Gerting v. Wells

Burke, J., delivered the opinion of the Court. On the 16th day of August, 1892, Charles Gerting of Harford County, Maryland, executed a last will and testament by which he devised and bequeathed his whole estate in trust to his brother, William Gerting, whom he constituted his sole executor, without bond. The testator died on the 31st day of August, 1892. The clause of the will by which the trust was created is as follows: “I give, devise and bequeath to my brother, William Gerting, all my estate real, personal and mixed of which I die seized in trust for my daughter and only child, Minnie E. Gerting, until she arrives at the age of twenty-five years, when the said trust shall cease, and the said property shall vest absolutely in the possession of the said Minnie Gerting. In the event of the death of the said Minnie Gerting without legal heirs or heir, I give and bequeath to my brother, Frederick Gerting, the sum of two thousand ($2,000.00) dol. *626 lars current money. All the rest and residue, and the remainder of my estate real, personal and mixed of every kind, and wherever the same may be situated, I give, devise and bequeath to my brother, William Gerting, of the city of Baltimore, in the State of Maryland, his heirs, personal representatives and assigns.” In 1897 his daughter, who is the appellee, married Edward C. Wells. William Gerting qualifieá as executor, and settled his accounts in the Orphans’ Court for Harford County, by which it appears that the total amount which came into his possession as executor of the estate of his brother Charles was the sum of $18,557.24. In 1899, upon a bill filed by Mrs. Wells against William Gerting, the Circuit Court for Harford County, sitting as a Court of equity, assumed jurisdiction of the trust created by the will of Charles Gerting, and required William Gerting to give bond for the faithful discharge of his duties as trustee thereunder. The bond was given as directed, and thereafter the trust was administered under the direction and control of the Court, and the income of the estate was paid to Mrs. Wells as provided by her father’s will. After Mrs. Wells had arrived at the age of twenty-five years, William Gerting as trustee filed a petition in said cause asking the Court to construe the will of Charles Gerting, and to determine whether the estate of said deceased then in his possession as trustee should be paid and transferred to Mrs. Wells, or whether the trust should continue to await the event of the death of the testator’s daughter and the contingency of her leaving issue. The Court on the 31st day of December, 1903, decreed that the trust had ceased and terminated, and directed the trustee to deliver and transfer the whole trust estate to Mrs. Wells. An appeal was taken to this Court, which affirmed the decree of the lower Court. Gerting v. Wells, 100 Md. p. 93. Upon the affirmance of the decree of the Circuit Court of Harford County, the trustee accounted for and paid over to Mrs. Wells the whole trust estate, as shown by his inventories and accounts filed and passed in the Orphans’ Court of Harford County. *627 Prior to the decision of Gerting v. Wells, 100 Md. supra, Mrs. Wells on the 31st of March, 1903, filed a petition in the pending case in the Circuit Court for Harford County in which she made the following charges against William Gerting, trustee, and his son, William E. Gerting, and praying that certain specific relief might be granted, viz.: ■ First. That William Gerting, executor and trustee under the last will and testament of Charles Gerting, deceased, was a brother of the said Charles and the uncle of your petitioner, and that at the time of the death of the said Charles your petitioner was a child in her fifteenth year, and that the said Charles had been a widower for eleven years before his death, and after his death your petitioner resided four or five years with the said William Gerting, who was the only paternal uncle she knew, although the said Charles left two other brothers one of whom resided and now resides in Baltimore City and the other in the city of Brooklyn. Second. That your petitioner had confidence in her said uncle, William Gerting, and it has not occurred to her until recently to doubt the honesty and good faith of the said William in the conduct and management of the estate of her father. Third. That it has recently come to the knowledge of your petitioner, and she now charges that in addition to the moneys belonging to her father, the said Charles, which are set forth and accounted for by the reports heretofore filed by the said trustee in this cause, there were other moneys and securities which came into the hands of the said William with which he is chargeable as executor and trustee in this case, and for which he has hitherto failed to account although such account has heretofore been duly demanded in this case, that is to say: (a) Northern Central Railway Company second mortgage