Tillinghast v. Lamp

OFFUTT, J., delivered the opinion of the Court. Anna E. K. Tillinghast is the surviving sister of Anna Katherine Lamp, who died in Baltimore City on January 25th, 1932. J. George Lamp is the surviving husband of Mrs. Lamp, and Charles F. W. Tillinghast and Samuel F. Leroy Tillinghast are sons of Mrs. Tillinghast. At her death she left a considerable estate, including both real and personal property, which she disposed of by a will dated February 19th, 1931, in the following manner : To her husband, J. George Lamp, she left a legacy of $10,000, a life interest in her home property at Park Heights Avenue and Clarke Lane, in Baltimore City, and a stall in the Broadway Market; to her nephew, Charles F. W. Tillinghast, 200 shares of the preferred stock of the William Schluderberg-T. J. Kurdle Company; to Samuel Leroy Tillinghast the net income from 200 shares of the same stock left in trust until he arrives at the age of forty, then to him absolutely, and to those two a policy of life insurance for $10,000 on the life of her husband, and the remainder of the estate in her home property; ³⁸ to her sister Anna E. K. Tillinghast, 600 shares of the preferred stock in the Schluderberg-Kurdle Company, her stock in the Equitable Trust Company, her jewelry, and all the rest and residue of her estate.

And she appointed J. George Lamp, her husband, executor of the will. The will was in due course admitted to probate; on February 3rd, 1932, letters testamentary on the estate were granted to J. George Lamp; and on April 7th, 1932, he filed in the Orphans’ Court of Baltimore City, where the will had been probated, a renunciation of the provisions for his benefit which it contained, anú an election to take in lieu thereof his legal share of the real and personal estate of Anna, his wife. Mrs. Lamp married J. George Lamp on November 24th, 1921. On November 20th of that year, in contemplation of her approaching marriage, she executed a deed in which she covenanted and agreed to make no claim as wife or widow against his estate.

On November 16th, 1921, she deposited to her credit, in a savings account in the Equitable Trust Company of Baltimore City, $20,000, and on December 2nd, 1921, she had on deposit in a checking account at the same bank $10,576.88. On November 30th, 1921, the title of the savings account was changed so as to read: “Anna K. Lamp. In trust for self and J. G. Lamp joint owner subject to the order of either, the balance at death of either to belong to the survivor.” On December 2nd, 1921, the balance to her credit in the checking account was transferred to an open or checking account having the same heading. At the death of Mrs. Lamp, J. George Lamp claimed the balances in these two accounts as his own individual property, and he also claimed full legal rights to her estate as the surviving spouse.

On September 13th, 1933, Anna E. K. Tillinghast filed the bill in this case against him individually and as executor of the will of Anna K. Lamp, and against the Equitable Trust Company, in which she asked the court (1) to assume jurisdiction of the estate and direct its administration; (2) to annul the gifts and transfers of the funds ³⁹ in the checking and savings accounts, and to declare the same a part of the estate of Anna K. Lamp; (3) to require Lamp to account for any sums withdrawn from said accounts after his wife’s death; and (4) to declare the renunciation and election of J. George Lamp null, void, and ineffective. On November 7th, 1933, she amended the bill by adding an additional prayer for relief, in which the court was asked to decree that, contemporaneously with the deed of November 20th, 1931, Lamp had executed a separate deed, also in contemplation of marriage, releasing her estate and property of every kind from any marital rights or interest he might have therein, or, in the alternative, to decree that she was led by the fraud of Lamp to believe that the deed which she signed and which he also signed contained a provision that he would release and relinquish all rights which he had or might have in her estate, that she signed that deed in the mistaken belief that it contained such a provision, that it be reformed by including such a provision in it, and further to decree that Lamp cannot now claim any marital rights in her estate. The defendants demurred to the bill, and the demurrer being overruled, answered. Evidence was taken, the case was heard, and after those proceedings the court decreed: “That the entries on said signature cards created a trust in the deposits above named whereby at the death of either the said J. George Lamp or Anna K. Lamp, his wife, their survivor became absolutely entitled to the funds then on deposit to the credit of each of said accounts in the Broadway Branch of the Equitable Trust Company, and that the said J. George Lamp at the death of his said wife, Anna K. Lamp, became entitled to the sums then on deposit in each of such accounts referred to in said cards. “2.

