American University v. Collins ( 1948 )

On April 1, 1940, a certain Lidie M. Voshell, a resident of North East in Cecil County, signed in the presence of two witnesses the following paper which was delivered to the appellant.

"Estate No. 41

$6,000,000 — The American University — $6,000,000

Washington, D.C.

Chartered by Special Acts of Congress

Approved February 24, 1893, and

March 2, 1895

Date April 1, 1940

In consideration of my interest in Christian Education and for and in consideration of the mutual promises of other subscribers to The American University Fund of $6,000,000 for Endowment, Buildings, Betterments, Equipment, Liquidation and Expenses, I hereby promise and will pay to The American University, an educational corporation organized and existing by and under certain Acts of Congress, the sum of ONE THIRD OF MY ESTATE . . . Dollars ($1/3 of my estate) payment to be made to the Treasurer of said American University at Washington, District of Columbia.

This subscription is made upon the following terms and conditions:

1. This pledge shall become due upon the day of my decease and shall be paid within one year thereafter by my Administrator or Executor out of the proceeds of my estate.

2. This subscription shall bear interest at the rate of . . . per cent (%) per annum, payable semi-annually, from and after December first, 1927. To be known as the Lidie M. Voshell Memorial Fund."

On July 15, 1944, Mrs. Voshell died, seized and possessed of valuable real estate, and owning considerable personal property. She left no will, and the appellee, Florence W. Collings, was appointed her administrator by the Orphans' Court for Cecil County. The appellant filed a claim against her estate in the Orphans' Court and made demand upon the administratrix for 1/3 of the estate which was refused. Thereupon it filed its bill of complaint (subsequently amended) in the Circuit Court for Cecil County alleging that it was a corporation organized and existing under special Acts of Congress and located in the District of Columbia; that, by such Acts, it was empowered to establish and maintain within the District of Columbia a university and that it does maintain such a university; that it has carried among its assets upon which it has placed reliance in its planning operations the estate pledge of Mrs. Voshell; that the amount due it under said pledge can only be arrived at by means of an accounting; that a full and adequate remedy can only be afforded it by a court of equity, and that in the interest of simplicity and economy the administration of the estate of Mrs. Voshell should be completed by the equity court. The amended bill, filed against the administratix and the heirs-at-law of Mrs. Voshell, prays an accounting, and asks that the court direct the payment to it of 1/3 of the total of the estate, and that the court complete the administration of the estate. Further relief is also requested. To this bill the defendants demurred. The chancellors sustained the demurrer and dismissed the amended bill of complaint, whereupon the complainant appealed.

The argument on behalf of the complainant is that the pledge is not testamentary, that the fact that it calls for payment of a fraction of an estate rather than a fixed sum does not render it so uncertain that it does not meet the requirements of a present obligation, and that there was adequate consideration for the pledge to make it a binding obligation.

There are cases in this court which hold that where one has made a subscription and thereby authorized the entering into engagements to accomplish the purpose for which the subscription was made, the subscription was upon a valuable consideration. SeeGittings v. Mayhew, 6 Md. 113; Erdman v. Trustees of EutawChurch, 129 Md. 595, 99 A. 793. In these cases, however, the promisee had actually incurred obligations relying upon the promises. In the case before us, it is not claimed that any such obligations had been entered into. The contention is made in a most general way that pledges of this nature were kept by the appellant and considered by it in planning its future development.

A number of cases from other jurisdictions are cited by the appellant to support the conclusion, which, it states, represents the general trend of judicial authority, and it is in accordance with the better reasoned opinion, that contracts for subscriptions or donations to churches or charitable or kindred institutions which have been duly accepted are based upon a valid consideration because of the mutual obligations of other subscribers. The pledge before us, it is contended, comes within this view. Among the cases cited are Presbyterian Board ofForeign Missions v. Smith, 209 Pa. 361, 58 A. 689; New JerseyOrthopaedic Hospital v. Wright, 95 N.J.L. 462, 113 A. 114;Barnett v. Franklin College, 10 Ind. App. 103; 37 N.E. 427;Annotation, 38 A.L.R. 868. However, Professor Williston criticizes this view on the ground that each subscriber makes his promise directly to the charitable corporation and not in exchange for the promisee's inducing other persons to subscribe.1 Williston on Contracts, Rev. Ed., § 116. This last view was held by the Delaware court in a case involving a pledge similar to the one here in question. American University v. Todd, 9 W.W. Harr., Del., 449, 1 A.2d 595.

It is also contended by the appellant that the fact that the fund pledged is to be known as a memorial fund under the name of the donor also furnishes a basis for holding that the pledge was given for a valuable consideration.

In view of our conclusion on the other question involved, it becomes unnecessary for us to decide either of appellant's contentions that the pledge was given for a valid consideration. We think the paper is testamentary in its nature.

This court in the case of Cover v. Stem, 67 Md. 449, 10 A. 231, 232, 1 Am. St. Rep. 406, held that a paper writing stating "at my death, my estate or my executor pay to July Ann Cover the sum of $3000." was testamentary in character and was not enforceable. In discussing the reason for the decision the court said "There must be terms employed to create a debitum in praesenti, although the solvendum may bein futuro and even after death of the obligor. It would seem to be clear that the relation of debtor and creditor must be created, and existent in the lifetime of the parties to the instrument, though the time of payment may be deferred until after the death of one of the parties." In the case of Feeser v.Feeser, 93 Md. 716, 50 A. 406, there was an instrument under seal which said "Due David H. Feeser the sum of $204.68, with interest from date * * * said sum of money and interest * * * to be paid by my executor out of my estate within one year after my death * * *." The court said this constituted an admission of a present debt and was enforceable against the testator's estate. A similar decision was made in the case of Junkins v. Sullivan,110 Md. 539, 73 A. 264. In the case of Harper v. Davis,115 Md. 349, 80 A. 1012, 35 L.R.A., N.S., 1026, Ann. Cas. 1913A, 861, a promissory note to pay "$3000.00, without interest, after my death" imported a consideration and the court held that the plaintiff made out a prima facie case by its production in evidence. It was there stated: "The fact that the note was payable after the maker's death would not of itself defeat recovery."

The pledge which it is endeavored to enforce in this case is not, on its face, an acknowledgement of any existing indebtedness. It is a paper writing attempting to leave the appellant a share of the pledgor's estate after her death. The pledgor retained full possession of her estate during her lifetime, and could, at any time during her life, dispose of any or all of it without regard to any claim of the appellant. The appellant had no claim or debt upon the basis of which it could prevent the pledgor from alienating her property before she died. Such claim as it had, was, by the terms of the instrument creating it, effective only after the death of the pledgor.

In the case of American University v. Conover, 115 N.J.L. 468,180 A. 830, the New Jersey court had before it a pledge practically identical in language with the one before us, except that in that case it was for a scholarship fund instead of a memorial fund. It was there held that this paper was an attempted testamentary disposition, and, as such, was void, because it did not comply with the New Jersey statutes.

Since it is not contended that the pledge in this case was executed in accordance with the testamentary laws of this State, it cannot be given effect otherwise, and the decree will be affirmed.

Decree affirmed, with costs.