Reeder v. Lanahan

Burke, J., delivered the opinion of the Court. The record in this case shows that William Lanahan, Sr., had been for many years engaged in the foreign and domestic liquor business in the City of Baltimore, and that in the latter years of his life his son, Samuel J. Lanahan, was associated with him as a partner in the business, the co-partnership being known as William Lanahan & Son. William Lanahan was the owner of valuable real and personal property, and the capital of the partnership business had' been furnished exclusively by him. Desiring to retire from the business and ³⁷⁴ dissolve .the co-partnership, he executed and delivered to his son, Samuel J. Lanahan, a deed of trust of all his property of every kind and description, real, personal and mixed.

This déed was dated the 8th day of June, 1868, and, in addition to the trusts therein created, the deed contained certain stipulations, which will he presently stated, between William Lanahan and his son Samuel J. Lanahan as to the conduct and management of the business. The terms and conditions of the stipulations and the specific trusts contained in the deed are substantially as follows: 1st. That at the time of the execution thereof and up to the first day of June, 1868, the firm of William Lanahan & Son was indebted to Samuel J. Lanahan in the sum of twelve thousand dollars for his proportion of profits to that date, and no more. ' 2nd. That said firm was then and there dissolved, but that whilst William Lanahan withdrew from the active participation of the business the same should be continued and carried on under the same firm name for a period of six years from the 1st day of June, 1868, by Samuel J. Lanahan, he using to that end all the property of every kind and description, save and except the real estate of William Lanahan, in any manner he deemed necessary for the succssful prosecution of the business, until the 1st day of June, 1874. 3rd.

That Samuel J. Lanahan was entitled to receive from the 1st day of June, 1868, and during the stipulated time named in the agreement, one-fourth of the net profits derived from the business from his labor, as compensation for his responsibility in the premises, and the remaining three-fourths Were to be paid over by him to William Lanahan at such times and in such manner as he required the same, and in the event of the death of said William Lanahan prior to the’first day of June, 1874, Samuel J. Lanahan was to continue in possession of the real and personal property that passed under the deed to be held by him upon the following trusts: ³⁷⁵ A. He was to continue the conduct of the business until the 1st day of June, 1874, and the profits derived therefrom in the meantime between the period of the death of William Lanahan and the 1st of June, 1874 (after deducting his own one-fourth), were to be divided' into equal proportions among the seven children of the said William Lanahan, viz, Mary C. Lanahan, William Lanahan, Jr., Josephine Lanahan, Charles M. Lanahan, Emma Lanahan, Harry W. Lanahan and Gertrude M. Lanahan. B. That out of said profits and assets of the business, and out of the property, if necessary, Samuel J. Lanahan should liberally and amply provide for the maintenance, support and education of his brothers and sisters, all of whom at that time were minors under twenty-one years of age. O. That on the 1st day of June, 1874, the business as conducted by Samuel J. Lanahan should be wound up and brought to a close, and the interest of the respective parties accurately ascertained, and, if William Lanahan had died before the 1st day of June, 1874, the property, real, personal and mixed, that passed under the deed, was to be divided equally between the eight children of William Lanahan, and all profits made in the business of William Lanahan & Son, from the date of the deed of trust up to the 1st of June, 1874, after deducting the one-fourth interest of Samuel J. Lanahan, were to be divided equally between the remaining seven children of William Lanahan mentioned above in the following manner, subject to the following restrictions and provisions : 1st. The portion to which each of the daughters of William Lanahan would' be entitled, Samuel J. Lanahan should convey to a trustee or trustees to be selected, if necessary, by asking their appointment by a Court of Equity, so that the said daughters would receive the rents, income and profits derived therefrom during their lives respectively, and at their deaths the principal to be paid to their children. ³⁷⁶ 2nd.

