Von Buchwaldt v. Schlens

Thomas, J., delivered the opinion of the Court. The original bill in this case was filed in October, 1911, by the appellant, Mrs. Alice Wilkens Von Buckwaldt, to set aside a deed of trust executed by her on the 8th of October, 1900. After the testimony had been taken the bill was amended, and now avers as the grounds upon which she seeks to have the deed annulled, that she was born in Baltimore, Maryland, in 1877, and has resided since 1879 in Germany; that by reason of her “continuous residence abroad” she “has, at no time, been able to read, write, speak or understand” the English language, and that in October, 1900, “while temporarily in the City of Baltimore — under the influence hereinafter more particularly mentioned, she was constrained to execute, against her will, to her brother-in-law, Gustav A. Schlens, the defendant, and husband of her sister, Henrietta Wilkens Schlens, now deceased,” the deed of trust in question. The influence referred to above is stated in the next (sixth) section of the bill as follows: “That shortly before the execution and delivery of said deed of trust she became engaged to be married to the defendant, said Christian Von Buchwaldt, whom she afterwards married; that said engagement was strongly objected to by the mother of your oratrix, ⁴⁰⁷ who endeavored to prevent your oratrix from becoming the wife of said Christian Yon Buchwaldt, and that under the constraint and most urgent importunities of her mother she was finally induced to execute said deed of trust, upon the belief hereinafter mentioned, and said deed, with that understanding, was prepared for the purpose of restoring amicable relations between your oratrix and her mother.” In the next paragraph she states “that she was finally induced to sign the deed upon the belief that she could, at any timo thereafter, should she so desire, revoke the same;,— and that hut for said belief she never would have executed” said deed; that after executing the deed she returned to her home in Germany, and about four months later she decided “to put her property in trust,” and notified “Gustav A. Schlens, trustee,” to have the deed recorded, believing that she could at any time thereafter “revoke the same.” The bill then avers: “Recently, however, upon notifying said Gustav A. Schlens, trustee, of her desire to revoke said deed, she, greatly to her surprise, was informed that the deed as executed by her was irrevocable and that it could not be revoked except under and by virtue of a decree passed in a cause to which all the parties, who by the terms of said deed had an actual or contingent interest in said property, were made parties, so as to be heard by the Court.” It is to be observed that- the bill does not allege that the deed was procured by fraud, hut the claim to the relief sought is based upon the averments that she was constrained to execute it, “against her will,” by the constant and most urgent importunities of her mother for the purpose of restoring amicable relations between them, and that she acted “upon the belief that she could, at any time thereafter, should she so desire, revoke the same.” ⁴⁰⁸ The rules applicable to cases of this kind have been so often and clearly stated by this Court that it is only necessary to repeat what has already been said, and to give a reference to some of the cases illustrating the application of these principles.

In the early case of Todd v. Grove, 33 Md. 188 , where the relation of the parties was that of principal and agent, the Court, speaking of gifts between parties standing in a confidential relation, and after a review of many of the English and American cases, said: “From the doctrines announced by these authorities, it is plainly deducible, as well as positively decided, that a gift obtained where such relation exists, as we have shown did exist between the parties in this case, is prima facie void, and the burden is on the donee to establish to the full satisfaction of the Court, that it was the free, voluntary, unbiased act of the donor; that a Court of Equity, on grounds of public policy, watches such transactions with a jealous scrutiny, and to set them aside it is not necessary 'to aver or prove actual fraud, or that there was such a degree of infirmity or imbecility of mind in the donor, as amounts to legal incapacity to execute a will or a valid deed or contract,” The'doctrine there announced was applied in the case of Williams v. Williams, 63 Md. 371 , and in the case of Whitridge v. Whitridge, 76 Md. 54 , Judge McSherry quotes the following statement of Lord Romilly in Cooke v. Lamotte, 15 Beav. 239, as follows: “The rule in cases of this description is this: Where those relations exist by means of which a person is able to exercise a dominion over another, the Court will annul a transaction under which a person possessing that power takes a benefit unless' he can show that the transaction was a righteous one. It is very difficult to lay down with precision what is meant by the expression 'relation in which dominion may be exercised by one person over another.’ That relation exists in the cases of parent, of guardian, of solicitor, of spiritual adviser and of medical attendant, and may be said to' apply to every case in which two persons are so situated that one may obtaixx con ⁴⁰⁹ siderable influence over tlie other. The rale of the Court, however, is not confined to such cases. Lora) Cottehtham considered that it extended to every case in which a person obtains by donation a benefit from another to the prejudice of that other person and to his own advantage, and that it is essential in every such case, if the transaction should be afterwards questioned, that ho should prove that the donor voluntarily and deliberately, performed the act, knowing its nature and effect.

