Gaither v. Williams

Ritchie, J., delivered the opinion of the Court. On the 16th day of October, 1855, Henry J. Williams, and Priscilla, his wife, two of the appellees, conveyed certain lands lying in Anne Arundel County, to Abraham L. Jarrett, his heirs and assigns, in trust for the use of the said Priscilla during her natural life, and in case said Henry survived her, to him for his natural life, and whichever of them survived the other and remained unmarried, then at his or her death for such of the children of said Henry and Priscilla, and their heirs, and in such proportions, as such survivor, might by last will and testament, name, limit and appoint, and in case of the marriage of the survivor, then at the death of such survivor, for the use of the children of said Henry and Priscilla, and their heirs equally, and in default of any such children or their descendants living at the time of the death of such survivor, then in trust for the right heirs of such survivor. And also in further trust, that said Jarrett should “unite with the said Henry and Priscilla in any conveyance of the whole or any part of said property upon such or further — 633 — trusts of said property, which they may request and direct even to the entire revocation of the trusts herein and hereby created, {full poioer of revocation, as to the whole or any part of said property by deed, to said Henry and, Friscilla, being hereby expressly reserved.”) The material question in this controversy is, whether the power of revocation reserved to Williams and his wife in the last clause of the trust first mentioned, was exercised by them in executing the mortgages to Glenn and Turnbull respectively, of which the complainant became the assignee. The mortgage to Glenn was executed by said Williams and wife, on the 23rd day of May, 1871, to secure the payment of 87500, according to the tenor of several promissory notes of even date with the mortgage, drawn by said Henry J. Williams to the order of said Glenn. This mortgage conveys the identical property previously conveyed in the deed of trust, the grant being of it as a certain piece or parcel of land, (describing it,) with all the buildings and improvements thereupon, and the appurtenances thereof, to said Glenn, his heirs and assigns, in fee simple. Among the covenants, is one by the said Henry J. Williams to keep the buildings insured against fire to the amount of $7000, and to so frame the policy of insurance, that in case of loss it shall enure to the benefit of the said John Glenn, to the extent of his claim. It is further agreed, that if the said Henry J. Williams, his heirs or assigns, shall sell any of the property lying east of the Baltimore and Potomac Railroad, for a sum not less than $1000, the said Glenn, or his legal representatives, shall unite in the deed to the purchaser, with the privilege of retaining the purchase money, as a partial payment on account of the mortgage debt. And it is further provided, that in case of any default, the said Glenn, his representatives or assigns, are authorized and empowered to sell all the properly, or so much as may be necessary, — 634 — and apply the proceeds of sale, first, to expenses and commissions ; secondly, to the payment of all the indebtedness owing under the mortgage, “ and as to the balance to pay it over to the said Henry J. Williams, his heirs or assigns.” On the 5th day of September, 1874, Williams and wife executed a second mortgage, to one Turnbull, to secure an indebtedness of $2500 to him, which is similar in its covenants and provisions to the one to Glenn. These mortgages duly devolved by assignment upon Thomas H. Gaither, the complainant; and default having been made, the property, according to the conditions of the' mortgages, was sold by him, and he became the purchaser of the property. This sale was finally ratified hv the Circuit Court for Anne Arundel County in equity, on the 18th day of July, 1877, and the said Gaither received a deed of the' property from J. J. Donaldson, Esq., who had been appointed by the Court to so convey the same. The defendants having resisted the complainant’s right to the possession of the premises, setting up the claim that no estate was passed by the mortgages, but the uses limited for life to said Williams and his wife, respectively, by the deed of trust; and that the latter instrument remained in full force and effect as to the trusts therein contained for the children of said Henry and Priscilla, the complainant instituted his present suit for the quieting of his title and possession, on the ground that there had been an entire disposition of the property mentioned in the deed of trust by the said deeds of mortgage, and that as the effect thereof, all the right, title and interest in the said property of the said Williams and wife, their said children and the said trustee Jarrett, who are the present defendants, had passed to him under the exercise of the power of sale contained in the mortgages, and the ratification of the sale by the Court. The assertion of — 635 — the right to the reversion on the part of the said children of Williams and wife, complained of in the bill, is expressly relied upon by these defendants in their