The portion to which each of the sons would be entitled, if they were minors, should likewise be conveyed and paid over to a trustee or trustees to be invested for their benefit, so that the rents, income and profits derived therefrom should only be paid over to them until they should respectively arrive at the age of twenty-five years, when they should be entitled to the principal. 3rd. That if William Lanahan died before the 1st of June, 1874, full power and authority was given to Samuel J. Lanahan as trustee, after that date, but not before, for the purpose of making’ a division of the estate among those entitled, to sell, dispose of and convey absolutely any and all of the real or leasehold property that passed under the deed. 4th. The first stipulation of the deed was a reservation to Thomas M. Lanahan, a brother of the grantor, to wind up and have discontinued the business earlier than the 1st of June, 1874, in the event of the death-of William Lanahan before that period, if, during the progress of the business, his judgment directed that said business should be wound up. Immediately upon the execution and delivery of the deed, Samuel J. Lanahan took possession of all the property that passed thereunder, and continued the business in which he and his father had been engaged until the 1st day of June, 1874, as provided in the deed of trust.

William Lanahan was then dead, having departed this life on the 8th of August, 1868. The time had now arrived' for winding up the business, and for dividing the- estate that had passed under the deed, as well as all profits arising from the conduct of the .business, among the parties entitled thereto. For this purpose full power had been given Samuel J. Lanahan, trustee by the deed to sell all the real and leasehold property; but he declined to exercise the power, preferring that the division should be made through the intervention of a Court of Equity. Before there could be a division of the profits of the business from June 1st, 1868, to the 1st day of June, 1874, it was necessary that a careful examination should be made of ³⁷⁷ the hooks containing the record of the business, and that Samuel J. Lanahan as trustee should render an account of all the dealings in the management of the business.

It was also necessary that he should account for all property that had passed to him under the deed, or which belonged to the trust estate. During the conduct of the business by Samuel J. Lanahan as trustee it was not deemed advisable that letters of administration should be taken out upon the estate of William Lanahan, deceased; but preparatory to a final settlement and division of his estate such letters were granted to Thomas M. Lanahan and Oliver Reeder. On the 24th of September, 1814, a bill was'filed in the Circuit Court of Baltimore City by Thomas M. Lanahan and Oliver Reeder, administrators of Wm. Lanahan, deceased, and by Oliver Reeder in his own right and Mary C. Reeder, his wife,' and Josephine Lanahan and William Lanahan, Jr., and wife against Samuel J. Lanahan individually and as trustee, and all the other children and heirs at law of William Lanahan, deceased.

This bill, after reciting substantially the facts we have stated, charged that the real estate of William Lanahan, deceased, could not be equally and fairly proportioned or divided among the parties entitled thereto without a sale thereof, and that it would be to the interest, benefit and advantage of all the parties, adults as well as infants ; first, to have the profits ascertained and' the business closed up, and the estate of William Lanahan properly divided among his children according to the terms and directions of the deed of trust; and secondly, to have the real estate sold for that purpose; but that the same could not be done, nor the provisions of the deed and agreement respecting the shares of the daughters of said deceased, nor of his sons, be properly carried out except through the instrumentality of a Court of Equity; first, because of the infancy of some of the parties ; and secondly, because none of the sons of the said deceased, other than Samuel J. Lanahan, had reached the age of twenty-five years, the period at which the ³⁷⁸ sons would be entitled to their principal share of their father’s estate. The relief prayed for in the bill was first, that Samuel J. Lanahan, as trustee, should' render a full, accurate, and reliable schedule or schedules of all the property not only that had passed to him under the deed of trust as of the date thereof, but also as of the date of the death of William Lanahan, and of the 1st day of June, 1874, and that he should r’ender full and accurate account or accounts of all his transactions as trustee in the conduct and management of the business from the 1st day of June, 1868, to the 1st day of June, 1874, under the provisions of the deed and agreement aforesaid in order that there might be an ascertainment and division of the profits, if any, made in the conduct of said business, and that Samuel J. Lanahan might be required to deliver over to the administrator's of William Lanahan,- deceased, all personal property which came into his hands under and by virtue of the provisions of the deed of trust, and which had not been sold .or otherwise disposed of, or, if sold, that he be required to pay over to said administrator’s the proceeds of such sale or account to said administrators for the same, and that likewise that he should be required to account to and pay over to the administrators all profits accruing from the business up to the 1st day of June, 1874; and secondly, that .all the real estate might be sold and the proceeds thereof brought into Court for distribution among the parties entitled thereto. The answer of Samuel J. Lanahan, individually and as trustee, admitted the allegations of the bill to be true, and filed three schedules, marked Exhibits “A,” “B” and “C,” which he stated contained accurate and just statements of the facts therein set forth. Exhibits “A” and “B” are here transcribed. ³⁷⁹ Exhibit A. Property turned over to Samuel J. Lanahan, Trustee, by the deed of 'William Lanahan, executed June 8th, 1868: Gash...............,......,.... $19,360.98 Bills receivable................ 14,356.06 Open accounts......... -95,785.11 Store building, Light Street...... 18,864.58 Dwelling, lot and furniture, Lexington Street................. 15,000.00 Mdse, on hand.................. 30,863.33 Do. in bond.................... 5,835.67 - $200,065.73 LIABILITIES.