It is not possible to draw the rule tighter or to make it more stringent, and 1 believe it extends to every such case.” After referring to other English cases and to Todd’s Case and Williams’ Case, Judge MoSiiejíiiy says: “But it is needless to multiply references to adjudged cases mi this subject — because it is the firmly settled law of Maryland that a gift or voluntary conveyance between living parties standing in the confidential relation of parent and child is ¡mima facie void, and when assailed by the donor or grantor, can only be upheld if satisfactorily proved to have been the free, voluntary and unbiased act of the person who made it.” The statement of the above rule obviously limits its application to cases in which the person holding ihe position of influence obtains some benefit from the person subject to- the influence, and where no such benefit is procured there is no reason why a Court of Equity should regard the transaction with such jealous scrutiny, or impose upon the grantee in a deed of trust the burden of showing that it was the free, voluntary and unbiased act of the grantor. In ihe case of Williams v. Williams, supra, Judge Miller said: “But it would seem to he clear that there must he some gift, or conveyance, or some bargain, purchase or other business transaction, by means of which the party holding the position of influence acquires property or obtains some pecuniary advantage or benefit, in order to bring this equitable rule into operation. It cannot in reason he applicable whore the deed simply settles the estate and property of the grantor upon himself for life, and after his death transmits it to -his own ⁴¹⁰ heirs-at-law. If a party capable of disposing of his property chooses,, for the purpose of protecting it from his own improvidence, or for any other reason, thus to settle it, why should a Court of Equity look with suspicion upon the transaction simply because he has made his father or his solicitor the trustee in the deed of settlement ?” This view was concurred in by Judge Robinson, and is not in conflict with the rule applied by the majority of the Court in that case, for the Court held that the deed of trust there in question did confer benefits on the trustee.

The language of Judge Millee is quoted with approval in the later case of Rogers v. Rogers, 97 Md. 573 , where the declaration of trust did not secure any advantage to the trustee or provide for commissions, and where Judge Peaece said: “But if it had conferred a right to a fixed commission, this would not have altered the case, since it was held in Brown v. Mercantile Trust Co., 87 Md. 392 , that the law regards reasonable commissions as compensation for services rendered, and not as a benefit granted by the deed. * * * Under these circumstances then can it be said that this declaration of trust is piima facie void, and that the burden is on the trustee to establish to the full satisfaction of the Court that it was the free, voluntary, unbiased act of the grantor? We think not.” Where the facts do not bring a case within the rule applicable to a case in which a gift or conveyance is made to one standing in a confidential relation to the donor or grantor, the burden of proof, as in all other cases, is upon the person assailing the validity of the deed, and the principles by which it is to be determined are also well settled in this State. In Goodwin v. White, 59 Md. 503 , Judge Alvey said that, “every person, whether man or 'woman, of sound and disposing mind, if under no legal disability, has the absolute right of making any disposition of his or her property that he or she may think proper, provided it does not interfere with the existing rights of third persons. If the disposition of property be fairly made by a competent person, though ⁴¹¹ entirely voluntary and without consideration, it is perfectly valid, and cannot he rescinded simply because the Court may think it absurd or improvident that such a disposition should have been made.” In Brown v. Mercantile Trust Co., 87 Md. 377 , the Court, after referring to a number of decisions, said in reference to the contention that the declaration of mist, was invalid because it did not contain a power of revocation; “the rule now seems to he the one stated by Lord Justices Turner, in Toker v. Toker, 3 De G. J. & S. 491: ‘That the absence of a power of revocation may be evidence that the party did not understand the transaction and so of undue influence.

