Clarke v. CLARKE, TRUSTEE

159 A.2d 362, 222 Md. 153, 1960 Md. LEXIS 320

• Court: Court of Appeals of Maryland
• Decided: March 28, 1960
• Docket: [No. 111, September Term, 1959.]
• Status: Published

Opinions

Hammond, J.,

delivered the opinion of the Court.

We are called upon to decide whether a testamentary gift to the issue of a life tenant, with no intrinsic or extrinsic evidences of intent, results in a grandchild of the life tenant sharing equally with his father, a child of the life tenant, or whether the father takes to the exclusion of his son. The decision below was that the father took, and the infant son, by his guardian, appeals.

The will of J. Beauregard Clarke, a resident of Anne Arundel County who died in 1913, leaving a will executed two weeks before his death, left the residue of his estate in trust to pay the income to his widow for life, and at her death to his son Ernest for life and “from and after the death of my said son * * * then to his issue, absolutely.” Ernest Clarke had three sons. One died before his father without issue; the other two survived their father, and are now living. Of these two, Thomas has no children, and Robert Fulton, one child— Robert Fulton Clarke, Jr.

In 1950, while Ernest Clarke, the life tenant, was still living, his grandson, Robert Fulton Clarke, Jr., by his mother, the divorced wife of Robert Fulton Clarke, brought suit for a declaration of his interest in the trust estate, for an accounting by the trustee and for protection against dissipation of the estate. The chancellor decreed that “by a true construction of the will * * * the word ‘issue’ means all descendants of J. Ernest Clarke,” and that his grandson, Robert Fulton Clarke, Jr., “has a contingent remainder in the trust property dependent upon his survival of J. Ernest Clarke, upon which event he will be entitled to share equally with other descendants living at J. Ernest Clarke’s death.”

It was further ordered that the substituted trustee file a report of her administration, and a bond for faithful performance. The appeal was from that decree, and the chief contention of J. Ernest Clarke, his wife Angela, the substituted trustee, and their two sons, Thomas and Robert Fulton, was that the word “issue” in the will should be construed to include only the children of J. Ernest Clarke, and the infant plaintiff thus had no interest in the trust estate.

This Court rejected that contention in the case entitled In re Clarke's Will, 198 Md. 266, and held that the infant had a potential future interest in the corpus of the trust sufficient to sustain the action of the chancellor in requiring the substituted trustee to account and post bond. All other questions, including the infant’s contention that at the death of his grandfather Ernest, the life tenant, he would be entitled to share per capita with his surviving children and descendants even though his father should also then be alive, were held to be prematurely presented and “reserved for future determination as the need may arise.”

When the life tenant died in 1958 and the trust estate was ready for distribution, the need arose to decide the infant’s claim to equality with his uncle and his father. The chancellor held that the uncle and father took in equal shares to the exclusion of the infant, saying the testator had used “issue” as the equivalent of “children.”

The parties agree that “issue” is used as a word of purchase, as a word indicating the class who are to take at the death of the life tenant.¹ They agree, further, that no evidence of intent as to what the testator meant by the word “issue” can be found in the will or in the evidence. We concur in both instances. The opinion in the first appeal established that its meaning was broader than “children,” a meaning it often has been given.² Miller, Construction of Wills in Maryland, Sec. 90.

We accept the contention of the infant appellant that the word “issue” was used by the testator to mean “descendants.”³

The decision that “issue” means “all descendants” does not answer the ultimate and narrower question in the case—do the descendants of different generations take equally, or do those of the younger generation take only as representatives of deceased ancestors, that is, can a child compete with a living parent?

The infant says the answers to the questions are in the affirmative on the strength of the English rule (that “issue,” unqualified when used as a word of purchase, is the equivalent of “descendants” and that the descendants, of whatever generation, take per capita—as was held in Davenport v. Hanbury (Ch. 1796), 3 Ves. 257, 30 Eng. Rep. 999, for example), which, he claims, the Maryland cases long ago made the law of this State. His father and his uncle argue that the later cases indicate that Maryland has adopted the rule of the Restatement, Property, Future Interests, Sec. 303—“When a conveyance creates a class gift by a limitation in favor of a group described as the ‘issue of B,’ or as the ‘descendants of B,’ * * * then, unless a contrary intent * * * is found * * * distribution is made to such members of the class as would take, and in such shares as they would receive, under the applicable law of intestate succession if B had died intestate * * '*”.⁴ The comment, speaking of the English rule, said, “Whatever justification this construction may have had in its origin, it is clear that its retention in the United States at the present time would cause serious deviations from the intent normally present in the mind of a conveyor limiting property to the ‘issue of B.’ ” The comment continues, referring to the Restatement rule: “This rule rests upon the fact that conveyors normally use ‘issue’ as substantially the equivalent of ‘heirs of the body,’ and seldom desire the inequalities between stirpes which were unavoidable under the earlier English rule.”

