This bill was filed to vacate and declare void a voluntary deed of trust from the appellant to the appellee.
The bill was filed on the 10th day of March, 1902, and alleges that the appellant was on or about the 17th day of February, 1896, the owner of certain real and personal property, amounting to the sum of $25,000, which she obtained of her father, Daniel Stein, late of the State of California; that on the 13th of April, 1896, not being conversant with business affairs, and because, upon marriage in the future, she was desirous of having the property and the income free from the control of her husband, conveyed the property by a deed or *Page 148 trust to the appellee, to hold upon certain trusts mentioned therein.
By the terms of this deed, the appellee was to hold the property, "in special confidence and trust, and to pay the net income thereof into her own hands reserving, however, the right by a last will and testament to bequeath and devise all the property that may be a part of the trust estate, in any manner that she may see fit, either to create trust estates by such will or to dispose of the same absolutely; and upon failure to make and execute such last will and testament, then all, or such part thereof that remain undisposed of at the time of her death, shall vest in her next of kin or heirs according to law." The appellee to have power to sell any of the property, to receipt for the same and to re-invest the proceeds of the sale. And the appellee also to have the power to return to the appellant out of the estate, the sum of $5,000, at such time, and in such installments as the appellee company shall in its discretion deem fit.
The appellant then avers that while by a proper construction of the meaning and intent of the deed she desired the appellee company to manage and control her property, she did not by its terms deprive herself of the right of alienation and disposition of the property, and she understood that the trust created by the deed was revocable at any time at her pleasure.
She also avers that at the time of the execution of the deed she was inexperienced in business matters, and did not understand the legal effect of the deed, but believed at the time that the trust was revocable at her pleasure.
She further avers that since the execution of the deed she was intermarried with one Jacob M. Raffel, and being now able and competent to manage and control her property, she desires to have it returned to her, but that the appellee company refuses so to do.
The prayer of the bill is, that the deed be declared null and void, and that the appellee company be decreed to deliver the property described in the deed to the appellant.
The appellee in its answer admits the execution of the deed *Page 149 and its acceptance of the trust according to its terms, but avers that by the deed the appellant deprived herself of the right to dispose of the estate conveyed, except by last will and testament; that the trust created by the deed is irrevocable and that the appellant knew at the time of the execution of the deed, that the trust created thereby was not revocable.
The case was heard upon bill, answer and proof and from a decree of Circuit Court No. 2, of Baltimore City, denying the relief prayed and dismissing the plaintiff's bill of complaint, this appeal has been taken.
The appellant's claim to relief is based upon two grounds; first, that if the deed creates an irrevocable trust, and deprives her of the control of her property, it was executed by her in ignorance of its meaning and under circumstances which equitably entitle her to its cancellation, and second, by a proper construction of the deed, she has not divested herself of anything more than the legal title to the property, and as the only party in interest, she has the right to call for a re-conveyance of the legal title.
The declaration of trust in the deed now under consideration is in these words: "In trust to pay the net income thereof into her own hands * * reserving, however, the right by a last will and testament to bequeath and devise all the property that may be a part of the trust estate * * in any manner that she may see fit, either to create trust estates by will, or to dispose of the same absolutely, and upon failure to make such will, then all or such part thereof that remains undisposed of by such will, shall vest in her next of kin or heirs according to law, the trustee to have power to sell any of the property and to re-invest the proceeds of such sale — the trustee shall have the power to return to the appellant out of said estate, the sum of five thousand dollars, at such time and in such installments as the trustee shall in its discretion deem fit."
The object and purpose of the trust is stated by the deed to be for the purpose of better securing the property, and having full confidence that the trustee will manage her estate properly, she not being conversant with business affairs, and *Page 150 because upon her marriage at any time in the future she is desirous of having the property and the income thereof free from the control of her husband — is desirous of conveying the property upon the trusts mentioned.
Now it will be observed that according to the terms of the deed in question, the appellant did not exhaust her whole estate, in the property conveyed. The trust mentioned in the deed, upon which the property was conveyed, relates solely to the income, with a power of sale to change the investments. There is no limitation as to the duration of the trust, and no conveyance of her interest in remainder. While she reserves to herself the right to dispose of the property by will, she at the same time provides that the property not disposed of by her will, shall go to her next of kin or heirs at law according to law.
The rules of law applicable to a case of this character have been considered and announced by this Court in a number of cases. In the case of Warner v. Sprigg, 62 Md. 14, the trust was declared in the following terms: "To have and to hold, the same in trust, for the use and benefit of Wm. A. Warner during his life, and after his decease to go as he, by last will may have directed or in case of his decease intestate, the same to go, according to law, under the existing statutory provisions of the law of Maryland." And this Court in passing upon this trust said: "The trust declared is for the life of William with certain powers of disposal. What becomes of the property after his death? William having the fee-simple in the real estate and an absolute equitable estate in the leasehold and personalty conveys the property to a trustee to hold on certain trusts, which do not exhaust the whole estate. All interests which the grantor did not convey necessarily remained in him; consequently the reversion after his life estate was vested in him. He held, therefore, the equitable life estate and the equitable reversion in the fee in the realty and corresponding estates in the personalty. These estates coalesced by way of merger; the life estate with all its incidents was swallowed up in the reversion. The result is that after *Page 151 the execution of the deed in question William held by equitable title the absolute and entire interest in the property which he conveyed by the deed." And to the same effect are the cases ofBrown v. Renshaw, 57 Md. 67; Hughes v. Nicklas,70 Md. 484; Rickards v. Safe Deposit and Trust Company, 97 Md. 608;Sears v. Choate, 146 Mass. 395.
In the case at bar, it seems to be clear that by a true construction of the deed in question the appellant holds by equitable title the entire interest in the property conveyed by the deed, and she is entitled to have the trust declared to be at an end, and the legal title re-conveyed to her.
But apart from this, we think that according to the facts and preponderance of proof in the case the appellant did not intend by the deed to surrender control of her property and that it was executed by her under a mistaken belief as to her power to revoke it. It also appears that she was misadvised as to the legal effect of the deed and her rights under it. There are no vested rights in remainder created by the deed, nor are the rights of third parties or creditors, in any way involved. The only person interested in continuing the trust is the trustee, and this only to the extent of its commissions. A deed executed under such circumstances and of the import of the one here in controversy, cannot be upheld, nor "treated as the free, voluntary and unbiased act of the grantor."
For the reasons we have given, the decree of the Circuit Court No. 2, of Baltimore City, will be reversed and the cause remanded to the end that a decree may be passed declaring null and void, the deed of the 13th day of April, 1896, from the appellant to the appellee in accordance with the views herein expressed.
Decree reversed and cause remanded. The appellant to pay thecosts in both Courts.
(Decided January 13th, 1905.) *Page 152