But whether it would ho so or not, would depend upon all the circumstances of the case. Again I think it is going too far to say that no voluntary settlement can he valid unless the settlor is advised there should he a power of revocation inserted in it. What the Court has to be satisfied of in these cases, I apprehend, is that the settlement, whether containing or not containing a power of revocation, is 1he free determined act of the party making it; and the absence of advice as to fhe insertion of a power of revocation, is a circumstance and a circumstance merely, to be weighed in connection with the other circumstances of the case.’ ” In Rogers v. Rogers, supra, it is said: “There is a class of voluntary settlements to which powers of revocation are appropriate, and another class to which 1hey are not, and it is fairly well settled that each case depends, in this regard, upon its own facts,” and in Dayton v. Stewart, 99 Md. 643 , Judos Jones, in affirming 1he rule stated in Goodwins Case and Roger s Case as to the effect to be given 1o the absence of a power of revocation in a declaration of trust, quotes the statement in 3 Perry on Trusts, Sec. 104, that “a trust once created and accepted without reservation of power can only he revoked by the full consent of all parties in interest; if any of the parties arc not in being or are not sui juris, it cannot be revoked at all. It is perfectly clear fhat where the settlor did not misapprehend the contents of the deed and ⁴¹² there was no fraud or undue influence and no power of revocation was reserved, the settlor is bound, though some contingency was forgotten and unprovided for.” In the light of these firmly settled principles, let us examine the facts in this case.

The record is a voluminous one, containing nearly six hundred pages, and we shall not attempt to review it in detail, but will confine ourselves to a reference to those features of the evidence that, in our view, are controlling in the decision of the issues involved. William Wilkens, Sr., the father of the appellant, died in Baltimore City in 1879, where he had lived for a number of years and acquired a large estate. He was married three times. By his first wife he hadi three children, viz., Henrietta, who married the appellee, Gustav A. Schlens, and who is now deceased; Charles Wilkens and William Wilkens, and by his third wife he had three children, viz., Anna Marie, now Mrs. Von Bose; Alice, the appellant, who was born October 6th, 1877, and Christian, who was bom in April, 1879.

By his will, which was executed in 1876, before the birth of the appellant and her brother Christian, after confirming the marriage settlement made with his wife and giving her his household furniture and $20i,000.00, in case she survived him, and after providing for a number of special legacies, he directed that all the rest and residue of his estate, including his interest in the property mentioned in the marriage settlement, be divided into as many parts as he had children, the child or children of a deceased child to represent the share of such deceased child. To his daughter Henrietta, wife of appellee, Gustav A. Schlens, he gave one share absolutely. He gave one share to his son William for life, with remainder to his children. One share was given to his brother, Louis Wilkens, and his two friends, Herman H. Graue and Charles Morton Stewart, in trust for his son Charles for life, with remainder to his children, etc. The share of his daughter Anna Maine, now Mrs. Von Bose, he ⁴¹³ devised and bequeathed to Herman H. Grane; Louis Wilkens and Gustav A. Sehlens, in trust to apply the income, or so much thereof as they deemed necessary, to her support and education during her minority, the amounts so applied by them to be paid to her mother, and after she arrived at the age of twenty-one years to pay the income to her during her natural life, for her sole and separate use, without power to her to alien or anticipate said income.