We have found no direct, no binding decision on the point in Maryland.⁵ There are cases in which the English rule has-been referred to as stated but in all of them the basis of decision was the intent of the conveyor disclosed by the instrument. In McPherson v. Snowden, 19 Md. 197, 227-230, which cited Davenport v. Hanbury, a deed of trust gave income for life to four daughters (the children of any daughter-dying to take the mother’s share during the continuance of the trust), after the death of the last daughter to die, the corpus was given outright to “all the issue of all the daughters.” A concessum in the case was that “issue” meant “children.” From the contrast between the disposition of income which the children of a deceased life tenant took as her representatives, and the disposition of corpus to children “aggregated into a class, with no relation to their parents which would indicate that the issue should take through them,” and from the terms of the grant of corpus (“to all the issue of all the daughters,”) the Court found a clear intent to make the children the “immediate and equal recipients” of the trust estate.

In Allender v. Keplinger, 62 Md. 7, the will directed the distribution of the corpus after the death of the last life tenant “equally” and “share and share alike” among their issue. A clear intent was found that the surviving children and grandchildren of the life tenants (the parents of the grandchildren were dead) were to take equally, that is, per capita.

In Levering v. Orrick, 97 Md. 139, the will expressly ordered a per capita distribution among the descendants of a life tenant. A reference to the English rule clearly was dictum, since the express direction for a per capita division was a clear evidence of intent.

In Requardt v. Safe Deposit & Trust Co., 143 Md. 431, 434, there were three equitable life tenants and children of a deceased life tenant took his share of the income during the continuance of the trust. No distribution of corpus was to be made until the death of the last of the life tenants to die. Then the will declared, “said trust shall cease and the corpus be divided equally among their surviving children.” Speaking of the direction for equality of division, the Court held: “A distribution per stirpes would not satisfy that requirement. It would result in an unequal division of the estate among the designated remaindermen. It is only by a per capita distribution that the testator’s declared purpose as to the disposition of the corpus can be given effect.” The Court then referred to other cases in which the use of the words “equally” or “share and share alike” were found to evidence an intent to require a per capita distribution, and noted the dictum in Levering v. Orrick, supra, that the English rule is that a gift to “descendants” simpliciter, as well as “equally” or “share and share alike,” imports a per capita distribution to all descendants, of whatever generation. Clearly, this observation was not a necessary basis of decision in a case where plain intent was evidenced.

When we turn the coin we find that the Maryland cases stamped on that side favor the proponents of the rule of the Restatement, the appellees, to perhaps a slightly greater degree than those on the reverse side do the proponent of the English rule, the infant appellant, but that they are, by no means, conclusive of the question to be answered in the case.

In Henderson v. Henderson, 64 Md. 185, 192, the disposition was to three equitable life tenants, children of the testatrix, with remainders to their “lineal descendants”—-subject to provisions “in case either of my said children should die without leaving issue.” One child died before the testatrix. When she died her other two children claimed absolute estates under the rule in Shelley’s case. The Court held that the Rule did not apply and that the children of the deceased child of the testatrix took an absolute interest in one-third of the estate, and that “it is also apparent that a trustee should be appointed * * * and that he should hold one-third of the property for each of the surviving children of the testatrix; and that on the death of either of said children of the testatrix, the share thus held should go, absolutely and free from the trust, to his or her issue, if there be any then living, per stirpes * * There was no discussion of the holding of the case that the distribution should be per stirpes.

In Thomas v. Safe Deposit & Trust Co., 73 Md. 451, the language of the will was “at the death of my said daughters, or any of them, her share to pass to her issue, children or descendants * * The Court said: “The plain meaning of these words would seem to be that the testator intended to make provision for children in the first instance, if any, and for the descendants of deceased children.”

