Sieling v. Sieling

Digges, J., delivered the opinion of the Court. The bill in this case was filed in the Circuit Court for Howard County by four of the children of Johann Sieling and Anna Sieling, his first wife, against Johann Sieling and Amelia C. Sieling, his second wife, and one of the children by the first marriage, Henry J. W. Sieling. An answer was filed by the defendant Henry J. W. Sieling, admitting the allegations of the bill and consenting to a proper decree. An answer was also filed by the defendants Johann Sieling and Amelia C. Sieling, making denials of certain of the allegations of the bill and also demurring to each and every paragraph thereof.

The complainants subsequently filed a de ⁵³⁸ murrer to the answer of Johann Sieling and Amelia C. Sieling. The case was thereupon heard upon the bill, answer, and demurrers to the bill and answer. The chancellor overruled the complainants’ demurrer to the defendants’ answer, sustained the defendants’ demurrer to the bill of complaint, and dissolved the preliminary injunction theretofore granted, with leave to the complainants to amend the bill of complaint. The complainants declining to amend, the chancellor passed a decree dismissing the bill, with costs to the defendants.

From this decree the present appeal is prosecuted. The allegations of the bill of complaint, which upon demurrer must be assumed to be true, are substantially as follows: That Johann Sieling, also known as John H. Sieling, and Anna Sieling, his first wife, who died on April 15th, 1920, came to Howard County between forty and fifty years ago and purchased a farm in that county near Guilford, which was conveyed to them as tenants by the entireties by a deed from Richard H. Dorsey et al., dated September 4th, 1882, and duly recorded among the land records of that county; that this farm contained 275 acres and was later added to by an additional purchase from Emily L. Dorsey by deed dated February 15th, 1915; that on this property the father and mother of the complainants made their home and raised their children, these children being the complainants, together with the defendant Henry J. W. Sieling and another son, William Sieling, who died unmarried, intestate, without issue, on April 17th, 1897; that as the children were growing up, the conduct of their father, Johann Sieling, towards them was exceedingly harsh and arbitrary, and they were compelled to work very hard upon the farm property and allowed little liberty and no money. That under these conditions it became apparent to the wife and mother, Anna Sieling, that the children would all leave home as soon as they respectively reached their majorities, and that she and her husband would be left without the care and companionship of the children, the farm property would be without the labor of the children, and the .fortunes of herself and her husband would ⁵³⁹ suffer thereby. That the said Anna Sieling^ the mother, thereupon arranged with her husband, Johann Sieling, to agree that the property which he and she had acquired, in the shape of the farm property and the personal property thereon, and any other property which they might thereafter acquire by their labor and diligence, would be held for the benefit of the children and should not be alienated ■ from them; that this agreement was originally made verbally by the said husband and wife with all of their children, but that later a formal paper in the nature of a declaration of trust-covering said agreement was drawn up and executed by the said Johann Sieling and Anna Sieling, dated June 2nd, 1900, which paper writing was filed as an exhibit with the bill, and is in the following words: “We, the undersigned, John Sieling and Anna, his wife, do hereby agree, promise and obligate ourselves and each of us, to our children, that in consideration of the help rendered us by them and to be rendered, in the conduct of our farm and household, we will not give away from them any of the property or estate we now have or may hereafter acquire, but that all which the survivor of us may have or be entitled to at the time of his or her death, shall go to them at the death of the survivor of us, thus: to each one of them that works at home for us at the rate of one hundred dollars per annum, from the time he or she attained the age of twenty years, and any excess as the survivor of us may appoint in writing, and in default thereof, to be divided equally among our children. “This, however, is not to prevent or hinder us or either of us, in any way, from selling or otherwise (save by gift or marriage) disposing of any such property. “Dated this 2nd day of June, A. D. 1900.

