1886                                      Vetoes

the trustees, and one or both of them happen to be non-residents of
Maryland, Senate Bill 296 would prohibit him from naming his sons as
the trustees.

3.    Problems relating to the marketability of title, if Senate Bill
296 is not vetoed, will be very difficult. This could be true even if the
Bill were interpreted to apply only to deeds of trust for purposes of
financing. If the trustees of a deed of trust are Maryland residents
and one of them moves out of state, the Bill would undoubtedly require
him to resign as soon as he left the state. If the trust were engaged in
any type of transaction while he was in the process of moving to an-
other state, enormous title problems would be created. The problem is
further compounded, from the title searcher's point of view, when he
may have to dig back into the facts concerning the conveyance by the
trustees as to whether or not the trustees who signed the deed con-
veying, mortgaging, or foreclosing the real estate were in fact
residents of Maryland when the deed or mortgage was executed or the
foreclosure proceedings were instituted.

4.    The Bill relates only to a deed of trust "conveying real
estate." One of the most ambiguous terms in Maryland practice is
"real estate." Does it refer only to fee simple real estate or would it
also include the interest of a long-term tenant? Many large tracts of
land which are developed for industrial or commercial purposes are
leased by the developers under long-term leases. These are technically
leasehold estates and might, according to some opinion, not constitute
"real estate." Even if the Bill could be interpreted to refer only to
deeds of trust in the nature of financing devices, the Bill is ambiguous
as to whether it applies only to fee simple real estate, or whether it
also applies to leasehold property.

5.    The Bill is not limited to real estate located in Maryland. If
the only parcel of real estate involved in the transaction is located in
some other state, the Bill does not by its terms exclude a deed of trust
conveying that real estate. If a Maryland grantor conveys Pennsyl-
vania real estate to a deed of trust, the Bill, on its face, attempts to
require Maryland trustees. There may be serious constitutional prob-
lems in such an attempt.

6.    This Bill reverses a healthy trend that was initiated a few
years ago by the General Assembly and the Governor. In 1969, all
restrictions on non-resident executors, administrators, and guardians
were removed by statute. The theory of the removal of this restriction
was that if a man desires to have his assets handled by certain people,
especially persons in his family, he should not be prohibited from doing
so. This Bill, unless it is vetoed, would reverse that trend.

For all of the above reasons, we urge the Governor to veto Senate
Bill 296.

Respectfully submitted,

Maryland State Bar Association
Section of Estate and Trust Law
Shale D. Stiller, Esquire,
Chairman

Section of Real Property, Planning

& Zoning Law
Professor Russell R. Reno,
Chairman