Mazziotte v. Safe Deposit & Trust Co., 180 Md. 48, was a case where the testator directed that upon the death of all the life tenants the trust should cease and the corpus be delivered “to the issue of my said four daughters, living at the termination of the trust per capita.” The contest was between children and grandchildren of the life tenants. The eminent lawyer who represented the guardian ad litem for the infant grandchildren (who would take if the distribution were per capita) argued first in his brief that “issue” was synonymous with “descendants” and that where there is a distribution to “issue” simpliciter, it includes all descendants, who take per capita even though, in so doing, they take shares along with their living ancestors. Apparently in answer to this contention, Judge Bond for the Court said at page 50 of 180 Md.: “The word ‘issue’ in the disputed clause is clearly one of purchase. * * * And standing alone, the meaning of it has been a subject of difference of opinion. * * * Primarily, it embraces all lineal descendants. * * * But in Maryland it has usually been found equivalent to heirs of the body or those who would take in case of intestacy, thus rendering gifts to remoter descendants only substitutional, in place of gifts to deceased ancestors. Horwitz v. Safe Deposit Co., 172 Md. 437, 451, 192 A. 281; Miller, supra, Sec. 358, p. 1012.” Having disposed of the first contention of the guardian ad litem, the Court held the meaning of the word “issue” was always a question of intention and that since the gift to issue had been expressly per capita, remoter descendants would share equally with their parents, citing among other authorities Restatement, Property, Future Interests, Sec. 303, Comment (i). In his brief counsel for the guardian ad litem, in arguing his second point—that the words “per capita,” showed an intent for equal divisions among children and grandchildren—had directed the attention of the court to the rule of per stirpes distribution (which he designated the minority rule) and to the fact that the “Restatement of Property, Future Interests, which has adopted the position of the minority insofar as a remainder to ‘issue’ is concerned, specifically supports the contention of the appellant that where the remainder is ‘to issue per capita’ children must share with their living parents,” citing Sec. 303 (i). (Emphasis supplied.).

The language of Judge Bond, which has been quoted, does not refer to Sec. 303 (1) of the Restatement, Property, Future Interests, but its meaning is the same as that section, as is made manifest by the comment to Sec. 1, paragraph a, page 1658: “The change from the English rule began with increased emphasis upon the constructional factors sufficient to cause ‘issue’ to be construed as substantially similar to ‘heirs of the body’ and hence to cause the ascertainment of the takers thereunder by reference to the statute of intestate distribution.”

The concurring opinion of Judge Henderson in Patchell v. Groom, 185 Md. 10 (in which Judge Collins and Judge Marked joined), agreed with the majority that descendants of living ancestors do not share in a distribution to descendants “then living per stirpes and not per capita,” but disagreed with the holding of the Court that the stocks of descent were the grandchildren of the testator and not his children, the life tenants. The concurring opinion referred to the view of the Restatement, Property, Future Interests, Sec. 303, that in a gift to a class composed of the issue of B or the descendants of B, distribution is made to those who would take and in such shares as they would receive under the applicable law of intestate succession. It was then said: “In so far as the Restatement requires distribution per stirpes of a gift to ‘descendants’ or ‘issue,’ without more, this reflects a change from the early English authorities, as to ‘issue,’ and from a dictum of Mr. Jarman in his first edition, as to ‘descendants,’ quoted by this Court in Levering v. Orrick, 97 Md. 139, 145, 54 A. 620, and by the majority opinion in the case at bar. The rule of the Restatement was, however, adopted by this court in Mazziotte v. Safe Deposit & Trust Co., supra.”

The views of the concurring minority in Patchell v. Groom, supra, became those of the Court in Ballenger v. McMillan, 205 Md. 94, where again the distribution was to descendants of the grantor of the trust after the death of the life tenants, and was expressly directed to be made per stirpes and not per capita. The holding was that the children of the grantor were the stocks of descent, and the Court quoted at length Judge Henderson’s concurring opinion in Patchell, including the sentence that the Restatement rule had been adopted as Maryland law by the court in Mazziotte.