(Signed) “Johann Sieling, “Anna Sieling.” That Anna A. Sieling, one of the children, worked at the home of her father and mother approximately ten years after ⁵⁴⁰ she attained the age of twenty years; that Elise Dorsey, another of said children, so worked approximately eight years; that Frederick W. Sieling, another child, so worked for approximately seven years; and that Henry J. W. Sieling, another of said children, so worked approximately twelve years, all without any compensation whatsoever from the said Johann Sieling and the said Anna Sieling. That on the 5th day of June, 1922, the said Johann Sieling, having become solely entitled to said property by the death of his wife Anna Sieling, sold to one of his sons, Henry J. W. Sieling, the home property, together with the personal property, then owned by the said Johann Sieling; that the said Johann Sieling, as a result of the industry and thrift of the entire family, and with funds which had been either produced on the home property or raised by virtue of mortgages thereon, had acquired other property in Howard County, and that he subsequently sold the same to his son, the defendant Henry J. W. Sieling, and as a part of the purchase price received from his son a mortgage for the sum of $6,000, which is now overdue and which the said son, Henry J. W. Sieling, is now about toi pay to his father, the said Johann Sieling. That in addition to the said $6,000 secured by said mortgage, the defendant Johann Sieling had to your orators’ knowledge the sum of approximately $5,000 in' cash which he recently withdrew from a bank in Howard County, the same being also the proceeds of the property which the said' Johann Sieling and Anna Sieling had acquired from time to time as a result of the labor and work performed by the entire family upon the home property. That the said Johann Sieling is now in his eighty-fifth year, and has recently married a second time, to the defendant Amelia C. Sieling, and is now residing in Baltimore City; that since the marriage of the said Johann Sieling to the said Amelia C. Sieling, the said Johann Sieling has received by deed from Charles E. Raymo et al., dated November 18th, 1925, and recorded among the land records of Baltimore City, an interest with his wife, as tenants by the entireties, in certain property located in said city and known as 219 North Calhoun Street; that your ⁵⁴¹ orators have no means of knowing whether any or all of said .sum of $5,000 has been invested in the purchase of said property, or not.

That the said Johann Sieling has repeatedly stated that he is going to see that when he dies there is no property left for his children, and has repeatedly violated his paper writing or declaration of trust of June 2nd, 1900, by .giving away considerable sums of money, and has recently violated same by virtue of his second marriage; that unless the property which he now holds, consisting of the $6,000 about to he paid him, the $5,000 in cash, and his interest in the property No. 219 North Calhoun Street, and, any other property, real and personal, of which he may be possessed, is declared to he held in trust under the provisions of the paper writing of June 2nd, 1900, for the benefit of your orators and the said Henry J. W. Sieling, and for the benefit of the said Johann Sieling as therein set forth, he will speedily dissipate the entire fund, in violation of said paper-writing, and the interest of your orators and the other parties entitled thereto will he dissipated and lost entirely. The prayers of the bill are, that the court take jurisdiction and administer the trust estate created by the paper-writing of June 2nd, 1900; that Henry J. W. Sieling be restrained from paying the mortgage debt to his father, and be required to pay the same into court pending the determination of this suit; that a receiver he appointed to hold the said fund, and any other funds that may come into his hands herein, pending the determination of this suit, and that such receiver may be authorized and directed to release said mortgage to the said Henry J. W. Sieling, when the same shall have been paid to him; that the said mortgage debt of $6,000, and the said sum of $5,000, and the interest of the said Johann Sieling in the property known as 219 North Calhoun Street, in the City of Baltimore, and any and, all other property now owned or held by the said Johann Sieling, may he declared to he held in trust under the terms of the said paper-writing of June 2nd, 1900, for the benefit of your orators and such other persons who may he -entitled thereto; .and that a trustee may be appointed to hold the same and ⁵⁴² administer said trust under the direction of this court; that the said Johann Sieling may be enjoined, pending the determination of this proceeding, from alienating or disposing of any of said moneys or property without the order of this court; that the said J ohann Sieling may be required toi make-a full and true discovery and report of the exact amount of money, and amount and character of property, which he now holds, and the source from which the same was derived, and where the same is located. The defendant Johann Sieling in his answer denies that the complainants have any interest in the leasehold property No. 219 North Calhoun Street, and also denies the alleged threats attributed to him, and avers that under the law he is entitled to make such disposition of his own property and estate as to him seernsj just and proper; and further denies that he ever made any valid or enforceable contract or declaration of trust of any kind, of the nature set up in the bill of complaint. He admits signing the paper writing of J une 2nd, 1900, but denies that said paper writing ever became a valid and enforceable contract, or any part of a valid and enforceable contract, or ever became a valid and enforceable declaration of trust, or that he ever made a valid and enforceable contract or declaration of trust of any kind of the nature set up in the bill of complaint; and denies that he entered into 'any binding legal verbal arrangement with his then wife, Anna Sieling, as to the disposition of their property as alleged.

It will thus be seen that the first question presented for our determination is whether or not the paper writing signed by Johann Sieling and Anna Sieling, together with the attendant circumstances as shown by the allegations of the bill, constitutes a legally binding declaration of trust. It is contended by the appellees that it does not, for two reasons : Eirst, that there must be a complete separation of the legal estate and the beneficial enjoyment, even in the case of a trust created or continued in the party from whom the bounty emanates; the transaction must show that the entire equitable interest is parted with; if the legal and equitable ⁵⁴³ estates come together in the same person, the equitable is merged in the legal and the trust is terminated; and, second, that because in the paper writing of June 2nd, 1900, the settlors reserve.the right to sell or otherwise dispose of any property mentioned, therein^ except by way of gift or marriage, and therefore might so dispose of the property as to leave nothing at the time of the death of Johann Sieling, there could be no valid trust. These contentions were made in the court below and appear largely to be the basis upon which the learned chancellor acted in passing the decree in this case. We will consider them in the order stated.