The will directs that after her death her share shall bo paid to her children, and in the event that she dies “leaving no issue,” one-half of her share is given io her mother, if living, and the other half to the other children of the testator. In case his wife is not living at the death of his said daughter, the whole of her said share is to go to his other children, and the trustees were given the power to appoint their successors. The next clause of the will is as follows: “And if it shall happen that any other children shall be horn to me hereafter who or their issue shall he living at the time of my death, then I give and devise each such child, or his or their representative issue, one of the said equal parts or shares into which my residuary estate shall he divided as aforesaid, provided such child or the issue living at the time of my death of any such hereafter-to-be-born child then deceased, shall live to attain the age of twenty-one years-And I empower my executors to expend so much as they shall deem requisite of the income of the contingent share or shares of such hereafter-born child or children, or issue aforesaid, during their respective minorities, in or towards their maintenance and support respectively; and in case of the death of any such hereafter-to-be-born child of mine, or of all the issue of any such deceased child, as aforesaid, under the age of twenty-one years and without issue, then I limit - and give the part or share of my estate which such child would have taken if living to the age of twenty-one years in the same manner as hereinbefore provided in respect to the part or share of the said Anna Maria in case of her dying without issue, as aforesaid.” ⁴¹⁴ Herman H. Graue, Louis Wilkens and Gustav A. Sehlens were appointed executors. ’ After the death of her husband, Mrs. Catherine Wilkens, in 1880, returned to Germany to live, and she and her said children have lived there ever since. The shares of her children in their father’s estate remained in the hands of Gustav A. Sehlens and Louis Wilkens, trustees, during their minority, and so much of the income therefrom as was required for their support and education was regularly sent by Mr. Sehlens to their mother, Avho in 1885 married General Schubert, of the German Army.

The record shows that in the distribution of the personal estate of William Wilkens $26',599.31 was distributed to Gustav A. Sehlens and Louis Wilkens, trustees of Alice Wilkens; that in the partition of his real estate a number of lots, appraised at $109,133.41, were allotted to said trustees, “and that during the years from 1883 to October 6, 1898 (the date of her majority), the sum of $50,000.00 was added to her estate as the result of income, unused in her maintenance and support, being taken into the corpus of her estate.” Entertaining some doubt about the proper construction of that clause of Mr. Wilkens’ will in which the appellant was given her share of the testator’s estate, in July, 1898, Mr. Sehlens wrote her mother, Mrs. Schubert, as follows : “July 14, 1898. “Dear Catherine: In October Alice Avill be twenty-one years old and of age, and now the question comes up how her estate shall be handled, as it does not say positively in the testament. The legal way is that laAvyers be engaged to represent both sides, one for Alice and one for the trustees. The lawyers take the testament into the court. Each of them represent their side, and then it will be left to the judges to say Avhat was the intention of the testator.

Such proceedings, of course, cost a great deal of money, and Alice’s estate will have to pay all. I have now had a conversation with Mr. Slingluif, the attorney of the estates, and it is his view that the judges would decide that it Avas . ⁴¹⁵ tlie intention of the testator to treat Alice’s estate in the same way as her sister Mamie’s, that is that the estate should remain in the hands of the trustees for their management, but Alice would be entitled from her twenty-first birthday to receive the net income of her estate. In order to evade the considerable and, no doubt, useless expense of such a lawsuit, there is another way, namely, that Alice, by her own free will, declares she would be satisfied that her estate be treated in the same way as the estate of Mamie, namely to remain in the hands of the trustees for management, and that Alice receives the entire net income. Please talk this matter over with Alice and let me know the result.

If Alice is satisfied, I will have the legal document made up and sent over for her signature. With heartfelt greetings, “Ad. Schtjeits." That, the suggestion that the appellant share her father’s estate was, under the terms of the will, to remain in trust-like the share of her sister, Mrs. Von Bose, did not meet with the approval of Mrs. Schubert and the appellant, and that they finally determined to have the matter submitted to the Court is shown by the following letters from Mr. Schlens: “August 17, 1898. “Dear Catherine: Your letter of August 2 from Xorderney has been received. I have expected that my letter about this matter would cause you restlessness, but the matter had to be brought up for discussion.

I am sorry to hear that you are under the impression that the trustees about this matter would cause trouble. Please understand me once and for all forever, that the trustees don’t want anything and have nothing to say. They are named by the testament, as managers, and they are compelled to follow the provisions and conditions under the supervision of the court to invest income funds also according to the instructions of the court, and for the conscientious ⁴¹⁶ carrying out o£ these provisions they have been obliged to give a bond of $100,000 for each child. I enclose a short extract from the testament, leaving out formalities.