five per cent bonds of the par value of ten thousand ($10,000.00) dollars. (h) 5 Shares in the steamer Oceanic registered at the port of Philadelphia and valued at five thousand ($5,000) dollars. (c) One hundred dollars collected from Henry Gerting. *628 (d) The gold watch and chain of the said Charles. And your petitioner avers and charges that the said moneys and securities have been falsely and fraudulently withheld from the estate of the said Charles Gerting, and converted to the use of the said William. Fourth. That the Northern Central Railway Company second mortgage five per cent bonds which have been fraudulently withheld from the estate of the said Charles Gerting, and converted to the use of the said William are coupon bonds of the par value of one thousand ($1,000) dollars each andaré numbered-as follows: 450, 476, 479, 1622, 1623, 1624, 1625, 1626, 1629 and 2219. Fifth. That your petitioner further charges that she is advised and believes that as a part of the scheme of the said William to defraud the estate of- said Charles, he has turned over to his son, William E. Gerting, who resides in Baltimore City, the said Northern Central Railway Company bonds, and that he has also turned over to the said William E. Gerting and others all his property and estate so far as your petitioner can learn, thereby rendering it impossible to collect from him the unsettled part of this estate, and your petitioner further charges that the said William E. Gerting even pays with his own check, and has paid for the last three years, the interest or income that has been received by your petitioner from said estate of which the said William is trustee, and your petitioner believes that unless some restraining order of this Court is passed to prevent the said William and his son, William E. Gerting, from disposing of the bonds above mentioned, that they will convert them into money as soon as they have notice of these proceedings, and your petitioner will be unable to collect the proceeds thereof. Sixth. That in addition to the matters set forth in the preceding paragraph of this petition your petitioner charges that on the first day of June, in the year 1893, the said William sold the interest of the said Charles in the lumber business of John DuBois and Company in the city of Havre de Grace, for the sum of nine thousand ($9,000) dollars and received the money *629 for.the same; and your petitioner further charges that the said William as executor and trustee failed to make return to the Orphans’ Court of Harford County of the interest so held by the said Charles in said partnership, as will appear by a certified copy of the appraisement and inventory herewith filed as part of this petition and marked Exhibit M. L. W., No. i, and that the accounts filed by the said William in said estate and in this case are so meagre and incomplete that your petitioner cannot say whether the said sum has been properly accounted for or not, and therefore she charges that the said William has failed to account for the said sum, and that the same has been unduly and improperly withheld from said estate. Seventh. That the suppression and withholding of the moneys and securities as set forth in the-third paragraph of the petition constitute breaches of trust and duty on the part of the said William Gerting, the-executor and trustee of such character as to disqualify him from the duties of his office, and your petitioner is entitled to have the said William Gerting removed from the said office of executor and trustee and to have some competent person appointed as his successor; to have a full and detailed account of said estate in addition to the matters contained in the several reports heretofore filed in this cause, together with the income thereon, and an order ol this Court requiring the said William Gerting or William E. Gerting, his son, to produce in this Court at once the ten second mortgage bonds of the Northern Central Railway Company as above set forth, and an order of. this Court passed restraining and prohibiting the said William Gerting from in any way selling, or disposing of any other securities or funds belonging to this estate. To the end therefore: (i) That the said William Gerting may account for the moneys and securities so withheld by him from said estate of Charles Gerting set forth in this petition so that he may not only be charged with the principal, but the income thereon. (2) That the said William Gerting *may be removed from said office of executor and trustee under the last will and tes *630 tament of Charles Gerting, deceased, and that some suitable person may be appointed as his successor in said trust. (3) That an order of this Court may be passed restraining the said William Gerting and William E. Gerting, his son, as prayed in said petition, and require them to produce in this Court at once to be held subject to its order the ten second mortgage bonds of the Northern Central Railway Company