The authorities relied upon in support of the first proposition, namely, that there must be a complete separation of the legal estate and the beneficial enjoyment, are 26 R. C. L. 1186, sec. 22, and Doan v. Ascension Parish, 103 Md. 662 , the last case being tbe authority cited by tbe author in support of the text found in Ruling Case Law. In the section quoted from 26 R. C. L., the author, after stating the rule as contended for by the appellees and adopted by the chancellor, states: “It has been said, however, that a trust does not fail by the appointment of a beneficiary as trustee”; citing in support of the last statement Clark v. Callahan, 105 Md. 600 . In that case, quoting from the syllabus, it is said: “When property is transferred to one upon the faith of his promise to divide it between himself and another, equity will enforce the trust thereby created.” In Carson v. Phelps, 40 Md. 73 , we quoted with approval from Lewin on Trusts, p. 56: “If a settlor purpose to convert himself into a trustee, then the trust is perfectly created, and will be enforced so soon as the settlor has executed an express declaration of trust, intended to be final and binding upon him, and in this ease it is immaterial whether the nature of the property he legal or equitable whether it be capable or Incapable of transfer.” And again, in the same case, quoting from Hill on Trustees, p. 63, it is said: “A trustee of real or personal property may be created by any formal instrument, whether deed or will, which passes the legal title to the trust estate, and con ⁵⁴⁴ tains a proper declaration of trust; or without any transmutation of possession, the owner of property may convert himself into a trustee of it by a proper declaration of trust.” In Brandau v. McCurley, 124 Md. 243, at 248 , we said: “An owner of property can in his individual capacity make a valid conveyance, in this state, to himself' as trustee.” And in Stone v. National City Bank, 126 Md. 235 , quoting from the opinion of Lord Cranworth in Jones v. Lock, L. R. 1 Ch. 25, we said: “If I give any chattel, that of course passes by delivery; and if I expressly or impliedly say I constitute myself trustee of such and such personal property for a person, that is a trust executed, and this court will enforce it, in the absence of fraud, even in favor of a volunteer. * * * The authorities all turn upon the question whether what took place was a declaration of trust or merely an imperfect attempt to make a legal transfer of the property. In the latter case the court will afford no assistance to volunteers; but when the court considers that there has been a declaration of trust, it is a trust executed, and the court will enforce it whether with or without consideration. * * * It is the donor’s ant which originates the trust, and it is the intention with which he does the act that is material.” Again, in Milholland v. Whalen, 89 Md. 218 , this Court, speaking through Judge McSherry, said: “Mor does the circumstance that the depositor makes himself a beneficiary jointly with another, prevent the trust from attaching to the fund.

A trust is not rendered void by the appointment of a beneficiary as trustee. 1 Perry on Trusts, sec. 297; Woods v. Woods, 1 M. & Cr. 401; Crockett v. Crockett, 1 Hare, 451; S. C., 2 Phill. 553 ; Hill on Trustees, 65, note 1; Story v. Palmer, 46 N. J. Eq. 1; Rogers v. Rogers, 18 Hun. 409 . * * * The declaratioii of trust transferred to the trustee the legal title for the benefit of the survivor of the two cestuis que trustent, as to the balance of the fund remaining in bank at the death of either. By the terms of the declaration of trust, upon the death of Miss O’Meil, the balance on deposit became Mrs. Whalen’s property, not by a gift and delivery ⁵⁴⁵ of the bank book, nor by the right of survivorship as one of two joint owners, nor by a gift of the funds inter vivos; but purely and exclusively because the trust, as declared in 1895, stripped Miss O’Neil of her individual ownership of the money, and vested the money in her in trust, as to this balance, for Mrs. Whalen, if the latter happened to outlive Miss O’Neil.” In the last-mentioned case the declaration of trust concerned a savings bank deposit, in which Miss O’Neill constituted herself, by her declaration, trustee for the benefit of herself and her sister, Mrs. Whalen, joint owners, subject to the order of either, the balance, at the death of either, to belong to the survivor; and this Court held that there was a valid declaration of trust impressed upon* the funds in bank, the bank holding thenq not as trustee, but for the trustee, the trustee being seised of the money for the use of herself and her sister as joint owners of the equitable interest, both being authorized to draw the funds upon producing the bank book, and the balance at the death of either to belong to the survivor. A careful reading of the case of Doan v. Ascension Parish, 108 Md. 662 , will disclose that the Court, in the expressions it used, was referring to the whole of the equitable estate and the whole of the legal estate. There can be no doubt that a transfer of the whole of the