Court Opinion

ID: 9884880
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:22:18.064994+00
Date Added: 2024-06-11T07:48:41.932145
License: Public Domain

Henderson, J.,
filed the following dissenting opinion, in which SybERT, J., concurred and Bruñe, C. J., concurred in part.
I disagree with the conclusion reached by a majority of the Court in this case and state my reasons as concisely as I can. I shall not attempt to restate the facts. As I read the decision, it repudiates what is called “the earlier rule” laid down in the Maryland cases, and overrules them. This seems to me to be peculiarly unfortunate, because this Court has sedulously observed the rule of stcM'e decisis, and stressed the need of certainty, in the field of testamentary law. If lawyers cannot rely *217upon past adjudication, in advising their clients, they should be licensed as soothsayers.
Professor Reno, in the article cited (17 Md. L. Rev. 285, 298), points out that at least under the earlier cases there was no question but that the loss suffered by a specific legatee caused by a renunciation was not compensable. The renunciation, removing from the estate the specific property bequeathed, operated in the same manner as an ademption, a term used to describe the removal from the estate of the specific thing bequeathed, prior to the testator’s death, rendering it impossible to carry out the testator’s declared intention. The disappointed legatee was not entitled to reimbursement for the simple reason that the loss came about by operation of law. It is true that ademption does not result where there is a mere change in the form of the property bequeathed. The cases of Johns Hopkins University v. Uhrig, supra (substitution of bonds for stocks by reason of a corporate reorganization), and Seifert v. Kepner, supra (liquidating dividend substituted for stock in a case where the bequest was of “the proceeds” of certain stock) do not turn on any question of indemnification. They rest on the proposition that the specific property is still in esse, or at least capable of being traced directly into the substituted res. In the instant case the ten shares the widow was compelled to surrender to the estate by her election were still in esse, and the five shares remaining, after the allocation of one-half to her, were available to satisfy, pro tanto, the specific bequest. Hence there was no ademption of these shares.
The majority opinion seems to brush aside the whole theory of ademption, and to substitute speculation as to an unexpressed intention for a definite rule of law. 1 find nothing in the cases to justify this. In Darrington v. Rogers, 1 Gill 403, 410 (1843), Judge Dorsey, for the Court, said: “The election of the widow, to stand upon her legal rights, does, it is true, occasion loss to the appellants; but it is a loss resulting by operation of law, and against which the testator only could have provided an indemnity.” That is still the law. In Levin v. Safe Dep. & Tr. Co., 167 Md. 41, 45, Chief Judge Bond, for the Court, said: “Adherence to the plan under the altered conditions requires, we think, ihat the remainders in the widow’s half should be held *218inoperative now; the renunciation having the same effect as ademption of a specific legacy.” In Webster v. Scott, 182 Md. 118, 121, Judge Ogle Marbury, for the Court, in regard to the effect of renunciation upon certain stock specifically bequeathed, said: “The result is a situation similar to that of an ademption * * *.” The Webster case appears to be the latest case upon the subject.
The majority opinion deals at length with the doctrine of sequestration. This is a recognized equitable doctrine, applied in numerous cases beginning with Hinkley v. House of Refuge, 40 Md. 461 (1874). The doctrine is applicable only to cases where, by reason of a renunciation, the property left to the renouncing spouse is surrendered to the estate, and available to compensate disappointed legatees out of the windfall. But this is a far cry from the situation in the case at bar, where there is no windfall and no property surrendered except the five shares the employees receive under the decree. The majority opinion makes whole the specific legatees at the expense of the others, on the basis of an assumed intention which the testator deliberately refrained from expressing. The prior Maryland cases, as I read them, do not require or justify the adoption of such a rule.
The majority opinion relies heavily upon Mercantile Trust Co. v. Schloss, 165 Md. 18, and states that the case was not one of sequestration. I cannot agree. The prayer of the bill was that “the benefit intended for the widow should be sequestered to compensate * * *” the specific legatee for the loss of an undivided interest in leasehold property valued at $7,000. Judge Digges for the Court said (p. 27) : “The second question presented * * * is whether or not the doctrine of sequestration should be applied in order to compensate Mrs. * * * White for the loss of one-half interest in 402 West Saratoga Street. The renunciation of the widow, * * *, so far as regards the remaindermen’s interest in the estate, was equivalent to her death, and had the effect of accelerating the remainders and making them become payable presently, instead of at the time designated in the will.” The remaining beneficiaries were damaged “to the extent that their respective shares were diminished by the enlargement of the widow’s share, and it benefited them by accel*219erating or pushing forward the time at which they would receive the full benefits of their remainder interest.” Judge Digges went on to say (p. 29) that the rule (of no compensation) stated in the earlier cases was “firmly settled,” but that in those cases “nothing was left in the estate which had been devised or bequeathed to the widow, after her renunciation and the receipt of her legal share, which could be sequestered for the purpose of reimbursing or making whole specific legacies or devises * * *.”
It is true that the court did not go through the form of determining the then value of the renounced life estate. But it seems perfectly clear that the award of $3,500 to Mrs. White as compensation, out of an estate appraised at $135,000, was not in excess of the value of the life estate. I find nothing in the briefs of counsel or the opinion of the court to support a claim of a broader right than that of sequestration. The suggestion that the income should have been accumulated during the widow’s life, and applied to the liquidation of the claim (as was apparently the relief granted in Hinkley, supra) is answered by the acceleration. The failure to value the life estate was probably due to the fact that the decree below was claimed to be a consent decree, wherein all parties agreed at least to the correctness of the result if sequestration were held to be in order. As stated by Professor Reno, supra (p. 302), “the amount sequestered was only a small portion of the actual present value of the renounced life estate.” Upon that concessum in the case, it was unnecessary to obtain a precise valuation figure.