above mentioned. (4) And for such other and further relief as your petitioner's case may require. An injunction was granted as prayed. The respondents filed separate answers. William Gerting denied each and every allegation contained in the third paragraph of said petition, and charged and averred that the allegations therein contained were not only made recklessly and falsely, but willfully and maliciously, and denied that the ten thousand ($10,000.00) dollars of the Northern Central Railway second mortgage five per cent bonds mentioned in said paragraph were owned by the said Charles Gerting, and denied that they constituted any part of his estate, but averred that they were owned by himself individually. Second. He denied that the said Charles Gerting owned any share or shares of stock in the steamer Oceanic at the time of his death. Third. He denied that Henry Gerting owed Charles Gerting at the time of his death the sum of one hundred dollars, or any other sum so far as he knew and denied that he had collected from said Henry Gerting any money after the death of Charles Gerting due and owing to his estate. Fourth. He averred that Charles Gerting in his lifetime gave to him his gold watch and chain and that this gift was known to the petitioner about the time and has been known to her ever since, and that she also knew it was not accounted for in the estate. Fifth. He denied that any part of the estate of the said Charles Gerting had been withheld as charged in the bill and particularly denied all allegations of fraudulent conduct on his part therein alleged. *631 The separate answer of William E. Gerting denied the truth of the allegations in the fifth paragraph of the bill, viz.: That William Gerting had turned over to him the Northern Central Railway bonds in said petition mentioned or any other bonds of said railway mentioned. He admitted that several times he had sent his individual check to the petitioner for the interest or income due her, but he denies it was done with any intention on his part or that of William Gerting as a part of a scheme to defraud the estate of Charles Gerting, deceased, out of anything. Upon the issues thus made by the petition and answer a great mass of testimony was taken and numerous exceptions were filed to parts of the testimony. By its decree of October the 6th, 1903, the Court sustained the exceptions filed by the plaintiff to the testimony of Wjlliam Gerting and William E. Gerting in so far as they undertook to testify to any declaration had with or statements made by Charles Gerting in his lifetime to either of them. It also sustained the exceptions on the part of the defendants to the testimony offered by the plaintiffs of declarations of Charles Gerting in his lifetime. This testimony was inadmissible under the Act of 1902, chap. 495, and was properly excluded. The result of the rulings upon the exceptions to evidence, in all of which we concur, was the exclusion from the case of a large amount of testimony which if admissible would have been of much weight and importance. The decree sustained the claim of the petitioner against both William and William E. Gerting as to the ten bonds of the Northern Central Railway Company and ordered them to deliver said bonds, or the equivalent of said bonds and coupons thereto attached after January the 1st, 1903, to her. It further decreed that William Gerting owed the plaintiff $197.50, being the sum collected by him, and due the estate of Charles Gerting from the insolvent estate of Nicholson & Sons. It also found that William Gerting had collected from Henry Gerting in the lifetime of Charles the sum of one hundred dollars due Charles for which he had never accounted. These *632 sums he was ordered to pay to the petitioner. It made the injunction theretofore granted perpetual, and reserved the question as to the removal of the trustee for the further order of. the Court. In its decree the Court takes no notice of the petitioner’s claim to the testator’s interest in the steamer Oceanic, and in the firm of DuBois & Co., or of her claim for the testator’s watch and chain. From this decree both William Gerting and William E. Gerting have appealed, but no appeal has been taken by Mrs. Wells. It thus appears that only three questions are presented for consideration on this appeal. First. The ownership of the ten Northern Central Railway bonds. Second. The sum of one hundred dollars alleged to have been collected by William Gerting from Henry Gerting. Third. The $197.50 collected by William Gerting from the insolvent estate of J. J. Nicholson & Sons. While the record is voluminous, by the rulings of the Court upon exceptions to evidence, and the practical abandonment by the petitioner of her claim to the watch and chain, and to her father’s interest, alleged to be unaccounted for, in the steamer Oceanic, and in the firm of Dubois & Company, much the larger part of the evidence becomes irrelevant to the question