservation of his estate, because of his inability to protect and, care for it; that since that time'his habits have not improved, but have continued their hold upon him; that defendants have taken him to many hospitals and sanitariums for treatment; that his brothers feeling he was incapable of earing, for himself filed a petition under the statute, asking that an inquiry be made as to whether or not he was a habitual drunkard incapable of earing for himself; that these proceedings were dismissed on his promise of reformation,' hut before the week was out, he was agaiu uuder the control of his old habits; then proceedings were again instituted which resulted in the appearance of the plaintiff before the Court, whore he voluntarily submitted himself to its jurisdiction, admitted his inability to care for himself and consented to the appointment of a committee and confinement by the committee in an, institution ; that Mr. Charles J. Maddox was at plaintiff’s request appointed his committee and took him to his. own home, and in such surroundings, plaintiff did abstain to a very larg;o degree from the use of intoxicants and after some monthsi secured employment and for more than a year has kept himself employed and has been to a large degree temperate and self-supporting - (the testimony shows, that proceedings were ¹⁶⁴ had in August and September, 1916) ; finally defendants at plaintiff’s request wrote the judge before whom the proceedings had been brought that they would not resist the granting of an order for the discharge of plaintiff from the commitment if he could show the Court that such discharge was proper, and an order* was passed discharging him; that an effort was made to induce defendants to renounce the trust, but they are unwilling to do this, because on several occasions before plaintiff has kept himself free from intoxicants for comparatively long periods, one of them at least quite as long as the present one, but after these periods of sobriety has again succumbed, and they feel that as a matter of protecting him, from his own weakness they ought not to surrender the right which he voluntarily gave them to protect him and his property; that they have managed the affairs of their trust with fidelity in every respect without pecuniary compensation of any kind; that plaintiff is a lawyer by profession, had been engaged in practice for several years and executed the deed voluntarily and freely and of his own volition and without coercion or impelling influence exercised by any member of his family, although all the members of the family advised it. Plaintiff in his own testimony supports the allegations of the bill as to his motives for making the deed, his being without counsel, and his intention and beliefs in regard to the effect of the deed; but admits he did-not inform defendants of such motives, intention or beliefs. The averments of the answer are supported, substantially, by the testimony.

It appears the net income received by plaintiff from his property, including his home property, is about $1,200.00. One of the physicians, who has a sanitarium at Nockville where plaintiff was frequently treated, testified that in his. opinion plaintiff would probably never recover from his habits. It further appears from the record that as late as February, 1919, a month after the answer* in this case was filed admitting the abstention of plaintiff for ¹⁶⁵ more than a year prior to that time, he was found helplessly drunk and apparently under the influence of narcotics. The reasons urged by plaintiff for the relief prayed are as follows: 1.

That the deed was executed without the benefit of counsel and under a misunderstanding as to its effect. 2. That the purpose for which the trust was created no longer exists, and therefore the continuance of the trust is unnecessary. 3. That the attempted limitation by the appellant of an estate in remainder' to his own heirs effected a reversion, and consequently he alone is interested, and has a right to call for a reconveyance. 4. That even if the deed created a remainder in the trustees the use could not be executed until after the expiration of the life estate and therefore the equitable estate for life in the settlor and the equitable estate in remainder in his heirs at law coalesced under the Rule in Shelley’s Case, and the entire beneficial interest is in the appellant.

It will be more convenient to consider first the third -and fourth points. As to the third point, which was most ably and persuasively presented, it is unquestionably true that at common law a grantor could not by deed convey an estate in remainder to his own heirs, and a very high authority, the late Major. Venabile, in his syllabus on Real Property, declared that to be the law of this State in reference to common law conveyances. But, assuming that to be true, as to such conveyances, it does not follow that a settlor may not, by a deed of trust, create such an estate; and whatever the rule may be in other jurisdictions, such remainders have been upheld by this Court in at least three cases, and in another case the principle was recognized.

In Williams v. Williams, 63 Md. 371 , the deed was set aside on another ground. It was a most strenuously con ¹⁶⁶ tested case in which, very able counsel appeared on each side. If the point we are now considering could have been successfully urged it would have settled the whole controversy; and yet it was not suggested by Col. Charles Marshall, John V. L. Eindley and Robert Gilmor who were seeking to have the deed vacated or in any way referred to by the Judge below or in this Court.

But in a dissenting opinion by Judg-es Miller and Robinson (referring to the rule that a gift obtained where a confidential relation exists is prima facie void) it’ is said, “It cannot in reason be applicable where the deed simply settles the estate and property of the grantor upon himself for Ufé and after his death transmits it to Ms own heirs at lam. If a party capable of disposing of his property chooses, for the purpose of protecting it from his own improvidence, or for any other reason, thus to settle it, why should a court of equity look