Taylor v. Mercantile-Safe Deposit & Trust Co.

Smith, J., delivered the opinion of the Court. In the unusual facts in this case we have testimony by an individual that he knew nothing of an assignment of a mortgage to him, that a subsequent assignment of that mortgage purportedly by him was not in fact signed by him, that he only recently has learned of a chancery sale reported in his name, that he paid no part of the purchase price of that property, that he learned 36 years after the fact that title to the real estate stood in his name as a result of an ⁵³⁴ assignee’s deed from that sale, and that he, as a member of the bar, was induced more than 40 years ago by a then circuit judge to enter into a partnership with a non-lawyer real estate agent by which he was to share the profits from the real estate business and the real estate agent was to share the profits derived by him from his professional activities as a lawyer. 1 Mercantile-Safe Deposit and Trust Company as personal representative of the estate of Richard H. Hodgson (Hodgson) appears here as appellee and cross-appellant. It filed a bill of complaint in the Circuit Court for Wicomico County against appellant and cross-appellee, Levin Paul Taylor (Taylor), praying that a resulting trust might be declared in its favor as to certain real estate in Wicomico County appearing in the name of Taylor among the land records of that county. A mortgage was assigned to Taylor on December 24, 1932.

Under date of January 7, 1933, an assignment of that mortgage to a Wicomico County attorney “for the purpose of foreclosure” appears in the record. Thereafter the attorney proceeded to sell. The report of sale stated that Taylor was the purchaser at public sale on February 4, 1933, for the sum of $2600. The sale was finally ratified by the circuit court on November 10, 1933.

Under date of October 24, 1933, the assignee conveyed the land to Taylor. The deed was not recorded, however, until March 31, 1944. At that time it was mailed by the clerk of the circuit court to Hodgson, from which the inference is drawn that Hodgson was responsible for its recordation. Additional facts were succinctly summarized by the chancellor in his opinion: “Mr. Hodgson, of course, is no longer here to testify and neither are the grantor, Mr. Seth Taylor, nor the witness, Miss Livingston. [Miss Livingston was said to have been Hodgson’s secretary for 51 years prior to her death “[a]round Thanksgiving of 1969.”] However, Mr. Merrill Eversman, a certified ⁵³⁵ public accountant who had prepared Mr. Hodgson’s tax returns for twenty years, testified that Mr. Hodgson’s business records showed the subject property as part of a listing of the Hodgson properties.

This list was prepared in 1952 to show location, name, how and when acquired, original cost, cost of improvements, tax assessment, rents collected, depreciation, and other factors necessary for the preparation of Mr. Hodgson’s tax returns. The subject property was shown on this list as having been purchased in No. 4334 Chancery on October 25, 1933, for $2,600.00 cash. Mrs. Eleanor Hearn, Mr. Hodgson’s secretary at the time of his death, testified Mr. Hodgson kept in his desk a list of all his properties and the subject property was included on that list, valued by him at $8,500.00. Tax bills for the property were sent to Levin P. Taylor in care of Mr. Hodgson.

Mr. Hodgson paid the taxes on the property and collected the rents from it from 1933 until the time of his death. He reported the income from the property on his income tax returns. The deed was found in his safe deposit box after his death. This exercise of dominion and control over the property by Mr. Hodgson, coupled with Mr. Taylor’s testimony that he did not pay the purchase price, lead inescapably to the conclusion that Mr. Hodgson did.” (Emphasis in original.) A decree was passed holding that the deed to Taylor “created a resulting trust in and to the property therein conveyed for the benefit of Richard H. Hodgson for his lifetime” and “that upon the death of Richard H. Hodgson, the beneficial interest in said property became vested in Levin Paul Taylor . . . .” The bill of complaint was then dismissed.

Both sides appealed. The questions presented are the right of a defendant to appeal when a bill of complaint is dismissed; the application of the “dead man’s statute,” Code (1957) Art. 35, § 3; and ⁵³⁶ whether there was a resulting trust. Since we conclude there was no error, we shall affirm the decree of the chancellor (Pollitt, J.) on these questions. Hodgson’s personal representative has moved to dismiss Taylor’s appeal.

It claims that since the complaint has been dismissed in its entirety and the complainant ordered to pay the costs, no appeal will lie. Taylor says his appeal was filed out of an abundance Of caution because he has pending in the Circuit Court for Wicomico County a suit against the Hodgson estate for rents and profits realized from the property- here in controversy. If the court decree holding that there was a resulting trust during Hodgson’s lifetime were permitted to stand, then, as Taylor states, any chance he might have of recovery in that civil suit would be destroyed. Since there was a partial finding in favor of the complainant, the decree should not have dismissed the proceeding and Taylor does have a right of appeal to us.