Mamie’s share remains in trust. She received from her twenty-first year on the entire income, and upon her death her entire estate goes to her children. In the event that she dies leaving no children, one-half of her property goes to you, if you are alive at the time; the other half goes back to the estate of William Wilkens. Should you, at Mamie’s death, not be living, Mamie’s entire estate goes back to the estate of William Wilkens.

Mo provision has been made for the after-born children, except that the trustees are authorized, up to the time that they arrive at the age of twenty-one years, to remit sufficient funds for their education and support. Then comes an additional proviso that in case of the death of the children without leaving any children, the same conditions shall become effective as with Mamie, namely, that one-half of the estate goes to you if you are alive at such time, and the, other half goes back to the estate of William Wilkens; and if you are not alive, the entire estate' reverts back to the estate of William Wilkens. This condition has reference to all the after-born children, both Alice and Christian. Eor instance, Alice marries, and the trustees, after having converted her entire estate into cash, send same to Alice upon her arriving at the age of twenty-one years.

Her husband would get hold of this money, gamble or spend it recklessly ; all such things have happened before; and Alice should die without leaving any children, the money is ' gone. In that event, you as well as the other heirs of the estate of William Wilkens would come to the trustees and demand their respective shares of Alice’s estate according to the provisions of the testament, and you will all be perfectly justified to make such a demand. Mow, if the trustees have paid Alice’s share over to her, then in that event the trustees and their bondsmen may be legally compelled to supply this ⁴¹⁷ share of Alice’s estate out of their own pocket, and neither the trustees nor their bondsmen can afford to run such a risk. After this explanation you will no doubt perfectly understand that Alice’s as well as Christian’s estate must remain in trust.

It was the desire of the deceased to provide for all his children and to safeguard them from poverty. Charles Wilkens thanks God that his estate was placed in trust; he would have formerly, in his youthful extravagance, perhaps squandered his estate, and would have undermined his health, whereas he is now comfortably fixed with his wife and six fine children. He can enjoy the entire income and can afford to live well on it, and he thanks his father that he has in such a manner provided for himself and family. I have seen no lawyers, only I have read the testament through again and thought it over, and the above is the result.

If you think over this matter, no doubt you will agree with me. With heartfelt greetings, “An. Soiixms." “September 26, 1898. “Dear Catherine: Upon receipt of your letter of the 21st inst. I went to the office of Mr. Slingluff and' talked the said matter over with him.

He is also of the opinion that it would be best for all parties concerned, and more satisfactory, if we would let this matter be decided by the Court. Inasmuch as Mr. Slingluff represents the estate, it will be necessary to select another attorney to represent Alice’s interest. If you recall the name of some attorney, let me hear of your selection (Mr. Frick does not practice any more; he is over eighty years' of age). If you cannot think of anyone, authorize me to select a competent and honest lawyer.

I ask you for an immediate reply. With heartfelt greetings, your, “Ap. Sohleks." ⁴¹⁸ Accordingly Alice Wilkens filed a petition in the Circuit Court for Baltimore County, “alleging, among other things, that she had attained the age of twenty-one years on the 6th of October, 1898, and that she was entitled to hold her property free and discharged from any trust whatever.” The suit was pending in the lower Court and in the Court of Appeals until June 21st, 1899, and in the meantime the appellant and her mother were kept advised of the progress of the case -by Mr. Sehlens. After the decision of the Court of Appeals, which is reported in 89 Md. 529 , that “the share held in trust and set apart for Alice Wilkens, became vested in her absolutely upon her attaining the -age of twenty-one years,” Mr. Sehlens -wrote Mrs. Schubei't and the appellant fully explaining the result of the case and that it terminated the trusteeship.