answer to the bill of complaint. As in respect to the verbal construction of the deed of trust, it is our opinion, that, full power to revoke the same by their deed is expressly reserved therein to the said Williams and wife, the issue in this case is, whether the said mortgages of themselves worked such revocation, notwithstanding no reference in terms is made to this power in these instruments. That such was the operation and effect of these deeds of mortgage we entertain no doubt, in the light of the received decisions indicating how such a power may be exercised. In 1 Story’s Eg. Juris., 174 (a), it is laid down, that, “ where the intention to pass the property comprised in the power is clearly established, the Court will give effect to the intention, although there is no intention expressed to act in execution of'the power.” In 4 Kent’s Com., 371, it is stated: “ The power may be executed without reciting it, or even referring to it, provided the act shows that the donee had in view the subject of the power.” In Blagge vs. Miles, 1 Story’s C. Ct., 427, the Court in discussing the execution of powers, says, UA11 the authorities agree, that it is not necessary that the intention to execute the power, should appear by express terms or recitals in the instrument. It is sufficient that i-t shall appear by words, acts or deeds, demonstrating the intention and continuing, “ Three classes of cases have been held to be sufficient demonstrations of an intended execution of a power; (1) Where there has been some reference in the will or other instrument to the power ; (2) Or a reference to the property which is the subject on which it is to be executed; (3) Or where the provision in the will or other, instrument, executed by the donee of the power, would — 636 — otherwise be ineffectual or a mere nullity; in other words, it would have no operation, except as an execution of the power.” ’ This Court in a late case, Foos vs. Scarf, et al., 53 Md., 309, expresses the same view thus : “The rule by which the execution of a power either by a' will or any other instrument is to be determined is well settled. The intention to execute . the power must appear by a reference in the instrument to the power, or to the subject of it, or from the fact that the instrument would be inoperative, without the aid of the power.” Mory vs. Michael, 18 Md., 227; Society of Red Men vs. Clendinen, 44 Md., 429 ; See also 4 Cr. Dig., 240, 245, 249. The objection that a mortgage being regarded in equity simply as a security for a debt, it will. operate merely as a revocation pro tanto, does not apply in the present instance, because there is not only in these mortgages a grant in fee simple of the land itself, and a power of sale, hut a disposition of the residue of the proceeds of sale, after paying the mortgage debt, wholly inconsistent with the dispositions and uses of the deed of trust. As is said in 1 Sugden on Powers, 360, “But where there is not only a mortgage, but an ulterior disposition inconsistent with the former (uses,) it will operate even in equity as a total appointment or revocation, unless there be a declaration that it shall be an appointment or revocation only pro tanto.” As to the legal estate created in Jarrett, the trustee, hy the deed of trust, the power of revocation being reserved in express terms in the same instrument, his title is subjected to the operation of this power whenever exercised ; and this power of revocation having been exercised by the execution of the mortgages, duly signed, sealed, witnessed and acknowledged as deeds, and by whose terms, as has been seen, they convey the whole property in fee simple, provide for its sale in case of default, and direct — 637 — the surplus after paying the debt to be paid over to the said Henry J. Williams, his heirs and assigns. Jarrett’s title was thereby extinguished. Even if we considered an outstanding legal title to be still in the trustee, equity will aid a defective execution of a power. 1 Story’s Eq. Juris., 171, 172, 173, 174 ; 2 Sugden on Powers, 136. But, as we have stated, the deeds of mortgage being in their provisions incompatible with the disposition of the property made by the deed of trust, and operating the execution of the power of revocation, to which revocation the grant to Jarrett, as trustee, with the uses and trusts by the deed created, were made subject; there is no need of a deed of conveyance from him to complainant to perfect his title. (Decided 1st March, 1882.) In accordance with this expression of our views of the case, we must reverse the pro forma decree taken against the complainant, and remand the cause, that a decree may be passed by the equity Court below, in conformity with this opinion, adjudging and determining that the complainant under the sale of the property ratified to him acquired the same free, clear and discharged of all right, title or interest of any of the parties defendant, in the property described in said mortgages, which they might have had under said deed of trust, and enjoining them, and each of them, from setting up any claim or title to' said premises as against the complainant, under or by virtue of said deed. Decree reversed, and cause remanded.