Therefore, the motion to dismiss must be denied. A second preliminary matter is a holding relative to the “dead man’s statute.” 2 Taylor was called as'a witness for the plaintiff, Hodgson’s personal' representative. On direct examination he testified that he practiced law in Wicomico County “[f]rom January, 1927, until July, 1929,” and that Hodgson, his half brother, was his “associate.” 3 It was specified that Hodgson was a realtor, nót a-lawyer. ’Taylor was then led through the situation relative to this property, that he was not aware of the sale, that he did not attend the sale, that he did not purchase the property, that he did not put up any money to purchase the property, that he was ⁵³⁷ not “aware of’ parting “with any consideration with regard to the property,” that prior to the death of Hodgson he collected no rents from the property, that he did not know and never saw the long time tenant of the property, and that he never owned any real estate in Salisbury. He stated that “[u]ntil 1967” his son, a lawyer, resided in Hodgson’s home.

Taylor knew nothing of the deed to him until December 24, 1969. At that time a water bill for the property sent to Levin Paul Taylor in care of Hodgson was missent to Taylor’s son, Paul, who notified his father that he was the legal owner of the property. On cross-examination he was again interrogated relative to the mortgage. Questions then elicited from him the information that his and Hodgson’s uncle, a then circuit judge, suggested that Taylor come to Salisbury to practice law, “to go in with [his] brother,” Hodgson, the uncle, having given “a rosy picture of the financial future,” and it being agreed that Hodgson would get half of what Taylor earned as an attorney and Taylor would get half of what Hodgson earned from his real estate business.

The record then is: “Q. Did it work out that way? A. No, sir. “Q. How did it work out? A. I got half of what I earned, that’s all, and I didn’t get one cent from his real estate transactions. “Q. Do you know of any reason why this mortgage might have been put in your name and the property later conveyed to you in your name? A. The only thing I can think, Mr. Robins, is that when I went to him, my brother, and complained about— “Q. Which brother are you referring to?

A. Mr. Hodgson. Mr. Richard H. Hodgson. “So, I went to him, Mr. Richard H. Hodgson, and I complained about that I wasn’t getting — “(Mr. Fox) I am going to object to this, Your Honor. I think this is far afield. And then there is the ‘dead man’s statute’ for one thing. “(The Court) The ‘dead man’s statute’ would ⁵³⁸ apply, except you called him as your witness, Mr. Fox. “(Mr. Fox) I don’t think that because I asked him about his relationship with Mr. Hodgson that that opens the door for anything that would — “(The Court) You asked him if he was associated with Mr. Hodgson when he came to practice law in Salisbury, and he said he was, and I think that opened the door. “(Mr. Fox) Your Honor, I must strongly urge that I have not waived the ‘dead man’s statute.’ If I understand it correctly, you have to question the witness about transactions that the witness had with the deceased person.

The fact that you establish that he practiced law as an attorney certainly does not go into any transactions between the two of them. “I would strongly urge upon the Court that this comes a long way short of waiving the ‘dead man’s statute.’ “Just because he practiced law with the man certainly does not — “(Mr. John Robins) Yes. And we suggest that he didn’t object when we were establishing this relationship, Your Honor, and when we — “(The Court) His objection is probably late, that’s true. “But the ‘dead man’s statute’ is waived when the witness is called by the other party. “When he is then questioned about his association with the other party, then he is entitled to go ahead and explain that association. “I will overrule the objection.” An exception is contained in Code (1957) Art. 35, § 3 for the situation where an individual is “called to testify by the opposite party . . . .” This testimony came in on cross-examination. It was within the scope of the direct ⁵³⁹ examination. Thus, it was admissible.

Leahy v. McManus, 237 Md. 450 , 206 A. 2d 688 (1965), and Cooper v. Davis, 226 Md. 371 , 174 A. 2d 144 (1961). At least as far back as Dorsey v. Clarke, 4 H. & J. 551 (1819), our predecessors recognized that where one purchases land, pays for it with his own money, and takes a conveyance in the name of another, a trust results in favor of the purchaser, unless there be circumstances rebutting that presumption. The authorities relative to this doctrine were recently reviewed in Lacey v. VanRoyen, 259 Md. 80 , 267 A. 2d 91 (1970). In Battle v. Allen, 250 Md. 672 , 245 A 2d 590 (1968), Judge Marbury said for the Court: “A resulting trust is one which exists because of the inferred or presumed intention of the parties where the terms of the disposition or accompanying facts establish that