That the said J. George Lamp is entitled to the interest and estate in the real and personal property whereof his wife died seized and possessed, which he took under the law, by virtue of his said renunciation; as a result of which he does not take any interest or estate in said prop ⁴⁰ erties under the last will and testament of the said Anna K. Lamp, deceased. “3. That this Court take jurisdiction over the further administration of the estate of the said Anna K. Lamp, deceased.” This appeal is from that decree. The questions which this court is asked to consider are these: (la) Did >J. George Lamp ever execute a deed releasing his marital rights in his wife’s estate, or (lb) fraudulently induce her to believe that the deed of November 20th, 1921, which she and he signed, operated to release her estate from any marital rights which he had or might claim, as well as release his estate from any marital rights which she might have or claim? (2) Were the transfers of the funds in her two accounts with the Equitable Trust Company valid and effective?

And (3) did his act in taking out letters testamentary under the appointment in his wife’s will, and his occupation of property left to him under it, estop him from renouncing the provisions for his benefit therein contained, and electing to take his statutory share as surviving spouse in her estate? Before coming to the facts of the case, there are certain questions of evidence which must be considered because of their effect upon the issues involved in these questions. This is an action against an executor as such. Therefore the provisions of Code, art. 35, sec. 3, that in such a case “no party to the cause” shall be allowed to testify to any “transactions had with, or statement made by the testator,” are applicable, if the subject-matter of the suit is within the scope of that statute.

There can be no doubt that so much of it as relates to the bank deposits is within the scope of the statute (Farmer v. Farmer, 137 Md. 72 , 111 A. 464 ; Martin v. Munroe, 121 Md. 679 , 89 A. 319 ; Taylor v. Brown, 65 Md. 366 , 4 A. 888 ), nor should there be any real doubt that so much of it as relates to the transactions between the decedent and Lamp in reference to releases by each or either of his or her marital rights in the property of the other is also within its prohibition. ⁴¹ The purpose of the statute is to eliminate, so far as. possible, frauds upon the estates of deceased persons, which might be effected by the testimony of such interested parties as are actually parties to a cause to enforce a claim against such an estate, because of the ease and security with which such evidence could be fraudulently fabricated, in the absence of any fear of contradiction by the party who is said to have made the statement or to have taken part in the transaction, and whose estate is sought to be bound by the claim. «Certainly the opportunity for fraud and the temptation to exercise it would be as great, where, as a result of the transaction, a claimant may gain or lose half of an estate, as it would be in the case of a tradesman suing to recover for goods bargained and sold and delivered to the decedent. Mrs. Anna E. K. Tillinghast, the plaintiff, was repeatedly called upon and permitted to testify as to statements made by her deceased sister, Anna K. Lamp. Seasonable objections were made to the testimony, but were overruled. The objection was made by the appellees, and, since they won in the trial court, they were not injured by the rulings.

Nevertheless, since this court, in appeals from courts of equity, must weigh and consider the evidence as a court of chancery would do, if its admissibility was questioned below, the rulings in respect to it are open for review here, and indeed, under Code, art. 16, sec. 279, it is the duty of this court to review such rulings in so far as the same may be material to a determination of the case. In the course of the trial, witness after witness was called upon to testify to statements made by Mrs. Lamp to the effect either that J. George Lamp had executed a deed releasing his marital rights in her property, or that such a release was embodied in the deed that she had signed, or that the money which she had on deposit with the Equitable Trust Company was, after it had been transferred to the joint account of her and her husband, her individual property. All of these statements were mere self-serving declarations. No argument in favor of their general ad ⁴² missibility has been suggested to this court, and none has occurred to it.

Under our system of jurisprudence, hearsay evidence is excluded as irrelevant and immaterial, self-serving declarations are classified as hearsay evidence, and, in so far as those statements were offered as proof of facts, they were inadmissible. Jones on Evidence, 483; Wigmore on Evidence, secs. 1738, 1790; Jackson v. Kniffen, 2 Johns. (N. Y.) ,31. But where the mental condition of the declarant is in issue, and where undue influence is charged, such declarations may become relevant as reflecting upon the mental condition of the declarant, and may be admitted for that purpose only, but, when so admitted, afford no substantive proof of disputed facts. 22 C. 278 ; Jones on Evidence, sec. 438.

In considering the facts of this case, thereore, all such declarations will be excluded from consideration, except in so far as they relate to any mental condition of the declarant relevant under the issue of undue influence, and will not be accepted as proof of any other fact. While, in view of what has been said, it becomes unnecessary to deal at any length with objections to the testimony of certain attorneys employed by Mrs. Lamp concerning information which they acquired while acting in that capacity, on the ground that they were confidential communications and therefore privileged (Jones on Evidence, 748), it may be said that evidence of statements made by her to her attorneys was inadmissible for the additional reason that they were confidential; that the relationship of attorney and client prevented the witnesses from disclosing them; that the privilege was that of Mrs. Lamp, and not of the attorneys; and that it was not affected by her death. Id. The question first stated is essentially one of fact.