The infant plaintiff here argues that Judge Bond’s paraphrase of the Restatement rule in Mazziotte did not mean what it would appear to mean literally, but was talking of the word “issue” when construed as a word of limitation. Although the statement was made in connection with a will executed before 1912, it was made (a) in a case in which, like the one before us, the rule in Shelley’s case was not applicable because the life estates were equitable and the remainders legal and (b) in a case in which the Restatement rule (Sec. 303) of per stirpes distribution where “issue” is used without more had been cited to the Court and (c) after the legislature had abolished the rule in Shelley’s case by Ch. 144 of the Acts of 1912, now Code (1957), Art. 93, sec. 366, by providing specifically that “any form of words” that limit a remainder, after a life estate to “heirs of the body” should be construed as words of purchase. The appellant argues further that if it was intended to mean what it literally says, it was dictum and that the dictum has been perpetuated and compounded by dictum in the concurring opinion in Patchell and the majority opinion in Ballenger. Certainly it is true that Judge Bond’s statement was not necessary to the decision in Mazziotte, although as we have noted, it has more force than it would otherwise because it was a direct answer to, and dispositive of, a contention pressed earnestly and at some length by distinguished counsel in the case. It is equally true that the reference to Sec. 303 of the Restatement was not necessary to the conclusion reached by Judges Henderson, Collins and Markell in their concurring opinion in Patchell, nor to the result reached by the Court in Ballenger, although it strengthened their conclusions, because the distribution under Sec. 303 would have been to the same persons who took under the decisions in those cases. Also, the statement in the concurring opinion in Patchell, repeated in Ballenger that the view of the Restatement had been adopted as Maryland law in Mazziotte may have read more into Judge Bond’s language than this Court then intended.⁶ Nevertheless, it would seem that approval of the Restatement rule has been indicated by this Court, at least implicitly, three times, as well as by Judges Henderson, Collins and Markell, concurring.

The first two instances were Mazziotte and Ballenger, and the third is Robinson v. Mercantile-Safe Deposit & Trust Co., 214 Md. 30, in which the Restatement, Property, Sec. 303 (1), was quoted, as was comment (e) thereon, which states that where issue consisted of children of B and grandchildren of B, who are children of a living child of B, the grandchildren are wholly excluded from sharing in the distribution of the subject matter of the class gift unless a “ ‘contrary intent of the conveyor is found from additional language or circumstances.’ ” In Robinson the distribution was directed to be made “to the issue or descendants of said Emanuel E. Robinson living at that time, per stirpes and not per capita,” from which the Court found that the intent was that the distribution was to be stirpital, quoting comment (h) to Sec. 303 of the Restatement that conveyances “frequently contain language or have circumstances tending to corroborate the conclusions that the term ‘issue’ or ‘descendants’ has been used as substantially the equivalent of ‘heirs of the body’ and hence that distribution should be made in accordance with the law of intestate succession.”

Faced with the situation where we find no case a conclusive and controlling precedent, we think the meaning of “issue” should be determined as the Restatement suggests. The English cases, which form the basis of the dicta in the cases relied on by the infant appellant, reached the result they did with reluctance and from force of necessity, as the judges of that day saw it. 3 Page, Wills, Sec. 1079 (Lifetime Ed.), notes that the English decisions originally came at a time when the share of a member of a class who died before testator, passed to the other members of the class, and not to his heirs or legal representatives, and then says: “The courts felt that they had no choice between permitting grandchildren to share equally with their parents and excluding them entirely, although they conceded that testator probably intended grandchildren whose parents were dead to take their parents’ shares, and grandchildren whose parents were alive, to take nothing. Being unable to give effect to testator’s entire intention they preferred not to disinherit the grandchildren whose parents had died before testator, even at the expense of permitting the other grandchildren to take equally with their parents.” Professor Page then points out that statutes with reference to lapse now prevent this result in almost all cases, and then says: “If the courts restrict ‘issue’ to the first generation, and distribute per capita, with representation if any of the first generation have died after the will was made and before testator dies, they will reach the result which the English courts wished to reach but could not. Some of the American states have construed such a gift in this way.

“Other courts persist in applying the English rule, and in dividing per capita among all generations, including those whose parents are living. Where this rule is still in force it is an interesting example of a rule, undesirable from the first, and selected only as a choice of evils, which has persisted so long that it is strong enough to force recognition although the alternative evil has ceased to exist, and the choice of the result which was desired from the first is perfectly possible.”

The trend of the cases in other states is strongly in favor of the rule of the Restatement. In several instances Courts have reversed or repudiated earlier decisions favoring the English rule and have adopted the rule of the Restatement and, in so doing, have pointed out, as did Professor Page, the reluctance of the English Courts to reach what they considered an undesirable result, unwanted by the testator. States in which this has been done include: Pennsylvania—In re Mayhew’s Estate, 160 A. 724 (see also In re Thorn’s Estate, 46 A. 2d 258); Rhode Island—Rhode Island Hospital Trust Company v. Bridgham, 106 A. 149; Minnesota—In re Thompson’s Estate, 279 N. W. 574. Other states increasingly have found the intention of the testator, where unrevealed except by the use of the word “issue” or “descendants,” to be that surviving members of the first generation share among themselves per capita, with those of subsequent generations whose ancestors have died, taking by representation. Massachusetts was one of the earliest. In Dexter v. Inches, 17 N. E. 551, 554, Justice Holmes said for the Supreme Judicial Court of Massachusetts: “The difficulty which was felt by Lord Loughborough, in Freeman v. Parsley, 3 Ves. 421, in finding a medium between total exclusion of grandchildren and the admission of them to share with their parents, does not strike us as insuperable, * * *” and in Jackson v. Jackson, 26 N. E. 1112, the court made the fiat holding, which has since been followed in the State, that “when by a will personal property is given in trust to pay the income to a person during life, and on the death of such person to pay the principal sum to his issue then living, it is to be presumed that the intention was that the issue should include all lineal descendants, and that they should take per stirpes, unless from some other language of the will a contrary intention appears.”

