Rodeheaver v. State

KRAUSER, J. In his will, John Ellwood Hinebaugh left a substantial parcel of land, known as “Friend’s Delight,” to his friends Donald and Charlotte Sebold, provided, among other things, they did not alienate their interest in the property and continued to farm it. If they either did not comply with the terms and conditions of the devise or disclaimed the devise, the property was to pass, under the -will, to the State of Maryland, “subject to the same conditions and covenants.” ³ When the Sebolds did disclaim the devise, the State filed a complaint for declaratory judgment in the Circuit Court for Garrett County requesting that the alienation provision of the will be declared “invalid” and the farming provision “unenforceable.” Among those opposing the State’s action were Donald Sebold, the executor of the will, and appellant Shelley Rodeheaver, a residuary beneficiary whose request to intervene was granted. The State then filed a motion for summary judgment. The circuit court granted the motion, rendering the declaratory relief requested by the State.

Although acquiescing in the circuit court’s ruling that the alienation provision was “invalid,” appellant maintains on appeal that the circuit court erred in finding that the condition on the devise of Friend’s Delight to the State, namely that the property continue to be farmed, was “unenforceable.” 1 For the reasons that follow, we shall affirm the judgment of the circuit court. BACKGROUND In his will, Hinebaugh devised Friend’s Delight, together with the Sang Run Community Park, to the Sebolds: “M. 1.) I give, devise and bequeath to Donald Sebold and Charlotte Sebold, husband and wife ... all that realty ... known as Friends’ [sic] Delight ... together with ... the Sang Run Community Park.” That devise required the Sebolds to continue to farm 2 Friend’s Delight and prohibited them from “leasing] it or otherwise alienating] their interest in it.” “[A]ll these condi ⁴ tions,” the will averred, “shall be covenants running with the land.” The will further declared that, “[u]pon the death of the last” of the Sebolds or “in the event that they ... disclaimed] the above [devise]” or “breaeh[ed] or fail[ed] to observe any of the above conditions and covenants,” the property passed, “subject to the same conditions and covenants,” to the State of Maryland, adding that “said conditions [were] covenants running with the land.” The will also contained a residuary clause leaving to five residuary beneficiaries, among them appellant, the “rest and residue” of Hinebaugh’s estate. After Hinebaugh’s death, the Sebolds’ decision to disclaim that devise left the State with the question of whether, in accepting the property, it had to abide by the restrictions placed on the alienation and use of the property by the will. Troubled by what it considered an “unreasonable restraint on alienation” and fearful that the will provisions would “severely inhibit” its “choices in property management,” the State filed a complaint for declaratory judgment requesting judicial declaration that the alienation provision was legally invalid and the farming provision legally unenforceable.

The State’s complaint was initially opposed by the executor of the will, Donald Sebold, but he later withdrew his opposition after reaching a settlement with the State. 3 But appellant, a residuary beneficiary who, with the consent of all parties, was permitted to intervene, continued to oppose the relief requested by the State’s complaint. Eventually, because there were no genuine disputes of material fact, the parties agreed that the matter should be resolved by summary judgment. The circuit court thereafter granted summary judg ⁵ ment in favor of the State, holding the alienation provision “invalid” and the farming provision “unenforceable.” DISCUSSION Appellant contends that the circuit court erred in holding that the condition of Hinebaugh’s will requiring the State to continue farming the property was unenforceable. Although the will does not expressly provide for a reversion or that the property will pass to a specific beneficiary if the State fails to abide by that condition, appellant nonetheless argues that if the State fails to farm the property, the property will devolve to her and the other residuary beneficiaries.

We disagree. “In reviewing a circuit court’s grant of summary judgment, we look to whether a dispute of material fact exists. We also seek to determine whether the court was legally correct.” Deboy v. City of Crisfield, 167 Md.App. 548, 554 , 898 A.2d 1189 (2006) (citations removed). Because there is no genuine issue of material fact here, we need only determine whether the court was “legally correct.” We so find. Under Maryland law, a grantor can place conditions and restrictions on the use of the granted property.

See, e.g., Rogers v. State Roads Commission, 227 Md. 560, 564-65 , 177 A.2d 850 (1962). Such conditions and restrictions, however, are disfavored because the law favors “the free transfer of land,” Middleton Realty Co. v. Roland Park Civic League, 197 Md. 87, 93 , 78 A.2d 200 (1951), as well as “the natural right which an owner possesses to use and enjoy his property,” Norris v. Williams, 189 Md. 73, 76 , 54 A.2d 331 (1947). Particularly disfavored are conditions subsequent, whereby the grantor “designates some event which may cut short [an] estate before it reaches its ... regular expiration or predetermined end.” Brown v. Hobbs, 132 Md. 559, 563 , 104 A. 283 (1918). 4 They are viewed with disapproval because ⁶ “the breach of such a condition causes a forfeiture and the law is averse to forfeitures.” Gray v. Harriet Lane Home for Invalid Children, 192 Md. 251, 264 , 64 A.2d 102 (1949). In fact, so disfavored are these conditions that the Court of Appeals has declared that a will shall not be “construed to create an estate on condition [subsequent]” unless “the intent of the grantor to make a conditional estate is otherwise clearly and unequivocally indicated.” Sands v. Church of the Ascension and Prince of Peace, 181 Md. 536, 542 , 30 A.2d 771 (1943).