presented in this Court, and a great deal of that which is relevant is conflicting and most unsatisfactory. The main question in the case is this: To whom did the ten bonds mentioned in the petition belong at the time of the death of Charles Gerting? If the title to these bonds was vested in Charles Gerting at the time of his death, or if any part of said bonds were owned by him at that time, it passed to and became vested in his executor, William Gerting, upon his qualification as such in the Orphans’ Court for Harford County. He has not accounted to Mrs. Wells for these bonds, or any portion thereof, as it was his duty to do, if the whole, or any part thereof belonged to the testator at' the time of his death. There are certain undisputed and controlling facts bearing *633 upon the purchase and ownership of the bonds which will be first considered before the testimony of the witnesses offered in support of the claims of the respective parties is examined. On the 26th of August, 1884, Henry Gerting bought of J. J. Nicholson & Sons six one thousand dollar Northern Central Railroad Company second mortgage five per cent coupon bonds, numbers 1622, 1623, 1624, 1625, 1626, 1629. On the 27th of August, 1884, he deposited these bonds in his own name with the Safe Deposit and Trust Company of Baltimore, and received from it a certificate of deposit therefor. The circumstances under which the bonds were purchased are thus stated by Henry Gerting, “Charles came to see me, and he said I should go to see Harry Hopper, and he would give me a check for six thousand dollars, and I should go and buy five per cent railroad -bonds, Northern Central Railroad bonds, for that money which I did. After I bought the bonds I went and deposited them in the Safe Deposit Company in my name. After a short time he came again and he says to me, he says I want them bonds transferred to my name, and I says that is all right, and I went up there with him, and had them 'transferred in his own name, and, that settles it, they were his bonds ever afterwards.” These bonds remained on deposit in the name of Henry Gerting until the second day of February, 1885, on which day Henry and Charles Gerting went to the Deposit Company, surrendered the certificate issued to Henry Gerting, withdrew the bonds, and then redeposited them, together with one other Northern Central second mortgage coupon bond numbered 476 for one thousand dollars, in the individual name of Charles Gerting, to whom a certificate of deposit was issued by the company. On the loth of July, 1885, Charles Gerting deposited in his own name one other bond numbered 450 of the same company, and for a like amount, and received a certificate therefor. These eight bonds remained on deposit with, the Trust Company in the sole name of Charles'Gerting until the 22nd day of December, 1885, on which day Charles Gerting surrendered the certificate of deposit, withdrew the bonds and took them away. Four days *634 later Charles and William Gerting went together to the Trust Company, and redeposited these eight identical bonds in their joint names and received a certificate of deposit reciting that the company had received from Charles and William Gerting these bonds, which it agreed to hold on deposit subject to the order of either. These eight bonds remained on deposit, without addition thereto, in,the joint names of Charles and William Gerting until the 17th day of October, 1888, when two more bonds of the same issue and for like amounts (Nos. 479 and 2219) were deposited by Charles and William Gerting in their joint names subject to the order of either. The proof therefore shows that on the 17th day of October, 1888, the identical bonds in controversy were on deposit with the Safe Deposit and Trust Company in the joint names of Charles and William Gerting, that they had been so deposited by their direction, and it also appears that they remained so deposited in their joint names at the time of the death of Charles Gerting in August, 1892. The testimony is silent as to the purchase of bonds numbers 450, 476, 479 and 2219. By whom, or from whom, or with whose funds they were bought does not appear. The six bonds bought by Henry Gerting from Nicholson and Sons were paid for by the money gotten upon the order of Charles Gerting from Hopper and Company. But it is by no means clear that this money was wholly the money of Charles Gerting. The record shows that the most intimate and confidential relations existed between Charles and his brother William, and that large sums of money had been sent at various times by William to Charles, and it also appears that the account with Hopper & Company for. the greater part of the time was a joint account of Charles and William Gerting. It cannot therefore be said that as to the six bonds bought by Henry Gerting they were the sole property of Charles Gerting, and it is fair to presume that the title to all the bonds involved was vested in Charles and