Other decisions reaching the same conclusion include: Wyeth v. Crane (Ill.), 174 N. E. 871, and Wilmington Trust Co. v. Chapman (Del. Chan.), 171 A. 222. Connecticut and South Carolina have reached the same result by holding that the meaning of “issue” is equivalent to that of the phrase “heirs of the body.” See Greenwich Trust Co. v. Shiveley (Conn.), 147 A. 367, and Rembert v. Vetoe (S. C.), 71 S. E. 959. New Jersey seems to be the only State which continues to adhere strongly to the English rule. The writers in the law reviews generally support the Restatement rule and predict that more and more courts will follow it. See Schnebly, Testamentary Gifts to "Issue,” 35 Yale L. J. 573; Comment, 37 Mich. L. Rev. 630, 633; Willard Brooks, Gifts to Issue— Another View, 6 Ill. L. Rev. 230. See also 7 W. Res. L. Rev. 186.

We conclude that the decree below was correct in directing distribution to the children of Ernest Clarke living at his death in equal shares to the exclusion of the infant appellant.

Decree affirmed, costs to be paid from the trust estate.

1 . The Rule in Shelley’s case does not have application for several reasons. The will was executed after the abolition of the Rule by Ch. 144 of the Acts of 1912, Code (1957), Art. 93, Sec. 366. Also, the estate of the life tenant was equitable, those of the remainder-men are legal; the two not being of the same quality, the Rule would not apply. Cowman v. Classen, 156 Md. 428, 435-436. And see Timanus v. Dugan, 46 Md. 402, 417-419, where the devise was to “the said issue in fee” and it was held that the addition of the words “in fee” evidenced an intent that the two words first quoted were words of purchase. In Shreve v. Shreve, 43 Md. 382, 397-398, are found instances as to the effect of words of distribution upon the word “issue” as showing the estate in the first taker was for life. See also Horwitz v. Safe Deposit & Trust Co., 173 Md. 437. There is a full discussion in Miller, Construction of Wills in Maryland, Sec. 359.

2 . The decree in the lower court entered after a mandate in the first appeal came down said “that by a true construction of the will of J. Beauregard Clarke, deceased, the word ‘issue’ means all descendants of J. Ernest Clarke * * Apparently this phraseology reflected the understanding of the parties of the meaning of this Court’s opinion.

3 . In Goldsborough v. Martin, 41 Md. 488, 501, where the question for decision was the rule against perpetuities, Judge Miller said for the Court: “The term ‘issue’ is here used without restriction, and embraces all the lineal descendants of the daughter.” See also Lee v. Waltjen, 141 Md. 458, 462; Ryan v. Herbert, 186 Md. 453, 460.

4 . The first illustration under Sec. 303 (1) assumes that the rule-in Shelley’s case has been abolished and embodies substantially the language of the will in the case before us, in a conveyance as-follows: “To my Son B for life and thereafter to the issue of B absolutely” and says that the distribution will be exactly as if B had died intestate.

5 . In the case of Worthington v. Milnor in the Circuit Court for Baltimore County, Daily Record of Aug. 16, 1940, in which counsel' outstanding in the field, including the late Charles McHenry Howard, participated, the Court held that the word “issue,” simpliciter referred to the children of the equitable life tenant and did not include her four grandchildren whose parents were living. In the opinion it is said: “The question is a novel one in this State. There is no decision of the Maryland Court of Appeals construing the-word ‘issue’ in a will, used without qualification, and unexplained by other provisions in the will.”

6 . Page, Wills, Cumulative Supplement, Sec. 1027, p. 416 n. 7, cites the Mazziotte case in support of the text (3 Page, Sec. 1027, p. 154) that “There is, however, a strong tendency to treat ‘issue’ as equivalent to heirs of the body; that is, such lineal descendants as would take under the statute of descent.”