The conclusion of the suit was followed by a controversy about counsel fees which Mr. Sehlens finally succeeded in adjusting in April, 1900. The Court having determined that the appellant was entitled to the possession of her estate, she then executed a power of attorney to Mr. Sehlens, under which he continued to exercise practically the same powers exercised by him as trustee, and to remit to her regularly the income. On the 6th of October, 1898, the day the appellant became twenty-one years of age, she celebrated at her mother’s .home her engagement to Captain Von Buchwaldt of the -German Army. Shortly thereafter Mrs. Schubert began to hear rumors reflecting unfavorably upon the character and habits of her prospective son-in-law, and in consequence thereof she became very much opposed to the proposed marriage of the appellant. -She told the appellant of the rumors she had heard and insisted upon her breaking the engagement, but the appellant refused to accede to her wishes and firmly resisted the opposition of her mother and all the other members of her family to her marriage.

Mrs. Schubert states that the matter was a. subject of daily discussions and of frequent quarrels between her and the appellant, and that she told her that if she insisted upon marrying Captain Von ⁴¹⁹ Buchwaldt she should at least do something to protect her property, and that the appellant agreed with her “that some steps ought to be taken.” She says further that in her correspondence with Mr. Schlens she told him how unfortunate they were and tried to arouse his sympathy for the appellant as her guardian and relation; that she told him what she had heard about Captain Von Buchwaldt, that he was not trustworthy, and that something should be done to prevent his getting possession of the appellant’s property. In the summer of 1900 the appellant’s sister, Mrs. Von Bose, and her husband decided to visit America and invited the appellant to accompany them. Shortly before their departure the appellant decided to do so. Her mother was much pleased with the idea, and hoped that the change would do her good and that she would find some one else “that she would like better” than Captain Von Buchwaldt.

She advised her to consult her uncle, Mr. Schlens, about the propriety of taking some step to protect her property in the évent of her proposed marriage. On their way to America the matter was discussed by her and her brother-in-law, Captain Von Bose. They arrived in Xew York in August, and after remaining there a few days went to visit Mr. Schlens in Baltimore. Shortly after reaching Baltimore Captain Von Bose spoke to Mr. Schlens about the opposition of the family to the proposed marriage of the appellant, and of her and their desire that something should be done to protect her property.

They remained in Baltimore about a week and then started on a trip to the west. On the 24th of August, 1900, Mr. Schlens wrote Mrs. Schubert as follows: “Dear Catherine: Our travelers left us on Tuesday the 21st. I suppose they are now at Xiagara Falls. From there they will go to Chicago, where Charles Wilkens will look after them.

They arrived here one month too soon, and therefore suffered considerable from the heat. Their appetite, however, was good. Mamie stated that she had gained three pounds ⁴²⁰ . here in Baltimore. We have, as yet, not talked about estate, etc. This has been put off until their return.

Belative to Chrissie’s estate the legal routine has to be followed. This cannot be avoided.” After further reference to his nephew’s estate, the letter concluded, “With heartfelt greetings, Your, Ad. Sehlens.” After their return to Mr. Sehlens’, September 28th, Captain Yon Bose, Mrs. Yon Bose and the appellant talked with Mr. Sehlens about the engagement of the appellant to Captain Von Buchwaldt and their desire to protect her estate from the possible consequences of an unfortunate alliance. As the result of these conversations they all went to the office of Mr. Bielder C. Slingluff, who had always acted as counsel for the several estates created by the will of the appellant’s father, and there the matter was carefully and fully discussed with Mr. Bielder C. and Mr. Lee Slingluff.

About a week later the appellant executed the deed of trust to Mr. Sehlens which is the subject of this controversy and which was, in accordance with the advice of counsel and the understanding they had with her, withheld from record until after she returned home and had an opportunity to consider it further, consult her mother and relatives and cabled Mr. Sehlens to have it recorded. Mr. Sehlens on the 15th of October, 1900, wrote Mrs. Schubert about the execution of the deed as follows: “Dear Catherine: Our visitors have now left us, and they will return to you tomorrow, per Steamer Deutschland. JSTellie and Ernst are also