William Gerting as co-owners at the time of Charles death, unless the testimony offered in support of the claim of William Gerting shows that the title of Charles was transferred to him. The *635 presumption as to the co-ownership of those bonds is strengthened by the action of Charles and William Gerting in their dealing with the bonds. They declared themselves, by the terms of deposits with the Trust Company, the lást and only clear evidence of title, to be co-owners of these bonds. This co-ownership as fixed by themselves so far as the same is evidenced by the certificates of deposit continued down to the death of Charles Gerting; and long after the qualification of William Gerting as executor. Upon this state of facts we think it clear that one-half of these bonds belonged to the estate of Charles Gerting, and the trustee should account to Mrs. Wells for them, unless the evidence offered by William Gerting is sufficient to show the title of Charles is now vested in him. The evidence upon which he relies to support his title to the sole ownership of the bonds is found in the testimony of Frederick Gerting and Sylvester Penning, and consists of statements made by Charles Gerting in July, 1892, and in August, 1892, at and about the time the will was made. It must be conceded that this evidence should not be permitted to defeat the plaintiff’s right to one-half of these bonds, unless it clearly appears that Charles Gerting’s title thereto had been divested. The evidence of Frederick Gerting upon this point is found on page 192 of the record, and is as follows: Q. “Did he tell you anything about his ownership of any bonds, or his not'owning any bonds, or what did he tell you? A. He told me that he owned no bonds, that what bonds there was was Williams. Q. How was it that he told you about the bonds? A. We were in a general conversation about the business of one another, and I asked him the question, I says,.“have you got any bonds,” and the reply he made was “I have no bonds; what bonds there is, is Williams.” The evidence of Mr. Penning, found on page 215 of the record, is as follows: Q. “At the time of the execution of the will of Charles Gerting as you have testified, did he tell you of what his estate consisted, and if so how did he come to tell it, and what did he tell you? A. I asked Mr. Gerting of what his estate consisted, and he told *636 me there was a brick house in Havre de Grace, and the household furniture in it, his interest in the DuBois & Company’s mill in Havre de Grace, the money that he had in the Eutaw Savings Bank, and the money in the Southern Building Association; I made a memorandum at the time as well as the draft of the will, and I have made diligent search for them among my old papers, but I failed to find them. He stated that there had been some bonds at the same time, but they were all Williams.” When it is remembered that at the very time these declarations were made the legal title to one-half of these bonds was in Charles Gerting, it must be conceded that these declarations of themselves did not operate to divest him of that title. This has been settled by many decisions in this State. In re Bauernschmidt Estate, 97 Md. 59—62; Ta ylor v. Henry & Bruscup Admrs., 48 Md. 557—558, and other cases. This is the only evidence in the record to sustain the claim of William Gerting to the sole ownership of the bonds, and in our opinion, is legally insufficient to support his claim. If there had existed an understanding between these brothers to the effect that William should have the bonds there is no evidence of it in the record, and, as the title to one-half thereof was vested in Charles at the' time of his death, William as trustee, must account therefor, together with one-half of the interest thereon collected by him as executor and trustee. Upon this branch of the case our conclusion is that it was error to have held William Gerting liable for the whole amount of the bonds and the coupons collected by him and William E. Gerting, as was done by the decree. The whole decree as to William E. Gerting is erroneous, as there is no evidence that the bonds are now, or ever were in his possession, and that in collecting the coupons he was not acting in the utmost good faith. There is nothing to show that he had knowledge of, or had any reasons to suspect any fraud or breach of trust on the part of the trustee, if any such existed. As to the one hundred dollars alleged to have been collected by William- Gerting from Henry, this claim rests upon the *637 testimony of Henry Gerting alone. His testimony upon this point is so absolutely discredited by that of William and Frederick Gerting, and by other circumstances appearing in the record, that we cannot accept it as reliable evidence. This claim should have been rejected. The bill makes no claim for the money received by William Gerting from the insolvent estate of Nicholson & Sons, and it is argued for the appellants that the decree