Appellant’s position in respect to it, as disclosed in the allegations of her bill, is that Mrs. Lamp was led by her husband to believe that, by executing the deed under which she released her marital rights in his property, he also released his marital rights in her property, or that he did contemporaneously execute a separate deed releasing her ⁴³ property from any claims that he might have therein as her husband. Before referring particularly to the evidence relating to that issue, it will tend to amplify the discussion of it to state just what that transaction was, as well as what it was not. The deed was in its form an indenture, in its nature a deed poll. Lamp executed it jointly with his wife, although he granted nothing and released nothing, and, there is no apparent reason why he should have signed it, or why it should have been drawn in the form it was.

Its terms are clear, simple, and direct, and there is no reason why any one of normal intelligence should have failed to understand its meaning and effect. Under it, Mrs. Lamp parted with no property, right or other thing of value, which she then owned, but she did release rights which would vest in her upon her marriage to Lamp. Inasmuch as those rights were inchoate during her life, since she predeceased Lamp, they never became consummate, so that in fact she lost nothing by the deed. Whether she was induced to execute it through fraud, or undue influence, or by mistake, has now become wholly immaterial, unless it appears that she executed it in the mistaken belief that, by signing it, Lamp also released his marital rights in her estate, and that that belief was based upon false and fraudulent assurances by Lamp that the deed did have that effect.

It may be conceded for the question that Lamp stood in a confidential relation to Anna Katherine Schluderberg at that time, and that the deed was induced by his fraud, but, while that would be ground for striking it down, its annulment could not now affect Mrs. Lamp’s estate in any way. So that the attempt here is not to strike it down, but to reform it by incorporating in it a covenant which it does not contain, to wit, a covenant and agreement by Lamp to release his marital rights in Mrs. Lamp’s estate. It is needless to say that in that attempt the burden is upon the plaintiff, and she is aided by no presumptions of any kind. For, while a confidential relationship may, under appropriate circumstances, ere- ⁴⁴ ate a presumption that a fiduciary who has obtained property or valuable rights at the expense of one who confided in him is not entitled to retain them unless he can show by clear and satisfactory evidence that there was no abuse of the confidence reposed in him, and that the transaction was a fair one, there is no presumption that, because one standing in a confidential relation to another could or should have conferred a benefit upon him, in fact, he did so.

Pomeroy’s Equity, sec, 956. While such a relation may be invoked to strike down a transfer, it in itself affords no basis for the creation of one. It is one thing to say you had no right to do the thing you did do; it is quite another to say you should have done something which you did not do. There is not the slightest legal evidence in the case that Lamp ever signed any paper or agreement in connection with the marital rights of himself or his wifé other than the agreement offered in evidence in this case, nor is there any legal evidence that any such paper ever existed.

Nor does the evidence support the charge that Lamp induced Mrs. Lamp, then Katie Schluderberg, to sign the deed of November 20th, 1921, by leading her to believe that in executing it he released the marital rights which would accrue to him upon his marriage to her. The only direct evidence on that question is that Mrs. Lamp executed and acknowledged the deed and was given a carbon copy of it. That statement by a disinterested witness was improperly stricken out, but, since it was clearly admissible, it must be accepted as a part of the evidence. After the execution of that paper, it stood unquestioned until the death of Mrs. Lamp, some ten years later, and during that period she knew that Lamp had the usual marital rights in her property, because he was required to join with her in the conveyance of real estate which she owned, and, except for the self-serving declarations attributed to Mrs. Lamp, which, for reasons stated above, should have been stricken out, there was no evidence which could be accepted as even tending to prove that Lamp ever promised, or agreed, or conveyed the impression, that he would release ⁴⁵ his interest in Mrs. Lamp’s estate, or that she understood or believed that he did so promise or agree.

Passing to the second question, the evidence sufficiently shows that both as a matter of law and fact, at the time the funds were transferred, Lamp stood in a confidential relation to his wife; that she had the most complete and implicit confidence in him; that she subordinated her wishes to his; and that he exercised a very real dominion and control over her. To understand their relations and the extent of that control, some reference to their lives prior to the marriage in 1921 is unavoidable. Anna Katherine Lamp, better known to her family and intimates in her younger days as Katie Schluderberg, was the daughter of William Schluderberg, a sturdy and respected figure in the business life of Baltimore a generation ago, who, as the result of a successful career in the meat packing business, accumulated a substantial fortune. She lived with her father until her marriage to her first husband, Clayton Emerich, and then lived with him in Baltimore until 1890, when she and her husband moved to Washington, D. C., where Emerich operated a chain of provision stores.