Marriott v. Marriott, supra, is also heavily relied on in the majority opinion. As I read the case, it was primarily concerned with the right of pecuniary legatees to be made whole out of the residue. The cases uniformly support this proposition, Hanson v. Worthington, 12 Md. 418; Read v. Maryland General, 157 Md. 565; Mercantile Trust v. Schloss, supra. It is true that the pecuniary legatees were also bequeathed the household furniture and personal effects of the testator, but this was a minor matter. The record in the case does not disclose the value of these items, and Judge Mitchell, for the Court, noted (p. 572) that the appeal of the Cushings was “directed to that part of the order which, by reason of the assertion by the widow of her *220claim, apportions the consequent diminution of the testator’s estate among the pecuniary and the residuary legatees alike, and thereby ignores priority to the pecuniary legatees.” (Italics supplied.) In short, the only question presented on appeal in that case was the claim of pecuniary legatees to preference, and they did not claim any preference in regard to their specific bequests.
It is true that the opinion in Marriott seemed to equate pecuniary and specific bequests, and referred to cases in other states so holding. Yet the holding of the Court was “that the pecuniary legatees of Mr. Marriott are entitled to be first paid out of the net estate, after the widow’s right has been ascertained and satisfied.” I do not see how this limited and explicit holding can be expanded into a holding that specific legacies are entitled to a preference, contrary to a whole line of decided cases that Marriott did not purport to overrule. The majority opinion also misstates Read, supra. That case held that because a pecuniary legacy must be paid in full, the appellant (a pecuniary legatee) had no standing to appeal and contest other dispositions made by the decree. There was no specific legacy involved in the case.
I take it that the majority opinion does overrule prior cases, and substitutes for the established order, a glimpse of intention by a bare majority of this Court. But even on the point of intention I find no intention of the testator in the will before us to prefer former employees to his blood relations and those of his first wife, and the charities in which he had shown an unusual and abiding interest over a long period of years. The whole argument seems to rest on the fact that the specific legacies were mentioned first. Surely, this fact is not controlling. It is the usual practice in drafting a will to first list the specific legacies, if for no other reason, to insure that in case of lapse or ademption they fall into the residue. Moreover, the residuary clause commonly provides a trust for the primary object of concern, usually the widow and children. The opinion states that the employees were “first in his mind and * * * preferred * * * over all legatees * * * since all [the rest] of his estate * * * was to pass under the residuary clause * * This is to my mind a triumph of form over substance. The testator was obviously more concerned with perpetuating the business he had *221founded than with the immediate enrichment of his associates. Only such loyal and devoted employees as should stick to the ship and survive him were to have any slice of the melon. They were all required to execute an irrevocable trust agreeing on behalf of themselves and their heirs and representatives not to sell without first offering their stock to the others at 40% of its book value, or, in other words, at a sacrifice of 60% of its current value. The plan seems designed to keep them all loyal and devoted, as in the testator’s lifetime, until the last survivor should take all, thus holding out the inducement of a great prize. I find nothing in the plan to indicate an intention to presently benefit any employee, far less to indemnify him in cash for the loss of stock due to the widow’s renunciation. It is perfectly clear from the testimony in the case that the testator knew that the antenuptial agreement could not be enforced, that the widow could renounce, and take in kind, and that the effect of a renunciation would be to decrease the amount of stock available. He deliberately chose to take the chance, and to provide no alternative. To my mind it is pure speculation to say that, in the event that happened, the residuary legatees must bear the loss. This is not equitable sequestration. It is robbing Peter to pay Paul.
Indeed, there is abundant reason to hold that the first tier legatees, at least, were to be preferred, as pecuniary legatees under Marriott to all others. Cf. Church Extens’n M. E. Ch. v. Smith, 56 Md. 362, 399. The actual residue of the estate was dealt with in what is called tier three. In Webster v. Scott, supra, this Court refused to compensate a specific legatee at the expense of pecuniary legatees, and distinguished Schloss on the express ground that that was a case of sequestration. The majority opinion makes the point that the intention of the testator that the loyal employees should receive a controlling interest can be carried out, because the widow has intimated that she is willing to sell her shares to them (presumably at $2,000 per share). Surely, that is an extraneous suggestion that should play no part in arriving at the testator’s intention. Neither the widow nor the employees are bound to take advantage, or disadvantage, of the suggested offer. The truth is that the testator’s plan was frustrated by the renunciation, and he made no provision *222whatever as to where the loss should fall. It may be inferred that he intended the law to take its course. To require that the first and second tier legatees remunerate the employees in cash for the value of what the widow took as of right, is based on nothing but speculation and is in the teeth of the adjudicated Maryland cases. I cannot escape the conclusion that this Court is rewriting the testator’s will, according to what the majority think he would have done, if compelled to do so. This is contrary to what this and other courts have repeatedly said they would not do. I would affirm the decision of the Chancellor.
Judge Sybert authorizes me to say that he concurs in the views here expressed.
Chief Judge Bruñe concurs on the point of intent. :l-