Open accounts................. $ 5,486.64 S. J. Lanahan................... 12,000.00 -:- 17,486.64 $182,579.09 Exhibit B. Assets and property of the firm of William Lanahan & Sons, August 31st, 1874: Gash.......................... $ 2,853.34 Merchandise.................... _ 9,743.00 . Open accounts................. 124,890.77 Bills receivable................ 24,407.51 Store fixtures.................. 200.00 Warehouse on Light Street....... 30,000.00 Lot on Light Street............. 10,000.00 Dwelling, lot and furniture, Lexington Street................ 15,000.00 $217,094.82 . LIABILITIES. Bills payable.................. $11,000.00 Open accounts.................. 146:95 11,146.95 $205,947.87 ³⁸⁰ Exhibit “G” is merely a more detailed statement of some of the items appearing in.

Exhibit “B.” The evidence of Samuel J. Lanahan and John Thomas Washhurne was taken under a commission. Mr. Lanahan testified that Exhibit A filed with his answer was a true, accurate, and faithful account of the property turned over to him by the deed of June 8th, 1868; that it was taken from the hooks of William Lanahan & Sons, and that he took stock at the time of receiving the deed in order to ascertain what property was turned over to him by his father. He further testified that Exhibit B was a correct statement of the assets and property of William Lanahan & Son as of the 31st of August, 1874, and that the property was then in his hands as trustee, and that the books of the firm showed the account to be correct. He further stated that he would have another account to furnish which would exhibit the dealings of the house and the profits, if any, since the 31st day of August, 1874.

This testimony was corroborated in all particulars by that of Mr. Washburne. On January 4th, 1875, a decree was passed in the cause whereby it was adjudged that the complainants were entitled to relief, and that the entire estate of William Lanahan, deceased, should be administered in that Court, and that the parties in interest were entitled to have a division of the entire estate in order that they might have and hold their interest therein in severalty according to the terms and provisions of the deed of trust. To the end that such division and partition might he made the decree provided that “Samuel J. Lanahan, the trustee named in said deed, is hereby ordered and directed to yield up, surrender and convey unto Thomas M. Lanahan and Oliver Reeder all the trust property of every kind and description which passed to him under said deed, as said property existed at the time of making said deed, or as it may have been changed or converted since the date thereof by the said Samuel J. Lanahan in execution of his powers as trustee, an dthe said Samuel J. Lanahan account and pay over to the said Thomas M. Lanahan and Oliver ³⁸¹ Eeeder all profits remaining from the conduct of the said' business of William Lanahan & Son from the day of the date of said deed of trust until the date of this decree, and all of which property and profits when so conveyed and made over to them the said Thomas M. Lanahan and Oliver Eeeder shall hold in trust until the further orders of this Oourt distributing the same among the cestuis que trustent entitled thereto. And it is further adjudged, ordered and decreed that the said Thomas M. Lanahan and Oliver Eeeder be and they are hereby appointed trustees to sell all the real estate and personal estate embraced in the trust and not disposed of by the said Samuel J. Lanahan in the conduct of said business provided for under said deed aforesaid, or so much thereof as is in its nature vendible and not divisible by public sale in the City of Baltimore.” The decree directed that three weeks’ notice should be given of the sale of the real estate and ten days’ notice of the sale of the personal estate by