That means that testamentary language purporting to create such a condition must clearly state that “the grant is ... void if the condition is not carried out” or “clearly indicate” the grantor’s intention “that the property is to revert to him” or to pass to another party if the property is “diverted from the declared use.” Gray, 192 Md. at 264 , 64 A.2d 102 . See also Sands, 181 Md. at 542 , 30 A.2d 771 . Otherwise, the condition “merely expresses the grantor’s confidence that the grantee will use the property so far as may be reasonable and practicable to effect the purpose of the grant.” Id. Although the farming provision at issue may have created a condition subsequent as to the Sebolds — because it specifically provided that if the Sebolds breached the farming provision, the property would pass to the State — it did not create such a condition with respect to the State upon its acceptance of the bequest.

See Gray, 192 Md. at 264 , 64 A.2d 102 . For while the property passed to the State “subject to the same conditions and covenants” as it did to the Sebolds, this language does not indicate that, if the State does not comply with the farming provision, the grant to the State is void or the property will revert to Hinebaugh or pass to another party. See id. In fact, the will does not indicate in any way what is to happen to the property should the State cease to farm the property.

Thus the language of the devise, we conclude, expresses no more than Hinebaugh’s confidence that the State would “use the property so far as may be reasonable and practicable to effect the purpose of the grant,” that is to farm the property. Sands, 181 Md. at 542 , 30 A.2d 771 . ⁷ Appellant does not agree. She argues that the farming provision is enforceable because the property is otherwise “redirected” to the residuary beneficiaries in the event the State fails to comply with the farming provision. To buttress her claim, appellant cites two cases: Mayor and City Council of Baltimore v. Peabody Institute of Baltimore, 175 Md. 186 , 200 A. 375 (1938), and Gray .

In Peabody, the testator’s will stated: “I leave to the Mayor and City Council of Baltimore the properties 101-103 N. Howard Street. 113-115 W. Fayette St. Five years after my decease, the said properties to be sold and the proceeds invested in a public park.” 175 Md. at 188 , 200 A. 375 . The city asked the circuit court to construe the devise to permit it to buy “a number of small units of land” to form “several playgrounds,” rather than one single lot of land to form a park. Id. at 188-89 , 200 A. 375 . The circuit court declined to do so.

Id. at 189 , 200 A. 375 . Affirming the circuit court’s decision, the Court of Appeals stated that the city “[had] to decide now ... whether it [was] going to accept the gift with the condition” and, if it was “not willing” to do so, the “devise would fail and the property go to the Peabody Institute as residuary devisee.” Id. at 193 , 200 A. 375 . But the question posed by the city, and addressed by the Court, was not whether the park provision created a condition subsequent. It was whether the city, under its charter, was “restrained in the application” of the funds from the sale of the property to the purpose described in the devise or if it could “divert [the funds] to any purpose ... within its corporate powers.” Id. at 190-192 , 200 A. 375 .

In fact, the Court specifically declined to address the city’s argument that it “would not be accountable for a diversion of the gift” because there was “no condition subsequent in the devise or provision for a reversion or defeasance in case of a diversion,” stating “[t]his question we think is premature now, as the question may never arise.” Id. at 192-93 , 200 A. 375 . Peabody therefore does not bear directly on the question before us. ⁸ In Gray , the other case upon which appellant relies, the testator bequeathed to the Harriet Lane Home for Invalid Children of Baltimore City (“Home”) her estate “as ... endowment fund[s] for the use and benefit” of two “open wards” for the treatment of contagious disease: one for the treatment of diphtheria and the other for scarlet fever. 192 Md. at 256, 261 , 64 A.2d 102 . The funds were to be used for, among other things, “the care and treatment of deserving free patients” in those two wards “to the end that two-thirds (2/3) of the number of beds in each of the said two wards ... shall be used for the reception, care and treatment of free patients.” Id. at 256 , 64 A.2d 102 . In response, the Home filed a bill of complaint asking the circuit court to decree the “absolute distribution of the funds ... to the Home” and to “fix[ ] the purposes ... the places ... and the method in