He later sold that business, and for a time conducted two hotels in that city, one the B. & 0., later known as the Cosmopolitan, the other the Pennsylvania Avenue Hotel. She was divorced from Emerich, apparently about 1900, and in the settlement made in connection with that divorce she received the B. & 0. Hotel, which she conducted as the Cosmopolitan Hotel until 1905, when she returned to Baltimore to live at her father’s home, and later she lived for a time with her sister, Anna E. K. Tillinghast. On June 25th, 1907, she married J. George Lamp, who was also in the meat business.

After the marriage, Mr. and Mrs. Lamp boarded at the Den-more Hotel, and then moved to a new house which Lamp owned, on Clark’s Lane, and there they lived until March, 1908. In April of that year Lamp filed a bill for divorce a vinculo matrimonii against his wife on the ground of premarital unchastity unknown to him at the time of the marriage. In his testimony in the divorce case, Lamp ⁴⁶ said that, shortly after the marriage, while they were boarding at the Denmore Hotel, he found his wife “under the influence of liquor,” that he then discovered that she drank habitually, and that as a result of that discovery he suspected that she was guilty of other offenses, and had “an investigation made.” During the investigation, and while he was still cohabiting with her, she returned from a trip to Washington, and told him that she had learned that he was trying to secure evidence to divorce her. He then told her that he would not stay in the room with her any longer, and she then said: “ ‘What are you going to do?’ and I said, ‘I’m going to get out of this room, I am not going to stay in this room with you another night’; she said, ‘You shall not go and can’t go,’ and by that she took the key out of the door and tried to hold me down on the chest we had in the room that I was sitting on, to keep me from going out of the room, and I pushed her aside, and told her if she did not put the key in the door I would break the door down and get out, and she would not do it and then I started to break the door open when she put the key in and let me out, and that night I slept on the third floor, and the following night I slept on the third floor, until I got all my things out and then I left her.” In her answer, Mrs. Lamp neither admitted nor denied the charges of misconduct, and in due course a decree was passed divorcing Lamp from his wife.

Notwithstanding the divorce and the supposed indignation and resentment which had prompted him to institute the divorce proceedings and to publish the most damaging and humiliating charges against her character, after the decree he continued to pay attention to his former wife, until June 25th, 1921, when they were remarried and went to live in the home which she had inherited from her father, who had died on April 5th, 1921. It may be inferred from the record that William Schluderberg, the father, who had learned of the details of the divorce proceedings, had little tolerance for Lamp, and both Lamp and Katie Schluderberg apparently believed that Lamp’s ⁴⁷ attentions would be unwelcome to him, so that, while Lamp and his former wife met from time to time, and he frequently called her over the telephone, and visited her at her home, there was always an atmosphere of secrecy and concealment about their relations until the father’s death. His visits to her home were always made after her parents had retired for the night, and there is nothing to indicate that Mr. Schluderberg knew of them. After their remarriage they lived in her home until her death, and, except for provisions which he furnished from his store, at her expense.

During that period she gave every evidence of a devoted attachment to him, and their relations appear to have been pleasant and affectionate. She had an implicit and apparently unshakable confidence in his integrity, relied upon him for advice and guidance, and feared to do or say anything which she thought might give him the impression that she did not trust him. It is undisputed that the funds deposited to Mrs. Lamp’s checking and savings accounts with the Equitable Trust Company were a part of her own sole and separate estate, nor is it disputed that they were transferred from such accounts to joint accounts in trust for herself and her husband, and that her husband at least aided, if he did not direct, that transfer. With that background, under the conventional doctrine of confidential relations, the burden would have been upon the husband to show that the gift was with the free consent of the donor, that the transaction was fair, that there had been no abuse of the confidence, and that the gift was the “pure, voluntary and well understood act of the other” (Beach, Eq.

Jur., 141, Pomeroy, Eq. Jur., sec. 956), for “while equity does not deny the possibility of valid transactions between the two parties, yet because every fiduciary relation implies a condition of superiority held by one of the parties over the other, in every transaction between them by which the superior party obtains a possible benefit, equity raises a presumption against its validity, and casts upon that party the burden of proving affirmatively its compliance ⁴⁸ with equitable requisites, and of thereby overcoming the presumption.” Pomeroy, Eq. Jur., sec. 956, p. 2039. But appellee contends that in this state the law is that that doctrine does not apply to transactions such as those involved here between husband and wife, and cites, in support of that contention, Hillwood v. Hillwood, 159 Md. 167, 172, 175 , 150 A. 286, 288 ; Brell v. Brell, 143 Md. 443, 449, 450 , 122 A. 635 ; Lewis v. Lewis, 140 Md. 524, 527 , 118 A. 65 ; Reed v. Reed, 109 Md. 690, 692, 693 , 72 A. 414 ; Taylor v. Brown, 65 Md. 366, 372, 373 , 4 A. 888 .

An examination of those cases shows that while they do not deal with the question of the burden of proof,