in that respect is erroneous because not in conformity to the relief asked in the petition ; while the appellee contends that it was properly allowed under the prayer for general relief. It is provided by section 36, Art. 5 of the Code of Public General Laws that: “On an appeal from a Court of equity, no objection to the competency of a witness, or the admissibility of evidence, or to the sufficiency of the averments of the bill or petition, or to any account stated and reported in said cause, shall be made in the Court of Appeals, unless it shall appear by the record that such objection was made by exceptions, filed in the Court from which such appeal shall have been taken.” This section modifies the former practice as it existed in this State. In the absence of proper exceptions filed in the Court below it was the duty of that Court to decree according to the proof. In Schroeder, Admr., v. Loeber, 75 Md. 202, it is said: “It is no matter whether the averments of the bill cover the case proved in evidence or not, we are obliged to decree according to the matters established by proof. The section of the Code is made up chiefly of the Act of 1832, chapter 302, section 5. It has been frequently construed, and the practice under it is well established. In Harwood et al. v. Jones, 10 Gill & Johnson, 419, this Court said: “The decree of the county Court, it is said, must be reversed on account of the variance between the. allegations in the bill and the proofs in the cause. Whether there be such variance or not, we have deemed it unnecessary to inquire, because, according to our interpretation of the fifth section of the Act of 1832, chapter 302, it is immaterial whether there exists'such variance or not; no exceptions having been filed in the Court below, either to the admissibility of *638 the evidence, or the sufficiency of the averments of the bill, the complainant is entitled to the affirmance of the decree in this Court, if warranted by the proof, whether his allegata and probata correspond or not.” When John B. Deming, one of the witnesses produced on behalf of the petitioner, was asked to produce the receipt of Mr. Samuel D. Schmucker, the permanent trustee of Nicholson & Sons, given by William E. Gerting as attorney for William Gerting, administrator of Charles Gerting, for $197.31 Mr. Young noted an exception, but no exception was filed to the testimony of Mr’. Deming, or to the introduction of the receipt in evidence. The noting of the exception, at the time of taking the evidence, is not a compliance with the section of the Code above quoted. In Freeney v. Freeney, 80 Md. 409, it is said: “If it is decided to except to testimony-taken before an examiner, to be used at the hearing of a case in a Court of equity, it is sufficient to have the examiner note the objection (Code, Art. 16, sec. 222), without setting forth the ground on which such objection or exception is based, unless when a question is objected to because it is leading, in which case the ground of the objection should be stated by the attorney making the objection and recorded by the examiner, in order that an opportunity may be afforded for changing the form of the question. Under, rule 43 of general equity rules, adopted by this Court (sec. 223, Art. 16 of the Code), evidence taken and returned by an examiner shall remain in the Court ten days, subject to exceptions before the cause shall be taken up for hearing, unless by agreement of the parties such time be waived. Ample time, therefore, is afforded for the preparation of exceptions, if counsel wish to avail themselves of it. Every exception to testimony must be reduced to writing and filed in the case, at least before the hearing begins.. It will not do, as was done in this case to except generally to all of the testimony objected to and noted by the examiner. Every exception should clearly indicate the testimony excepted to, the ground on which the exception is based, and the name or names of the witnesses whose testimony is excepted to should be set forth.” *639 (Decided June 16th, 1906.) The objection, therefore, that the decree is not in conformity to the relief asked for in the petition is not, for the reasons stated, open for consideration on this appeal. The evidence shows that William Gerting received two dividends from the estate of Nicholson & Sons; $197.31 on July 23rd, 1897, and $7.68 on the 16th day of February, 1900, biit as the proof shows that the claim upon which the dividends were paid was a joint indebtedness due by the firm to himself and Charles he should only be charged with one-half of the amounts received with interest from the date of payment. It follows that the decree must be reversed, and the cause remanded for a new decree in conformity to this opinion. Decree reversed, and cause remanded, costs below to be paid by William Gerting, and one-half of the costs in this Court to be paid by William Gerting, and the other one-half by Mrs. Wells.